Tucker v Mongbwalu Goldfields Investments Limited [2021] FCA 135

Tucker v Mongbwalu Goldfields Investments Limited [2021] FCA 135

Section 440B of the Corporations Act 2001 (Cth) operates extra-territorially to prevent the First Defendant from enforcing its security interest during administration of the Third Plaintiff, and the court has jurisdiction to grant declaratory relief despite lack of defendant participation, as such relief may be useful in foreign proceedings.

Parties
First Plaintiff: Richard Scott Tucker as Joint and Several Administrator of Vector Resources Limited (Administrators Appointed) ACN 107 541 453; Second Plaintiff: Benjamin Forster Carruthers as Joint and Several Administrator of Vector Resources Limited (Administrators Appointed) ACN 107 541 453; Third Plaintiff: Vector Resources Limited (Administrators Appointed) ACN 107 541 453; First Defendant: Mongbwalu Goldfields Investments Limited (Registered No. 133304); Second Defendant: Mongbwalu Goldfields Investments Holdings 6 Limited (Registered No. 1571486); Third Defendant: Harneys Corporate Services Limited (Registered No. 1006316)
Jurisdiction
Australia
Judgment Date
24 February 2021
Procedural Posture
Corporations/commercial Matter / Application for Declaratory and Procedural Relief at Hearing
Outcome
Declaratory relief granted; procedural orders made; costs to be paid from assets of the Third Plaintiff
Legal Topics
External Administration, Security Interests, Moratorium on Enforcement, Jurisdiction Over Foreign Companies, Declaratory Relief, Amendment of Process, Costs
Corporations Law Private International Law External Administration Security Interests Moratorium on Enforcement Jurisdiction Over Foreign Companies Declaratory Relief Amendment of Process +1 more

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Parties

Richard Scott Tucker as Joint and Several Administrator of Vector Resources Limited (Administrators Appointed) ACN 107 541 453

First Plaintiff

Benjamin Forster Carruthers as Joint and Several Administrator of Vector Resources Limited (Administrators Appointed) ACN 107 541 453

Second Plaintiff

Vector Resources Limited (Administrators Appointed) ACN 107 541 453

Third Plaintiff

Mongbwalu Goldfields Investments Limited (Registered No. 133304)

First Defendant

Mongbwalu Goldfields Investments Holdings 6 Limited (Registered No. 1571486)

Second Defendant

Harneys Corporate Services Limited (Registered No. 1006316)

Third Defendant

Procedural Posture

Corporations/commercial Matter / Application for Declaratory and Procedural Relief at Hearing

Legal Issues

  1. 1 Does s 440B of the Corporations Act 2001 (Cth) apply to security interests held by foreign companies over property outside Australia?
  2. 2 Does the court have jurisdiction over foreign defendants who do not submit to jurisdiction?
  3. 3 Should declaratory and/or injunctive relief be granted in these circumstances?

Ratio Decidendi

Section 440B of the Corporations Act 2001 (Cth) operates extra-territorially to prevent the First Defendant from enforcing its security interest during administration of the Third Plaintiff, and the court has jurisdiction to grant declaratory relief despite lack of defendant participation, as such relief may be useful in foreign proceedings.

Court Disposition

Declaratory relief granted; procedural orders made; costs to be paid from assets of the Third Plaintiff

Orders

  • Declaration that the Escrow Deed created a security interest in favour of the First Defendant over property of the Third Plaintiff (69.5% shareholding in the Second Defendant).
  • During administration, s 440B precludes First Defendant from enforcing that security interest or effecting transfer of shares.