Georges v Seaborn International Pty Ltd (Trustee), in the matter of Sonray Capital Markets Pty Ltd (in liq) [2012] FCAFC 140

FEDERAL COURT OF AUSTRALIA

Georges v Seaborn International Pty Ltd (Trustee), in the matter of Sonray Capital Markets Pty Ltd (in liq) [2012] FCAFC 140 Citation: Georges v Seaborn International Pty Ltd (Trustee), in the matter of Sonray Capital Markets Pty Ltd (in liq) [2012] FCAFC 140

Appeal from: Georges v Seaborn International (Trustee), in the matter of Sonray Capital Markets Pty Ltd (in liq) [2012] FCA 75

Parties: GEORGE GEORGES (IN HIS CAPACITY AS JOINT AND SEVERAL LIQUIDATOR OF SONRAY CAPITAL MARKETS PTY LTD (IN LIQUIDATION) ACN 104 482 993), JOHN ROSS LINDHOLM (IN HIS CAPACITY AS JOINT AND SEVERAL LIQUIDATOR OF SONRAY CAPITAL MARKETS PTY LTD (IN LIQUIDATION) ACN 104 482 993) and SONRAY CAPITAL MARKETS PTY LTD (IN LIQUIDATION) ACN 104 482 993 v SEABORN INTERNATIONAL PTY LTD (AS TRUSTEE FOR THE SEABORN FAMILY TRUST), MARYLAND PTY LTD ACN 150 886 427 (AS TRUSTEE FOR THE NORWEGIAN TRUST), ALISANTE PTY LTD ACN 067 268 802, BON RIVER PTY LTD ACN 059 666 750, ROLAND MARK WARD ABN 66 473 078 418 (AS TRUSTEE FOR THE AWARD SUPERANNUATION FUND) and EFAX PTY LTD ACN 001 886 120 EAGLE SECURITIES LTD v EFAX PTY LTD ACN 001 886 120, GEORGE GEORGES (IN HIS CAPACITY AS JOINT AND SEVERAL LIQUIDATOR OF SONRAY CAPITAL MARKETS PTY LTD (IN LIQUIDATION) ACN 104 482 993), JOHN ROSS LINDHOLM (IN HIS CAPACITY AS JOINT AND SEVERAL LIQUIDATOR OF SONRAY CAPITAL MARKETS PTY LTD (IN LIQUIDATION) ACN 104 482 993)) and SONRAY CAPITAL MARKETS PTY LTD (IN LIQUIDATION) ACN 104 482 993

File numbers: VID 160 of 2012 VID 250 of 2012

Judges: JACOBSON, BESANKO AND JAGOT JJ

Date of judgment: 5 October 2012

Catchwords: CORPORATIONS – appeal from orders made on application by liquidators for directions pursuant to s 511 of Corporations Act 2001 (Cth) – where defalcations on client accounts held with financial services provider Sonray – ownership of shares acquired by Sonray on behalf of client Efax – whether shares to be included in pooling of assets in accordance with rules concerning deficient mixed trust funds – whether agency or contractual relationship between Efax and Sonray – where purchase price of shares paid into tainted segregated account by Efax – where Sonray recorded debit in client ledger of Efax – whether shares paid for through use of funds from tainted segregated account – consideration of what constitutes payment – whether legitimate or lawful appropriation – whether contributors to tainted segregated account have equitable interest in shares on application of principles of tracing. Held: The appeal should be allowed and the directions for pooling of the shares sought by the liquidators should be made.