In the matter of Courtenay House Capital Trading Group Pty Limited (in liquidation) and Courtenay House Pty Limited (in liquidation) [2019] NSWSC 1113

In the matter of Courtenay House Capital Trading Group Pty Limited (in liquidation) and Courtenay House Pty Limited (in liquidation) [2019] NSWSC 1113

The Westpac Investors, Post 21 April 2017 Westpac Investors, Mistaken Investors, and if proven, Nina Girsa and Zoja Gromova, are the beneficial owners of funds deposited in the relevant Westpac Accounts, as those funds were not intended to become part of the Companies' general assets, were provided for specific purposes, and/or were obtained in the context of a fraudulent Ponzi scheme. Accordingly, the funds are held on trust (Quistclose or constructive) for the relevant categories of investors and should be distributed rateably among them, with no party demonstrating grounds for separate treatment or exclusion except as noted.

Jurisdiction
Australia
Judgment Date
28 August 2019
Procedural Posture
Application for Directions in Liquidation / Final Orders After Contested Hearing
Outcome
The Court declared and ordered that the beneficial owners of the funds deposited in the Westpac Accounts are the Westpac Investors, Post 21 April 2017 Westpac Investors, Mistaken Investors, and Nina Girsa and Zoja Gromova (if their deposits' source is not Companies' funds). Distribution is to be made rateably among...
Legal Topics
['unregistered Managed Investment Scheme' 'liquidation' 'trusts (express, Quistclose, Constructive)' 'distribution of Funds' 'ponzi Scheme']
['corporations Law' 'equity'] ['unregistered Managed Investment Scheme' 'liquidation' 'trusts (express, Quistclose, Constructive)' 'distribution of Funds' 'ponzi Scheme']

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Procedural Posture

Application for Directions in Liquidation / Final Orders After Contested Hearing

Legal Issues

  1. 1 ['Whether funds deposited by certain investors in Westpac Accounts are held on trust for those investors' 'Whether express, Quistclose or constructive trust applies to funds' 'Whether Post 21 April 2017 and Mistaken Investors are beneficial owners of funds' 'Entitlement to distribution pro rata or by tracing among investor classes']

Ratio Decidendi

The Westpac Investors, Post 21 April 2017 Westpac Investors, Mistaken Investors, and if proven, Nina Girsa and Zoja Gromova, are the beneficial owners of funds deposited in the relevant Westpac Accounts, as those funds were not intended to become part of the Companies' general assets, were provided for specific purposes, and/or were obtained in the context of a fraudulent Ponzi scheme. Accordingly, the funds are held on trust (Quistclose or constructive) for the relevant categories of investors and should be distributed rateably among them, with no party demonstrating grounds for separate treatment or exclusion except as noted.

Court Disposition

The Court declared and ordered that the beneficial owners of the funds deposited in the Westpac Accounts are the Westpac Investors, Post 21 April 2017 Westpac Investors, Mistaken Investors, and Nina Girsa and Zoja Gromova (if their deposits' source is not Companies' funds). Distribution is to be made rateably among...

Orders

  • ["The beneficial owners of the funds deposited in the Westpac Accounts are: (a) the Westpac Investors; (b) the Post 21 April 2017 Westpac Investors; (c) the Mistaken Investors; and (d) Nina Girsa and Zoja Gromova if they satisfy the Liquidators or the Court that the source of their deposits was not the Companies'...