Ying v I-Prosperity Pty Ltd
[2020] FCA 1862
•22 December 2020
FEDERAL COURT OF AUSTRALIA
Ying v I-Prosperity Pty Ltd [2020] FCA 1862
File number: NSD 137 of 2020 Judgment of: STEWART J Date of judgment: 22 December 2020 Catchwords: PRACTICE AND PROCEDURE – leave sought to file notice of discontinuance under r 26.12 of the Federal Court Rules 2011 (Cth) – where remaining respondents in liquidation or not in contact – leave granted Legislation: Federal Court Rules 2011 (Cth) rr 4.05, 26.12 Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Number of paragraphs: 14 Date of hearing: 22 December 2020 Counsel for the Applicant: A Combe Solicitor for the Applicant: William Roberts Lawyers Counsel for the First, Second and Third Respondents: The first, second and third respondents did not appear Solicitor for the First, Second and Third Respondents: Norton Rose Fulbright Australia Counsel for the Fourth, Fifth, Sixth, Seventh and Ninth Respondents: The fourth, fifth, sixth, seventh, eighth and ninth respondents did not appear ORDERS
NSD 137 of 2020 BETWEEN: FAXIANG YING
Applicant
AND: I-PROSPERITY PTY LTD (ACN 142 091 585)
First Respondent
I-PROSPERITY GROUP PTY LTD (ACN 607 564 527)
Second Respondent
IPROSPERITY AUSTRALIA PTY LTD (ACN 162 090 146) (and others named in the Schedule)
Third Respondent
ORDER MADE BY:
STEWART J
DATE OF ORDER:
22 DECEMBER 2020
THE COURT ORDERS THAT:
1.The applicant be granted leave to discontinue the proceeding on the basis that each party bear its own costs.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
(Revised from the transcript)STEWART J:
The applicant seeks to discontinue his proceeding against all of the respondents on the basis that each party bears its own costs. That leave is sought pursuant to r 26.12(2)(c) of the Federal Court Rules 2011 (Cth). The provision in the order for leave with regard to costs is required because the applicant would otherwise, by r 26.12(7), have to pay the costs of the other parties.
The liquidators of the first, second, third and eighth respondents have consented to the discontinuance on that basis and have signed notices of discontinuance to that effect. Rule 26.12(2)(b) accordingly applies in respect of those parties and leave is not required, although they can also be taken to have consented to leave being granted.
The fourth respondent was deregistered on 4 October 2020. That fact on its own is sufficient to justify leave to discontinue, and that fact taken together with the observation that the fourth respondent can thus make no claim for costs justifies the costs order that is sought.
It is, therefore, only the position of the other respondents (fifth to seventh and ninth respondents) that need be considered. I will refer to them as the remaining respondents.
This proceeding is but one chapter of a far larger story of the collapse of the I-Prosperity Group. It is reported to be the story of a very substantial fraud. Apparently, hundreds of millions of dollars of investor funds have been lost in a giant Ponzi scheme. It is also reported that the ninth respondent, who is the principal figure behind the group, fled the country in July 2020. Whether all of that is true or not does not matter for present purposes.
The applicant alleges that the first to eighth respondents were part of the I-Prosperity Group which conducted managed investment schemes in properties and businesses, including hotels and casinos. The ninth respondent is a director of each of the companies and CEO of the I-Prosperity Group.
The applicant claims that he transferred US$5 million for investment by the respondents between May 2017 and September 2018. The applicant claims the transfers were made in reliance on representations made by the respondents on the return and distribution rates of the investments. The applicant also claims that he entered into a repayment agreement with the ninth respondent in August 2019. The applicant claims that the repayment agreement has been breached and seeks damages in the sum of more than US$4 million.
All the respondents were at one time represented by solicitors Landerer & Company who filed defences for them. The first to third and eighth respondents thereafter went into administration on 15 July 2020, the eighth respondent was liquidated on 20 July 2020 and the first, second and third respondent were liquidated on 19 August 2020.
On 10 August 2020, Landerer & Company filed a notice of ceasing to act for the fourth to seventh and ninth respondents. As required by Form 8 read with r 4.05(1)(b), the notice of ceasing to act provided the last known residential or business addresses for each of the remaining respondents.
Despite the requirement under r 4.05(2) that a party whose solicitor has filed a notice of intention to cease to act must file a notice of address for service within five days, none of the remaining respondents has filed such an address for service.
Since the solicitors ceased to act, the applicant has written to the remaining respondents at their last known addresses given in the notice of ceasing to act. The correspondence indicated the applicant’s intention to discontinue the proceeding on the basis that each party bears its own costs. Each remaining respondent was advised that unless they indicated to the contrary, they would be taken to have consented to that course. None of the remaining respondents responded to those communications. Each remaining respondent has also been given notice of the application before me today at their last known address already referred to, and none has opposed the application.
Although I cannot be sure that each remaining respondent has actually received the correspondence and notice of this application, given the lack of response from any of them, that the applicant has done all that can reasonably be expected of him, and that it is the responsibility of the respondents to ensure that they are contactable in the proceeding including by filing an address for service, the respondents must be taken to have received notice. No remaining respondent appears intent on opposing the relief that is sought in the interlocutory application.
The group of companies appears to have collapsed, the ninth respondent is reported to have fled, and the applicant sees nothing to be gained by continuing to pursue the respondents that remain. These considerations render the continued pursuit of the principal proceeding pointless.
In those circumstances, I am satisfied that it is most appropriate and in the interests of justice that each party bear its own costs. The applicant should, thus, have leave to discontinue the proceeding on that basis. I therefore make the order sought in the interlocutory application, namely that the applicant be granted leave to discontinue the proceeding on the basis that each party bear its own costs.
I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Stewart. Associate:
Dated: 22 December 2020
SCHEDULE OF PARTIES
NSD 137 of 2020 Respondents
Fourth Respondent:
I-PROSPERITY WATERSIDE RHODES NO 1 PTY LTD (ACN 608 363 551)
Fifth Respondent:
CCIG NOMINEE CO PTY LTD (ACN 616 168 784)
Sixth Respondent:
PLANET TEL NETWORK PTY LTD (ACN 137 333 745)
Seventh Respondent:
PLANET TEL GROUP PTY LTD (ACN 161 256 186)
Eighth Respondent:
I-PROSPERITY CAPITAL PTY LTD (ACN 605 317 360)
Ninth Respondent:
MENGHONG GU
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