Solicitors:
Hamilton Locke (Plaintiffs)
File Number(s): 2024/459423
[2]
Nature of the application and affidavit evidence
By Originating Process filed on 9 December 2024, the Plaintiffs, Messrs Kelly and Kennedy as joint and several voluntary liquidators ("Liquidators") of Man AHL Gold (AUD) Ltd (in liq) ("Man Gold") and Man AHL Diversified (AUD) Ltd (in liq) ("Man Diversified") (together, "Companies") seek an order recognising certain foreign proceedings under the UNCITRAL Model Law on Cross-Border Insolvency ("Model Law"), which is Schedule 1 to the Cross-Border Insolvency Act 2008 (Cth) ("CBIA"). I made the orders sought by the Liquidators at the hearing on 3 February 2025. These are my reasons for doing so, and I have drawn on the helpful submissions of Ms Hamilton-Jewell who appears for the Liquidators in that regard.
By way of background, Man Gold was incorporated in the Cook Islands on 1 October 2009; its registered office is in Rarotonga in the Cook Islands; and it was registered in Australia as a foreign company on 19 October 2009 and deregistered in Australia on 5 December 2023. Man Diversified was incorporated in the Cook Islands on 16 October 2006; its registered office was also in Rarotonga in the Cook Islands; and it was registered in Australia as a foreign company on 30 October 2006 and deregistered in Australia on 31 October 2023. Each of the Companies was part of the Man Group of Companies, with their ultimate holding company being Man Group plc, an investment management business listed on the London Stock Exchange. Man Gold provided investors with access to two investment strategies and invested in gold, international futures contracts and foreign exchange markets. Man Diversified provided investors with access to an investment program and invested in Australian deposit investments or cash.
The Liquidators read Mr Kelly's affidavit dated 9 December 2024. He refers to the circumstances in which liquidators (now replaced by the present Liquidators) were appointed to the Companies, by the Deputy Registrar of International and Foreign Companies (Government of Cook Islands), pursuant to s 169 of the International Companies Act 1981-82 (Cook Islands) ("ICA Act"). He also refers to the nature of the Companies' business to which I referred above. Mr Kelly in turn refers to insolvency proceedings commenced in respect of the Companies in the Cook Island, after the directors and shareholders of each of the Companies resolved that they be wound up voluntarily in accordance with the ICA Act. Mr Kelly notes that the purpose of the liquidations is to realise the Companies' assets and use them to pay the costs of the liquidation, creditors and then contributories, and he expresses the view that the liquidations are "foreign proceedings" within the meaning of art 2(a) of the Model Law. Mr Kelly also refers to the Companies' assets, and notes that they hold amounts in bank accounts with National Australia Bank Ltd ("NAB") in Australia, but the Liquidators cannot access those amounts unless they obtain a Court order permitting them to do so. Mr Kelly notes that the Companies' only creditors are their investors and that the amount of funds held by NAB are more than the amount owed to investors.
By a second affidavit dated 3 February 2025, Mr Kelly refers to the giving of notice of the application in accordance with the orders previously made by the Court.
[3]
Determination
Article 15 of the Model Law provides that a foreign representative may apply to the Court for recognition of the foreign proceeding in which a foreign representative has been appointed. Section 13 of the CBIA and arts 15(2) and (3) of the Model Law set out certain matters to accompany such an application. These requirements are satisfied in this application, and, in particular, Mr Kelly's evidence is that he is not aware of any proceedings or appointments within the scope of s 13 of the CBIA.
Article 17(1) of the Model Law provides that a foreign proceeding must be recognised if specified requirements are met. These requirements include that, under art 17(1)(a) of the Model Law, the Cook Island liquidations are a "foreign proceeding" within the meaning of art 2(a) of the Model Law, namely "a collective judicial or administrative proceeding in a foreign state, … , pursuant to a law relating to insolvency in which proceeding the assets and affairs of the debtor are subject to control or supervisions by a foreign court, for the purposes of reorganization or liquidation". The liquidations in the Cook Islands are a collective proceeding in which the Liquidators are empowered to realise the assets of the respective Companies and pay their creditors. They are each a proceeding in a foreign state, namely the Cook Islands. Each liquidation is a judicial or administrative proceeding pursuant to a law relating to insolvency. The assets and affairs of Man Gold and Man Diversified respectively are subject to control or supervision by a foreign court (defined in art 2(e) of the Model Law as including an authority competent to control or supervise a foreign proceeding) for the purposes of liquidation.
For the purposes of art 17(1)(b) of the Model Law, the Liquidators satisfy the definition of "foreign representative" in art 2(d) of the Model Law, as a person authorised in a foreign proceeding to administer the reorganization of the liquidation of the debtor's assets or affairs. Each of the Liquidators have here been appointed as liquidators of the Companies by the Deputy Registrar of International and Foreign Companies (Government of Cook Islands).
Article 17(1)(c) of the Model Law is satisfied by certificates establishing the existence of the Cook Islands liquidation and of the appointment of the Liquidators, although I recognise that the validity date of the former (but not the latter) had expired by a small margin at the date of the hearing. I do not regard that matter as a material defect in the application. Article 17(1)(d) is satisfied where this Court has jurisdiction under art 4 of the Model Law. Where the applicable requirements are met, the foreign proceeding is to be recognised under art 17(1) of the Model Law: Raithatha (liquidator) v Ariel Industries Plc (in creditors voluntary liquidation), in the matter of Ariel Industries Plc (in creditors voluntary liquidation) [2012] FCA 1526 at [25]; Borrelli (Liquidator) v Orthogonal Trading Ltd (in liq) (a company registered in the British Virgin Islands) [2023] FCA 393 at [10].
The Liquidators seek an order that the Cook Island liquidations be recognised as foreign main proceedings pursuant to Art 17(2)(a) of the Model Law, as defined in art 2(b) as a foreign proceeding taking place in the state where the debtor has its centre of main interests ("COMI"). As Ms Hamilton-Jewell points out, the COMI is the place where the debtor conducts the administration of the debtor's interest on a regular basis; is identified by criteria that are both objective and ascertainable by third parties; and should be assessed at the time the Court is called upon to make the relevant decision: Moore v Australian Equity Investors [2012] FCA 1002 at [18]-[20]; Kapila, Re Edelsten (2014) 320 ALR 506; [2014] FCA 1112 at [35]-[39], [53]. Article 16(3) provides that, absent proof to the contrary, the Companies' COMI is presumed to be in the state in which their registered office is situated, namely the Cook Islands. While Man Gold and Man Diversified were previously registered as a foreign company in Australia, Man Gold ceased to be registered in Australia in December 2023 and Man Diversified ceased to be registered in Australia in October 2023. That presumption is not rebutted here.
Other factors also support the conclusion that Man Gold and Man Diversified each has its COMI in the Cook Islands. As to Man Gold, the resident secretary (Penryhn Securities Ltd) maintains documents for that company at the registered office in the Cook Islands; its twelfth annual general meeting took place in the Cook Islands and proxies for the meeting were to be provided to the Company at an address in the Cook Islands; its financial statements were prepared in accordance with the ICA; the notice of its extraordinary general meeting to take place in October 2023 provided an address in the Cook Islands for the meeting; although it has other international connections, including directors resident in Bermuda, an ultimate holding company listed on the London Stock Exchange and investors from around the world. As to Man Diversified, its resident secretary (also Penryhn Securities Ltd) maintains documents for Man Gold at the registered office in the Cook Islands: its sixteenth annual general meeting took place in the Cook Islands and proxies for the meeting were to be provided to the Company at an address in the Cook Islands; its financial statements were prepared in accordance with the ICA; the notice of its extraordinary general meeting to take place in October 2023 also provided an address in the Cook Islands for the meeting to take place; although it also has other international connections, including directors resident in Bermuda, an ultimate holding company listed on the London Stock Exchange and investors from around the world.
Article 6 of the Model Law provides that the Court may refuse to take any action governed by the Model Law if that action would be manifestly contrary to the public policy of Australia. There is nothing to suggest that situation arises here, and Mr Kelly's evidence is that he considers the orders to be in the best interests of the creditors of the Companies and consistent with the objectives of the Model Law.
The effect of recognition is set out in art 20 of the Model Law, and art 21 provides for the relief that may be granted on recognition. The Liquidators here seek an order under art 21(1)(e) of the Model Law that the administration and realisation of the company assets located in Australia be entrusted to them as foreign representatives and also seek an order under art 21(1)(a) investing the Liquidators with the powers available to liquidators under the provisions of the Corporations Act 2001 (Cth). These orders are appropriately made to allow the Liquidators to take control of the funds held in the Companies' Australian bank accounts and distribute those funds to creditors.
For these reasons, I was satisfied that the criteria for recognition are satisfied, and I made the orders sought by the Liquidators at the conclusion of the hearing on 3 February 2025.
[4]
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Decision last updated: 19 February 2025