Overview

• 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.
• No monetary award was granted yet.