The case involves a dispute over $16 million advanced by the Applicants (led by Shizhong Liu) to the Respondents (including Yunshen Xing and Naiyu Chai) for real estate development.
The Applicants argue that the funds were secured loans, while the Respondents claim they were investments without security.
The Applicants sought an interlocutory proprietary injunction and leave to register a Certificate of Pending Litigation (CPL) on three properties: Meadowlily, Buroak, and Exeter.
Decision
The court granted an injunction on Exeter and Meadowlily to prevent their sale or encumbrance until trial.
A modified injunction was granted on Buroak, allowing the Respondents to obtain financing only to pay off an existing mortgage.
The judge denied the CPL, though stated it would have been granted under the legal test.
Key Legal Findings
The RJR-MacDonald test was satisfied: there was a serious issue to be tried regarding an equitable mortgage and unjust enrichment, irreparable harm due to potential loss of security, and the balance of convenience favored the Applicants.
WeChat messages and emails indicated that the parties may have agreed to security. The Applicants’ funds flowed through multiple entities controlled by the Respondents.
The Statute of Frauds did not bar the claim, as electronic communications may satisfy writing requirements, and part performance applied.
The case is expedited for a hearing within six months.