Kadam v MiiResorts Group 1 Pty Ltd (No 5) [2018] FCA 1086

The assets in Australia (Fund from Mirage sale and Sanctuary Cove properties) constitute traceable proceeds of pooled trust funds held for investors under a collective investment scheme operated in India; equity requires rateable distribution among all investors, with proper declaratory, receivership and distributive orders, and allowance for recovery of reasonable costs by those who secured the assets for benefit of all beneficiaries.

Parties: First Applicant: Sunanda Balkrishna Kadam; Second Applicant: Vishal Dilip Mhetre; Third Applicant: Abasaheb Rupnar; First Respondent: MiiResorts Group 1 Pty Ltd ACN 140 177 395; Second Respondent: Pearls Infrastructure Projects Limited (India); Third Respondent: PACL Limited (India); Fourth Respondent: Nirmal Singh Bhangoo; Fifth Respondent: Sukhwinder Kaur; Sixth Respondent: Gurpartap Singh; First Intervener / Applicant (qud 147 of 2017): Securities and Exchange Board of India (SEBI); Second Intervener: The Commissioner of Taxation
Jurisdiction: Australia
Judgment Date: 20 July 2018
Procedural Posture: Representative Proceeding / Class Action and Related Proceeding / Initial Trial / Determination of Preliminary Common Issues
Outcome: Resolution of preliminary common issues and grant of declaratory relief; orders for further hearing to determine form of relief, reference on quantification of indemnity/recoverable costs, and scheme for distribution.
Legal Topics: Tracing of Pooled Trust Funds, Declaratory and Equitable Relief, Cost Recovery Out of Trust Estate, Appointment of Receiver, Distribution of Pooled Funds, Standing of Foreign Regulator

Practice and Procedure Equity Corporations Insolvency Tracing of Pooled Trust Funds Declaratory and Equitable Relief Cost Recovery Out of Trust Estate Appointment of Receiver +2 more

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Parties

Sunanda Balkrishna Kadam

First Applicant

Vishal Dilip Mhetre

Second Applicant

Abasaheb Rupnar

Third Applicant

MiiResorts Group 1 Pty Ltd ACN 140 177 395

First Respondent

Pearls Infrastructure Projects Limited (India)

Second Respondent

PACL Limited (India)

Third Respondent

Nirmal Singh Bhangoo

Fourth Respondent

Sukhwinder Kaur

Fifth Respondent

Gurpartap Singh

Sixth Respondent

Securities and Exchange Board of India (SEBI)

First Intervener / Applicant (qud 147 of 2017)

The Commissioner of Taxation

Second Intervener

Procedural Posture

Representative Proceeding / Class Action and Related Proceeding / Initial Trial / Determination of Preliminary Common Issues

Legal Issues

1 Are the funds in Australia the traceable proceeds of pooled investor trust funds from a collective investment scheme in India?
2 Is declaratory and other equitable relief appropriate to vindicate investor interests?
3 Should receivership and sale orders be made for Australian assets?

Ratio Decidendi

Court Disposition

Resolution of preliminary common issues and grant of declaratory relief; orders for further hearing to determine form of relief, reference on quantification of indemnity/recoverable costs, and scheme for distribution.

Orders

Funds held in Australia declared held on trust for investors; specific declaration for Mrs Kadam as investor; Sanctuary Cove properties declared held on trust for investors; receiver to be appointed for sale and distribution; reasonable costs incurred in securing assets (by Mrs Kadam and SEBI) to be paid from Fund,...