Zetta Jet Pte Ltd v The Ship “Dragon Pearl” (No 2)

Zetta Jet Pte Ltd and Mr Jonathan D. King, a trustee appointed under Chapter 7 of Title 11 of the United States Code, sought an interlocutory injunction to prevent the removal or alienation of the luxury cruise yacht "Dragon Pearl" from Australian waters. The injunction was sought to prevent Linkage Access Limited from removing the yacht or alienating title in it pending the trial of the Second Dragon Pearl Proceeding. Zetta Jet and Mr King alleged that one of Zetta Jet’s former directors, Mr Geoffrey Owen Cassidy, misappropriated AU$4,492,034.82 from Zetta Jet and used it to purchase the Dragon Pearl. The vessel was registered in the name of Dragon Pearl Limited, a company incorporated in the Marshall Islands. Mr Cassidy allegedly disposed of his interest in the Dragon Pearl to New Target Investments Ltd in satisfaction of a personal debt. The vessel has been in Australian waters and was subject to litigation. The Court was required to decide whether the plaintiffs had an arguable case and standing to seek the injunction. The Court also had to consider the relief available under the Model Law on Cross-Border Insolvency Art 19(1) in light of the foreign trustee in bankruptcy not yet being recognised in Australia. The Court found that there was an arguable case that Mr Cassidy misappropriated funds to acquire the Dragon Pearl. However, the Court held that the plaintiffs did not have standing to seek the injunction because the foreign trustee in bankruptcy was not yet recognised in Australia and recognition proceedings were on foot. The Court also found that the plea of res judicata was likely to succeed because the prior proceeding had been dismissed after the plaintiffs informed the Court that they could not proceed with the case. Therefore, the application for the interlocutory injunction was dismissed with costs. The Court dismissed the Plaintiff’s Amended Interlocutory Application filed on 19 July 2018 with costs.