Re Blockchain Tech Pty Ltd
[2024] VSC 690
•12 November 2024
| IN THE SUPREME COURT OF VICTORIA | Unrestricted |
| AT MELBOURNE COMMERCIAL COURT CORPORATIONS LIST |
S ECI 2019 02711
IN THE MATTER OF BLOCKCHAIN TECH PTY LTD (ACN 623 201 945)
B E TW E EN :
| JIN CHEN | Plaintiffs/Defendants by |
| (and another according to the attached Schedule) | Counterclaim |
| v | |
| WEI ZHAO | Defendants/Plaintiffs by |
| (and others according to the attached Schedule) | Counterclaim |
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| JUDGE: | Attiwill J |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 14, 19, 20, 21, 22, 26, 27, 28 February 2024, 1, 4, 5, 6, 7, 12, 13, 14, 18, 19, 25 March 2024 and 8, 16, 17 April 2024 |
| DATE OF JUDGMENT: | 12 November 2024 |
| CASE MAY BE CITED AS: | Re Blockchain Tech Pty Ltd |
| MEDIUM NEUTRAL CITATION: | [2024] VSC 690 |
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PRACTICE AND PROCEDURE – Two defendants appeared at trial until the 17th day of trial – No other defendants appeared at the trial – Consequences of non-appearance – Hacer Group
Pty Ltd v Euro Façade Tech Export Sdn Bhd [2022] VSC 373; Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279; Ying v Perpetual Trustee Victoria Ltd [2012] VSCA 316 applied.
CORPORATIONS – Oppression – Company established initially with two equal shareholders and two directors – Whether a director removed without his consent – Whether a director/shareholder misappropriated monies of the company – Whether a director issued
further shares in the company to third parties, including a company associated with the
director, without consent and in diminution of the other original shareholder’s shareholding – Oppression established – Whether accounts should be adjusted – Whether the company
should be wound up on the just and equitable ground – Whether person has standing to apply for an order pursuant to s 233 of the Corporations Act 2001 (Cth) – Order for accounts to be adjusted and the company wound up – ss 232, 233, 461(1)(k), 462(2)(c) of the
Corporations Act 2001 (Cth); Read-Zorn v Origin Distillers Group Pty Ltd [2023] FCA 280; Exton v Extons Pty Ltd & Ors (2017) 53 VR 520.
________________________________________________________________________________________
CONTRACT – Whether persons agreed to lend cryptocurrency, Bitcoin, to a company, to be used for working capital or contributed the Bitcoin to obtain equity – Held persons agreed to lend Bitcoin to the company to be used for working capital – Held that the terms of loans
concerning repayment likely the subject of agreement but no evidence of what was agreed.
BAILMENT – Whether an interest in Bitcoin may be subject of a bailment – Whether an interest in Bitcoin is property – Whether an interest in Bitcoin is held in possession – Held that an interest in Bitcoin is property but is intangible and is not held in possession – Held an interest in Bitcoin cannot be the subject of bailment – Yanner v Eaton (1944) 68 CLR 261;
National Trustees Executors and Agency Company Limited v Federal Commissioner of Taxation
(1954) 91 CLR 540; AA v Persons Unknown [2019] EWHC 3556 (Comm); Ruscoe v Cryptopia
Ltd (in liq) [2020] 2 NZLR 809; Tulip Trading Ltd v Bitcoin Association for BSV [2023] EWCA Civ
83; D’Aloia v Persons Unknown [2024] EWHC 2342 (Ch) considered and applied.
PRACTICE AND PROCEDURE – A defendant did not appear in the proceeding or at trial – Allegations of fact taken to be admitted – Whether claims made in closing submissions against that defendant are made in the pleadings – Where claims not made in the pleadings and plaintiff did not seek leave to amend and to serve an amended pleading – Held that the plaintiff not entitled to make the claims – Held, in any event, claims not established.
EQUITY – Whether a person is a volunteer who received misappropriated monies – Whether a person is liable to account for benefit received – Held person is not a volunteer – Black v S.
Freedman & Company (1910) 12 CLR 105 and Heperu Pty Ltd v Belle (2009) 76 NSWLR 230 applied.
TRUSTS – Whether there is an express trust in relation Bitcoin – Whether the trustee acted in breach of trust – Held there was an express trust and that the trustee acted in breach of her duties as trustee – Held plaintiff entitled to equitable compensation – Held trustee breached
her duties not in selling the assets of the trust but in not remitting the proceeds from the
sale – Held in the circumstances of this case the appropriate equitable compensation was
equivalent to the proceeds misappropriated by the trustee and not the value of the assets at
the date of judgment – LL UP Pty Ltd v Kegland Distribution Pty Ltd [2024] VSC 651; Youyang
Pty Ltd v Minter Ellison Morris Fletcher (2003) 212 CLR 484; Break Fast Investments Pty Ltd v
Rigby Cooke Lawyers (A Firm) [2022] VSCA 118 applied.
CORPORATIONS – Oppression – Multiple instances of oppression – Held that oppression established – Order for transfer of shares by minority shareholder to majority shareholder refused – No evidence of valuation – Order for accounts to be adjusted refused and the companies wound up – ss 232, 233 and 461(1)(k) of the Corporations Act 2001 (Cth).
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________________________________________________________________________________________
| APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs/Defendants by | Mr G P Harris KC with | KCL Law |
| Counterclaim | Mr C Hibbard | |
| For the First Defendant/First | In person (up to and | N/A |
| Plaintiff by Counterclaim | including 14 March 2024) | |
| For the Second Defendant/ | No appearance | N/A |
| Second Plaintiff by Counterclaim | ||
| For the Third Defendant | No appearance | N/A |
| For the Fourth Defendant | No appearance | N/A |
| For the Fifth Defendant | No appearance | N/A |
| For the Sixth Defendant | No appearance | N/A |
| For the Seventh Defendant/ | The First Defendant, Ms Wei | N/A |
| Third Plaintiff by Counterclaim | Zhao (pursuant to leave granted) (up to and including 14 March | |
| 2024) | ||
| For the Eighth Defendant | No appearance | N/A |
| For the Ninth Defendant | No appearance | N/A |
| For the Tenth Defendant | No appearance | N/A |
| For the Eleventh Defendant | No appearance | N/A |
| For the Thirteenth Defendant | No appearance | N/A |
| For the Fourteenth Defendant | No appearance | N/A |
| For the Fifteenth Defendant | No appearance | N/A |
________________________________________________________________________________________
TABLE OF CONTENTS
| A. | INTRODUCTION ........................................................................................................................ 1 |
| B. | PARTIES AND OTHER RELEVANT PERSONS AND ENTITIES ................................... 1 |
| C. | MS ZHAO’S NON-ATTENDANCE AT THE TRIAL ........................................................... 9 |
Ms Zhao’s reasons for non-attendance ...................................................................................... 9
Consequences of Ms Zhao’s non-attendance at trial ............................................................. 11
| D. | WITNESSES ................................................................................................................................ 13 |
Mr Chen ........................................................................................................................................ 13
| ||
| Ms Ding ........................................................................................................................................ 14 Mr Bailey ...................................................................................................................................... 15 Mr McLeish .................................................................................................................................. 15 |
Ms Zhao’s and Galaxy Crowdfunding’s witnesses ............................................................... 15
| E. | APPLICABLE LAW: OPPRESSION, WINDING-UP AND CORRECTION OF THE |
REGISTER ................................................................................................................................... 15
| Oppression ................................................................................................................................... 15 Winding up on the just and equitable ground ........................................................................ 20 |
Correction of a company’s register ........................................................................................... 23
| F. | CRYPTOCURRENCY ................................................................................................................ 25 |
| G. | GALAXY CROWDFUNDING ................................................................................................. 28 |
What were the terms of the agreement between Mr Chen and Ms Zhao concerning Galaxy
Crowdfunding? Did the alleged Debt to Equity Agreement form part of the agreement? .. 28
Pleadings ............................................................................................................................. 28
Background......................................................................................................................... 30
Submissions ........................................................................................................................ 33
Analysis ............................................................................................................................... 33
Did Ms Zhao appoint Mr Hu as a director of Galaxy Crowdfunding on 16 April 2019 without
Mr Chen’s consent and/or remove Mr Chen as a director of Galaxy Crowdfunding on 9
May 2019 without his consent? ........................................................................................... 37
Pleadings ............................................................................................................................. 37
Background......................................................................................................................... 37
Submissions ........................................................................................................................ 40
Analysis ........................................................................................................................................ 41
Did Ms Zhao procure the issue of further shares in Galaxy Crowdfunding to other persons
without the consent of Mr Chen and/ or in contravention of the constitution? .................. 44
Pleadings ............................................................................................................................. 44
Background......................................................................................................................... 44
Submissions ........................................................................................................................ 57
Analysis ............................................................................................................................... 59
Did Ms Zhao transfer $32,674 to her personal bank account without the consent of Mr Chen? . 60
Pleadings ............................................................................................................................. 60
Background and submissions .......................................................................................... 61
Analysis ............................................................................................................................... 61
Did the conduct alleged in the points of claim at paragraph 37 cause a diminution of the value of
Mr Chen’s shareholding interest in Galaxy Crowdfunding? .............................................. 62
Pleadings ............................................................................................................................. 62
i
Background .................................................................................................................................. 62
Submissions ........................................................................................................................ 63
Analysis ............................................................................................................................... 63
Did Ms Zhao engage in any conduct that was oppressive to, unfairly prejudicial to and unfairly
discriminatory against Mr Chen, within the meaning of s 232 of the Corporations Act? .. 65
Pleadings ............................................................................................................................. 65
Submissions ........................................................................................................................ 65
Analysis ............................................................................................................................... 66
Is Mr Chen entitled to relief pursuant to ss 175, 233(1) and/or 461(1)(k) of the Corporations
Act? ...................................................................................................................................... 66
Pleadings ............................................................................................................................. 66
Submissions ........................................................................................................................ 67
Analysis ............................................................................................................................... 68
Issue of Galaxy Crowdfunding shares ............................................................... 69
Adjustment of the accounts .................................................................................. 69
Winding up? ........................................................................................................... 70
| H. | BLOCKCHAIN TECH AND OTHER ENTITIES ................................................................ 71 |
Did Mr Chen and Ms Zhao enter into the alleged Blockchain Business Agreement? Did Ms
Zhao agree to contribute 66.2 Bitcoin for the purpose of producing working capital for the alleged Blockchain Business? Did Mr Chen and Ms Zhao enter into the alleged Bitcoin
Loan Agreement? ................................................................................................................. 71
Pleadings ............................................................................................................................. 71
Background .................................................................................................................................. 73
Submissions.................................................................................................................................. 84
Analysis ........................................................................................................................................ 89
Did Mr Chen and Ms Zhao enter into the alleged Blockchain Business Agreement? .................................................................................................................................. 89 Operation, equity percentages and roles in the companies and businesses 90 Loans of Bitcoin .................................................................................................... 91
Did Ms Zhao agree to contribute 66.2 Bitcoin for the purpose of producing
working capital for the alleged Blockchain Business? ..................................... 95
Did Mr Chen and Ms Zhao enter into the alleged Bitcoin Loan Agreement? .......... 96
Did Ms Zhao act as Chief Financial Officer of the Blockchain Business and/or conduct activities
consistent with having that role? ......................................................................................... 98
Pleadings ............................................................................................................................. 98
Background......................................................................................................................... 98
Submissions ...................................................................................................................... 100
Analysis ............................................................................................................................. 100
Did Ms Zhao contribute any funds to the Blockchain Business and/or Blockchain Tech? If so, in
what amount? ..................................................................................................................... 100 Pleadings ........................................................................................................................... 100
Background....................................................................................................................... 101
Submissions ...................................................................................................................... 101
Analysis ...................................................................................................................................... 102 Did Blockchain Tech deliver 36 of 66.2 Bitcoin to Ms Zhao pursuant to the alleged Bailment? 103
Pleadings ........................................................................................................................... 103
Background....................................................................................................................... 103
Submissions ...................................................................................................................... 104
Applicable law ................................................................................................................. 105
ii
Bailment ............................................................................................................................ 105
Is an interest in Bitcoin property? ................................................................................. 107
Analysis ...................................................................................................................................... 126
Did Ms Zhao breach the alleged Bailment by not returning the 36 Bitcoin and or transferring
them? Is Blockchain Tech entitled to relief against Ms Zhao for breach of the Bailment? 127
Is Mr Zhang liable to Blockchain Tech in respect of some or all of the 36 Bitcoin? .................... 127
Pleadings ........................................................................................................................... 127
Submissions................................................................................................................................ 128
Applicable law ........................................................................................................................... 128
Analysis ............................................................................................................................. 130
Is any other person liable to Blockchain Tech in respect of some or all of the 36 Bitcoin? .......... 132
Pleadings ........................................................................................................................... 132
Background....................................................................................................................... 133
Submissions ...................................................................................................................... 133
Analysis ............................................................................................................................. 134
Did Blockchain Tech own the 25 Bitcoin provided to Ms Zhao in March and April 2019? ....... 134
Pleadings ........................................................................................................................... 134
Background....................................................................................................................... 135
Submissions ...................................................................................................................... 135
Analysis ...................................................................................................................................... 136
Did Blockchain provide the 25 Bitcoin to Ms Zhao for the alleged 25 Bitcoin Conversion
Purpose? ............................................................................................................................. 136
Pleadings ........................................................................................................................... 136
Background....................................................................................................................... 139
Submissions ...................................................................................................................... 141
Applicable law ........................................................................................................................... 143
Analysis ............................................................................................................................. 147
Did Ms Zhao act in accordance with the alleged 25 Bitcoin Conversion Purpose? .................... 150
Pleadings ........................................................................................................................... 150
Background ................................................................................................................................ 152
Submissions ...................................................................................................................... 152
Analysis ...................................................................................................................................... 153
Is Blockchain Tech entitled to relief against Ms Zhao? ............................................................... 155
Pleadings ........................................................................................................................... 155
Submissions ...................................................................................................................... 155
Analysis ............................................................................................................................. 158
Paragraph 1 of the plaintiffs’ proposed order for final relief ....................... 158
Paragraph 3(a) of the plaintiffs’ proposed order for final relief .................. 158
Paragraph 4 of the plaintiffs’ proposed order for final relief ....................... 162
If Blockchain Tech provided the 25 Bitcoin to Ms Zhao for the alleged 25 Bitcoin Conversion
Purpose, did Mr Zhang receive proceeds from the sale of the 25 Bitcoin as a volunteer and/
or with notice of Blockchain Tech’s interest? ..................................................................... 162
Pleadings ........................................................................................................................... 162
Submissions ...................................................................................................................... 163
Applicable law ................................................................................................................. 163
Analysis ............................................................................................................................. 163
Is Blockchain Tech entitled to relief against Mr Zhang? ............................................................. 164
Pleadings ........................................................................................................................... 164
Submissions ...................................................................................................................... 164
iii
Analysis ............................................................................................................................. 165
Did Ms Zhao use funds for non-business purposes as follows: Blockchain Tech to Ms Zhao’s
accounts: $119,230 and Ms Zhao’s credit card accounts: $16,444.23 .............................. 167
Pleadings ........................................................................................................................... 167
Background....................................................................................................................... 167
Submissions ...................................................................................................................... 167
Analysis ............................................................................................................................. 168
Did Ms Zhao use funds for non-business purposes as follows: Dashboard to Ms Zhao’s accounts: $124,340 and Ms Zhao’s credit card accounts: $9,000 ...................................................... 170
Pleadings ........................................................................................................................... 170
Background....................................................................................................................... 170
Submissions ...................................................................................................................... 170
Analysis ............................................................................................................................. 171
Did Ms Zhao use funds for non-business purposes as follows: Digital Silo to Ms Zhao’s
accounts: $31,167 and Ms Zhao’s credit card accounts: $101.84 ..................................... 172
Pleadings ........................................................................................................................... 172
Background....................................................................................................................... 173
Submissions ...................................................................................................................... 173
Analysis ............................................................................................................................. 173
Did Ms Zhao use funds for non-business purposes as follows: Blockchain Tech to Apex:
$168,886.15 and Digital Silo to Apex: $9,767 ................................................................... 175
Pleadings ........................................................................................................................... 175
Background....................................................................................................................... 175
Submissions ...................................................................................................................... 175
Analysis ............................................................................................................................. 176
Did Ms Zhao use funds for non-business purposes as follows: Blockchain Tech to account of
Galaxy Crowdfunding: $24,945 ......................................................................................... 176
Pleadings ........................................................................................................................... 176
Background....................................................................................................................... 176
Submissions ...................................................................................................................... 177
Analysis ............................................................................................................................. 178
Did Ms Zhao fail to keep adequate books and records of the Blockchain Business? .................... 178
Pleadings ........................................................................................................................... 178
Background....................................................................................................................... 179
Submissions................................................................................................................................ 180
Analysis ............................................................................................................................. 181
Did Ms Zhao void or delete entries in the general ledger of Blockchain Tech? ........................... 181
Pleadings ........................................................................................................................... 181
Background....................................................................................................................... 181
Submissions ...................................................................................................................... 183
Analysis ............................................................................................................................. 183
Did Ms Zhao deny access to the books and records in the alleged Blockchain Business? ........... 184
Pleadings ........................................................................................................................... 184
Background....................................................................................................................... 184
Submissions ...................................................................................................................... 186
Analysis ...................................................................................................................................... 186
Did Ms Zhao remove Mr Chen as a director of Coin Loop, Digital Galaxy and/ or Digital Silo
without his consent? .......................................................................................................... 187
Pleadings ........................................................................................................................... 187
iv
Background....................................................................................................................... 188
Submissions ...................................................................................................................... 191
Analysis ............................................................................................................................. 191
Did Ms Zhao remove Mr Chen’s access to software for Blockchain Tech and Dashboard
Management? ..................................................................................................................... 192
Pleadings ........................................................................................................................... 192
Background....................................................................................................................... 192
Submissions ...................................................................................................................... 192
Analysis ............................................................................................................................. 193
Did Ms Zhao not attend a shareholders’ meeting on 31 May 2019 of Blockchain Tech, Dashboard
Management, Coin Loop, Digital Galaxy, and Digital Silo? ............................................ 193
Pleadings ........................................................................................................................... 193
Background....................................................................................................................... 193
Submissions ...................................................................................................................... 196
Analysis ............................................................................................................................. 196
Did Ms Zhao conduct a meeting on 3 June 2019 as alleged in paragraph 86B of the further
amended points of claim? ................................................................................................... 196
Pleadings ........................................................................................................................... 196
Background....................................................................................................................... 197
Submissions ...................................................................................................................... 199
Analysis ............................................................................................................................. 200
Did Ms Zhao remove 30 Octowallets from the Mulgrave office? ............................................... 201
Pleadings ........................................................................................................................... 201
Background....................................................................................................................... 201
Submissions ...................................................................................................................... 201
Analysis ............................................................................................................................. 202
Did Mr Chen suffer damage as a result of the alleged breaches by Ms Zhao in paragraphs 68 to
89E of amended points of claim? ........................................................................................ 202
Pleadings ........................................................................................................................... 202
Submissions ...................................................................................................................... 203
Analysis ............................................................................................................................. 203
Did Ms Zhao engage in any conduct that was oppressive to, unfairly prejudicial to and unfairly
discriminatory against Mr Chen within the meaning of s 232 of the Corporations Act by
reason of the matters pleaded in paragraphs 68 to 89E of points of claim? ....................... 204
Pleadings ........................................................................................................................... 204
Background....................................................................................................................... 204
Submissions ...................................................................................................................... 204
Applicable law ................................................................................................................. 205
Analysis ............................................................................................................................. 205
Is Mr Chen entitled to relief pursuant to s 233(1) or 461(1)(k) of the Corporations Act? ......... 206
Pleadings ........................................................................................................................... 206
Applicable law ........................................................................................................................... 207
Submissions ...................................................................................................................... 208
Analysis ...................................................................................................................................... 210
| I | COUNTERCLAIMS ................................................................................................................. 213 |
| J. | CONCLUSION ......................................................................................................................... 214 |
K. ORDERS .................................................................................................................................... 215
v
HIS HONOUR:
| A. | INTRODUCTION |
1 This proceeding concerns disputes between a Mr Jin Chen and a Ms Wei Zhao arising
from their failed dealings involving Blockchain technology and cryptocurrency.[1]
[1] For convenience, I set out the relevant background in relation to each issue to be determined in these reasons rather than setting it out in a single narrative.
2 On 12 February 2024, I made an order granting leave to Ms Zhao to defend the
proceeding on behalf of the seventh defendant, Galaxy Crowdfunding Pty Ltd
(Galaxy Crowdfunding). She appeared on her own behalf, and on behalf of Galaxy
Crowdfunding, on each day of trial until the seventeenth day on 18 March 2024. She
did not appear on that day or on any of the following days of trial. The trial proceeded
and concluded in the absence of Ms Zhao. This is the subject of a number of rulings.
No other defendants appeared at the trial.
| B. | PARTIES AND OTHER RELEVANT PERSONS AND ENTITIES |
3 Mr Chen, the first plaintiff/first defendant by counterclaim, is a software developer.
4 Blockchain Tech Pty Ltd (Blockchain Tech), the second plaintiff/second defendant by
counterclaim, was incorporated on 3 December 2017 as Blockchain HR Pty Ltd with
Mr Chen as sole director. Its name was changed to ‘Blockchain Tech Pty Ltd’ on 12
December 2017. Ms Zhao was the company secretary from 17 January 2019 to 19 June
2019. Mr Chen gave evidence that Blockchain Tech was incorporated for the purpose
of, inter alia, developing software. From April 2018, Blockchain Tech’s office was
based at 6 Nexus Court in Mulgrave (Mulgrave Office). Mr Chen holds 70% of the
shares and Livia Holdings Pty Ltd (Livia Holdings) holds 30% of the shares in
Blockchain Tech. Mr Chen was a sole shareholder in Blockchain Tech until about 7
August 2018. Mr Chen became a shareholder again in May 2023 and prior to that time
it was common ground that Mr Chen beneficially owned 70% of the interest in
Blockchain Tech.
5 Ms Zhao, the first defendant/first plaintiff by counterclaim, is a chartered accountant.
6 Mr Hu, formerly the second defendant/second plaintiff by counterclaim, was
employed by Galaxy Crowdfunding. Mr Hu did not appear at the trial and the
proceeding was dismissed against him on the second day of the trial.
7 Dashboard Management Pty Ltd (Dashboard Management), the third defendant, was
incorporated on 22 December 2017 with Ms Shuyuan Yao as director and company
secretary. Ms Yao is Mr Chen’s mother. During the trial, Dashboard Management was
not represented and did not appear. The first, second, seventh, eighth, ninth and tenth
defendants/plaintiffs by counterclaim (the Zhao parties) admitted that ‘Mr Chen has
at all material times (in reality) beneficially owned and controlled 70% of the interest
in… Dashboard Management’. Christopher James Lawyers (who also previously
represented the Zhao parties) previously represented Dashboard Management, but
ceased to act for it on 25 October 2019. Dashboard Management has received
correspondence sent to its last known email address for service being Mr Chen’s email
address of [email protected]. On 26 April 2018, Ms Yao ceased to be
secretary and director, and Ms Zhao was appointed as secretary and Mr Chen was
appointed as director. On 7 May 2018, Mr Chen ceased to be a director and Ms Zhao
was appointed as director. On 28 December 2018, Ms Zhao ceased to be a director and
Mr Chen was appointed director. From 15 March 2019, Dashboard Management had
the business name ‘Jinance’. On 4 June 2019, Mr Chen ceased being a director, and
Ms Yuan (Ashley) Wang, Ms Jiale (Daisy) He and Ms Zhao were appointed directors
of Dashboard Management. Ms Wang and Ms He ceased to be directors on 19 June
2019. On 9 September 2019, Ms Zhao ceased to be a director and on 10 September 2019,
she ceased to be company secretary. On 20 September 2019, Mr Chen was appointed
director. Mr Chen gave evidence that Dashboard Management was incorporated to
operate a cryptocurrency exchange, which later became known as ‘Jinance’. Mr Chen
holds 70% of shares and Livia Holdings holds 30% of shares in Dashboard
Management. Mr Chen became a shareholder in May 2023 and prior to that time it
| In the matter of Blockchain Tech Pty Ltd | 2 | JUDGMENT |
was common ground that Mr Chen beneficially owned 70% of the interest in
Dashboard Management.
8 Coin Loop Pty Ltd (Coin Loop), the fourth defendant, was incorporated on 9 April
2018 with Mr Chen as director. During the trial, Coin Loop was not represented and
did not appear. The Zhao parties admitted prior to trial that ‘Mr Chen has at all
material times (in reality) beneficially owned and controlled 70% of the interest in…
Coin Loop.’ Coin Loop was previously represented by Christopher James Lawyers
who ceased to act for it on 25 October 2019. Coin Loop has received correspondence
sent to its last known email address for service being Mr Chen’s email address of
[email protected]. Mr Chen was initially sole director from 9 April 2018
until ceasing on 16 May 2018. Ms Zhao was sole director and secretary from 16 May
2018 to 9 September 2019. Ms Zhao was also company secretary from 9 April 2018 to
9 September 2019. Mr Chen was reappointed as sole director with effect from 20
September 2019. Mr Chen gave evidence that Coin Loop was incorporated to develop
a mobile phone software application called ‘Coin Loop’ to be used in conjunction with
a hardware wallet for cryptocurrency. Mr Chen holds 70% of the shares and Livia
Holdings holds 30% of the shares in Coin Loop. Mr Chen became a shareholder in
May 2023 and prior to that time it was common ground that Mr Chen beneficially
owned 70% of the interest in Coin Loop.
9 Digital Galaxy Pty Ltd (Digital Galaxy), the fifth defendant, was incorporated on 9
April 2018 with Mr Chen, Mr Hu and Ms Zhao as directors. During trial, Digital
Galaxy was not represented and did not appear. The Zhao parties admitted prior to
trial that ‘Mr Chen has at all material times (in reality) beneficially owned and
controlled 70% of the interest in… Digital Galaxy’. Digital Galaxy was previously
represented by Christopher James Lawyers who ceased to act for it on 25 October 2019.
Digital Galaxy has received correspondence sent to its last known email address for
service being Mr Chen’s email address of [email protected]. Mr Chen
was a director from 9 April 2018 to 9 May 2019 and from 20 September 2019, and both
Mr Hu and Ms Zhao were directors from 9 April 2018 to 9 September 2019. Ms Zhao
| In the matter of Blockchain Tech Pty Ltd | 3 | JUDGMENT |
was the secretary from 9 April 2018 to 9 September 2019. Mr Chen gave evidence that
Digital Galaxy was incorporated for the purpose of making initial coin offerings to
raise money for new projects or services related to cryptocurrency and Blockchain
technology. Mr Chen holds 70% of the shares and Livia Holdings holds 30% of the
shares in Digital Galaxy. Mr Chen became a shareholder in May 2023 and prior to that
time it was common ground that Mr Chen beneficially owned 70% of the interest in
Digital Galaxy.
10 Digital Silo Pty Ltd (Digital Silo), the sixth defendant, was incorporated on 16 May
2018 with Ms Zhao as director. During the trial, Digital Silo was not represented and
did not appear. The Zhao parties admitted prior to trial that ‘Mr Chen has at all
material times (in reality) beneficially owned and controlled… close to 70% of the
interest in Digital Silo.’ Digital Silo was previously represented by Christopher James
Lawyers who ceased to act for it on 25 October 2019. Digital Silo has received
correspondence sent to its last known email address for service being Mr Chen’s email
address of [email protected]. Ms Zhao was director from 16 May 2018 to
12 July 2018, and from 6 August 2018 to 9 September 2019. Mr Chen was director from
1 July 2018 to 4 June 2019 and from 20 September 2019, and Mr Hu was director from
12 July 2018 to 9 September 2019. Mr Chen gave evidence that Digital Silo was
incorporated to develop a hardware wallet, known as ‘Octowallet’, for the storage of
Bitcoin. Mr Chen holds 70% of the class K shares and 7,000 of the 11,111 ordinary
shares and Livia Holdings holds 30% of the class K shares and 3,000 of the 11,111
ordinary shares in Digital Silo. Mr Chen became a shareholder in May 2023 and prior
to that time it was common ground that Mr Chen beneficially owned ‘close to 70%’ of
the interest in Digital Silo.
11 Galaxy Crowdfunding, the seventh defendant/third plaintiff by counterclaim, was
incorporated on 24 October 2017. Upon incorporation, Mr Chen was appointed as
director and Ms Zhao was appointed as director and company secretary. Mr Hu was
a director from 16 April 2019 to at least 10 February 2024. On 9 May 2019, Mr Chen
was removed as a director. Dr Pasquale Franzese was a director from 15 August 2020
| In the matter of Blockchain Tech Pty Ltd | 4 | JUDGMENT |
to 2 August 2023. Mr Chen gave evidence that Galaxy Crowdfunding was
incorporated to operate a crowdfunding business and acquire an Australian Financial
Services Licence (AFSL) for that purpose. Mr Chen gave evidence that Dr Franzese
was the responsible manager for Galaxy Crowdfunding’s AFSL and Dr Franzese’s
role was to ensure that Galaxy Crowdfunding met its compliance requirements under
the Corporations Act 2001 (Cth) (Corporations Act). The present and historical
shareholding of Galaxy Crowdfunding is set out Annexure A to these reasons.
Annexure A is addressed in paragraph 127 of these reasons.
12 Castle Accountants Pty Ltd (later renamed Morning Shine Pty Ltd) (Morning Shine),
the eighth defendant, was incorporated on 8 February 2017, with Ms Zhao as the sole
director. During the trial, Morning Shine was not represented and did not appear. It
was previously represented by Christopher James Lawyers who then filed their notice
of ceasing to act on 1 February 2024 and has received correspondence sent to its last
known email address for service being Ms Zhao’s email address of
[email protected]. Morning Shine is a shareholder in Galaxy Crowdfunding.
13 Market St Investments Pty Ltd (Market St Investments), the ninth defendant, was
incorporated on 2 October 2018, with Ms Zhao as the sole director.[2] During the trial,
[2] CB 4002-4003; WS of Chen [8].
Market St Investments was not represented and did not appear. It was previously
represented by Christopher James Lawyers who then filed their notice of ceasing to
act on 1 February 2024. Market St Investments has received correspondence sent to its
last known email address for service being Ms Zhao’s email address of
[email protected]. Mr Chen gave evidence that Market St Investments
purportedly replaced Apex Legendary Consulting Pty Ltd (Apex) as the trustee of the
Capricorn Assets Management Trust on 2 October 2018.
14 Apex, the tenth defendant, was incorporated on 15 December 2009 as Migration
Leader Pty Ltd, with Mr Guodong Zhang, Ms Zhao’s husband, as the sole director.[3]
[3] CB 5045
Ms Zhao was also the sole director of Apex from 31 August 2015, except for between 1 May 2019 to 11 May 2019 during which time Mr Hu was also a director. During the
trial, Apex was not represented and did not appear. It was previously represented by
Christopher James Lawyers who then filed their notice of ceasing to act on 1 February
2024 and has received correspondence sent to its last known email address for service
being Ms Zhao’s email address of [email protected]. Its name changed from
‘Migration Leader Pty Ltd’ to Apex on 6 September 2015. Mr Zhang was director from
15 December 2009 to 18 May 2015, Xinhua Chu was director from 18 May 2015 to 31
August 2015, Mr Hu was director from 1 May 2019 to 11 May 2019, and Ms Zhao was
director from 31 August 2015. Mr Chen gave evidence that Apex is the former trustee
of the Capricorn Assets Management Trust.
15 Epacris Impressa Pty Ltd (Epacris Impressa), the eleventh defendant, was
incorporated on 5 March 2019, with Mr Hu as the sole director and company secretary.
No notice of appearance was filed for Epacris Impressa in this proceeding. Epacris
Impressa was a shareholder in Galaxy Crowdfunding.
16 The proceeding has been discontinued against Australasian Finance & Investment
Corporation Pty Ltd (Australasian Finance & Investment Corporation), the twelfth
defendant. Australasian Finance & Investment Corporation was a shareholder in
Galaxy Crowdfunding.
17 Bitgrowth Advisory Pty Ltd (Bitgrowth Advisory), the thirteenth defendant, was
incorporated on 26 April 2018, with Mr Hu as the sole director and company secretary.
No notice of appearance was filed for Bitgrowth Advisory in this proceeding.
Bitgrowth Advisory was a shareholder in Galaxy Crowdfunding.
18 Livia Holdings, the fourteenth defendant, was incorporated on 22 December 2017,
with Mr Bao Zhao (presumably Mr Baoquan Zhao) as the sole director and company
secretary. This is Ms Zhao’s father. Ms Zhao is the sole shareholder. No notice of
appearance was filed for Livia Holdings in this proceeding. Livia Holdings is a
shareholder in Galaxy Crowdfunding. I have already set out that it is a shareholder in
Blockchain Tech, Dashboard Management, Digital Silo, Coin Loop and Digital Galaxy.
| In the matter of Blockchain Tech Pty Ltd | 6 | JUDGMENT |
For convenience I will refer to these companies as the ‘Blockchain Companies’ and
the businesses conducted by them as the ‘Blockchain Business’.
19 Mr Zhang, the fifteenth defendant, is Ms Zhao’s husband. Mr Zhang was served with
the amended originating process and the amended points of claim. There is no
evidence that he was served with the further amended points of claim but no
amendment was made to the claims against him. No notice of appearance was filed
for Mr Zhang in this proceeding. Grand Castle Lawyers is Mr Zhang’s law firm. The
office of Grand Castle Lawyers was the original registered address for Coin Loop,
Dashboard Management, Digital Galaxy, Digital Silo and Ding Ding Holdings Pty Ltd
(Ding Ding Holdings).
20 The counterclaim of Super Junior Pty Ltd, the fourth plaintiff by counterclaim (not a
defendant) was abandoned prior to trial. This is because the solicitors for Super Junior
Pty Ltd were also the solicitors for the Zhao parties and filed the second further
amended points of defence on 6 December 2023 in which the counterclaim of Super
Junior Pty Ltd was abandoned by being struck out.
21 Mr Chen and/or his wife, Ms Shurui Ding were the sole directors of the following
companies at the relevant times:
(a) Ding Ding Holdings which was incorporated on 22 December 2017 with Ms Ding as the sole director and secretary.
(b) Kette Investment Pty Ltd (Kette Investment) which was incorporated on 1 August 2018 with Ms Ding as the sole director and secretary. On 2 October
2018, Mr Chen was appointed director. Kette Investment was a service
provider to Blockchain Tech under a General Services Agreement signed by
Ms Ding, and was a user on the Jinance exchange.
(c) Crochet Pty Ltd (Crochet) which was incorporated on 24 June 2017, with Ms Ding as sole director and secretary.
| In the matter of Blockchain Tech Pty Ltd | 7 | JUDGMENT |
22 Ms Zhao, Ms Zhao’s father, Mr Baoquan Zhao and/or Ms Zhao’s husband,
Mr Zhang, were the sole directors of the following companies at the relevant times:
(a) Half Moon AM Pty Ltd (Half Moon AM) which was incorporated on 27 March 2019, with Ms Zhao as the sole director and secretary.
(b) Business Block Solutions Pty Ltd (Business Block Solutions) which was incorporated on 14 February 2018, with Ms Zhao as the sole director and
secretary.
(c) Leader Tech Co Pty Ltd (Leader Tech) which was incorporated on 8 June 2004. Ms Zhao’s husband Mr Zhang was initially appointed as sole director and
secretary, though these roles changed over the course of the relevant period.
Ms Zhao was the sole director of Leader Tech from 12 October 2015 to 28
August 2017, and from 1 July 2018 to at least 14 March 2021, and Mr Zhang was
the sole director from 28 August 2017 to 1 July 2018. On 20 July 2020, Ms Zhao
was appointed company secretary. On 28 June 2021, Leader Tech was
deregistered.
(d) Block Business Solutions Pty Ltd (Block Business Solutions) which was incorporated on 14 February 2018 with Ms Zhao as the sole director and
company secretary. Block Business Solutions occupied the office space the
Mulgrave Office and provided accounting services to Blockchain Tech,
employing Ms Yuan and Ms He. Ms Zhao deregistered Block Business
Solutions on 22 February 2019.
(e) Ruby AM Pty Ltd (Ruby AM) which was incorporated on 15 July 2019, with Ms Zhao’s father, Mr Baoquan Zhao as the sole director and company
secretary. Ruby AM was a shareholder in Galaxy Crowdfunding.
23 Blockchain Jet Pty Ltd (Blockchain Jet) was incorporated on 4 December 2017 with
Ms Yao as sole director and secretary. On 29 March 2019, Ms Yao ceased as director
and secretary and Mr Chen was appointed as director and secretary. Mr Chen gave
| In the matter of Blockchain Tech Pty Ltd | 8 | JUDGMENT |
evidence that Ms Zhao set up this company. It was common ground that Blockchain
Jet was and always has been one of Mr Chen’s companies.
24 Kette Investment Trust was a unit trust set up by Ms Zhao. Kette Assets Management
Trust was another unit trust set up by Ms Zhao on 19 February 2019. Mr Chen gave
evidence that it was set up for the purpose of providing a vehicle for employees to
invest in Kette Investment’s trading activities but no investments were ever made.
| C. | MS ZHAO’S NON-ATTENDANCE AT THE TRIAL |
Ms Zhao’s reasons for non-attendance
25 Ms Zhao was granted leave to defend the proceeding on behalf of Galaxy
Crowdfunding. As I have already said, she appeared on each day of trial until the
seventeenth day of trial on 18 March 2024, when she failed to appear in court at
10:30am. It is convenient to provide the following summary of what then occurred.
These matters are the subject of rulings of the Court made on 19 March 2024, 25 March
2024, and 8 April 2024.
26 On 10:44am on 18 March 2024, Ms Zhao sent email correspondence to Chambers,
copied to the plaintiffs’ solicitor, with the subject, ‘Unwell’, informing the Court that
she was ‘at the hospital’. The Court adjourned the matter to a time and date to be fixed.
On 5:33pm on that day, Ms Zhao sent further email correspondence to Chambers, not
copying in the parties, which, inter alia, attached a medical certificate certifying that
Ms Zhao was suffering from a ‘Medical illness’ and would be unfit to follow her daily
occupation from 18 March 2024 to 22 March 2024, inclusive. With Ms Zhao’s consent,
the Court forwarded this email correspondence, including the attached medical
certificate, to the parties at 10:23am on 19 March 2024.
27 The Court convened a Zoom hearing at 11:00am on 19 March 2024. Ms Zhao did not
appear. The Court gave a ruling and ordered that, inter alia, the trial be adjourned to
10:30am on 25 March 2024, and for Ms Zhao to notify Chambers and the plaintiffs by
email as to whether or not she intends to make any adjournment application by
midday on 22 March 2024, and if so, to file a supporting affidavit by 10:00am on 25
| In the matter of Blockchain Tech Pty Ltd | 9 | JUDGMENT |
March 2024. On 20 March 2024, Mr Allen Clayton-Greene accepted a request to the
Victorian Bar Pro Bono Assistance Scheme to assist Ms Zhao. On 22 March 2024 at
10:40am, Chambers received an email from the email address
‘[email protected]’ which attached a medical certificate stating that
Ms Zhao had a ‘medical condition’ and would be ‘unfit for work/court presentation
from 21/03/2024 to 05/04/2024 inclusive’.
28 At the hearing on 25 March 2024, Ms Zhao did not appear. Mr Clayton-Greene
informed the Court that he had had no contact from Ms Zhao but was available to act
for her in the capacity of assisting with any adjournment application made by her. The
Court gave a ruling and ordered that, inter alia, the trial be adjourned to 10:30am on
8 April 2024, that Ms Zhao must notify Chambers by email as to whether or not she
intends to make any adjournment application by midday on 5 April 2024, and if so, to
file a supporting affidavit by 10:00am on 8 April 2024, and for the plaintiffs to
forthwith send a copy of these orders by express post to Ms Zhao’s address. On 1 April
2024, Chambers received an email from ‘[email protected]’
attaching a medical certificate signed by Mrs Krysta Kors, which stated ‘Ms Wei Zhao
has a psychological condition and will be unfit for work or attending court, from
01/04/2024 to 22/04/2024, inclusive.’
29 At the hearing on 8 April 2024, Ms Zhao did not appear. The Court gave a ruling and
ordered that, inter alia, the trial be adjourned to 9:30am on 16 April 2024, and for the
plaintiffs to send a copy of these orders and of the Court’s ruling made on that day to
Ms Zhao’s address by 4:00pm on 10 April 2024 (which was subsequently extended by
further order to 10:00am on 11 April 2024).
30 The trial resumed on 16 April 2024 and 17 April 2024. Ms Zhao did not appear and
did not send any correspondence to the Court. On 17 April 2024, the plaintiffs closed
their case and judgment was reserved. On 11:12am on 19 April 2024, Mr Clayton-
Greene informed the Court and the parties that, inter alia, Ms Zhao and Mrs Krysta
Kors made contact with him via Mrs Kors, and he notified them that he was no longer
able to act for Ms Zhao. On 12:00pm on the same day, Ms Zhao sent email
| In the matter of Blockchain Tech Pty Ltd | 10 | JUDGMENT |
correspondence to Chambers, copied to the plaintiffs’ solicitor, stating ‘I request pro
bono assistance immediately’. On 3:52pm on the same day, Chambers sent email
correspondence to Ms Zhao, copied to the plaintiffs’ solicitor, requesting for Ms Zhao
to ‘please identify the matter for which you seek pro bono seek assistance’. No
response was received. On 5:02pm on 24 April 2024, Chambers sent email
correspondence to Ms Zhao, copied to the plaintiffs’ solicitor, repeating the request
that Ms Zhao identify the matter for which she seeks pro bono assistance. Again, no
response was received.
Consequences of Ms Zhao’s non-attendance at trial
31 In Hacer Group Pty Ltd v Euro Façade Tech Export Sdn Bhd,[4] Stynes J recently set out the
[4] [2022] VSC 373.
applicable principles where a Court determines to proceed with a trial without the
appearance of a defendant:
26 In circumstances where the Court determines to proceed with the trial generally without the appearance of the defendant, the authorities suggest:
(a) the court must investigate the merits of the matter; (b) Hacer must prove its case on the balance of probabilities in the usual way; (c) Hacer’s relief is restricted to that claimed in its pleadings; (d) the court may allow evidence to be tendered and affidavits to be read on behalf of the party which is present; and (e) the court is entitled to assume the correctness of the facts claimed by Hacer in its submissions where Hacer tenders uncontroverted evidence in support of those submissions.[5] [5] Ibid [26] (citations omitted).
In Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd,[6] Brennan J said
[6] (1990) 169 CLR 279.
Non-appearance of a defendant at the trial does not allow the plaintiff a free rein to amend the pleadings to raise issues of which the absent defendant has had no notice or to obtain relief not founded on the pleadings. The reason why the court does not allow substantive amendments to pleadings so as to allow the plaintiff further or other relief against an absent defendant can be gleaned from analogous cases where the court has not allowed substantive amendments of the writ against a defendant who has failed to enter an appearance unless the writ is re-served. The reason is not that the court has no
jurisdiction to amend the writ in the defendant’s absence; the reason is that the
risk of injustice to the absent defendant must be avoided, as Romer LJ
explained in Jamaica Railway v. Colonial Bank (38):
The Court has always borne in mind that an absent defendant served with the original writ may have acted upon the supposition that he thereby gathers substantially what the case made against him is, and relies upon it that that case and no other substantially different case will be made against him, and on that footing does not choose to appear. Accordingly the Court has refused to act upon a rule, which in terms covered a defendant who had not appeared, in cases in which the Court came to the conclusion that it would not be just to enforce the rule
against such a defendant — not that the Court had no jurisdiction to
proceed, but that it did not think it right to proceed in such a case.
And (39):
Again, it has been held in favour of a defendant who has not appeared that, if a writ be amended by altering the claim indorsed on it so as substantially to increase the claim against the defendant, the Court, in the exercise of its discretion, will not allow the plaintiff to obtain as against such a defendant the relief sought by the amended indorsement or extended claim unless the defendant be re-served personally with the amended writ.[7]
[7] Ibid 288–9.
33 In Ying v Perpetual Trustee Victoria Ltd,[8] the Court of Appeal said:
[8] [2012] VSCA 316.
It is axiomatic that if the relief claimed by a plaintiff does not arise on the pleadings, a court is not entitled to grant the particular relief unless amendment is sought and notice is first given to the defendant. This is so whether or not the defendant appears at trial. [9]
[9] Ibid [81] (Weinberg, Harper and Priest JJA).
34 I also accept the following submission of the plaintiffs:
M Osborne J recently explained: ‘The more appropriate course in evaluating competing evidence is “to place primary emphasis on the objective factual
surrounding material and the inherent commercial probabilities, together with
the documentation tendered in evidence”, and make “inferences drawn from the documentary evidence and known or probable facts”.’ His Honour went on to refer to Lord Goff’s judgment in Grace Shipping Inc v C F Sharp & Co
(Malaya) Pte Ltd,[10] where his Lordship endorsed the following statement:
[10] (1987) 1 Lloyds Rep 207 at 215-216.
Speaking from my own experience, I have found it essential in cases of fraud, when considering the credibility of witnesses, always to test their veracity by reference to the objective facts proved independently of their testimony, in particular by reference to the documents in the case, and also to pay particular regard to their motives and to the overall probabilities. It is frequently very difficult to tell whether a witness is telling the truth or not; and where there is a conflict of evidence such as there was in the present case, reference to the objective facts and
documents, to the witness’s motives, and to the overall probabilities,
can be of very great assistance to a judge in ascertaining the truth ...[11]
[11]
35 The plaintiffs submitted that some departure from these principles might be
accommodated by the Court in giving effect to the overarching purpose in the Civil
Procedure Act 2010 (Vic).
36 Prior to not appearing, Ms Zhao opened her case and that of Galaxy Crowdfunding
and cross-examined the plaintiffs’ witnesses. Ms Zhao did not give evidence and did
not call any witnesses. The substance of the defence of Ms Zhao and Galaxy
Crowdfunding is set out in the Zhao parties’ second further amended points of
defence, their particulars, and Ms Zhao and Galaxy Crowdfunding’s opening
submissions (written and oral). It is convenient, therefore, in these reasons to address
the Zhao parties’ pleadings and also Ms Zhao’s and Galaxy Crowdfunding’s opening
submissions.
| D. | WITNESSES |
37 I made detailed typed notes of the evidence each day of the trial, including my
observations on the witnesses and their evidence.
Mr Chen
38 Mr Chen gave evidence and was cross-examined over a number of days by Ms Zhao.
He listened carefully to questions and answered them in a direct manner. Some of his
evidence was imprecise but this is to be expected given that the events took place
many years ago, including the period from 2017 to 2019. In addition, at times, but not
often, Ms Zhao became argumentative in her questioning of Mr Chen. Despite this, he
maintained a calm and responsive manner when answering her questions. I do not,
however, for the reasons I give later, accept all of the evidence of Mr Chen. Some of
his evidence was inconsistent with the matters opened on his behalf by his senior
counsel and with contemporaneous documents. In this respect, I find that Mr Chen was mistaken in his evidence and was not deliberately untruthful. This concerns his
evidence of the basis upon which he and Ms Zhao provided Bitcoin to Blockchain
Tech.
Ms Zhang
39 Ms Zhihong (Stella) Zhang is a former employee of Blockchain Tech. I was not
impressed by the evidence of Ms Zhang. She gave evidence in chief concerning a
meeting on 9 May 2019, further conversations with Ms Zhao, and Mr Chen’s
announcement that he was shutting down the ‘Blockchain Business’ in about June
2019. In cross-examination, Ms Zhang could not recall basic details of the meeting,
including what was discussed. She repeatedly said she was ‘shocked’ concerning what
she saw on a whiteboard. The text of what was on the whiteboard is at page 2035 of
the court book and Ms Zhang’s evidence added nothing.
Ms Ding
40 Ms Ding is Mr Chen’s wife. I was not impressed by the evidence of Ms Ding. She gave
evidence in chief that she did not have any knowledge of certain matters. In cross-
examination, however, she gave evidence that she, in effect, left matters to Mr Chen
and had no involvement herself, even though she was a director. Ms Ding gave
evidence that she signed documents in her capacity as a director but she did not
understand and or read them. For example:
(a) she signed the General Service Agreement between Blockchain Tech and Kette Investment in her capacity as a director of Kette Investment but did not
understand it;
(b) she signed the General Service Agreement between Dashboard Management and Crochet in her capacity as a director of Crochet. Ms Ding gave evidence
that she did not read it when she signed it. She said that at the time she signed
the agreement she did not have any discussion with Mr Chen about the services
to be provided that are listed in the General Service Agreement. Ms Ding said
that she did not perform any of the services under the General Services
Agreement and she does not know who did perform the services. Ms Ding gave
| In the matter of Blockchain Tech Pty Ltd | 14 | JUDGMENT |
evidence that she was not involved in operating Crochet and she only signed
the General Services Agreement because she was a director of Crochet.
Mr Bailey
41 Mr Mark Bailey, a chartered accountant and a director at Hall Chadwick Forensics at
Hall Chadwick Melbourne Pty Ltd, gave expert evidence on particular aspects of the
financial position and affairs of the Blockchain Tech and the third to seventh and tenth
defendants.
Mr McLeish
42 Mr Andrew McLeish, a computer forensic specialist and the managing director and
Chief Executive Officer of Stopline Pty Ltd, gave expert evidence on the forensic data
of documents relevant to the proceeding, including purported meeting minutes and
trust deeds.
Ms Zhao’s and Galaxy Crowdfunding’s witnesses
43 Ms Zhao and Galaxy Crowdfunding did not call any witnesses. This is because
Ms Zhao did not appear at the trial after having cross-examined the plaintiffs’
witnesses. The plaintiffs submitted:
Ms Zhao has tendered some documents in her opening, but has not tendered
any witness statements. Ms Zhao’s case lacks credit. Her lack of credit is
underscored by her repeated failure to comply with discovery obligations (including deliberate attempts to conceal documents and manipulate others in order to advance her narrative).
I have addressed whether Ms Zhao’s case lacks credit in relation to the relevant issues
and the matters to be determined in light of the evidence. This includes the matters
raised by the plaintiffs concerning her credit in their closing submissions to the extent
that those matters are relevant.
| E. | APPLICABLE LAW: OPPRESSION, WINDING-UP AND CORRECTION OF THE REGISTER |
Oppression
45 The oppression provisions are found in pt 2F.1 of the Corporations Act. Section 232
relevantly provides:
| In the matter of Blockchain Tech Pty Ltd | 15 | JUDGMENT |
232 Grounds for Court order
The Court may make an order under section 233 if:
(a) the conduct of a company’s affairs; or (b) an actual or proposed act or omission by or on behalf of company; or (c)
a resolution, or a proposed resolution, of members or a class of members of a company;
is either: (d) contrary to the interests of the members as a whole; or (e)
oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members whether in that capacity or in any other capacity.
…
46 Subsections 233(1) and (2) provide:
233 Orders the Court can make
(1) The Court can make any order under this section that it considers
appropriate in relation to the company, including an order:
(a) that the company be wound up; (b) that the company’s existing constitution be modified or repealed;
(c) regulating the conduct of the company’s affairs in the future; (d) for the purchase of any shares by any member or person to whom a share in the company has been transmitted by will or by operation of law; (e) for the purchase of shares with an appropriate reduction of the company’s share capital;
(f) for the company to institute, prosecute, defend or discontinue specified proceedings; (g) authorising a member, or a person to whom a share in the company has been transmitted by will or by operation of law, to institute, prosecute, defend or discontinue specified proceedings in the name and on behalf of the company; (h) appointing a receiver or a receiver and manager of any or all of the company’s property;
(i) restraining a person from engaging in specified conduct or from doing a specified act;
| In the matter of Blockchain Tech Pty Ltd | 16 | JUDGMENT |
(j) requiring a person to do a specified act. Order that the company be wound up
(2) If an order that a company be wound up is made under this section, the
provisions of this Act relating to the winding up of companies apply:
(a) as if the order were made under section 461; and (b) with such changes as are necessary.
47 Section 234 provides:
234 Who can apply for order
An application for an order under section 233 in relation to a company may be made by:
(a) a member of the company, even if the application relates to an act or omission that is against:
(i) the member in a capacity other than as a member; or (ii) another member in their capacity as a member; or (b) a person who has been removed from the register of members because of a selective reduction; or (c) a person who has ceased to be a member of the company if the application relates to the circumstances in which they ceased to be a member; or (d) a person to whom a share in the company has been transmitted by will or by operation of law; or (e) a person whom ASIC thinks appropriate having regard to investigations it is conducting or has conducted into:
(i) the company’s affairs; or (ii) matters connected with the company’s affairs.
48 The affairs of a company for this purpose are non-exhaustively defined in s 53 of the
Corporations Act, and include, relevantly, ‘the promotion, formation, membership,
control, business, trading, transactions and dealings’ of the company and, in the case
of a trustee company, matters ‘concerned with the ascertainment of the identity of the
persons who are beneficiaries under the trust, their rights under the trust and any
| In the matter of Blockchain Tech Pty Ltd | 17 | JUDGMENT |
payments that they have received, or are entitled to receive, under the terms of the
trust’.[12]
[12] Corporations Act s 53(a)–(b).
49 The oppression provisions contemplate a flexible jurisdiction, responsive to any
conduct that occurs within or in relation to a company that, according to accepted
standards of corporate behaviour, is burdensome, harsh and wrongful, productive of
unfair prejudice, or contrary to the interests of the members as a whole.[13] The
[13] Patterson v Humfrey (2014) ACSR 152, 194 [186] (Le Miere J), citing Goozee v Graphic World Group Holdings Pty Ltd (2002) 42 ACSR 534, 543 [40] (Barrett J) (Goozee v Graphic World).
provisions are accordingly required to be construed broadly and the imposition of
judge-made limitations on their scope is to be treated with caution.[14] It is however
[14] Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304, 334 [72] (French CJ) (Campbell).
important to recognise that sub-ss 232(d) and (e) form distinct categories of conduct
which are each independently capable of engaging the Court’s jurisdiction to award
relief.
50 Subsection 232(d) calls for an objective assessment of whether conduct is contrary to
the interests of the members as a whole. Conduct may fall within this category even if
it does not exhibit commercial unfairness. [15] In Exton v Extons Pty Ltd (Extons),[16]
[15] Re Skytraders Pty Ltd [2022] VSC 416 [37] (Button J) (Re Skytraders); Campbell, 360 [176] (Gummow, Hayne, Heydon and Kiefel JJ)
[16] (2017) 53 VR 520 (Extons).
following a comprehensive review of the relevant authorities, Sifris J said:
The court is required to examine all of the relevant facts and circumstances in order to determine whether the conduct under scrutiny is in the best interests of the company as a whole, apart from its members. In this context breaches of duty (whether statutory or fiduciary) by directors and officers may well be conduct that is not in the best interests of the company as a whole. Whether breaches of duty in a small family type company, where there is an overwhelming identity of interest between shareholders and directors, fall within the sections is a related matter. There is authority, as referred to above, to the effect that where there is consent or ratification of such conduct, it may, in context and in the circumstances, not be contrary to the interests of members as a whole or indeed unfair. [17]
[17] Ibid 531 [39].
51 In relation to s 232(e), the terms—‘oppressive to’, ‘unfairly prejudicial to’, and
‘unfairly discriminatory against’—are treated as a compound expression.[18] Put another way, the various terms, as Young J explained in Morgan v 45 Flers Avenue Pty
[18] Re SRW Nominees Pty Ltd [2019] VSC 547, [34] (Re SRW Nominees).
Ltd (Morgan),[19] should be ‘considered merely as different aspects of the essential
[19] (1986) 10 ACLR 692 (Morgan).
criterion, namely commercial unfairness’.[20] Under this rubric, the appropriate inquiry
[20] Ibid 704. See also Joint v Stephens (2008) 26 ACLC 1467, 1496; Hillam Ample Source International Limited (No 2) [2012] FCAFC 73, [4]; cited with apparent approval in Hylepin Pty Ltd v Doshay Pty Ltd [2021] FCAFC 201, [124].
is whether, on the balance of probabilities, an objective commercial bystander would
be satisfied that the affairs of the company were being conducted unfairly.[21] This is
[21] Re SRW Nominees (n 18) [40] (Robson J). See also Re Skytraders (n 15) [28] (Button J).
sometimes described as conduct that reasonable directors would consider unfair.[22]
[22] Morgan (n 19) 704.
The test was articulated by Brennan J in Wayde v New South Wales Rugby League Ltd.[23]
[23] (1985) 180 CLR 459, 473.
The court must determine whether reasonable directors, possessing any special skill, knowledge or acumen possessed by the directors and having in mind the importance of furthering the corporate object on the one hand and the disadvantage, disability or burden which their decision will impose on a member on the other, would have decided that it was unfair to make that decision.[24]
[24] Ibid.
52 The requisite unfairness can arise from the cumulative effect of a course of conduct,
or from a single act or omission.[25] But to meet the applicable threshold, it is recognised
[25] Donaldson v Natural Springs Australia Ltd [2015] FCA 498, [248]–[249] (Beach J).
that commercial unfairness usually results in some harm or prejudice, arising from the
conduct complained of, that is not reasonably or commercially justifiable.[26] Poor
[26] Extons (n 16) [48].
management is not of itself sufficient to establish oppressive conduct.[27]
[27] Re Skytraders (n 15) [39] (Button J), citing Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (1998) 28 ACSR 688, 740.
53 The Court does not conduct its inquiry in a vacuum: regard must be had to the full
factual context in which the impugned conduct occurred. In Re Skytraders Pty Ltd (Re
Skytraders),[28] Button J explained:
[28] Re Skytraders (n 15).
That context includes the business, the conduct of the aggrieved party — which
may be such that the conduct complained of is not unfair, or may affect the
relief to be granted — and the nature of the relationship between the people
participating in the business. In many cases, there may be an agreement or understanding between those engaged in business with one another. Such an agreement or understanding will often be important in assessing whether the conduct in question constitutes oppression. Such agreements or
Date Description Source Destination Amount Evidence / Response from First The Plaintiffs’ comments Defendant
• Pressed. Ms Zhao cannot claim a reimbursement of the same funds.
2018-12-27 26Dec22:44 Tfr Ex Br Internet DBM BOM 5607 WZ BOM 4498 $5,000 Partial Return of Ms Zhao’s own funds • Ms Zhao claimed $10,000 as her Withdrawal $10,000 loaned on 26/12/2018. CB 330 financial contribution: SCB 192. • Mr Bailey concludes $10,000 as Ms Zhao’s financial contribution: CB 330. • Pressed. Ms Zhao cannot claim a reimbursement of the same funds.
2018-12-27 26Dec22:45 Tfr Ex Br Internet DBM BOM 5607 WZ STG 5451 $5,000 Partial Return of Ms Zhao’s own funds • Ms Zhao claimed $10,000 as her Withdrawal $10,000 loaned on 26/12/2018. CB 330 financial contribution: SCB 192. • Mr Bailey concludes $10,000 as Ms Zhao’s financial contribution: CB 330. • Pressed. Ms Zhao cannot claim a reimbursement of the same funds.
2019-01-09 09Jan14:50 To Br Wz Internet DBM BOM 5607 BR BOM 3650 $5,650 Partial Return of Ms Zhao’s own funds • Ms Zhao claimed $8,960 as her financial Withdrawal $8,960 loaned on 16/12/2018. CB 329 contribution: SCB 192. • Mr Bailey concludes $8,960 as Ms Zhao’s financial contribution: CB 329. • Pressed. Ms Zhao cannot claim a reimbursement of the same funds.
2019-01-12 11Jan23:10 Brief Bag Internet DBM BOM 5607 WZ BOM 4498 $249 Mr Chen brief bag Invoice 2.1 • The record at 2.1 is only an order Withdrawal confirmation. • Pressed. Ms Zhao has produced no receipt and no payment record. 2019-01-12 11Jan23:13 Ato Payg Re Internet DBM BOM 5607 WZ BOM 4498 $14,500 Reimburse $6,140 paid on 16/10/2018 • Pressed. Ms Zhao hasn’t produced an Withdrawal for July 2018 ATO PAYG. -ATO invoice or a payment record for the Activity statements $6,140 nor the $5,000. • Ms Zhao claimed $11,200 as her Reimburse $5,000 ATO PAYG Aug 18 financial contribution: SCB 192. paid. • Mr Bailey concludes $11,200 as Ms Partial return of $3,360 of Ms Zhao’s Zhao’s financial contribution: CB 328. • Pressed. Ms Zhao cannot claim a own funds loaned $11,200 on 30/11/2018. ( Balance to be repaid to financial contribution and a Ms Zhao $1,840 ($11,200-6,000-3,360) reimbursement of the same funds. CB 328 2019-03-04 04Mar16:52 Tfr Wz Internet DBM BOM 5607 WZ BOM 4498 $6,000 Partial return of Ms Zhao’s own funds • Ms Zhao claimed $8,000 as her financial Withdrawal transferred $8,000 on 4th March 2019 contribution: SCB 192. to CBA a/c 1445 then loaned to • Mr Bailey concludes $8,000 as Ms Dashboard . CB 317 and Zhao’s financial contribution: CB 317. CB 331.
Date Description Source Destination Amount Evidence / Response from First The Plaintiffs’ comments Defendant
• Pressed. Ms Zhao cannot claim a reimbursement of the same funds.
2019-03-22 22Mar15:42 Officeworks Internet DBM BOM 5607 WZ STG 5451 $71 • Pressed. Ms Zhao hasn’t produced an Withdrawal invoice.
2019-04-30 30Apr10:13 Br Internet DBM BOM 5607 WZ BOM 3650 $7,650 Partial return of Ms Zhao’s own funds • Ms Zhao claimed $8,960 as her financial Withdrawal loaned $8,960 on 17/12/2018. CB 329 contribution: SCB 192. • Mr Bailey concludes $8,960 as Ms Zhao’s financial contribution: CB 329. • Pressed. Ms Zhao cannot claim a reimbursement of the same funds.
Dashboard Sum $124,340 Management $118,340 TABLE 3 Digital Silo
Date Description Source Destination Amount Evidence /Response from First The Plaintiffs’ comments Defendant 2018-07-13 WZ ;13JUL 13:03 DS BOM 4743 WZ BOM 4498 $8,450 Return of Ms Zhao’s own funds loaned
• Ms Zhao claimed $8,450 as her
$8,450 on 13/07/2018. CB337 financial contribution: SCB 192.
• Mr Bailey concludes $8,450 as Ms Zhao’s financial contribution: CB 337.
• Pressed. Ms Zhao cannot claim a reimbursement of the same funds.
2018-07-27 TM Application DS BOM 4743 WZ BOM 4498 $250 Invoice provided to Mr Bailey and matched • Pressed. Ms Zhao has provided no CB847 (for String Exchange) evidence to show she paid this fee. •
At CB 819, Mr Bailey concludes he has not identified any payments to Ms Zhao for which an invoice was
provided. 2018-07-31 31JUL16:01 Tfr DS BOM 4743 WZ BOM 4498 $19,638 Return of Ms Zhao’s own funds loaned • Ms Zhao claimed $19,638 as her $19,638 on 13/07/2018. CB337 financial contribution: SCB 192. • Mr Bailey concludes $19,638 as Ms Zhao’s financial contribution: CB 337. • Pressed. Ms Zhao cannot claim a reimbursement of the same funds.
2018-09-07 ASIC and Business name DS BOM 4743 WZ BOM 4498 $1,500 $403 for ASIC fee re name change • Pressed. Ms Zhao hasn’t produced an Octowallet Australia and business name invoice and the expense is not relevant $82 and $1,000 was return of fund from to this proceeding. Ms Zhao on 19/07/2018
•
No record of Ms Zhao loaning $1,000 to Digital Silo on 19 July 2018. CB 337 records $1,000 transferred to Digital
Silo but does not say it was Ms Zhao’s contribution. 2019-02-11 Office works DS BOM 4743 WZ BOM 4498 $125 • Pressed. Ms Zhao’s given no explanation. 2019-05-15 Inv 20190331 DS BOM 4743 WZ BOM 4498 $1,100 Company setup • Pressed. Ms Zhao’s given no explanation and hasn’t produced an invoice or receipt. 2019-05-23 Avira DS BOM 4743 WZ BOM 4498 $104 Amex $107 • Pressed. Ms Zhao’s given no explanation. Digital Silo Sum $31,167 Balance to repay Ms Zhao $4,400
TABLE 4 Galaxy Crowdfunding
Date Description Source Destination Amount Evidence / Response from First The Plaintiffs’ comments Defendant 2017-12-23 Transfer to xx8057 GC CBA 8112 WZ CBA 8057 542.13 Partial reimbursement of management
• The invoices at 4.3.1 and 4.3.2 are for
CommBank app Insurance liability insurance $853.49. $853.49 and $646.60 respectively. Dec reim • Pressed. The invoices don’t match the
Invoice reference: 4.3.1 & 4.3.2 claimed reimbursement.
Date Description Source Destination Amount Evidence / Response from First The Plaintiffs’ comments Defendant 2017-12-23 Transfer to xx8057 GC CBA 8112 WZ CBA 8057 542.13 Partial reimbursement of management
• The invoices at 4.3.1 and 4.3.2 are for
CommBank app Insurance liability insurance $853.49 and balance $853.49 and $646.60 respectively.
Nov reim 646.60. • Pressed. The invoices don’t match the Invoice reference: 4.3.1 & 4.3.2 claimed reimbursement.
2018-01-18 Transfer to xx8057 GC CBA 8112 WZ CBA 8057 2081 Invoice 4.5 Employee Laptop • Pressed. The document at 4.5 is an CommBank app Asus order confirmation addressed to “Biyang laptop Hu” and not addressed to a business. • See SCB 3 p 73. The Zhao Parties say they no longer have the laptop. 2018-03-06 Transfer to xx8057 GC CBA 8112 WZ CBA 8057 4058.46 Oxford Blockchain strategy £2,200.00 being • Pressed. This invoice is addressed to CommBank app Ben AUD $4058.60 for staff training , Invoice Biyang Hu and not to Galaxy Oxford trainin 4.10 Crowdfunding. Mr Hu undertook this training for his own benefit. 2018-05-29 Transfer to xx8057 GC CBA 8112 WZ CBA 8057 2038.3 Cyber Liability insurance Invoice 4.2 • Not pressed. CommBank app Cyber
liabilty2018-05-29 Transfer to xx8057 GC CBA 8112 WZ CBA 8057 436.57 Financial Ombudsman Service • Not pressed. CommBank app Financial Invoice 4.1 Ombud 2018-05-29 Transfer to xx8057 GC CBA 8112 WZ CBA 8057 3333.99 PI & Public Liability Invoice 4.4 • Not pressed. CommBank app PI and
Public i2018-11-05 INTERNET WITHDRAWAL GC BOM 5746 WZ BOM 4498 7886.09 2122.61, Invoice ref: 4.12 • Not pressed.
Bizcover 2019 insurance Cyber Liability
PI 3425.67, Invoice ref: 4.14 Management 2337.81 Invoice ref: 4.13 7886.09
2018-11-27 INTERNET WITHDRAWAL GC BOM 5746 WZ BOM 4498 352.26 • Pressed. Ms Zhao hasn’t given an Economics subscription explanation and hasn’t produced an invoice or receipt.
2019-01-04 Transfer to xx8057 GC CBA 8112 WZ CBA 8057 300 Xero monthly fee $60 per month, for five • Pressed. Ms Zhao hasn’t produced an CommBank app Xero month. invoice or receipt. 2019-02-11 INTERNET WITHDRAWAL GC BOM 5746 WZ STG 5451 65.3 Office supplies reimbursement • Pressed. Ms Zhao hasn’t produced an Office supplies invoice or receipt. 2019-03-28 INTERNET WITHDRAWAL GC BOM 5746 WZ BOM 4498 93.5 Compliance meeting light meal • Pressed. Ms Zhao hasn’t produced an Lunch Reimb reRM invoice or receipt. meeting 2019-04-12 Transfer to xx8057 GC CBA 8112 WZ CBA 8057 74.3 Compliance meeting light meal • Pressed. Ms Zhao hasn’t produced an CommBank app Reimb invoice or receipt. lunch Pas 2019-04-16 INTERNET WITHDRAWAL GC BOM 5746 WZ BOM 4498 1430 AUST BRITISH CHAMBER Galaxy • Not pressed. ABCC membership fee membership Office rent Attached Ref 4.16 2019-04-24 Transfer to xx8057 GC CBA 8112 WZ CBA 8057 4016.5 Office rent • Pressed. Ms Zhao hasn’t produced an CommBank app Regus rent invoice or receipt. 2019-05-15 INTERNET WITHDRAWAL GC BOM 5746 WZ BOM 4498 4016.05 Office rent Attached Ref 4.9 • Not pressed. Regus Reimb Amex
Date Description Source Destination Amount Evidence / Response from First The Plaintiffs’ comments Defendant 2019-10-01 Transfer to xx8057 GC CBA 8112 WZ CBA 8057 1407.86 Monthly AWS Fee.
• Not pressed. CommBank app AWS fee paid Invoice ref: 4.25 Galaxy Sum $32,674 Crowdfunding $12,125.14 TABLE 5 Transfers from the Blockchain Business, sorted by company, to Ms Zhao’s personal credit cards
Date Description Credit Cards Amount Source Evidence / Response from First The Plaintiffs' Comments
Account Defendant
2018/10/03 Tfr Wdl BPAY Internet 03Oct20:36 CreditCards:x92005 3,897.00 BCT BOM 1445 Invoice 5.1.1 and 5.1.2 two pages • Pressed. Pressed. Ms Zhao
376062770392005 American Lenovo laptops delivered to Mr hasn’t produced a record that Express Chen evidences she made payment
of the invoices at 5.1.1 and5.1.2.
2018/11/05 Tfr Wdl BPAY Internet CreditCards:x1001 5,078.64 BCT BOM 1445 Blockchain Tech marketing • Not pressed.
04Nov15:37 377739060101001 Fintechtalents/VC innovations David Jones Amex London Marketing GBP @2,700 Invoice and email reference:
5.2/5.2.1/5.2.3
2018/12/12 Tfr Wdl BPAY Internet 12Dec18:51 CreditCards:x92005 2,365.55 BCT BOM 1445 Invoice 5.3, Desks at Blockchain • Pressed. Ms Zhao hasn’t
376062770392005 American Tech produced a record that Express evidences she made payment of the invoices at 5.3.
2019/01/03 Tfr Wdl BPAY Internet 03Jan01:59 CreditCards:x1001 3,608.00 BCT BOM 1445 Amex statement Oct 2014, • Pressed. Ms Zhao hasn’t
377739060101001 David Jones Reference 5.4 produced invoices for the Amex expenses that total $3,608 on the AMEX statement at 5.4.
2019/01/18 Tfr Wdl BPAY Internet 18Jan19:05 CreditCards:x92005 1,055.10 BCT BOM 1445 Invoice5.5 bizcover insurance • Pressed. No invoice produced. 376062770392005 American Ms Zhao has only produced Express entries of $1,053.86 in an
AMEX credit card statement.
2019/03/26 DAVID JONES AMEX CreditCards:x1001 439.94 BCT CBA 5044 Monthly instalment of insurance • Pressed. No invoice produced. CommBank app BPAY 88013 377739060101001 Bizcover 2018/12/18 Tfr Wdl BPAY Internet 18Dec11:16 CreditCards:x5922 2,000.00 DBM BOM 5607 Partial return Ms Zhao's fund • Pressed. Ms Zhao claimed
4265561000805922 Hsbc Cards $9,400 transferred to DBM BOM $9,400 as her financial
A/C on 18/12/2018 contribution: SCB 192.
• Mr Bailey concludes $9,400 as Ms Zhao’s financial
contribution: CB 329.
• Pressed. Ms Zhao cannot
claim a financial contribution
and a reimbursement of thesame funds.
2018/12/18 Tfr Wdl BPAY Internet 18Dec11:17 CreditCards:x92005 2,396.00 DBM BOM 5607 Invoice 5.8/5.8.2 • Pressed.
376062770392005 American • This is a concert ticket and the Express order confirmation at 5.8.2 is
Date Description Credit Cards Amount Source Evidence / Response from First The Plaintiffs' Comments
Account Defendant addressed to
The amount of $2,393.90 also
does not match the amount of
$2,396 that was transferred to
Ms Zhao.
2018/12/18 Tfr Wdl BPAY Internet 18Dec11:19 CreditCards:x1001 604.00 DBM BOM 5607 Reimburse Adobe creative cloud • Pressed. Ms Zhao hasn’t
377739060101001 David Jones 18/10/2018 and part produced an invoice or receipt.
Amex reimbursement of insurance
2018/12/20 Tfr Wdl BPAY Internet 20Dec20:07 CreditCards:x1001 4,000.00 DBM BOM 5607 Partial return Ms Zhao's fund • Pressed. Ms Zhao claimed
377739060101001 David Jones $9,400 transferred to DBM BOM $9,400 as her financial Amex A/C on 18/12/2018 contribution: SCB 192.
• Mr Bailey concludes $9,400 as Ms Zhao’s financial
contribution: CB 329.
• Pressed. Ms Zhao cannot claim
a financial contribution and a
reimbursement of the samefunds.
2018/10/05 TO AMERICAN EXPRESS CreditCards:x92005 24.90 DS BOM 4743 Reimburse Office amaysi • Pressed. Ms Zhao hasn’t 376062770392005 produced an invoice or receipt. 2018/10/05 TO AMERICAN EXPRESS CreditCards:x92005 10.00 DS BOM 4743 Reimburse Office amaysim • Pressed. Ms Zhao hasn’t 376062770392005 produced an invoice or receipt. 2018/10/05 TO AMERICAN EXPRESS CreditCards:x92005 66.94 DS BOM 4743 Reimburse overtime meal for staff • Pressed. Ms Zhao hasn’t 376062770392005 produced an invoice or receipt. 2018/10/05 TFR WDL BPAY INTERNET CreditCards:x92005 2,598.00 GC BOM 5746 Galaxy staff laptop • Pressed. The invoice at 5.14 is
376062770392005 AMERICAN Attached ref: Invoice 5.14/5.14.1 addressed to Wei Zhao and EXPRESS laptops were shipped to Guodong.
2019/03/20 TFR WDL BPAY INTERNET CreditCards:x92005 57.97 GC BOM 5746 Part of monthly fee of Intuit • Pressed. Ms Zhao hasn’t
376062770392005 AMERICAN Qbooks Online produced an invoice or receipt. EXPRESS
2018/10/03 AMERICAN EXPRESS CreditCards:x92005 3,897.00 GC CBA 8112 Lenovo laptops for Galaxy • Pressed. Ms Zhao hasn’t CommBank app BPAY 5 Crowdfunding employees produced an invoice or receipt. 376062770392005 laptop 370 Lenovo 2018/10/03 DAVID JONES AMEX CommBank CreditCards:x1001 2,304.01 GC CBA 8112 Lenovo laptop for Galaxy • Pressed. Ms Zhao hasn’t
app BPAY 8 377739060101001 Crowdfunding- WZ produced an invoice or receipt. laptop x1 yoga
2019/02/06 AMERICAN EXPRESS CreditCards:x92005 200.00 GC CBA 8112 Training for Mr Chen paid by • Pressed. Ms Zhao hasn’t
CommBank app BPAY 5 Galaxy Crowdfunding produced an invoice or receipt. 376062770392005 Kaplan Jin
2019/06/10 DAVID JONES AMEX CommBank CreditCards:x1001 8,495.52 GC CBA 8112 Galaxy Crowdfunding employee • Pressed. Ms Zhao hasn't
app BPAY 8 377739060101001 Laptops . produced records that evidence apple MacBookPro 2 Invoice Attached ref:5.19 she made this payment.
Subtotal for Blockchain Tech $16,444.23 $11,365.59
Subtotal for Dashboard $9,000 Management
Subtotal for Digital Silo $101.84
Date Description Credit Cards Amount Source Evidence / Response from First The Plaintiffs' Comments
Account Defendant
Subtotal for Galaxy $17,552.50 Crowdfunding
Sub-Total $38,019.93
CERTIFICATE
I certify that this and the 234 preceding pages are a true copy of the reasons for judgment of Attiwill J of the Supreme Court of Victoria delivered on 12 November 2024.
DATED this 12 day of November 2024.
Associate
| In the matter of Blockchain Tech Pty Ltd | 235 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 1 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 5 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 11 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 12 | JUDGMENT |
| 3 Apples Childcare Centre Pty Ltd v MMC Pacific International Pty Ltd |
Citing [2023] VSC 21 [144] Rep 1, 57 (Lord Goff).
| In the matter of Blockchain Tech Pty Ltd | 13 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 18 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 19 | JUDGMENT |
(Austin J).
| In the matter of Blockchain Tech Pty Ltd | 20 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 22 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 23 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 24 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 26 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 28 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 32 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 39 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 44 | JUDGMENT |
also Munstermann v Rayward; Rayward v Munstermann [2017] NSWSC 133, [22(6)] (Stevenson J) and In
the matter of Computer Room Solutions Pty Limited [2021] NSWSC 845, [88] (Black J).
| In the matter of Blockchain Tech Pty Ltd | 66 | JUDGMENT |
Management, Coin Loop, Digital Galaxy, Digital Silo, and Galaxy Crowdfunding.
| In the matter of Blockchain Tech Pty Ltd | 91 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 94 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 105 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 106 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 107 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 108 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 109 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 110 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 111 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 112 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 118 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 119 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 120 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 121 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 124 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 125 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 126 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 128 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 129 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 130 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 135 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 143 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 147 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 154 | JUDGMENT |
Pty Limited, 8th ed, 2016), 539–540 [22-05].
| In the matter of Blockchain Tech Pty Ltd | 158 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 159 | JUDGMENT |
Pty Limited, 8th ed, 2016), 541 [22-05] and also Re Dawson (deceased); Union Fidelity Trustee Co Ltd v
Perpetual Trustee Co Ltd [1966] 2 NSWLR 211, 214–6 (Street J).
| In the matter of Blockchain Tech Pty Ltd | 160 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 161 | JUDGMENT |
Gummow, Callinan, Heydon and Crennan JJ).
| In the matter of Blockchain Tech Pty Ltd | 166 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 178 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 205 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 207 | JUDGMENT |
| In the matter of Blockchain Tech Pty Ltd | 208 | JUDGMENT |
[1] CB1296
[2] CB1391
[3] CB1526
[4] CB2627
[5] CB1757
[6] CB2634
[7] CB2645
[8] CB2630
[9] CB2642
[10] CB2802
[11] CB2819
[12] CB2811
[13] CB3077
[14] CB3049
[15] CB3052
[16] CB3075
[17] CB3202
[18] CB5029
[19] CB2 204
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