Australia, Nov. 30 -- Supreme Court of Victoria issued text of the following judgement on Oct. 18:
1 This proceeding is brought by the first and second plaintiffs, Stephen Robert Dixon and Geoffrey Trent Hancock (the Liquidators) in their capacity as joint and several liquidators of the third plaintiff, Chang Jiang Financial Pty Ltd (In Liquidation) (ACN 624 164 067) (the Company).
2 The named defendant is Long River Australia Pty Ltd (Long River). The Liquidators understand from their enquiries that Long River did not conduct any business apart from acting as an agent for the Company in relation to receiving customer funds, and that Long River's bank accounts were used to pool money for the Company's business.
3 In essence, the Liquidators have identified that there are significant amounts of funds that were involved in, or the subject of aspects of, the Company's former business operations that currently are held by third parties (primarily Long River). However, because the Australian Federal Police (AFP) seized and now have control of the books and records of the Company, the Liquidators are unable to ascertain or express an opinion as to who is the beneficial owner of, or person(s) beneficially entitled to those funds. In the case of the funds held by Long River, the solicitor acting for Long River has informed the Liquidators that neither Long River nor its sole director, Ms Zhenting Yu, maintains any beneficial interest in the 'Long River Funds'[1] and Ms Yu does not know who those funds belong to.
4 In those circumstances, the plaintiffs seek assistance from the Court pursuant to
s 90-15 of the Insolvency Practice Schedule (Corporations) (IPS), being Schedule 2 of the Corporations Act 2001 (Cth) (Corporations Act), and the inherent jurisdiction of the Court, to permit the Liquidators, in their capacity as liquidators, to pay, or procure the payment of, funds the subject of the Company's former business operations that currently are held by third parties (including Long River) into 'Funds in Court' so as to preserve them, pending investigation as to their beneficial ownership once the books and records of the Company become available to the Liquidators. The Liquidators anticipate that once the Company's books and records are released or made available by the AFP, they will be able to determine who is beneficially entitled to the funds.
5 For the sake of clarity - and while further explanation will be given later in these reasons - it is necessary at this early stage to identify the funds that the plaintiffs seek be paid into Funds in Court. The originating process refers to two types of asset, the first being 'Cash Assets' and the second being 'Long River Funds'. The Cash Assets constitute (a) cash on hand held in a safety deposit box, and (b) proceeds from an account held with Macquarie Bank. The Long River Funds comprise (a) two bank cheques issued by the Commonwealth Bank of Australia to Long River upon closure of its account(s), and (b) cash held in Long River's Westpac account (the Long River Funds).
6 Following the hearing on 6 November 2024, when it became clear that a 'staged' process was required to be adopted, the plaintiffs formulated a set of proposed interim orders to address the Long River Funds (only). In those proposed interim orders, it was noted under 'Other matters' that orders are no longer sought in relation to the Cash Assets, given that they are in the Liquidators' possession and control and that no other party has made a claim on them. Accordingly, the plaintiffs propose that the funds comprising the Cash Assets will be dealt with by the Liquidators in the ordinary course of the winding up of the Company.
7 Having provided the proposed interim orders and a short supplementary submission, the plaintiffs requested that the matter be re-listed for a further hearing for the making of the interim orders sought. The matter was re-listed for further hearing on 18 November 2024, and a copy of the minute of proposed orders sought was provided to the solicitors for Long River and the AFP.
*Rest of the document and Footnotes can be viewed at: (https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSC/2024/721.html)
Disclaimer: Curated by HT Syndication.