Jong (Trustee) v Au, in the matter of Au

The case of Jong (Trustee) v Au, in the matter of Au, involved an application for the recognition of a Hong Kong bankruptcy proceeding in Australia under the Cross-Border Insolvency Act 2008 (Cth) and the Model Law on Cross-Border Insolvency of the United Nations Commission on International Trade Law. The applicants, Jong Yat Kit and So Man Chun, sought recognition of the Hong Kong proceeding as a foreign main proceeding and the granting of associated relief. The central issue before the court was whether the Hong Kong proceeding should be recognised as a foreign main proceeding and if the applicants should be granted relief as trustees in bankruptcy for the respondent, Au Ho Wah.

The court determined that the Hong Kong proceeding was indeed a foreign main proceeding under the Model Law. This decision was based on the recognition of the Hong Kong proceeding as a foreign proceeding under section 6 of the Act and Article 15 and Article 17(1) of the Model Law. The court also found that the applicants were entitled to the relief sought, which included a stay on actions against the respondent's assets, the administration of the respondent's assets in Australia, and the application of the Bankruptcy Act to the applicants' actions. The court held that the recognition of the foreign proceeding and the granting of relief would facilitate cooperation between the Australian and Hong Kong courts, prevent fragmentation of the respondent’s estate, and protect the interests of creditors.

Consequently, the Federal Court granted the applicants’ application, recognising the Hong Kong proceeding as a foreign main proceeding and providing the associated relief. The court ordered that actions against the respondent's assets in Australia be stayed, the administration of the respondent's assets in Australia be entrusted to the applicants, and the respondent be subject to the obligations of a bankrupt under the Bankruptcy Act. The court also mandated the service of notices to the respondent and creditors and directed the publication of the orders in Australian newspapers. The costs of the proceeding were to be treated as costs of the bankruptcy of the respondent.