Georges (in his capacity as joint and several liquidator of Sonray Capital Markets Pty Ltd (in liq)) v Seaborn International Pty Ltd (as trustee for the Seaborn Family Trust)

The appeals involve Mr Georges and Mr Lindholm, in their capacities as joint and several liquidators of Sonray Capital Markets Pty Ltd (in liquidation), and Eagle Securities Limited. The disputes stem from defalcations on client accounts held with Sonray, a financial services provider. The central issue revolves around the ownership of shares acquired by Sonray on behalf of Efax, specifically whether these shares should be included in the pooling of assets as per the rules concerning deficient mixed trust funds. The primary legal question is whether Efax and Sonray had an agency or contractual relationship that could affect the ownership of the shares. Additionally, the court had to consider whether the purchase price of the shares was paid into a tainted segregated account by Efax, and if the shares were effectively paid for using funds from this account. The case also addressed the broader question of what constitutes payment and whether there was a legitimate or lawful appropriation of funds. The equitable interests of contributors to the tainted segregated account in the shares were also examined.

The court found that the liquidators were justified in directing Saxo to liquidate the Saxo Shares and pooling these shares into the Client Fund. The appeals were allowed, and the directions for pooling sought by the liquidators were made. The reasoning focused on the nature of the relationship between Efax and Sonray, the payment method for the shares, and the application of tracing principles to determine equitable interests. The court concluded that the liquidators' argument was sound, and it was unnecessary to consider the appeal brought by Eagle Securities Ltd. The final orders mandated that the liquidators of Sonray Capital Markets Pty Ltd (in liq) could direct Saxo to liquidate the Saxo Shares and pool these shares into the Client Fund, to be disbursed according to the specified order.