Probis Financial Services Pty Ltd (administrators appointed) v Kong [2023] FCA 1398

Probis Financial Services Pty Ltd (administrators appointed) v Kong [2023] FCA 1398

The court held there is a sufficiently arguable case that MCL held Probis’s funds on trust, breached its fiduciary duties by unauthorised transfer to third parties, and that Mr Kong had knowledge of the breach sufficient to satisfy the requirements for a freezing order. There is also a real risk that judgment would be frustrated by dissipation of assets. Discretionary factors favoured extension of the order; accordingly, the freezing order should continue and the disclosure affidavit be provided to the applicants.

Jurisdiction
Australia
Judgment Date
14 November 2023
Procedural Posture
Freezing Order Application / Inter Partes Hearing on Whether Ex Parte Freezing Order Should Be Continued
Outcome
Freezing order continued; disclosure affidavit to be served on applicants; costs reserved.
Legal Topics
['freezing Orders' 'trusts and Fiduciary Duties' 'equitable Remedies' 'corporate Insolvency']
['practice and Procedure' 'commercial Law' 'corporations Law'] ['freezing Orders' 'trusts and Fiduciary Duties' 'equitable Remedies' 'corporate Insolvency']

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Procedural Posture

Freezing Order Application / Inter Partes Hearing on Whether Ex Parte Freezing Order Should Be Continued

Legal Issues

  1. 1 ['Whether a freezing order made ex parte should be continued against the respondent' 'Whether the respondent’s disclosure affidavit should be provided to the applicants']

Ratio Decidendi

The court held there is a sufficiently arguable case that MCL held Probis’s funds on trust, breached its fiduciary duties by unauthorised transfer to third parties, and that Mr Kong had knowledge of the breach sufficient to satisfy the requirements for a freezing order. There is also a real risk that judgment would be frustrated by dissipation of assets. Discretionary factors favoured extension of the order; accordingly, the freezing order should continue and the disclosure affidavit be provided to the applicants.

Court Disposition

Freezing order continued; disclosure affidavit to be served on applicants; costs reserved.

Orders

  • ['The freezing order made on 14 September 2023 is extended until further order of the Court.' 'Order 3 of the orders made on 11 October 2023 is vacated.' 'The respondent is to serve the affidavit filed in accordance with order 2 of the orders made on 11 October 2023 upon the applicants forthwith.' 'Parties have...