Federal Court of Australia

Chu v Lin, in the matter of Gold Stone Capital Pty Ltd (No 10) [2025] FCA 633

ORDERS

THE COURT ORDERS THAT:

1. Orders 7, 14, 15, 16, 18 and 19 of the orders made on 7 November 2024 in these proceedings are vacated.

2. The plaintiffs are released from the undertaking given by them referred to in order 14 of the orders made on 7 November 2024.

3. Pursuant to rule 7.33 of the Federal Court Rules 2011 (Cth), within seven days of the date of these orders, Ms Lin is to swear or affirm an affidavit:

(a) identifying any income she has received from 1 January 2024 to date (the Relevant Period);

(b) describing how the $605,000 paid to Austleg Pty Limited upon settlement of the bridging loan provided by Allot Capital has been dealt with, and the whereabouts of the present balance of those funds;

(c) describing the circumstances in which any lease has been entered into in respect of the property located at 60 The Bulwark, Castlecrag, NSW in the Relevant Period, identifying the amount of rent that has been paid and describing how that rent has been dealt with; and

(d) annexing all bank statements for bank accounts in the name of, or operated or controlled by, Ms Lin for the Relevant Period.

4. The first defendant pay the plaintiffs’ costs of and incidental to this application as agreed or assessed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

Delivered ex tempore, revised from transcript

JACKMAN J:

1 The plaintiffs in this application seek to discharge the stay granted by consent in order 7 of the orders made on 7 November 2024. The discharge is sought on the grounds that Ms Lin has failed to comply with the conditions of the stay. The plaintiffs also seek an order ancillary to the freezing order made on 7 November 2024 requiring Ms Lin to swear an affidavit to explain various matters.

2 By orders made on 23 August 2024 (Primary Orders), Ms Lin is required to pay equitable compensation to the plaintiffs. Orders 1 and 2 require her to pay a total of about $9.8 million. orders 3 and 4 require her to pay a total of $308,297. Ms Lin has appealed against orders 1 and 2. She has not appealed against orders 3 and 4, nor has she paid any part of the $308,297 that she indisputably owes to the plaintiffs. The hearing of the appeal concluded on 19 May 2025, and judgment has been reserved.

3 By interlocutory process filed on 3 October 2024, Ms Lin applied for a stay of orders 1, 2 and 8 of the Primary Orders. The stay was sought on various conditions, including that she take all steps to sell a property owned by her at 60 The Bulwark, Castlecrag, New South Wales (the Property) and that, after the deduction of certain amounts from the sale proceeds, $308,297 be paid to the plaintiffs and the balance in a controlled moneys account. Ms Lin's application was supported by an affidavit from her solicitor, Mr Lu. On information and belief, Mr Lu deposed to the assets available to Ms Lin to meet the judgments against her. The effect of that evidence was that she can only pay the amounts she owes the plaintiffs through the sale of the Property. Mr Lu also deposed that Ms Lin intended to sell or refinance the Property, that the Property was worth about $5 million, and that once the property was on the market, Ms Lin would need to rent an apartment near her parents’ home in Chatswood.

4 The stay application was resolved by agreement on 7 November 2024 on the terms set out in orders 7 to 20 of the orders made on that day (Orders). Order 7 stayed the execution of orders 1, 2 and 7 of the Primary Orders, pending the outcome of the appeal “or further order of the Court subject to the following conditions set out below”. The first condition (Order 8) was:

Ms Lin will place [the Property] on market for sale on an arms-length basis within 30 days of the date of these orders (or such additional time as the plaintiffs agree to in writing) and undertakes to take all reasonable steps to achieve an expeditious sale at the best achievable price.

5 The plaintiffs contend that Ms Lin has failed to comply with this condition because she has not taken “all reasonable steps to achieve an expeditious sale at the best achievable price”, and that as a result the stay should be discharged. The Property was listed for sale on 6 December 2024. Details of what has been done to attempt to sell the Property are scant. It is not apparent that there has been any genuine attempt so far to sell the Property. On 29 May 2025, Ms Lin's solicitors confirmed in an email to the plaintiffs’ solicitors that the property was rented out to a tenant. The tenant appears to have been unaware that it was for sale until told by a real estate agent attempting to sell the property next door. The tenant was only issued with a notice to vacate on 9 May 2025 (some six months after the Orders were made by consent) and is not required to vacate until 9 August 2025. In the email sent on 29 May 2025, Ms Lin's solicitors state that they are instructed that there will be a “proper marketing campaign after the tenant moves out of the property”. In my view, that is sufficient to establish non-compliance with Order 8.

6 It is apparent that the Property has been listed with a price guide of over $6.5 million, notwithstanding Ms Lin's view that it is worth approximately $5 million. Mr Brackenridge-McMonigal, an expert valuer, opines in a desktop valuation that it is worth $4.5 million (Exhibit A). The property next door sold in March 2025 for $5 million after a 44 day campaign. Ms Lin relies on a brief market appraisal by a real estate agent at $5.7 to 6.27 million for the Property. I prefer the evidence in the formal valuation of Mr Brackenridge-McMonigal. Unsurprisingly, there does not appear to have been any significant interest in purchasing the Property at the price for which it is listed. No attempt has been made to auction the Property. Further, Ms Lin's solicitors and the real estate agent appointed by her (Agent) have been either slow or non-responsive in answering requests for information about the sale process.

7 As I have indicated above, Ms Lin informed her solicitors that in her view the Property was worth about $5 million. Notwithstanding this, Ms Lin appears to have appointed a sales agent on 2 December 2024 with a listing price of $6.8 million. The Agent's estimated selling price is within the range of $6,585,000 to $7,243,500. On 30 January 2025, the Agent informed Ms Lin that there had been 25 inquiries in relation to the Property, two groups had attended inspections, there had been no repeat inspections, and one contract had been requested. He also recommended that the price guide should be adjusted "in line with the current market feedback to date - $6.5 million". On 23 April 2025, in response to a request from the plaintiffs' solicitors, the Agent stated that, since the last report on 30 January 2025, the price guide had been set at $6.9 to $7.3 million (apparently contrary to his advice on 30 January 2025 that it should be lowered), there had been 67 inquiries, three groups had attended inspections, there had been no re-inspections, one contract had been requested, no building inspection reports had been obtained, and no offers had been made to purchase the property.

8 In an email to Ms Lin on 23 April 2025, the Agent's response to that was:

I think we may set the price guide range from $6.8m to $7.1m to attract more buyers.

9 The plaintiffs submit, and I accept, that if the previous guide was $6.9 to $7.3 million, then this decrease was unlikely to attract any additional buyers. Nor, as the plaintiffs submit, is there any suggestion that anyone who has previously inspected the Property be followed up. It would seem that at the present time, the Property is listed for sale on two websites with an asking price of $6.5 million. The Property has now been on the market for over five months. The sale campaign has clearly not attracted any interest in purchasing the Property at the price at which it has been marketed.

10 The failure to sell the Property can be contrasted with campaigns to sell comparable properties on the same road in the same period. The house next door to the property, at number 58, was sold on 14 March 2025 for $4.9 million. That property appears to be fairly similar to the Property (although Mr Brackenridge-McMonigal assesses it to be superior in value).

11 Mr Andonian was the agent who sold the next door property. His evidence is that it was listed for sale on 30 January 2025 and was sold on 14 March 2025 after 44 days on the market. He has produced records which show that during the campaign, there were 124 inquiries, 13 open homes at which there were 56 inspections, nine inspections by appointment, seven contracts issued, and five offers which ranged between $4.5 and 4.9 million.

12 Mr Andonian also says that he has spoken to a person who identified himself as the tenant of the Property. He says that the tenant said that he had not been made aware of the sale until he saw the listing online. Consistently with this comment, Mr Andonian also says that there were not any signs outside the Property advertising that it was for sale. The plaintiffs submit, and I accept, that renting the Property was inconsistent with any intention to achieve an expeditious sale. It is also hard to see, as the plaintiffs submit, how any inspections of the Property could have occurred if the tenant was unaware that it was for sale. The plaintiffs wrote to Ms Lin's solicitors on 21 February 2025 asking if the Property was tenanted and, if so, for details, but did not receive a response until 29 May 2025.

13 One of the other conditions of the stay was (Order 11(c)) that:

Ms Lin is to instruct her sales agents and professional advisers to respond promptly to any reasonable requests for information from the plaintiffs in relation to any sales campaign.

14 The plaintiffs have not had prompt or satisfactory responses to their inquiries. On 21 February, the plaintiffs' solicitors asked whether there had been an adjustment to the price guide, what the current guide was, and whether the Property was tenanted. That request met with no response until 24 April 2025. As I have indicated above, no response was provided as to whether the Property was tenanted until 29 May 2025.

15 On 6 May 2025, the plaintiffs' solicitors sent an email to the Agent (copied to Ms Lin's solicitor) asking various questions about the marketing of the Property. These included requests for copies of all correspondence and inquiries in relation to the Property, a list of all websites on which the Property had been marketed and the timeframes in which that occurred, an explanation for why the various price guides were set, and a description of the Agent's experience in selling properties of this nature and any similar properties in the same general area. No response was received.

16 In the circumstances, Ms Lin has plainly not complied with the conditions of the stay and it is appropriate that the stay be discharged. It follows that the plaintiffs should also be released from their undertaking in order 14 of the Orders, and that orders 15 and 16 of the Orders should be set aside. It is also appropriate to note that the agreements of the parties recorded in orders 18 and 19 are no longer operative.

17 The plaintiffs also seek an order for the provision of an affidavit ancillary to the freezing order which was made in relation to Ms Lin's assets on 7 November 2024 (being order 12 of the Orders). The usual order that an affidavit of assets be provided was not made.

18 The basis for seeking this order was prompted by Ms Lin having taken the amount of $156,000 from the bridging finance allocated for the purpose of paying her living expenses in breach of a condition of the stay, and that she appears to have rented out the property. Although the matter of the payment of $156,000 has now been resolved, it appears to me appropriate and desirable that the plaintiffs be provided with the information which they seek by way of affidavit from Ms Lin. Ms Lin submits that such an order is not necessary, but in my view, it is desirable and appropriate. Accordingly, I will make the order.

Associate:

Dated:    16 June 2025

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