Chen v Blockchain; Abel v Blockchain Global Ltd - [2022] VSC 93

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

S ECI 2020 03554

JIN CHEN	Plaintiff/Defendant by Counterclaim
v
BLOCKCHAIN GLOBAL LTD (ABN 82 601 628 497) & ANOR (according to the attached Schedule)	Defendants/Plaintiffs by Counterclaim

S ECI 2021 03329

LANCE ABEL & ORS (according to the attached Schedule)	Plaintiffs
v
BLOCKCHAIN GLOBAL LTD (ABN 82 601 628 497) & ORS (according to the attached Schedule)	Defendants

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JUDGE:	ATTIWILL J
WHERE HELD:	Melbourne
DATE OF HEARING:	1 December 2021
DATE OF RULING:	9 December 2021 (oral reasons); 28 February 2022 (revised written reasons)
CASE MAY BE CITED AS:	Chen v Blockchain Global Ltd; Abel v Blockchain Global Ltd
MEDIUM NEUTRAL CITATION:	[2022] VSC 93

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PRACTICE AND PROCEDURE – Applications to stay each proceeding against all defendants pursuant to s 440D of the Corporations Act 2001 (Cth) (‘Corporations Act’) – One defendant in voluntary administration – All parties accepted that the proceedings cannot be proceeded with against that defendant, except with the administrators’ consent or leave of the Court, pursuant to s 440D of the Corporations Act – Proceedings against the other defendants not a proceeding ‘against the company’ within the meaning of s 440D of the Corporations Act - Applications dismissed.

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S ECI 2020 03554

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	S Horgan QC with E Nikou Madalin	KCL Law
For the First Defendant	A Silver	SBA Law
For the Second Defendant	S Jenkins	Neo Legal

S ECI 2021 03329

APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	V Andreou (solicitor)	Christopher James Lawyers
For the First Defendant	A Silver	SBA Law
For the Fifth Defendant	S Horgan QC with E Nikou Madalin	KCL Law

HIS HONOUR:

INTRODUCTION

On 22 November 2021, Blockchain Global Ltd (‘Blockchain’), by summonses filed in proceeding no S ECI 2021 03329 (‘the Abel proceeding’) and in proceeding no S ECI 2020 03554 (‘the Chen proceeding’), applied for orders in each proceeding that the proceeding is stayed pursuant to s 440D of the Corporations Act 2001 (Cth) (‘Corporations Act’) and that the proceeding be otherwise adjourned to a date not before 25 February 2022.

PARTIES’ MATERIAL

The parties relied upon written submissions and affidavits on the applications as follows:

(a)Blockchain (first defendant in the Abel proceeding and the Chen proceeding): submissions dated 30 November 2021 (together with a bundle of authorities), affidavits of Mr Yeo, an administrator of Blockchain, sworn 25 November 2021 in each proceeding and an affidavit of Mr Hogg, formerly the solicitor for both Blockchain and Mr Guo, affirmed 2 July 2021 in the Chen proceeding;
(b)Plaintiffs in the Abel proceeding: submissions dated 30 November 2021 (together with a bundle of authorities) and an affidavit of Mr Stathopoulos, solicitor for the plaintiffs, sworn 13 September 2021;
(c)Mr Chen (fifth defendant in the Abel proceeding and the plaintiff in the Chen proceeding): submissions dated 30 November 2021 (together with a bundle of authorities) and tender bundles of documents dated 25 November 2021 in each proceeding…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Chen v Blockchain; Abel v Blockchain Global Ltd

Details

AGLC: Chen v Blockchain; Abel v Blockchain Global Ltd [2022] VSC 93
Case: [2022] VSC 93
Decision Date: 9 December 2021 (oral reasons); 28 February 2022 (revised written reasons)

CaseChat Overview and Summary

The applicants, Chen and Abel, sought orders to stay the proceedings against Blockchain Global Ltd and Blockchain Ltd pursuant to section 440D of the Corporations Act 2001 (Cth). Blockchain Ltd was in voluntary administration, and all parties agreed that the proceedings could not continue against it except with the administrators’ consent or leave of the Court. However, Blockchain Global Ltd was not in administration, leading to the dispute over whether the proceedings against it could be stayed.

The primary legal issue before the court was whether the proceedings against Blockchain Global Ltd constituted a proceeding "against the company" within the meaning of section 440D of the Corporations Act. The court had to determine if the stay applied to all defendants or only to the one in administration. The applicants argued that the proceedings against Blockchain Global Ltd should be stayed due to the connection with Blockchain Ltd, while Blockchain Global Ltd contended that the stay should not apply to it.

The court found that section 440D of the Corporations Act was intended to protect companies in administration and did not extend to proceedings against other defendants who were not in administration. The court held that the proceedings against Blockchain Global Ltd were not a proceeding "against the company" within the meaning of the Act. Consequently, the applications to stay the proceedings against Blockchain Global Ltd were dismissed.

The court's decision clarified that the stay provisions under section 440D of the Corporations Act apply specifically to proceedings against a company in administration and do not extend to other defendants. As a result, the applications to stay the proceedings against Blockchain Global Ltd were dismissed, allowing the proceedings against it to continue.

Orders