Federal Court of Australia

Mirror Trading International (Pty) Ltd (in liq) v Went [2025] FCA 665

ORDERS

THE COURT DECLARES THAT:

1.    Each of the transfers of bitcoin from the first plaintiff (MTI) to the fourth defendant (Transfers Out) as set out in annexure 1 to these orders (the Defendant Bitcoin) are:

(a)    insolvent transactions within the meaning of section 588FC of the Corporations Act 2001 (Cth) (Corporations Act);

(b)    uncommercial transactions within the meaning of section 588FB of the Corporations Act; and

(c)    voidable transactions within the meaning of section 588FE(3) of the Corporations Act.

2.    Pursuant to section 588FF(1)(h) of the Corporations Act, the Transfers Out are and were from the date they were each made void as against the second to ninth plaintiffs.

THE COURT ORDERS THAT:

3.    Pursuant to rule 5.23(2)(c) of the Federal Court Rules 2011 (Cth), judgment be given against the fourth defendant for the relief claimed in the originating process and the statement of claim dated 21 March 2025.

4.    Pursuant to section 588FF(1)(c) of the Corporations Act, the fourth defendant pay to MTI the sum of $828,486.36 being the Australian Dollar value of the Defendant Bitcoin as at the date of these orders.

5.    Pursuant to section 588FF(1)(c) of the Corporations Act the fourth defendant is to pay MTI interest in the sum of $49,226.65 being the interest on the value of the Defendant Bitcoin from the date of demand being 24 September 2024.

6.    The fourth defendant pay the plaintiffs’ costs of the Interlocutory Process dated 2 June 2025 and of the proceeding.

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

REASONS FOR JUDGMENT

(Delivered ex tempore, revised from the transcript)

O’CALLAGHAN J:

1    I have before me an application by the plaintiffs, in which they seek judgment against the fourth defendant, Alby (also known as “Albert”) Koster, pursuant to rules 5.22 and 5.23 of the Federal Court Rules 2011 (Cth) (Federal Court Rules). The plaintiffs are Mirror Trading International (Pty) Ltd (in liquidation) (MTI) and its eight joint liquidators.

2    Mr MAJ McKillop of counsel appeared this morning and made oral submissions in support of the application. He read the affidavits of Mr Vangev affirmed on 2 and 10 June 2025 and an affidavit of service of Mr Smith affirmed on 15 May 2025. Mr McKillop also relied on written submissions filed on 10 June 2025.

3    Rule 5.22 of the Federal Court Rules provides that a party is in default if the party fails to:

(a)     do an act required to be done, or to do an act in the time required, by these Rules; or

(b)     comply with an order of the Court; or

(c)     attend a hearing in the proceeding; or

(d)     prosecute or defend the proceeding with due diligence.

4    Rule 5.23(2)(c) provides the court with power to enter judgment for an applicant where the respondent is in default of a step in the proceeding, and the proceeding was started by an originating application supported by a statement of claim. This proceeding was so started.

5    The power to enter judgment in such circumstances is enlivened when an applicant applies to the court for the order. The power is a discretionary one and must be exercised cautiously. The court needs to be satisfied, on the face of the statement of claim, that the applicant is entitled to the relief claimed. And where a defaulting party is a respondent to the pleaded claim, as is the case here, the giving of judgment for final relief on the application needs to deliver complete success to the applicant without investigation of the merits of a pleaded claim.

6    For the purposes of determining whether the court is satisfied on the basis of the statement of claim that the applicant is entitled to the relief claimed, the facts as alleged in it are deemed to have been admitted by the respondent. Obviously enough, the court must be satisfied that the respondent, here Mr Koster (as the fourth defendant), has been served with the relevant documents and that the court has jurisdiction to grant the relief.

7    In this case, the plaintiffs also seek declaratory relief, and the court needs to be satisfied as to the utility of granting such relief.

8    In this case, I am satisfied on the evidence that Mr Koster was personally served on 28 April 2025 with the originating process filed 21 March 2025, the statement of claim filed on the same date, an email from my executive assistant informing him that a case management hearing was to take place on 9 May 2025 and an affidavit of Mr Cooper affirmed on 13 March 2025.

9    The evidence also discloses that Mr Koster has not filed a notice of address for service, nor did he attend the case management hearing that took place on 9 May 2025.

10    I now set out, in summary form, the nature of the proceeding brought by the plaintiffs against the defendants, including the fourth defendant.

11    MTI is a South African company in liquidation, which it is alleged was used as a vehicle for a worldwide “Ponzi scheme” involving bitcoin. The liquidators in this case are the eight appointed liquidators to MTI, who were appointed in winding up proceedings in the High Court of South Africa on 30 June 2021. On 6 October 2023, the liquidation was recognised in Australia as a foreign proceeding, pursuant to the Cross-Border Insolvency Act 2008 (Cth).

12    In March 2024, a judge of this court extended the time for the liquidators to make applications of the type now made. In essence, it is alleged by the liquidators and MTI that MTI operated an illegal Ponzi-type scheme in which members of the public invested in a bitcoin venture, promising high returns. Investors were told that the bitcoin was to be managed by an “AI trading bot” on something called the “Trade 300” platform. In fact, that platform did not exist and neither did any pooled investment.

13    It is alleged, in substance, that the scheme was a Ponzi-type scheme because returns to early investors were funded by the monies of later investors. Part of the object of the liquidators is to identify so-called “winners” (i.e. early investors who were paid returns) and assess whether it is possible to make a recovery from them so that their returns can be redistributed across all investors.

14    The size of the Ponzi scheme is remarkable. The liquidators have identified over 300,000 investors across 234 countries who have received a return of bitcoin from MTI. These proceedings have been issued to bring recovery proceedings in Australia against certain Australian-based investors, among whom is included the fourth defendant. It is alleged that the fourth defendant was, in substance, an early investor who received returns of bitcoin as a “winner”. It is alleged, and I agree, that the legal effect of such “arrangements” is that there was no consideration for the transfers, and that they are not a payment out of earnings because the fourth defendant’s bitcoin was never in fact invested by MTI.

15    The liquidators claim that MTI and the liquidators are entitled to recover payments of bitcoin made to the fourth defendant, set out in schedule B to the statement of claim, as “insolvent transactions” within the meaning of s 588FC of the Corporations Act 2001 (Cth) (Corporations Act), “uncommercial transactions” within the meaning of s 588FB of the Corporations Act and “voidable transactions” within the meaning of s 588FE(3) of the Corporations Act. The liquidators also claim, pursuant to s 588FF(1)(h) of the Corporations Act, that transfers of bitcoin to the fourth defendant are and were, from the date that they were each made, void as against the second to ninth plaintiffs.

16    The plaintiffs seek judgment for the return of the amount of bitcoin transferred by MTI to the fourth defendant, valued as at today. Mr Vangev has sworn that the value of that bitcoin (being 4.9037915400000003 bitcoin) totals $828,486.36, on the basis that the value of each bitcoin as at today is $168,937.53. The plaintiffs also seek interest on that amount from the date of the liquidators’ demand for repayment, namely from 24 September 2024 until today. Mr Vangev deposed that interest calculated at a rate of 8.35 per cent from 24 September 2024 until today is $49,226.65.

17    I am satisfied on the face of the statement of claim to which Mr McKillop took me in some detail that the plaintiffs are entitled to the relief claimed, including declaratory relief. I am also satisfied that the giving of judgment against the fourth defendant for final relief on this application will deliver complete success to the plaintiffs without any investigation of the merits of the claim. As I noted earlier, I am also satisfied on the evidence that all appropriate documents have been served on the fourth defendant personally, that he has failed to file a notice of address for service and that he failed to attend the case management hearing on 9 May 2025.

18    As the fourth defendant has failed to do an act required to be done by the Federal Court Rules and has failed to attend a hearing in the proceeding within the meaning of rule 5.22, he is in default of a step in the proceeding within the meaning of rule 5.23(2)(c).

19    As I said, the plaintiffs also seek declaratory relief. In my view, there is no difficulty in granting declaratory relief in the absence of a contradictor, because as Bromwich J said in Geneva Laboratories Ltd v Prestige Premium Deals Pty Ltd (No 4) [2016] FCA 867; (2016) 120 IPR 133 at 148–149 [82], the requirement of some opposition (and thus the existence of a controversy sufficient to ground jurisdiction) is satisfied by a respondent not turning up, despite knowing or being presumed to know that a declaration against them was to be sought.

20    I am satisfied that there is some utility in making the declarations that the plaintiffs seek — namely, that each of the transfers from the first plaintiff to the fourth defendant set out in schedule B to the statement of claim is an:

(a)    insolvent transaction within the meaning of s 588FC of the Corporations Act;

(b)    uncommercial transaction within the meaning of s 588FB of the Corporations Act; and

(c)    voidable transaction within the meaning of s 588FE(3) of the Corporations Act.

21    It follows that I am satisfied that it is appropriate to make a declaration pursuant to s 588FF(1)(h) of the Corporations Act that the transfers of bitcoin to the fourth defendant identified in schedule B to the statement of claim were, from the date that they were each made, void as against the second to ninth plaintiffs.

Associate:

Dated:    19 June 2025

SCHEDULE OF PARTIES