Sovereign Point Pty Ltd v Gu (No 3)

[2021] FCA 384

FEDERAL COURT OF AUSTRALIA

Sovereign Point Pty Ltd v Gu (No 3) [2021] FCA 384  

File number(s):

VID 359 of 2018

Judgment of:

DAVIES J

Date of judgment:

20 April 2021

Catchwords:

CORPORATIONS – review of the decision of a registrar – assessment of damages on default judgment.

Legislation:

 Corporations Act 2001 (Cth) s 1317H

Federal Court of Australia Act 1976 (Cth) ss 51A(1)(a), 52(1)

Federal Court Rules 2011 (Cth) r 5.23(2)(c)

Cases cited:

Shot One Pty Ltd (in liq.) & Anor v Day & Anor [2017] VSC 741

Sovereign Point Pty Ltd v Gu (No 2) [2020] FCA 1377

Division:

General Division

Registry:

Victoria

National Practice Area:

Commercial and Corporations

Sub-area:

Commercial Contracts, Banking, Finance and Insurance

Number of paragraphs:

24

Date of hearing:

31 March 2021

Counsel for the Applicant:

Ms V Bell

Solicitor for the Applicant:

SBA Law

Counsel for the First Respondent:

Mr M J Galvin QC

Solicitor for the First Respondent:

Eakin McCaffery Cox Lawyers

ORDERS

VID 359 of 2018

BETWEEN:

SOVEREIGN POINT PTY LTD

Applicant

AND:

MING FENG (RICHARD) GU

First Respondent

AXF GROUP PTY LTD (IN LIQUIDATION)

Second Respondent

ORDER MADE BY:	DAVIES J
DATE OF ORDER:	20 APRIL 2021

THE COURT ORDERS THAT:

1.The parties provide draft orders giving effect to these reasons within seven days.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

DAVIES J:

INTRODUCTION

1. This is an application by the first respondent (Mr Gu) for review of the decision of a registrar.  The application is conducted as a hearing de novo of the applicant’s (Sovereign Point) interlocutory process for assessment of the compensation payable by Mr Gu to Sovereign Point, pursuant to an order of the Court made on 25 October 2019, following judgment entered against Mr Gu as a defaulting party pursuant to r 5.23(2)(c) of the Federal Court Rules 2011 (Cth).

2. The proceeding relates to a joint venture entered into between Sovereign Point and the second respondent (AXF Group) for the development and sale of an apartment complex in Doncaster, Melbourne.  The development was undertaken by AXF Development (Sovereign Point) Pty Ltd (in liquidation) (Development Company) as trustee for the AXF Development (Sovereign Point) Unit Trust (SP Trust), a special purpose vehicle incorporated for the purpose of the project.  Sovereign Point and AXF Group were the shareholders of the Development Company and the unitholders of the SP Trust.  Mr Gu and Patrick Chan (Mr Chan) were the directors of the Development Company, Mr Gu (up to 23 May 2018) and Mr Chan were also the directors of Sovereign Point and Mr Gu was the sole director of AFX Group.  The Development Company was placed into liquidation pursuant to an order of the Federal Court on 1 June 2018.

3. The joint venture was governed by a shareholder agreement between Sovereign Point and AXF Group and a development agreement between Sovereign Point (as owner of…