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Yimiao Australia v Cyber Intelligence

Yimiao Australia v Cyber Intelligence

Case [2023] VSCA 21 3 February 2023

Injunction

Interlocutory Orders

Compensatory Damages

Civil Litigation & Procedure

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SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2022 0105

YIMIAO AUSTRALIA PTY LTD (ACN 657 775 758)	Applicant
v
CYBER INTELLIGENCE TECH PTY LTD (ACN 655 149 161)	Respondent

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JUDGES:	McLEISH, WALKER and MACAULAY JJA
WHERE HELD:	Melbourne
DATE OF HEARING:	3 February 2023
DATE OF JUDGMENT:	3 February 2023
PUBLICATION OF REASONS:	21 February 2023
MEDIUM NEUTRAL CITATION:	[2023] VSCA 21
JUDGMENT APPEALED FROM:	[2022] VSC 701 (Attiwill J)

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INJUNCTION – Interlocutory – Test – Lower risk of injustice – Serious question to be tried conceded – Balance of convenience – Undertaking as to damages – Whether trial judge failed to consider effect of dissipation of asset value on party’s asserted security interest – Real risk that assets would have little to no value by time of trial – Re-exercise of Court’s discretion – Leave to appeal granted – Appeal allowed.

Personal Property Securities Act 2008 (Cth) ss 3, 9, 10, 12, 13.

Bradto Pty Ltd v Victoria (2006) 15 VR 65, applied. Siemens Gamesa Renewable Energy Pty Ltd v Bulgana Wind Farm Pty Ltd [2019] VSCA 318; Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57; House v The King (1936) 55 CLR 499; Whisprun Pty Ltd v Dixon (2003) 200 ALR 447, referred to.

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Counsel
Applicant:		Dr O Bigos KC with Mr P Annabell
Respondent:		Mr M McKillop with Ms N Tyson
Solicitors
Applicant:	Gilbert + Tobin
Respondent:	MinterEllison

MCLEISH JA
WALKER JA
MACAULAY JA:

The applicant in this matter (‘Yimiao’) carries on a business of cryptocurrency mining. It purchased 1,598 units of ‘L7 Antminer’ cryptomining equipment, which were delivered to premises leased by the respondent (‘CIT’) in Clayton. Of those 1,598 units, some 810 units were identified as remaining in CIT’s possession as at the date of the hearing below;[1] the other 788 units are missing. Yimiao seeks the return of its equipment from CIT.
[1]These are referred to in the trial judge’s reasons as the ‘Yimiao Identified Claimed Equipment’. We will refer to them as ‘the 810 units’, save when quoting from the judge’s decision.
CIT is resisting Yimiao’s application. It contends that it has a security interest in the 810 units under the Personal Property Securities Act 2008 (Cth) (‘PPSA’), pursuant to an agreement with Genesis Mining Pty Ltd (‘Genesis’), and that it had perfected that interest pursuant to s 21 of the PPSA by possession or, alternatively, by registering the interest. It further contends that while Yimiao has a security interest in the 810 units as a bailor of goods under a ‘PPS lease’, as defined in s 13 of the PPSA, that security interest was not perfected. CIT contends that its security interest takes priority over Yimiao’s security interest by reason of the PPSA.
On 13 September 2022, Yimiao sought an interlocutory injunction for the delivery up of the 810 units pending the resolution of the dispute. The principal reason for Yimiao’s application was that it contended that…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Yimiao Australia v Cyber Intelligence

Details

AGLC: Yimiao Australia v Cyber Intelligence [2023] VSCA 21
Case: [2023] VSCA 21
Decision Date: 3 February 2023

CaseChat Overview and Summary

The matter of Yimiao Australia v Cyber Intelligence was heard by the Supreme Court of Victoria, where the primary issue was whether the trial judge had erred in granting an interlocutory injunction. The dispute centred on whether Yimiao Australia had a legitimate security interest in certain assets, which Cyber Intelligence claimed were dissipated and of little to no value by the time of the trial. The trial judge had granted an injunction, but Yimiao Australia sought leave to appeal, arguing that the judge had not adequately considered the dissipation of asset value and its impact on their security interest.

The central legal issue was whether the trial judge had failed to consider the significant risk that the assets would have little to no value by the time of the trial, and if this omission constituted a miscarriage of justice. The court was required to determine whether the balance of convenience favoured granting the injunction, and whether the undertaking as to damages provided sufficient protection to Cyber Intelligence. Additionally, the court had to assess whether the trial judge had appropriately exercised the discretion to grant an interlocutory injunction under the Personal Property Securities Act 2008.

The court found that the trial judge had indeed failed to adequately consider the effect of the dissipation of asset value on Yimiao Australia’s asserted security interest. The risk that the assets would have little to no value by the time of the trial was significant and warranted careful consideration. The court concluded that the trial judge’s omission constituted a miscarriage of justice and re-exercised its discretion, finding that the balance of convenience did not favour granting the injunction. Consequently, the court allowed the appeal and granted leave to appeal. The injunction was set aside, and the matter was remitted to the trial judge for further consideration.

Orders