Kellow, in the matter of Advanced Building & Constriction Limited (in liq) v Advanced Building & Construction Limited

MARKOVIC J: 1 By an originating application filed on 29 August 2022, the plaintiffs, Suk Lin Chua and Kwok Hung Lau as joint foreign representatives of Aoji Enrolment Centre of International Education Limited, applied for recognition of a foreign proceeding under the Model Law on Cross-Border Insolvency of the United Nations Commission on International Trade Law as it is incorporated into Australian law by the Cross-Border Insolvency Act 2008 (Cth). 2 By an interlocutory process filed on the same day, the plaintiffs also sought relief under Art 21 of the Model Law entrusting them with the administration, realisation and distribution of Aoji's property and for the conferral of powers upon them of the kind which would be available to a liquidator under the Corporations Act 2001 (Cth). 3 On 2 November 2022 I made orders in accordance with those sought by the plaintiffs for recognition in their originating application and for the additional relief sought by them in their interlocutory process. These are my reasons for making those orders.

background 4 Aoji has its registered office in the Hong Kong Special Administrative Region of the People's Republic of China. 5 On 7 October 2020 a winding up order was made against Aoji in proceeding No 89 of 2020 in the High Court of Hong Kong Special Administrative Region Court of First Instance (Hong Kong Proceeding) and the Official Receiver was appointed as its provisional liquidator pursuant to s 194(1A) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Hong Kong). 6 On 7 October 2020, pursuant to s 194(1A) of the Companies Ordinance, the Official Receiver appointed the plaintiffs as the joint and several provisional liquidators of Aoji. 7 Section 194 of the Companies Ordinance relevantly provides: (1) The following provisions have effect on a winding-up order being made - (Amended 3 of 1997 s. 41; 14 of 2016 s. 34) (a) subject to paragraph (aa) and subsection (1A), the Official Receiver shall by virtue of his office become the provisional liquidator and shall continue to act as such until he or another person becomes liquidator and is capable of acting as such; (Amended 3 of 1997 s. 41; 46 of 2000 s. 24) … (1A) Where the Official Receiver- (a) is the provisional liquidator of the company by virtue of subsection (1)(a); and (b) is of the opinion that the property of the company is not likely to exceed in value $200,000, he may, at any time, appoint 1 or more persons as provisional liquidator in his place. (Added 46 of 2000 s. 24) 8 On 31 August 2021 the High Court ordered that the plaintiffs be appointed as joint and several liquidators of Aoji. 9 Records filed by Aoji with the Hong Kong Companies Register prior to the appointment of the plaintiffs as joint and several provisional liquidators showed that the registered address of Aoji is 11/F, Times Tower, 391-407 Jaffe Road, Causeway Road, Hong Kong. 10 There has been no appointment of a receiver or controller or a managing controller to Aoji within the meaning of s 416 of the Corporations Act and as far as the plaintiffs are aware, other than the Hong Kong Proceeding by which Aoji was put into liquidation and the plaintiffs were appointed as its liquidators and this proceeding, Aoji is not involved in any other proceeding including any proceeding under Ch 5 or s 601CL of the Corporations Act or Sch 3 to that Act, in respect of Aoji. 11 The plaintiffs effected service of the originating application and the interlocutory process on all known creditors, advertised notice of the application and provided notice of it to all of Aoji's known creditors in accordance with orders made in this proceeding on 29 September 2022 and r 15A.6 of the Federal Court (Corporations) Rules 2000 (Cth).

legislative framework 12 Section 6 of the Act provides that, subject to the modifications set out in Pt 2 of the Act, the Model Law has the force of law in Australia. 13 Article 2 of the Model Law defines: (1) "foreign proceeding" to mean "a collective judicial or administrative proceeding in a foreign State, including an interim proceeding, pursuant to a law relating to insolvency in which proceeding the assets and affairs of the debtor are subject to control or supervision by a foreign court, for the purpose of reorganization or liquidation"; (2) "foreign main proceeding" to mean "a foreign proceeding taking place in the State where the debtor has the centre of its main interests"; and (3) "foreign representative" to mean "a person or body, including one appointed on an interim basis, authorized in a foreign proceeding to administer the reorganization or the liquidation of the debtor's assets or affairs or to act as a representative of the foreign proceeding". 14 Article 4 of the Model Law provides that the functions in relation to the recognition of foreign proceedings and cooperation with foreign courts are to be performed by a specified court or authority. Relevantly, s 10(b) of the Act specifies that this Court is competent to perform the functions referred to in the Model Law relating to recognition of foreign proceedings in relation to proceedings involving both a debtor who is an individual and a debtor other than an individual. 15 Article 6 of the Model Law provides that nothing in the Model Law "prevents the court from refusing to take an action governed by [the Model Law] if the action would be manifestly contrary to the public policy of this State". 16 Article 15 provides that a foreign representative may apply to the court for recognition of the foreign proceeding in which the foreign representative has been appointed and prescribes what must accompany the application. In summary the application must be accompanied by proof of the existence of the foreign proceeding and of the appointment of the foreign representative and a statement identifying all foreign proceedings in respect of the debtor known to the foreign representative. 17 Article 16(3) of the Model Law provides that in the absence of proof to the contrary the debtor's registered office is presumed to be the centre of the debtor's main interests. 18 Article 17 of the Model Law relevantly provides: 1. Subject to article 6, a foreign proceeding shall be recognized if: (a) The foreign proceeding is a proceeding within the meaning of subparagraph (a) of article 2; (b) The foreign representative applying for recognition is a person or body within the meaning of subparagraph (d) of article 2; (c) The application meets the requirements of paragraph 2 of article 15; (d) The application has been submitted to the court referred to in article 4. 2. The foreign proceeding shall be recognized: (a) As a foreign main proceeding if it is taking place in the State where the debtor has the centre of its main interests; or (b) As a foreign non-main proceeding if the debtor has an establishment within the meaning of subparagraph (f) of article 2 in the foreign State. 3. An application for recognition of a foreign proceeding shall be decided upon at the earliest possible time. 4. The provisions of articles 15, 16, 17 and 18 do not prevent modification or termination of recognition if it is shown that the grounds for granting it were fully or partially lacking or have ceased to exist. 19 Also relevant to an application for recognition are the terms of the Act itself and the Rules. 20 The requirements in Art 17 of the Model Law (and other relevant provisions) are said to fall into two categories: procedural criteria and status based criteria: Kellow, in the matter of Advanced Building & Constriction Limited (in liq) v Advanced Building & Construction Limited (in liq) (No 2) [2022] FCA 781. If those matters are established the foreign proceeding must be recognised, unless recognition would be manifestly contrary to public policy: Kapila, in the matter of Edelsten [214] FCA 1112 at [22]; Abate, in his capacity as Liquidator of Onix capital SA [2017] FCA 751 at [19]. 21 Article 21(1) of the Model Law provides that upon recognition of a foreign proceeding, whether main or non-main, where necessary to protect the assets of the debtor or the interests of creditors, the court may at the request of the foreign representative, grant any appropriate relief including relevantly: … (e) Entrusting the administration or realization of all or part of the debtor's assets located in this State to the foreign representative of another person designated by the court; … (g) Granting any additional relief that may be available to [a liquidator] under the laws of this State.

Recognition of the Hong Kong Proceeding 22 Turning first to the procedural criteria, I was satisfied that the plaintiffs established that: (1) their application was accompanied by certified copies of the orders made by the High Court of Hong Kong commencing the foreign proceeding and appointing the plaintiffs as liquidators which satisfied the requirements of Art 17(1)(c) and Art 15(2) of the Model Law; (2) they are not aware of any proceeding in relation to Aoji other than this proceeding and the proceeding in the High Court in which Aoji was wound up and that there has been no appointment of a receiver, controller or managing controller of Aoji or in relation to its property thus satisfying the requirements of Art 15(3) of the Model Law and s 13 of the Act; and (3) there has been no appointment of a receiver, controller or managing controller of Aoji or in relation to its property thus satisfying the requirements of s 13 of the Act. 23 It is then necessary to consider if the plaintiffs have established the status based criteria. 24 The terms "foreign proceeding" and "foreign representative" are defined in Art 2 (see [13] above). 25 It is clear that the Hong Kong Proceeding is a "foreign proceeding" within the meaning of that term in Art 2(a) of the Model Law. It is a collective judicial proceeding in that Court for the purpose of subjecting Aoji's assets to supervision by that court for the purpose of liquidation. The plaintiffs were appointed for that purpose as provisional liquidators and liquidators by orders made in that proceeding. 26 I was also satisfied that the plaintiffs are each a "foreign representative" as that term is defined in Art 2(d) of the Model Law. They have been appointed to administer the liquidation of Aoji's assets. 27 As set out at [14] above, this Court is specified as a court competent to perform the functions referred to in the Model Law for the purposes of Art 4 of the Model Law. 28 It follows that the status based criteria set out in Art 17(1)(a), (b) and (d) of the Model Law have been met. 29 That being so, the Court is required to recognise the Hong Kong Proceeding as a foreign proceeding. Relevantly, there is nothing to suggest that its recognition would be contrary to public policy. 30 As set out at [18] above, Art 17(2) of the Model Law provides that a foreign proceeding must be recognised as a "foreign main proceeding" if it is taking place in the State where the debtor had its centre of main interests. 31 Aoji's registered office is in Hong Kong. In the absence of proof to the contrary, of which there is none, there is a presumption that Hong Kong is Aoji's centre of main interests. Thus the Hong Kong Proceeding is a foreign main proceeding and is to be recognised as such.

Additional Relief under Art 21 of the Model Law 32 By their interlocutory process the plaintiffs also sought additional relief under Art 21(e) and (g) of the Model Law referred to at [21] above. In particular the plaintiffs sought orders that the administration, realisation and distribution of Aoji's assets located in Australia be entrusted to them and that they have available to them all powers available to a liquidator of a corporation under the Corporations Act. 33 The plaintiffs submitted, and I accepted, that the additional relief under Art 21 of the Model Law was sought to give effect to the recognition of the Hong Kong Proceeding and to enable the plaintiffs to take steps identified by Ms Chua including to investigate whether Aoji received any income from agency contracts it entered into with education providers in Australia and to undertake, if necessary, any further investigation. Relevantly, it seems that a former director of Aoji resides in Australia. 34 Given the circumstances described by Ms Chua, the proposed investigations and the fact that all of Aoji's creditors are located in Hong Kong, I was satisfied that it was appropriate to grant the additional relief sought pursuant to Art 21 and that the interests of creditors and other interested persons, including Aoji, would be adequately protected under the Hong Kong Proceeding.

conclusion 35 For those reasons I made the orders sought by the plaintiffs in their originating application and their interlocutory process. I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Markovic.