Georges v Seaborn International (Trustee), in the matter of Sonray Capital Markets Pty Ltd (in liq)

The case before the court involved a dispute regarding the liquidation of Sonray Capital Markets Pty Ltd, a financial services company. The liquidators sought direction to pool the balance of segregated accounts into a single account, convert foreign currency balances into Australian dollars for this purpose, and treat foreign currency as money under the Corporations Regulations. They also sought to set off positive account balances against negative balances owned by the same client. The court needed to determine whether these actions were justified. The dispute arose from substantial unauthorized withdrawals and trading by Sonray, which resulted in significant losses. The court needed to decide whether the liquidators could proceed with pooling the accounts, converting foreign currency, and setting off balances, considering the conflicting claims from various investors.

The court considered whether the liquidators were justified in pooling the accounts and converting foreign currency into Australian dollars for this purpose. The court examined the definition of "money" under the Corporations Regulations and whether foreign currency could be treated as such. The court also needed to determine whether the liquidators could set off positive balances against negative balances in accounts owned by the same client, subject to confirming the account balance in Sonray’s records. Furthermore, the court needed to address the broader issue of how to calculate the rateable entitlements of the various investors and resolve the claims over the mixed trust funds.

The court found that the liquidators were justified in pooling the accounts and converting foreign currency into Australian dollars for this purpose, as foreign currency could be considered "money" under the regulations. The court held that the liquidators could set off positive balances against negative balances in accounts owned by the same client, subject to verifying the account balance in Sonray’s records. The court provided detailed guidance on how to calculate the rateable entitlements of the various investors and resolve claims over the mixed trust funds. The decision allowed the liquidators to proceed with the proposed actions, subject to the conditions set out in the judgment.

The court granted the liquidators the directions sought, allowing them to pool the segregated accounts, convert foreign currency into Australian dollars, and set off positive balances against negative balances, subject to verifying account balances. The court also provided detailed guidance on how to calculate the rateable entitlements of the various investors and resolve claims over the mixed trust funds. This decision allowed the liquidators to manage the complex and contentious claims from various investors effectively.