Federal Court of Australia

Australian Securities and Investments Commission v NGS Crypto Pty Ltd (No 7) [2026] FCA 1545

ORDERS

UPON THE UNDERTAKING OF SHIHO BROWN, FILED AND SERVED BY 9.00AM (BRISBANE TIME) ON 21 OCTOBER 2026:

(A)    Prior to settlement of any sale of the property situated at Lot 26, 2 Jessie Daniels Drive, Benobble in the State of Queensland (Property):

(a) not to further charge, mortgage or otherwise encumber the Property;

(b) not to sell, dispose of or otherwise deal with the Property, except:

(i) by taking steps reasonably necessary to market and sell the Property in an arm’s-length transaction; and

(ii) by completing a sale of the Property in accordance with this undertaking; and

(c) to agree to any aggrieved person, within the meaning of s 1323 of the Corporations Act 2001 (Cth) (Corporations Act), enforcing against the Property, in accordance with the rules of any Australian court in which it is obtained, any future judgment obtained against the Sixth Defendant in relation to the affairs of the First to Third Defendants which are the subject of investigation by the Plaintiff.

(B)    Upon settlement of any sale of the Property, to apply the proceeds of sale in the following order of priority:

(a)    first, in payment of the reasonable costs and expenses of the sale, including the conveyancer’s or solicitor’s reasonable costs and disbursements and the selling agent’s commission and reasonable marketing expenses;

(b)    secondly, in repayment in full of the facility provided by the National Australia Bank secured by the mortgage over the Property; and

(c)    thirdly, in payment into the trust account of Gadens, solicitors for the Sixth Defendant, of:

(i) the sum of $135,000; or

(ii) if the proceeds remaining after the payments referred to in paragraphs (B)(a) and (B)(b) are less than $135,000, the whole of those remaining proceeds,

(Fund).

(C)    Not to dispose of or otherwise deal with the Fund, or any part of it, without:

(a) the written agreement of:

(i) the liquidators of the NGS Digital Mining Scheme;

(ii) Ms Shiho Brown; and

(iii) the Sixth Defendant; or

(b) further order of the Court.

(D)    To agree to any aggrieved person, within the meaning of s 1323 of the Corporations Act enforcing against the Fund, in accordance with the rules of any Australian court in which it is obtained, any future judgment obtained against the Sixth Defendant in relation to the affairs of the First to Third Defendants which are the subject of investigation by the Plaintiff.

THE COURT ORDERS THAT:

1.     Subject to the undertaking given by Ms Shiho Brown and recorded above (New Undertaking), Ms Shiho Brown be released from the undertaking given by her and recorded in the orders of Derrington J made on 30 April 2024 (30 April Undertaking), insofar as is necessary to permit her to market and sell the Property in accordance with the New Undertaking.

2. The 30 April Undertaking otherwise remain in force until settlement of the sale of the Property.

3. Upon:

(a) settlement of the sale of the Property; and

(b) payment of the Fund into the trust account of Gadens in accordance with paragraph (B)(c) of the New Undertaking,

Ms Shiho Brown be released from the balance of the 30 April Undertaking.

4. For the avoidance of doubt, the Fund must not be applied towards the Sixth Defendant’s legal expenses except with:

(a) the written agreement of each person identified in paragraph (C)(a) of the New Undertaking; or

(b) further order of the Court.

5. Paragraph 3 of the interlocutory application lodged for filing by the Sixth Defendant on 3 August 2026 (Interlocutory Application) is dismissed.

6. The balance of the Interlocutory Application be adjourned for hearing at 10.15am (Brisbane time) on 3 November 2026.

7. The costs of and incidental to the determination of whether, and on what terms, Ms Shiho Brown should be released from the 30 April Undertaking be reserved.

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

REASONS FOR JUDGMENT

COLLIER ACJ:

1 Before the Court is the discrete question whether, and if so on what terms, Ms Shiho Brown should be released from an undertaking recorded in orders made by Derrington J on 30 April 2024 (Undertaking), so as to permit the sale of Lot 26, 2 Jessie Daniels Drive, Benobble (Property). That question arises in the context of an interlocutory application brought by the sixth defendant, Mr Ryan Todd Brown, the balance of which remains for determination.

2 It is first necessary to outline the background to the proceedings, to give context to the parties’ submissions.

Background

3 A detailed factual background of the matter is set out at [4]-[15] of my decision in Australian Securities and Investments Commission v NGS Crypto Pty Ltd (No 5) [2025] FCA 1611 (NGS Crypto (No 5)).

4 In summary, NGS Group Ltd (NGS Group), a Hong Kong-registered company, offered a “blockchain mining package with minimum monthly returns” (Product) to Australian investors from November 2017, with NGS Crypto Pty Ltd (NGS Crypto) and NGS Digital Pty Ltd (NGS Digital) acting as authorised Australian resellers responsible for marketing and facilitating investments. Between November 2017 and December 2023, more than 450 Australian investors invested approximately $58.9 million in the Product, including 227 investors who invested through self-managed superannuation funds. The Product was promoted as a fixed-term investment generating returns through blockchain mining, with representations including annual returns of 6-16% and the return of 100% of investors’ capital at the end of the term. Investments were made under Mining Investment Agreements issued by NGS Group, with funds transferred either in cryptocurrency or through bank accounts operated by NGS Digital. The activities and arrangements undertaken by NGS Crypto and NGS Group to elicit or obtain funds from investors for the purpose of engaging in digital asset mining operations constituted the NGS Digital Mining Scheme.

Procedural History

5 On 9 April 2024 ASIC commenced proceedings by way of an Originating Process seeking urgent ex parte orders to preserve the defendants’ assets, including freezing orders and the appointment of receivers under s 1323 of the Corporations Act 2001 (Cth) (Originating Process).

6 By way of Orders made by Meagher J on 10 April 2024 (10 April Orders), and later varied by Derrington J on 30 April 2024 (30 April Orders), receivers were appointed over the defendants’ digital currency assets (Digital Currency Assets), the defendants were required to provide access to and information about the Digital Currency Assets and their financial accounts, and the defendants were restrained from dissipating or altering the Digital Currency Assets.

7 Insofar as is relevant to Mr Brown, the 30 April Orders created three carve-outs from the asset preservation regime ordered in the 10 April Orders. In particular:

The asset preservation restraint contained in the 10 April Orders was relaxed to permit the Receivers to pay Mr Brown $6,000 per month for his ordinary living expenses, from the proceeds of Digital Currency Assets delivered by him to the Receivers and which he asserted to be his assets (Orders 14(b) and 15(a) of the 30 April Orders).

The Receivers were permitted to pay Mr Brown’s reasonable legal expenses in the proceeding directly to his legal representatives, from the proceeds of Digital Currency Assets delivered by him and asserted to be his assets (Order 14(c) of the 30 April Orders). The mechanism for payment required itemised bills to be provided to the Receivers, invoices to be submitted by Mr Brown within a reasonable time, and the Receivers either to pay them within 14 days or seek directions from the Court as to the reasonable amount payable (Order 15(b)(i)-(iii) of the 30 April Orders).

On the basis of the Undertaking, the Receivers were permitted to pay Mr Brown $135,000, from Digital Currency Assets delivered by him and asserted to be his, for the purpose of Ms Brown completing the purchase of Property (Order 14(d) of the 30 April Orders).

8 Materially, the 30 April Orders set out the Undertaking in the following terms:

UPON THE UNDERTAKING OF SHIHO BROWN, GIVEN BY HER COUNSEL in relation to an unimproved real property at Lot 26, 2 Jessie Daniels Drive, Benobble in the state of Queensland (the Property), until further order or the written agreement of the Plaintiff:

(A)    not to further charge, mortgage or otherwise encumber the Property beyond that which is reasonably necessary to secure finance to enable her to complete the purchase of the Property as required by the contract referred to in paragraphs 39 and 40 of the Affidavit of Ryan Todd Brown filed 22 April 2024 (the Contract);

(B)    to discharge her repayment obligations to the bank or financial institution which provides the finance to enable her to complete the purchase of the Property as required by the Contract in accordance with the terms on which such finance is offered;

(C)    not to sell, dispose of, or otherwise deal with the Property; and

(D)    to agree to any aggrieved person (within the meaning of that term in s 1323 of the Corporations Act 2001 (Cth) enforcing any future judgment which may be obtained against the Sixth Defendant in relation to the affairs of the First to Third Defendants the subject of investigation by the Plaintiff against the Property in accordance with the rules of any Australian court in which such a judgment may be obtained,

9 On 18 December 2025 I delivered judgment in NGS Crypto (No 5). I relevantly found that the Product constituted an unregistered managed investment scheme and financial product, and that NGS Crypto, NGS Digital and NGS Group had carried on financial services businesses in Australia without holding the required Australian financial services licences.

10 Further, I found that NGS Crypto and NGS Digital provided financial services on behalf of the unlicensed NGS Group, and that NGS Group operated the unregistered scheme and carried on business in Australia without being registered as a foreign company.

11 In accordance with those findings, I made several orders. In substance, I granted ASIC the substantive relief sought by the Originating Process, including declarations of contravention, permanent injunctions, and orders winding up NGS Crypto, NGS Group and the NGS Digital Mining Scheme, with liquidators appointed to investigate and administer their affairs.

12 On 3 March 2026 I delivered judgment in Australian Securities and Investments Commission v NGS Crypto Pty Ltd (No 6) [2026] FCA 193 (NGS Crypto (No 6)), in which I determined the outstanding question of costs following the substantive judgment in NGS Crypto (No 5). I ordered that NGS Digital pay ASIC’s costs of the proceeding as against NGS Digital. Further, I ordered that the fifth defendant, Mr Mark James Ten Caten, pay ASIC’s costs of the unsuccessful interlocutory application lodged for filing by Mr Caten and NGS Group on 27 May 2024, which had sought to discharge or vary the 10 April Orders, which were later varied by the 30 April Orders.

13 I reserved judgment on the remaining costs issues concerning ASIC and the fourth defendant, Mr Brett Allan Mendham, Mr Caten and Mr Brown until the Receivers are discharged, at which point ASIC must notify the Court whether it intends to pursue those costs.

PRESENT PROCEEDINGS

14 On 19 June 2026 Mr Anthony Norman Connelly, Ms Katherine Sozou and Mr William James Harris, in their capacity as receivers and managers of the Digital Currency Assets (Receivers), lodged for filing an Interlocutory Process which sought orders to facilitate the transition from the receivership of the Digital Currency Assets to the liquidation of the NGS Digital Mining Scheme (Receivers’ Interlocutory Process). In particular, the Receivers sought the following orders:

1.    An order under rule 39.05 varying Order 14 of the December Orders to delete the word “Members” from each of subparagraphs (c)(i) and (c)(ii) thereof.

2.    An order that Mr Connelly, Ms Sozou and Mr Harris (as receivers and managers of the Digital Currency Assets) would be justified in transferring the Digital Currency Assets in their possession or under their control to Mr Connelly, Ms Sozou and Mr Harris (as liquidators of the NGS Digital Mining Scheme) in the manner set out in Annexure “ANC-83” to the affidavit of Anthony Norman Connelly sworn 19 June 2026.

3.    An order that Order 15 of the April Orders be discharged.

4.    An order that the costs of and incidental to this application of Mr Connelly, Ms Sozou and Mr Harris (as receivers and managers of the Digital Currency Assets) be paid from the Digital Currency Assets in accordance with the April Orders.

5.    Such further or other order, declaration or direction as may be just.

15 On 3 August 2026 Mr Brown lodged for filing an Interlocutory Application which sought, inter alia, to vary the 10 April Orders, which were later varied by the 30 April Orders, to exclude the digital currency previously held or controlled by Mr Brown from the Digital Currency Assets (Mr Brown’s Interlocutory Application). Mr Brown’s Interlocutory Application also sought the return of the “b21 Wallet” (B21 Wallet) and associated digital currency assets, the release of Ms Brown from the Undertaking, and orders that ASIC pay Mr Brown’s costs, including amounts deducted from the Digital Currency Assets for the Receivers’ costs and expenses. The specific orders sought in Mr Brown’s Interlocutory Application are as follows:

1.    The Orders of Meagher J dated 10 April 2024, as amended by the Orders of Derrington J dated 30 April 2024 (30 April Orders) be varied as follows:

a.    The definition of “Digital Currency Assets” be amended to exclude Digital Currency held or controlled by the Sixth Defendant;

b.    Orders 6 to 12 and 13 to 15 as contained in Annexure A of the orders of Derrington J dated 30 April 2024 be dismissed as against the Sixth Defendant.

c.    ASIC indemnify the Sixth Defendant in respect of any costs and expenses paid to the Receivers’ out of the Digital Currency Assets provided to the Receivers by the Sixth Defendant.

2.    The Receivers (as defined by the 30 April Orders) release:

a.    control and possession of the digital wallet with the address “0x6132285dde5f725b017129342F911c954DC11b21” (b21 Wallet) as provided to the Receivers by the Sixth Defendant;

b.    any and all Digital Currency Assets (and any proceeds from those assets) that were provided to the Receivers by the Sixth Defendant in the b21 Wallet.

3.    Ms Shiho Brown be released from the Undertaking provided by her and recorded in the 30 April Orders.

4.    The Plaintiff pay the costs of the Sixth Defendant in respect of the proceedings, including but not limited to:

a.    any costs arising from or in connection with the Plaintiff’s application pursuant to s 1323 of the Corporation Act 2001 (Cth);

b.     the disbursements made from Digital Currency Assets provided to the Receivers by the Sixth Defendant to pay the Receivers’ costs and expenses pursuant to the orders dated 10 April 2024 and the 30 April Orders.

5.     Any other orders that the Court deems appropriate.

16 On 16 July 2026 I ordered that the Receivers’ Interlocutory Process and Mr Brown’s Interlocutory Application be listed for a one-day hearing on 16 September 2026.

17 At the hearing on 16 September 2026, the Receivers handed up the following draft orders (which were labelled “MFI-6”):

1.    Pursuant to rule 39.05 of the Federal Court Rules 2011 (Cth), Order 14 of the December Orders be varied to delete the word “Members” from each of subparagraphs (c)(i) and (c)(ii) thereof.

2.    Pursuant to section 19 of the Federal Court of Australia Act 1976 (Cth) and rule 14.23 of the Federal Court Rules 2011 (Cth), the Receivers are advised that they would be justified in transferring the Digital Currency Assets in their possession or under their control to Mr Connelly, Ms Sozou and Mr Harris as liquidators of the NGS Digital Mining Scheme in the manner set out in Annexure “ANC- 83” to the affidavit of Anthony Norman Connelly sworn 19 June 2026.

3.    The appointment of the Receivers shall end when they have transferred all the Digital Currency Assets in their possession or under their control to Mr Connelly, Ms Sozou and Mr Harris as liquidators of the NGS Digital Mining Scheme.

4.    Order 15 of the April Orders be discharged.

5.    By 4.00pm on 30 September 2026, the Sixth Defendant must file and serve any affidavit responsive to the evidence adduced by Mr Connelly as to the preliminary view of the liquidators of the First Defendant, Third Defendant and the NGS Digital Minig [sic] Scheme about the provenance of the Digital Currency Assets in the B21 Wallet delivered up by the Sixth Defendant to the Receivers.

6.    By 4:00pm on 28 October 2026, the liquidators of the NGS Digital Mining Scheme must file and serve an affidavit setting out their final view about the provenance of the Digital Currency Assets in the B21 Wallet delivered up by the Sixth Defendant to the Receivers.

7.    The costs of and incidental to the Receivers’ application be paid from the Digital Currency Assets in accordance with the April Orders.

18 At the hearing on 16 September 2026 I made the following Orders:

1.    Pursuant to rule 39.05 of the Federal Court Rules 2011 (Cth), Order 14 of the December Orders be varied to delete the word “Members” from each of subparagraphs (c)(i) and (c)(ii) thereof.

2.    Pursuant to section 19 of the Federal Court of Australia Act 1976 (Cth) and rule 14.23 of the Federal Court Rules 2011 (Cth), the Receivers are advised that they would be justified in transferring the Digital Currency Assets in their possession or under their control to Mr Connelly, Ms Sozou and Mr Harris as liquidators of the NGS Digital Mining Scheme in the manner set out in Annexure “ANC-83” to the affidavit of Anthony Norman Connelly sworn 19 June 2026.

3.    Order 15 of the April Orders be discharged.

4.    By 4.00pm on 30 September 2026, the Sixth Defendant must file and serve any affidavit responsive to the evidence adduced by Mr Connelly as to the preliminary view of the liquidators of the First Defendant, Third Defendant and the NGS Digital Minig [sic] Scheme about the provenance of the Digital Currency Assets in the B21 Wallet delivered up by the Sixth Defendant to the Receivers.

5.    By 4:00pm on 26 October 2026, the liquidators of the NGS Digital Mining    Scheme must file and serve an affidavit setting out their final view about the provenance of the Digital Currency Assets in the B21 Wallet delivered up by the Sixth Defendant to the Receivers.

6.    The costs of and incidental to the Receivers’ application be paid from the Digital Currency Assets in accordance with the April Orders.

7.    The matter be adjourned to be resumed at 2.15pm (Brisbane time) on 21 September 2026.

19 Therefore, I made the orders sought by the Receivers’ Interlocutory Process but I did not make order 3 of the draft orders handed up by the Receivers at the hearing (“MFI-6”), being an order bringing the receivership to an end, because of the unresolved issues concerning costs and the provenance of the B21 Wallet assets (transcript QUD178/2024 16 September 2026 p 57 lines 24-40).

20 Accordingly, the remaining issues in dispute can be summarised as follows:

whether the appointment of the Receivers should end upon them transferring all the Digital Currency Assets in their possession or under their control to Mr Connelly, Ms Sozou and Mr Harris as liquidators of the NGS Digital Mining Scheme;

whether the 10 April Orders, which were later varied by the 30 April Orders, should be varied as sought by Mr Brown’s Interlocutory Application;

whether the Receivers should be required to release the B21 Wallet and related Digital Currency Assets;

whether, and if so on what terms, Ms Brown should be released from the Undertaking, therefore permitting the Property to be sold; and

whether ASIC should pay the costs of Mr Brown in respect of the proceedings, including but not limited to ASIC’s Originating Process and amounts deducted from the Digital Currency Assets for the Receivers’ costs and expenses.

21 At the hearing on 21 September 2026, I reserved my judgment limited to whether, and if so on what terms, Ms Brown should be released from the Undertaking, thereby permitting the Property to be sold (Present Issue).

22 The remaining issues in dispute will be determined following the final hearing of the matter at 10.15am (Brisbane time) on 3 November 2026.

SUBMISSIONS OF THE PARTIES

23 I now turn to the parties’ submissions on the Present Issue.

Mr Brown’s Submissions

24 In support of Mr Brown’s Interlocutory Application, Mr Brown lodged for filing an affidavit affirmed by him on 3 August 2026. In that affidavit, Mr Brown relevantly deposed that:

Mr Brown’s Interlocutory Application was brought, among other things, because of the financial requirements associated with the Property, noting that the $135,000 previously released under the 30 April Orders was confined to the Property’s purchase and did not extend to construction costs or associated financing expenses (at [7]-[10]);

no substantive proceedings had been commenced against Mr Brown and, despite requests by his solicitors, ASIC had not advised when its investigation would conclude, when proceedings may be commenced against Mr Brown, or the nature of any specific allegations against him (at [17]-[23]);

the Digital Currency Assets delivered to the Receivers following Orders made by Meagher J on 10 April 2024 included both assets belonging to NGS Digital and Mr Brown’s personal assets and had by then been expended almost in their entirety (at [28]-[34]);

Mr Brown and Ms Brown’s financial position had deteriorated, with increased living costs requiring them to make significant changes to their spending habits and rely on Mr Brown’s credit card and the sale of personal items (at [45]-[53]);

Mr Brown and Ms Brown’s principal remaining assets were their bank balances, two vehicles and the Property, such that they had no other assets, apart from personal chattels and household items, which could be used to fund legal expenses (at [54]-[95]);

the $6,000 monthly distribution previously received by Mr Brown from the Receivers (in accordance with the 30 April Orders) was no longer sustainable because there were insufficient Digital Currency Assets remaining to fund it (at [96]-[97]);

the Property, which Mr Brown valued at approximately $700,000, was subject to a mortgage with monthly repayments of $3,470.60 and an outstanding balance of $542,006.26 as at 21 July 2026 (at [136]-[139]);

rates of $1,332.01 per six months were also payable in respect of the Property (at [140]-[141]);

the contract concerning the Property required Ms Brown to commence construction of a house by 23 May 2026 (within two years of the settlement date) and complete construction within five years of the settlement date (at [142]-[146]);

the estimated construction cost had increased to $706,539 (at [147]);

further mortgage finance was likely to be non-viable given Mr Brown’s income and existing expenses (at [149]);

Ms Brown was in breach of the relevant contract (at [153]);

Mr Brown and Ms Brown’s combined recurring monthly income was approximately $14,467 and recurring monthly expenses were approximately $18,480, excluding the $6,000 monthly distribution previously received from the Receivers (at [164]-[166]);

Mr Brown’s outstanding legal fees were $77,730.36 as at 3 August 2026, with further work in progress of approximately $30,000 exclusive of GST (at [161]-[162]);

Mr Brown and Ms Brown lacked sufficient assets or income to fund a defence if ASIC were to commence proceedings against Mr Brown (at [163]);

following the depletion of Mr Brown’s asserted personal Digital Currency Assets and the proposed cessation of the $6,000 monthly distribution, Mr Brown would no longer be able to meet the ongoing expenses associated with the Property (at [168]-[169]); and

Mr Brown and Ms Brown therefore needed to sell the Property to mitigate the ongoing expenses associated with the Property, pay their ongoing living expenses, repay outstanding liabilities and fund any legal defence for proceedings that are commenced against Mr Brown (at [169]-[170]).

25 Mr Brown also relied on a further affidavit affirmed by him on 10 September 2026 in which he deposed that:

Coastal Real Estate had provided a sales estimate of the Property on 4 September 2026 which placed the Property’s value at $900,000 to $950,000 (at [10]-[13]);

Mr Brown’s finances had continued to be constrained (at [15]);

on or around 21 August 2026, Mr Brown became aware that he was unable to afford the mortgage payment for himself and Ms Brown, contacted the National Australia Bank (NAB) and advised that he was experiencing financial difficulties, and entered into an informal arrangement requiring him to make two payments in September 2026 (at [14]-[17]);

Mr Brown was unsure how he would be able to afford the next mortgage payments (at [18]);

in 2024, Mr Brown had provided an individual who identified themselves as being employed by the Receivers with a “Ledger Nano X” that was required to access the B21 Wallet and which cost approximately $200 (at [20]-[21]); and

given his financial circumstances, Mr Brown sought either replacement of the “Ledger Nano X” or reimbursement of its cost (at [23]).

26 On 12 September 2026, submissions were filed in support of Mr Brown’s Interlocutory Application. In summary, Mr Brown submitted the following regarding the Present Issue:

the Undertaking had been given by Ms Brown as the condition upon which $135,000 of Mr Brown’s Digital Currency Assets was released to enable her to complete the purchase of the Property, and had protected the Receivers and ASIC only in respect of the $135,000 (at [6]-[8], [31]);

the Undertaking had caused financial hardship to Mr Brown, Ms Brown and their family, whose liquid funds were $9,477 and whose monthly expenses exceeded their income by approximately $4,000, with the Property being one of their only significant remaining assets (at [30]);

Ms Brown could no longer comply with the requirement in the Undertaking that she meet the mortgage repayments because of the family’s monthly deficit, the cessation of Mr Brown’s allowance from the Receivers and “$9,477 in the bank” (at [7], [32]);

a mortgagee sale would dissipate the equity which ASIC maintained the Undertaking was intended to protect, whereas a sale by Ms Brown would not (at [32]);

the Property was vacant and Ms Brown was contractually obliged to construct a house upon it and was already in breach of that obligation (at [33]);

Mr Brown and Ms Brown could not fund the required construction and were unlikely to obtain finance (at [33]);

the Property cost approximately $3,693 per month to hold, which represented almost the whole of the family’s asserted monthly shortfall (at [33]);

the Property was estimated to be worth between $700,000 and $950,000 and was subject to a mortgage of $542,006, such that its “sale would release the equity the Family needs to live on” (at [33]);

although ASIC maintained that the Undertaking remained necessary because the equity in the Property stood in place of the $135,000 released and because Mr Brown might be liable to investors, the receivership which the Undertaking supported had “run its course”, the Receivers held none of Mr Brown’s assets and were retiring (at [34]);

continuing the Undertaking would be disproportionate because it imposed continuing harm upon Mr Brown and Ms Brown in order to preserve equity in property which was not Mr Brown’s against a claim which ASIC had not formulated (at [34]);

if ASIC sought pre-judgment security over the Property in respect of a claim not yet formulated against Mr Brown, the appropriate course would be a freezing order, rather than the indefinite continuation of the Undertaking (at [34]); and

alternatively, if the Court considered that some protection should be maintained, Ms Brown should be released from the restraints preventing her from further encumbering or selling the Property so that it could be sold, with the net proceeds of sale up to $135,000 to be held in her solicitors’ trust account pending further order (at [35]).

27 On 18 September 2026, Mr Brown filed further reply submissions, in which he submitted in summary:

the Receivers’ opposition to Ms Brown’s proposed undertaking (contained in “MFI-5” handed up at the hearing on 16 September 2026) rested on three propositions:

* (a) that their evidence was sufficient to support a proprietary claim;

* (b) that it shifted the evidential burden to Mr Brown, which he had failed to discharge; and

* (c) that permitting the $135,000 to be depleted would effectively deplete that amount from the liquidation,

none of which the Court would accept to be made out (at [1]-[2]);

although the Court retained a discretion to permit the use of assets even where a proprietary claim had been made, no proprietary claim had in fact been made against Mr Brown (at [3]);

the Receivers’ evidence did not establish the material facts necessary to support a proprietary claim against Mr Brown as:

* the concept of “Investor Funds” did not itself establish ownership;

* the identified transactions involved transfers from wallets used by the corporate defendants to the B21 Wallet rather than payments directly from investors to Mr Brown; and

* the evidence did not establish the purpose of those transfers, apart from references to Mr Brown’s commissions (at [4]-[5]);

no new allegation had been put to Mr Brown that the funds transferred to the B21 Wallet were subject to a trust, or that he had knowingly received “Investor Funds” (at [6]);

rather, Mr Brown’s evidence was that the B21 Wallet pre-dated his involvement with NGS Digital and that funds paid into it represented commissions, with the Receivers’ evidence showing that at least some payments into the B21 Wallet corresponded with commission invoices (at [6]);

the fact that funds could be “traced” back to investors did not itself give rise to a proprietary claim against Mr Brown, and the evidential burden could not properly have shifted to him where such an allegation had not adequately been put to him (at [7]-[8]);

the $135,000 previously released did not form part of the assets available to the liquidators because that money had been applied towards the purchase of the Property (at [9]); and

the Undertaking instead permitted a successful claimant to enforce against the Property to the extent of the $135,000, meaning that even if the liquidators concluded that the assets in the B21 Wallet belonged to the NGS Group, they would have no automatic entitlement to the $135,000 and would still be required to bring a successful claim (at [9]).

28 At the hearing on 16 September 2026, Counsel for Mr Brown handed up a new undertaking that Counsel proposed be made upon Ms Brown’s release from the Undertaking, which was labelled as “MFI-5” (MFI-5). The undertaking proposed in MFI-5 was in the following terms:

UPON THE UNDERTAKING OF SHIHO BROWN, GIVEN BY HER COUNSEL, UNTIL 4PM ON 28 OCTOBER 2026 OR OTHER ORDER OF THE COURT:

a)    upon settlement of any sale of the property at Lot 26, 2 Jessie Daniels Drive, Benobble in the state of Queensland (the Property), to pay the proceeds of sale in the following manner and priority:

a.    firstly, payment of all costs and expense of sale the conveyancer’s legal costs and disbursements and agent’s commission and expenses;

b.    secondly, repayment in full of the NAB facility with account number 92-192-0362, being the mortgage over the Property; and

c.    thirdly, the sum of $135,000 (or if the proceeds of sale are less than $135,000, that lesser sum) (the Fund) into the trust account of Gadens (solicitors for the Sixth Defendant);

b)    not to dispose of, or otherwise deal with the Fund or any part thereof without written agreement of the liquidators of the NGS Managed Investment Scheme, Ms Shiho Brown and the Sixth Defendant, or the leave of the Court, except in relation to the Sixth Defendant’s reasonably incurred legal expenses:

a.    the Sixth Defendant’s legal representatives are to deliver to the Receivers itemised bills within the meaning of s 300 of the Legal Profession Act 2007

b.    the Sixth Defendant is to submit any invoices received from his legal practitioners to the Liquidators within a reasonable time after receipt

c.    the Receivers are to either authorise payment of those invoices within 14 days or make an application to the Court for directions as to the reasonably incurred amount that ought to be paid on accounts of those liabilities;

d.    if authorised, or in the absence of an application by the Liquidators to the Court, Gadens are to pay apply the Fund towards the outstanding legal fees;

c)    to agree to any aggrieved person (within the meaning of that term in s 1323 of the Corporations Act 2001 (Cth)) enforcing any future judgment which may be obtained against the Sixth Defendant in relation to the affairs of the First to Third Defendants the subject of investigation by the Plaintiff against the Fund in accordance with the rules of any Australian court in which such a judgment may be obtained,

(with tracked changes accepted)

29 At the hearing on 21 September 2026, Counsel for Mr Brown provided the Court with a revised undertaking that they proposed be made upon Ms Brown’s release from the Undertaking, which was labelled as “MFI-8” (MFI-8). The revised undertaking proposed in MFI-8 was in the following terms:

UPON THE UNDERTAKING OF SHIHO BROWN, GIVEN BY HER COUNSEL, UNTIL FURTHER ORDER OF THE COURT:

a)    upon settlement of any sale of the property at Lot 26, 2 Jessie Daniels Drive, Benobble in the state of Queensland (the Property), to pay the proceeds of sale in the following manner and priority:

(i)    firstly, payment of all costs and expense of sale the conveyancer’s legal costs and disbursements and agent’s commission and expenses;

(ii)    secondly, repayment in full of the NAB facility with account number 92-192-0362, being the mortgage over the Property; and

(iii)    thirdly,  the sum of $135,000 (or if the proceeds of sale are less than $135,000, that lesser sum) (the Fund) into the trust account of Gadens (solicitors for the Sixth Defendant);

b)    not to dispose of, or otherwise deal with the Fund or any part thereof without written agreement of the liquidators of the NGS Managed Investment Scheme, Ms Shiho Brown and the Sixth Defendant, or the leave of the Court, except in relation to the Sixth Defendant’s reasonably incurred legal expenses:

(i)    the Sixth Defendant’s legal representatives are to deliver to the Receivers itemised bills within the meaning of s 300 of the Legal Profession Act 2007

(ii)    the Sixth Defendant is to submit any invoices received from his legal practitioners to the Liquidators within a reasonable time after receipt

(iii)    the Receivers are to either authorise payment of those invoices within 14 days or make an application to the Court for directions as to the reasonably incurred amount that ought to be paid on accounts of those liabilities;

(iv)    if authorised, or in the absence of an application by the Liquidators to the Court, Gadens are to pay apply the Fund towards the outstanding legal fees;

c)    to agree to any aggrieved person (within the meaning of that term in s 1323 of the Corporations Act 2001 (Cth)) enforcing any future judgment which may be obtained against the Sixth Defendant in relation to the affairs of the First to Third Defendants the subject of investigation by the Plaintiff against the Fund in accordance with the rules of any Australian court in which such a judgment may be obtained,

d)    prior to the sale of the Property occurring:

(i)    not to further charge, mortgage or otherwise encumber the Property;

(ii)    to agree to any aggrieved person (within the meaning of that term in s 1323 of the Corporations Act 2001 (Cth) enforcing any future judgment which may be obtained against the Sixth Defendant in relation to the affairs of the First to Third Defendants the subject of investigation by the Plaintiff against the Property in accordance with the rules of any Australian court in which such a judgment may be obtained.

(with tracked changes accepted)

30 At the hearing on 16 and 21 September 2026, Counsel for Mr Brown made further oral submissions, including in relation to MFI-5 and MFI-8. Regarding the Present Issue, Counsel for Mr Brown submitted in summary:

the reason Ms Brown had originally given the Undertaking was to enable $135,000 of the Digital Currency Assets to be released so that she could complete the pre-existing contract for the purchase of the Property (transcript QUD178/2024 16 September 2026 p 15 lines 5-13);

Ms Brown should therefore be released from the Undertaking so as to permit the Property to be sold and, if the Court considered further protection necessary, $135,000 of the proceeds could be retained in trust (transcript QUD178/2024 16 September 2026 p 15 lines 15-22);

there was urgency in resolving that issue because Ms Brown would otherwise be in breach of the Undertaking, there being insufficient funds available to meet the mortgage repayments (transcript QUD178/2024 16 September 2026 p 18 lines 35-42);

by way of MFI-5, Ms Brown proffered a replacement undertaking which would operate until further order of the Court, in which Ms Brown would undertake that:

* $135,000 of the net proceeds of sale of the Property would be preserved in Ms Brown’s solicitors’ trust account, corresponding to the amount previously released from the Digital Currency Assets to facilitate the purchase of the Property; and

* Mr Brown would retain access to the $135,000 fund for his reasonably incurred legal expenses,

(transcript QUD178/2024 16 September 2026 p 20 lines 34-36, p 21 lines 39-46, p 23 lines 7-22);

preserving $135,000, rather than the entirety of the net proceeds of sale of the Property, reflected the scope and purpose of the original Undertaking as the $135,000 had been released to enable Ms Brown to purchase the Property, who was not a defendant nor subject to the asset preservation orders (transcript QUD178/2024 16 September 2026 p 47 lines 1-11, p 48 lines 1-34);

requiring more than $135,000 to be retained would therefore enlarge the pool of security beyond that protected by the original orders (transcript QUD178/2024 16 September 2026 p 48 lines 20-22);

in any event, circumstances had materially changed since the Undertaking was given, including because:

* the Digital Currency Assets from which the $135,000 had been released had been exhausted;

* the family’s monthly income was approximately $14,467 against outgoings of approximately $18,480;

* the $6,000 monthly allowance from the receivership was no longer available; and

* Mr Brown and Ms Brown could no longer service the mortgage,

such that sale of the Property had become necessary (transcript QUD178/2024 16 September 2026 p 48 lines 34-49, p 49 lines 1-5);

the proposed $135,000 limitation was also consistent with the absence of evidence that any amount beyond the $135,000 was subject to a potential proprietary claim (transcript QUD178/2024 16 September 2026 p 49 lines 1-9);

Mr Brown should be permitted to meet his reasonably incurred legal expenses from the $135,000 fund because that would be consistent with the 30 April Orders, Mr Brown had substantial outstanding legal fees and further work in progress, the eventual sale price of the Property was uncertain, and, absent such a carve-out, there might be insufficient funds available to meet Mr Brown’s existing and future legal expenses (transcript QUD178/2024 16 September 2026 p 49 lines 11-44);

no proprietary claim had been commenced against Mr Brown, and ASIC or any aggrieved person remained able to seek a freezing order in the usual way if it could establish the requisite basis for such relief, such that the undertaking proffered by Ms Brown in MFI-5 provided sufficient protection in the circumstances (transcript QUD178/2024 16 September 2026 p 49 lines 44-49, p 50 lines 1-14);

by way of MFI-8 (which replaced MFI-5 as Mr Brown’s proposed new undertaking), the Undertaking should be discharged because circumstances had changed, with the new undertaking addressing any residual concerns while avoiding the hardship which continuation of the original Undertaking would cause (transcript QUD178/2024 21 September 2026 p 82 lines 3-15);

ASIC had effectively accepted that the Property should be sold, the remaining “qualms” being whether the whole of the net proceeds or only $135,000 should be preserved and whether legal expenses could be paid from the preserved amount (transcript QUD178/2024 21 September 2026 p 82 lines 15-19);

the Undertaking had been given in the context of an interim receivership under s 1323 of the Corporations Act, to preserve the position pending ASIC’s investigation, and had not been intended to operate indefinitely and “extend into the future for the rest of time” after the utility of those orders had come to an end, particularly where Mr Brown and Ms Brown’s circumstances had “changed” (transcript QUD178/2024 21 September 2026 p 82 lines 19-49);

it would not be in the interests of justice to permit a prospective claimant against Mr Brown to enforce against the Property beyond $135,000, when that was the amount protected by the original 30 April Orders (transcript QUD178/2024 21 September 2026 p 83 lines 1-6);

MFI-8 continued to preserve the $135,000, subject to the proposed legal-expenses carve-out (transcript QUD178/2024 21 September 2026 p 83 lines 6-11); and

the legal-expenses carve-out should be retained because:

* had the $135,000 remained within the receivership, Mr Brown would have had recourse to the relevant assets for legal and living expenses;

* Mr Brown’s outstanding legal fees were approximately $77,000 with approximately $30,000 in additional work in progress as at August 2026; and

* there was no certainty that the sale of the Property would realise sufficient proceeds above the preserved $135,000 to meet those costs; and

the Court should balance the above considerations, the absence of proceedings against Mr Brown and the hardship to Mr Brown and Ms Brown, and release Ms Brown on the terms proposed in MFI-8 (transcript QUD178/2024 21 September 2026 p 83 lines 25-40).

31 Relevantly, Mr Brown also relied on an affidavit of Ms Brown, affirmed on 10 September 2026.

ASIC’s Submissions

32 ASIC filed submissions relevant to Mr Brown’s Interlocutory Application on 11 September 2026. In relation to the Present Issue, ASIC submitted, in summary:

Ms Brown had given the Undertaking in order to obtain the release of $135,000 in proceeds of Digital Currency Assets for the purchase of the Property, which assets would otherwise have remained in the hands of the Receivers (at [14]);

the Undertaking was directed to preserving security for amounts which Mr Brown was or might become liable to pay (at [15]);

because the Undertaking prevented the sale of the Property, Ms Brown should not be released from the relevant restraint (at [16]);

the concerns which had originally justified the asset preservation orders (the 10 April Orders) included concerns about the investment scheme, representations made to induce investment, unlicensed conduct and dealings with investor funds inconsistent with representations concerning their use (at [17]);

those concerns had been “shown to be fully justified”, including by my subsequent findings concerning the NGS Digital Mining Scheme and the corporate defendants (at [18]);

Mr Brown had held a substantial role in the promotion and marketing of the scheme and had been entitled under his contract to commissions on direct sales and overriding commissions on new deals, with his commission invoices appearing to relate to a significant proportion of the relevant Mining Investment Agreements (at [19]-[20]);

the Receivers’ “tracing” evidence indicated that all or most of the Digital Currency Assets in the B21 Wallet were likely derived from funds or digital currency assets subscribed by investors, and Mr Brown might therefore be liable to restore traceable proceeds or pay equitable compensation on the basis of knowing receipt (at [21]);

Mr Brown might also be liable to claims by investors for compensation under s 1317HA of the Corporations Act, including in respect of profits or commissions resulting from relevant contraventions (at [22]); and

the foregoing matters demonstrated the need for the continued preservation of the Undertaking, and therefore of the Property, at least until any claims against Mr Brown were determined (at [23]).

33 Notwithstanding ASIC’s submissions that Mr Brown should not be released from the Undertaking, at the hearing on 16 September 2026 Counsel for ASIC handed up draft orders (which were labelled “MFI-4”) for Ms Brown to be released from the Undertaking on the basis of a new undertaking (MFI-4). The new undertaking that ASIC proposed in MFI-4 was in the following terms:

UPON THE UNDERTAKING OF SHIHO BROWN, GIVEN BY HER COUNSEL:

a)    upon settlement of any sale of the property at Lot 26, 2 Jessie Daniels Drive, Benobble in the state of Queensland (the Property), to pay the proceeds of sale in the following manner and priority:

a.    firstly, payment of all costs and expense of sale the conveyancer’s legal costs and disbursements and agent’s commission and expenses;

b.    secondly, repayment in full of the NAB facility with account number 92-192-0362, being the mortgage over the Property; and

c.    thirdly, the balance of such proceeds (the Fund) into the trust account of Gadens (solicitors for the Sixth Defendant);

b)    not to dispose of, or otherwise deal with the Fund or any part thereof without written agreement of the liquidators of the NGS Managed Investment Scheme, Ms Shiho Brown and the Sixth Defendant, or the leave of the Court; and

c)    to agree to any aggrieved person (within the meaning of that term in s 1323 of the Corporations Act 2001 (Cth)) enforcing any future judgment which may be obtained against the Sixth Defendant in relation to the affairs of the First to Third Defendants the subject of investigation by the Plaintiff against the Fund in accordance with the rules of any Australian court in which such a judgment may be obtained,

34 At the hearing on 16 and 21 September 2026, Counsel for ASIC made further oral submissions. ASIC also relied upon an amended outline of proposed oral submissions filed on 20 September 2026. Regarding the Present Issue, and MFI-4, materially Counsel for ASIC:

accepted that Ms Brown was likely unable to continue to maintain the Property because she could not, or shortly would not be able to, meet the mortgage repayments, and accepted that sale of the Property was an appropriate means of addressing that problem (transcript QUD178/2024 16 September 2026 p 16 lines 5-16);

identified the relevant issue as whether Ms Brown should be released from the Undertaking unconditionally or on terms (transcript QUD178/2024 16 September 2026 p 16 lines 16-18);

by way of MFI-4, proposed that Ms Brown be permitted to sell the Property, but that the status quo otherwise be preserved, including the security provided by the Undertaking, pending the further hearing on 3 November 2026 (transcript QUD178/2024 16 September 2026 p 25 lines 10-27);

opposed limiting the amount preserved from the proceeds of sale to $135,000, submitting that the Undertaking did not limit the extent to which judgment creditors of Mr Brown could enforce against the Property to that amount, and that the Undertaking should be construed objectively according to its written terms (transcript QUD178/2024 16 September 2026 p 25 lines 24-27; transcript QUD178/2024 21 September 2026 p 75 lines 27-49, p 76 lines 1-15);

relied upon the principle that relief from an undertaking was not lightly given where the undertaking had secured a benefit which had already been obtained, noting that Ms Brown had given the Undertaking to obtain the benefit of the release of funds that enabled her to purchase the Property (transcript QUD178/2024 21 September 2026 p 75 lines 8-24);

submitted that the changed circumstance constituted by Ms Brown’s inability to continue meeting the mortgage justified permitting a sale, but did not justify the further changes sought by Mr Brown, namely limiting the preserved fund to $135,000 and permitting that fund to be used for Mr Brown’s legal expenses (transcript QUD178/2024 21 September 2026 p 75 lines 23-35, p 76 lines 9-48, p 77 lines 1-23);

asserted that the application should be approached as an application for relief from an undertaking, rather than by asking whether a s 1323 order or freezing order would presently be made (transcript QUD178/2024 21 September 2026 p 75 lines 33-35, p 76 lines 34-44);

accordingly, submitted that Ms Brown was required to establish new facts or changed circumstances which made it in the interests of justice to relieve her from the Undertaking to the extent sought (transcript QUD178/2024 21 September 2026 p 77 lines 8-11);

submitted that the exhaustion of the Digital Currency Assets from which Mr Brown’s legal and living expenses had previously been paid did not constitute a relevant change of circumstances because, when the Undertaking was given, it was known that the Digital Currency Assets constituted a finite fund which could ultimately be depleted (transcript QUD178/2024 21 September 2026 p 76 lines 43-48, p 77 lines 1-4);

in relation to legal expenses, submitted in summary that:

* if the Court limited the preserved fund to $135,000, it would be premature to permit Mr Brown’s legal expenses to be paid from that amount before the sale price of the Property was known, because the sale might yield funds in excess of the mortgage and the preserved $135,000 which could be available to meet those expenses (transcript QUD178/2024 21 September 2026 p 77 lines 15-23);

* alternatively, if the Court did not limit the preserved fund to $135,000, the Court should await further evidence from the liquidators concerning the provenance of the Digital Currency Assets before permitting legal expenses to be paid from the fund, given the possibility of a proprietary claim capable of being satisfied from it (transcript QUD178/2024 21 September 2026 p 77 lines 25-33); and

submitted in summary that, if a satisfactory replacement undertaking were given, Ms Brown should be released from the Undertaking only insofar as necessary to enable her to sell the Property, such that, until the proceeds of sale were received and the replacement undertaking became operative, the Undertaking would otherwise remain in force so that Ms Brown could not further mortgage, give away or otherwise deal with the Property (transcript QUD178/2024 21 September 2026 p 77 lines 35-48, p 78 lines 1-19).

The Receivers’ Submissions

35 The Receivers did not file any written submissions relevant to the Present Issue, nor did the Receivers provide any proposed new undertaking as part of the draft orders Counsel for the Receivers handed up on 16 September 2026 (labelled as “MFI-6”).

36 Nonetheless, at the hearing on 16 and 21 September 2026, Counsel for the Receivers made (in summary) the following oral submissions relevant to the Present Issue:

if Ms Brown were released from the Undertaking so as to permit the Property to be sold, the $135,000 which had been applied towards its acquisition could be held in the liquidators’ solicitors’ trust account until further order (transcript QUD178/2024 16 September 2026 p 19 lines 6-17);

the Receivers opposed MFI-5 insofar as it permitted the $135,000 preserved from the sale proceeds of the Property to be applied towards Mr Brown’s legal expenses (transcript QUD178/2024 16 September 2026 p 51 lines 1-4);

circumstances had “moved on” from 30 April 2024, including because the Court had since made findings concerning the NGS Digital Mining Scheme and the corporate defendants and the liquidators had adduced evidence supporting their preliminary view that the Digital Currency Assets delivered to the Receivers could be traced to investor funds (transcript QUD178/2024 16 September 2026 p 51 lines 23-49);

permitting the legal-expenses carve-out would, in practical terms, substantially or wholly deplete the $135,000 and thereby remove funds which, on the liquidators’ preliminary view as to provenance, might otherwise be available to investors in the liquidation (transcript QUD178/2024 16 September 2026 p 52 lines 1-29);

it was likely that NGS Group held investments on trust for scheme members generally, or classes of scheme members, such that those members might have a proprietary claim to the relevant property (transcript QUD178/2024 21 September 2026 p 71 lines 1-30, p 72 lines 16-25); and

on that basis, the Court should not permit the $135,000 to be used for Mr Brown’s legal expenses, because investors that may have in specie claims on the property of the NGS Digital Mining Scheme would be deprived the opportunity to bring those claims if the $135,000 was “depleted and eradicated by legal expenses” (transcript QUD178/2024 21 September 2026 p 72 lines 27-49, p 73 lines 1-10).

CONSIDERATION

Relevant Legal Principles

37 As identified by ASIC at the hearing (transcript QUD178/2024 21 September 2026 p 74 lines 45-49), the legal principles relevant to the variation of an undertaking were set out by the High Court (Gibbs CJ, Murphy, Aickin, Wilson and Brennan JJ) in Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; (1981) 148 CLR 170 at [10], in the following terms:

Considerable argument was directed to the question whether a court has power, otherwise than in the case of mistake operative at the time of giving it to release a party from an undertaking, at least in the absence of the consent of the other party. But in our opinion a court undoubtedly has such a power. Just as an interlocutory injunction continues “until further order”, so must an interlocutory order based on an undertaking. A court must remain in control of its interlocutory orders. A further order will be appropriate whenever, inter alia, new facts come into existence or are discovered which render its enforcement unjust: cf. Woods v. Sheriff of Queensland (1895) QLJ 163, at p 165; Hutchinson v. Nominal Defendant (1972) 1 NSWLR 443, at p 447; Chanel Ltd. v. F. W. Woolworth &Co. Ltd. (1981) 1 WLR 485, at p 492; (1981) 1 All ER 745, at p 751. Of course, the changed circumstances must be established by evidence: Cutler v. Wandsworth Stadium Ltd. (1945) 1 All ER 103 . (at p178)

(emphasis added)

38 The principles stated in Philip Morris were recently cited by this Court in Emergency Flood Response Pty Ltd v Flood Emergency Services Group Pty Ltd [2026] FCA 357 at [14] and recognise both the Court’s continuing control over an interlocutory undertaking and the need for demonstrated circumstances making its continued enforcement unjust.

39 In Khan (Trustee) v Lo Pilato (Australian representative of the trustee of Bankrupt Estate of Farouk) [2023] FCA 736 at [6], Derrington J observed as follows:

… In that respect, it is well accepted that the Court has inherent power to release undertakings given to it and, indeed, can do so when circumstances change. However, it seems to be now well-established that it will not do so unless good reason is shown and in consideration of that issue there is very little difference between the matters a court will take into consideration under r 39.05(c) to vary an interlocutory order and the matters it will take into account in the present circumstances on an application to vary the undertaking.

40 In Khan it was held that insufficient reasons had been established as to why the undertakings should be released as the circumstances did not show any good cause other than that Mr Khan sought to utilise the trust funds for his own benefit (at [24]).

41 In HJ (a pseudonym) v Independent Broad-based Anti-corruption Commission [2021] VSCA 200; (2021) 64 VR 270, the Victorian Court of Appeal (constituted by Beach, Kyrou and Kaye JJA) held as follows:

[86]    Four observations may be made about the above statement. First, in order for an undertaking to be varied, there must be evidence before the court which establishes that enforcement of the undertaking, in the terms given, would be unjust. Secondly, enforcement of an undertaking, in the terms given, could be unjust where a mistake was operative at the time it was given, or where new facts come into existence or are discovered. Thirdly, the High Court’s reference to mistake, in conjunction with the words ‘inter alia’, indicate that mistake and change in facts or circumstances are not the only bases upon which enforcement of an undertaking, in the terms given, could be unjust. Fourthly, the High Court’s statement that a court must remain in control of its interlocutory orders indicates that the principles to be applied in determining whether to vary an undertaking must be sufficiently flexible to enable the court to ensure that the interests of justice are served in the circumstances of each case.

[87]    In our opinion, consistently with the above observations, the relevant principle is that a court may vary an undertaking if the party who gave it establishes by evidence that, in the circumstances that prevail at the time the variation is sought, the interests of justice require that the variation be made in order to avoid enforcement of the undertaking being unjust. The primary qualifying circumstance that may engage the principle is a change in facts since the undertaking was given. Other qualifying circumstances that may engage the principle include a change in the law, mistake and fraud.

[88]    There is no exhaustive list of qualifying circumstances that may engage the principle, and it would not be appropriate for us to propose one. However, we see no reason why the principle could not be engaged where the party who gave the undertaking can establish that its enforcement would be unjust because, in its practical application, a genuine dispute has arisen as to the scope of the undertaking. Such a dispute will usually arise due to an ambiguity in the meaning of the undertaking. A genuine dispute as to the scope of an undertaking can be a qualifying circumstance that may engage the principle because the consequences of a breach of an undertaking can include punishment for contempt of court. It is in the interests of justice for genuine doubts as to the scope of an undertaking to be removed so that its terms are clear and there is certainty about what conduct would constitute a breach.

[89]    The principle set out at [87] above is consistent with Adam P Brown.  It is also broadly consistent with the cases of Xiao and Just Group upon which Kennedy J relied in the present case. The principle is also consistent with the constrained approach that the courts adopt to applications to discharge or vary interlocutory orders or undertakings given by a party pending the determination of a proceeding. Whilst such orders or undertakings do not create an estoppel or res judicata, a party cannot seek to vary an undertaking simply because the party has changed its mind or compliance has caused inconvenience. Unless a qualifying circumstance exists, it is in the public interest that there be finality to the disposition of interlocutory proceedings.

(emphasis added and footnotes omitted)

42 In light of these authorities it is plain that the Court’s power to vary an undertaking is not confined to correcting a mistake operative when the undertaking was given. However, because an undertaking is solemnly given to the Court and may have induced the conferral of a benefit or affected the position of other persons, release from it is not automatic merely because continued compliance has become inconvenient or burdensome.

43 The question is whether the evidence establishes new facts or changed circumstances which, having regard to the interests of justice, warrant the relief sought.

44 As set out above, in HJ at [87]-[88], the Victorian Court of Appeal recognised that circumstances potentially warranting relief may include mistake, fraud, a change in the law or a genuine dispute concerning the undertaking’s scope. However, as was held in HJ at [102], the undertaking must be construed objectively and the subjective intentions of the person giving it, or of the parties concerned, cannot determine its meaning:

… The undertakings need to be construed objectively by reference to their terms and the circumstances prevailing at the time they were given. The subjective intentions of the parties cannot affect their construction. The objective factors referred to at [100] above strongly support our construction of the undertakings.

45 Further, a purported dispute about construction must be more than fanciful, and exchanges between Counsel for the parties and the Court when the undertaking was offered do not displace the written terms ultimately recorded in the Court’s order: HJ at [104], [107]. As I will explain later in these reasons, the principles outlined in HJ are particularly important in the present circumstances because the parties advanced competing constructions of paragraph (D) of the Undertaking.

46 As raised by ASIC, a further relevant consideration is whether the undertaking secured a benefit which has already been obtained. In Australian Securities and Investments Commission v Xiao [2012] NSWSC 1210 at [17], Brereton J observed that relief is not likely to be given lightly where an undertaking was given to secure a benefit which has been gained:

I also stress that I do not see this in any way as a question of punishment of the fifth defendant for the decamping of her husband, the first defendant. No question of punishment arises. It is no more than holding the fifth defendant to an undertaking that I must assume she knowingly, willingly and freely gave to procure a particular benefit, namely, the ability of her husband to travel. It would operate markedly to the disadvantage of others in a similar position if it were thought that such undertakings could be given and then, when they did not turn out for the better, be dispensed with. If I were to accede to this application, it would be a powerful message that the Court should not even entertain such undertakings in similar circumstances in the future.

47 I finally note, as submitted by ASIC at the hearing, that the application must be approached as an application concerning the continued operation of an undertaking, rather than simply by asking whether an equivalent freezing order or order under s 1323 of the Corporations Act would now be made. In Advanced Medical Institute Pty Ltd v Channel Seven Sydney Pty Ltd [2007] NSWSC 793 at [16], Harrison J distinguished between reconsidering whether the substantive injunction would presently be granted and deciding whether a party should be released from an undertaking previously given. As I have identified, the latter question turns upon whether new facts or changed circumstances make continued enforcement of the undertaking unjust.

Construction of the Undertaking

48 The context and purpose for which the relevant Undertaking before the Court was given remain relevant. The Undertaking was not given in isolation but was instead recorded as part of the 30 April Orders, which were made in circumstances of an interlocutory asset preservation regime, and were the basis upon which $135,000 was released from Digital Currency Assets then controlled by the Receivers.

49 The particular circumstances in which the Undertaking was given were considered by Derrington J in Australian Securities and Investments Commission v NGS Crypto Pty Ltd (No 2) [2024] FCA 521 at [30]-[31]:

[30]    The third proposed carve out is somewhat unusual for an application of this nature, and relates to certain property transactions which Mr Brown and his wife have entered into.  Mr Brown’s evidence was that his wife previously entered into a contract to acquire land on which it is intended to build their family home.  The contract is due to settle in the near future, and on Mr Brown’s evidence, Mrs Brown requires $135,000 from the crypto assets to meet the balance of the purchase price.  Of course, if she fails to settle she will be in breach of the agreement, and the evidence showed that in that case she will suffer a loss.  It is relevant that there was no offer from ASIC to indemnify Mr and Mrs Brown in relation to any losses that they might suffer were the contract not to be performed.

[31]    In those circumstances, it is also appropriate that Mr Brown have access to digital funds held by the receivers in the amount of $135,000 to allow his wife to complete the acquisition of land.  The land has been or is to be purchased in the name of Mrs Brown, such that there is a risk about the dissipation of the funds by her with the consequence being that they may become unrecoverable.  That was overcome by the offering of an undertaking by Mrs Brown.  Despite ASIC’s submissions to the contrary, it can be accepted that an adequate undertaking can be formulated and largely has been, which will protect the receivers and ASIC in relation to any amount given to Mrs Brown or allowed to be used by her to complete her contract. At the hearing, an undertaking was contained in the draft orders handed to me by Mr Russell of counsel, though it should be amended in accordance with the variation proposed by Mr Wilkins KC to the effect that Mrs Brown must undertake to maintain all mortgage payments with respect to the land which she acquires, such that the amounts secured by any mortgages does not increase.

(emphasis added)

50 On the basis of that reasoning, Derrington J ordered – by way of Order 14(d) of the 30 April Orders – that $135,000 be released from proceeds of the Digital Currency Assets. Order 14(d) was in the following terms:

14.    Order 13 above does not prevent:

…

(d)    the Receivers from paying to the Sixth Defendant, from proceeds of Digital Currency Assets delivered to the Receivers by the Sixth Defendant and which he asserts to be his Digital Currency Assets, the sum of $135,000 to be used for the purpose of Shiho Brown completing the purchase of the land as required by the contract to which reference is made at paragraphs 39 and 40 of the Affidavit of Ryan Todd Brown filed 22 April 2024.

51 In my view, those circumstances provide substantial support for the proposition that the practical purpose of the Undertaking was to preserve protection corresponding to the $135,000 released from the receivership. It does not however follow that paragraph (D) of the Undertaking expressly limited enforcement against the Property to $135,000. Indeed, paragraph (D) of the Undertaking contained no monetary limit and was set out in the following terms:

UPON THE UNDERTAKING OF SHIHO BROWN, GIVEN BY HER COUNSEL in relation to an unimproved real property at Lot 26, 2 Jessie Daniels Drive, Benobble in the State of Queensland (the Property), until further order or the written agreement of the Plaintiff:

…

(D)    to agree to any aggrieved person (within the meaning of that term in s 1323 of the Corporations Act 2001 (Cth) enforcing any future judgment which may be obtained against the Sixth Defendant in relation to the affairs of the First to Third Defendants the subject of investigation by the Plaintiff against the Property in accordance with the rules of any Australian court in which such a judgment may be obtained.

52 Paragraph (D) of the Undertaking therefore allowed for an aggrieved person to enforce against the Property any future judgment obtained against Mr Brown of the specified kind, in accordance with the rules of the court in which the judgment was obtained.

53 Accordingly, I do not accept Mr Brown’s submission that the Undertaking, properly construed, was expressly limited to securing $135,000. That construction cannot be reconciled with the absence of any limit in paragraph (D).

54 As held in HJ, the written undertaking must be construed objectively and cannot be rewritten by reference to an asserted subjective intention or the exchanges which accompanied its formulation.

Whether the Undertaking should be discharged and replaced

55 That conclusion does not however determine the separate discretionary question whether the Undertaking should now be discharged and replaced by narrower protection. The fact that the Undertaking was not expressly limited to $135,000 does not mean that its full operation must continue indefinitely, regardless of subsequent events. The Court retains control of the Undertaking and may grant relief where changed circumstances make its continued enforcement unjust: Philip Morris at [10].

56 As acknowledged by ASIC, the Receivers and Mr Brown, I am satisfied that circumstances have materially changed since the Undertaking was made on 30 April 2024. First, the Undertaking now prevents the sale of the Property even though the unchallenged evidence is that Mr Brown and Ms Brown cannot continue to meet the expenses associated with retaining it. The mortgage repayment is $3,470.60 per month, the family’s recurring monthly expenses exceed its income by approximately $4,000, and a mortgage payment had already been missed by September 2026. It appears that both ASIC and the Receivers ultimately accept that the sale of the Property is an appropriate means of addressing that difficulty.

57 Second, the Digital Currency Assets from which Mr Brown had previously received $6,000 per month for living expenses have been substantially exhausted, and Order 15 of the 30 April Orders has been discharged (by way of Order 3 of the Orders I made on 16 September 2026). While I accept ASIC’s submission that the finite nature of the Digital Currency Assets was foreseeable when the Undertaking was given, the Digital Currency Assets’ actual exhaustion materially affects the capacity of Mr Brown and Ms Brown to service the mortgage and retain the Property.

58 Third, the Property is vacant land and is not producing income. Ms Brown was contractually required to commence construction by 23 May 2026, was said to be in breach of that obligation and, on the evidence, was unlikely to be able to finance the estimated construction cost. Continuing to hold the Property would therefore require continuing mortgage and rates payments without providing Mr Brown and Ms Brown with accommodation or income.

59 Fourth, the evidence indicates that, if the Property is not sold voluntarily, default and enforcement by the mortgagee are real possibilities. A mortgagee sale could itself diminish the equity available to Ms Brown and to any person whose interests the Undertaking was intended to protect. Continued enforcement of paragraph (C) of the Undertaking would therefore risk frustrating, rather than advancing, the Undertaking’s protective purpose.

60 I consider that these circumstances establish more than mere inconvenience, and demonstrate that the existing prohibition on the sale of the Property can no longer operate in its present form without exposing Ms Brown to continuing financial loss and an appreciable risk of an involuntary sale. I am therefore satisfied that enforcement of paragraph (C), without modification, would be unjust within the principle stated in Philip Morris.

61 Such a conclusion substantially accords with the positions ultimately adopted by all parties at the hearing. ASIC accepted that the Property should be sold but contended that the existing protection given by the Undertaking should otherwise be preserved. The Receivers did not oppose a sale but proposed that $135,000 be retained in a solicitors’ trust account.

62 For the reasons given above, I consider it necessary to discharge the Undertaking and replace it with a new undertaking given by Ms Brown.

63 The remaining controversy concerns the amount to be preserved from the sale proceeds of the Property and whether the preserved amount should be available for Mr Brown’s legal expenses.

Amount to be preserved

64 In my view, the appropriate balance is achieved by substituting the Property with a fund comprising $135,000 of the net proceeds of sale, or the whole of the net proceeds if those proceeds are less than $135,000.

65 The amount of $135,000 reflects the identifiable benefit obtained by reason of the Undertaking. It was the amount released from the Digital Currency Assets to enable Ms Brown to complete the acquisition. Preserving that amount maintains the substance of the protection corresponding to the funds released, while allowing the remaining equity in the Property, after payment of sale costs and discharge of the mortgage, to be available to Ms Brown.

66 While the Undertaking was not expressly confined to $135,000, I accept the submission made by Counsel for Mr Brown that preservation of the whole of the net proceeds would materially enlarge the practical security attributable to the original release in circumstances where no amount beyond $135,000 was released to fund the acquisition. Further, Ms Brown was not a defendant to the proceedings, and the evidence has not established that the entirety of her equity in the Property was derived from assets subject to the 10 April Orders or the 30 April Orders.

67 This course also recognises the significance of the benefit already obtained by Ms Brown, as discussed in Xiao at [17]. The Undertaking was the means by which $135,000 in proceeds of Digital Currency Assets was released from the receivership and applied for the benefit of Ms Brown in completing the acquisition of the Property. That benefit was obtained and cannot now be reversed. While this consideration does not preclude relief, it weighs against an unconditional release which would remove the protection by reference to which the benefit was conferred. The $135,000 will continue to answer any future judgment within the scope of the replacement undertaking, subject to further order. At the same time, as I explained above, Ms Brown will not be required to preserve equity exceeding the identifiable amount released in reliance upon the Undertaking.

68 I do not consider that preservation of $135,000 prejudges whether any investor, liquidator or other person has a proprietary or personal claim against Mr Brown. No such claim is presently before the Court for determination. The order merely preserves the fund while leaving those matters open to be determined.

Proposed legal-expenses carve-out

69 A more difficult question is whether Mr Brown should be permitted to use the preserved $135,000 for his reasonably incurred legal expenses.

70 I accept that the 30 April Orders permitted Mr Brown’s reasonable legal expenses to be paid from the proceeds of Digital Currency Assets delivered by him to the Receivers. I also accept that his evidence identified substantial unpaid legal fees and further work in progress.

71 However, the proposed fund does not simply represent the remaining assets formerly held by the Receivers. It is a substitute for the protection supplied by the Property under the Undertaking. I accept the submissions made by ASIC and the Receivers that permitting the immediate depletion of the $135,000 fund for legal expenses would substantially diminish, and may eliminate, that protection before the unresolved issues concerning the provenance of the B21 Wallet assets and the existence of any proprietary claim have been determined.

72 The Receivers submitted that the liquidators’ evidence disclosed a preliminary basis for concluding that the Digital Currency Assets in the B21 Wallet were derived from investor funds. The Receivers relied upon several authorities in support of the possibility that property contributed to a managed investment scheme may be held for scheme members collectively, depending upon the governing arrangements, including Shiu Shing Sze Tu v Lowe [2014] NSWCA 462; (2014) 89 NSWLR 317 at [146]-[152]; Brookfield Multiplex Ltd v International Litigation Funding Partners Pte Ltd [2009] FCAFC 147; (2009) 180 FCR 11 at [53]-[62]; Re Willmott Forests Ltd (No 2) [2012] VSC 125; (2012) 88 ACSR 18 at [60]; and RnD Funding Pty Ltd v Roncane Pty Ltd [2023] FCAFC 28; (2023) 297 FCR 91 at [100]-[101], [107]-[110]. The Receivers ultimately submitted that those principles supported the possibility of tracing investor funds into the B21 Wallet and, ultimately, into the $135,000 applied towards the Property.

73 It is neither necessary nor appropriate to finally determine those issues in this judgment. The evidence concerning provenance remains incomplete, and the balance of Mr Brown’s Interlocutory Application will be heard on 3 November 2026 after the liquidators provide their final view. I accept that the existence of a tracing exercise does not itself establish the proprietary interest required to sustain a claim and that the Court has not yet determined whether Mr Brown received any relevant property with the knowledge necessary to establish knowing receipt.

74 Nevertheless, the potential proprietary character of the preserved $135,000 fund is relevant to whether its depletion should be allowed before those matters can be determined. As Counsel for the Receivers cited at the hearing on 21 September 2026, in His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc [2006] NSWCA 277 at [85]-[86], the New South Wales Court of Appeal observed, albeit in the particular circumstances of that case, that where there is a prima facie case that property is trust property, the Court should be attentive to its protection. A material consideration is whether, once expended, the property could realistically be restored or “made good” (St Petka at [85]).

75 That consideration is significant in circumstances in which Mr Brown relies upon his limited financial resources as the reason why the preserved fund must be available for legal expenses. The same financial circumstances indicate that, if the $135,000 were expended, there would be little realistic prospect of its restoration should a claimant later establish an entitlement to it.

76 I also accept that there is uncertainty as to the net amount that will be realised from the sale. The evidence included estimates ranging from $700,000 to $950,000. Until a contract of sale is entered into and settlement occurs, it is not possible to determine what funds will remain after payment of the costs of sale and discharge of the mortgage. If the Property is sold toward the upper end of the estimates, there may be substantial proceeds available to Ms Brown after preserving $135,000. In my view, ASIC was therefore correct to submit that it is premature to conclude that Mr Brown’s legal expenses can only be met by recourse to the preserved fund.

77 Accordingly, I will not make the legal-expenses carve-out proposed in MFI-8. The $135,000 should remain intact pending written agreement between the relevant interested persons or further order of the Court. That conclusion does not finally determine that the fund can never be used for legal expenses. It preserves the position until the exact amount of sale proceeds from the Property is known and the Court has the benefit of the further evidence and submissions relevant to the balance of Mr Brown’s application.

Operation of the replacement undertaking

78 As the proposed replacement undertakings would not operate upon proceeds of sale until settlement occurs, an immediate and complete discharge of the existing Undertaking would create a period during which neither the Property nor any substitute fund was protected.

79 I accept ASIC’s submission that the existing Undertaking should remain operative except to the extent necessary to permit sale of the Property. Until settlement, Ms Brown should remain restrained from further charging, mortgaging, giving away or otherwise dealing with the Property, apart from steps reasonably necessary to market and sell it. Upon settlement and payment of the preserved amount into the nominated trust account, I am satisfied that the replacement undertaking will supply the relevant protection.

80 The orders I make should therefore release Ms Brown from paragraph (C) of the Undertaking only insofar as necessary to permit the Property to be marketed and sold. The balance of the Undertaking should otherwise remain operative until settlement. Paragraph (B), requiring compliance with the mortgage obligations, will cease to have practical work to do when the mortgage is discharged from the settlement proceeds.

81 Upon settlement, the proceeds should be applied in the following order:

(a) first, in payment of the reasonable costs and expenses of sale, including conveyancing costs, disbursements, agent’s commission and marketing expenses;

(b) secondly, in discharging the mortgage over the Property; and

(c) thirdly, in paying $135,000, or if the remaining proceeds are less than $135,000, the whole of those remaining proceeds, into the trust account of Gadens (Mr Brown’s solicitors).

82 The amount paid into trust should not be disposed of or otherwise dealt with without the written agreement of the liquidators of the NGS Digital Mining Scheme, Ms Brown and Mr Brown, or further order of the Court. It should remain available to answer any future judgment of the kind specified in paragraph (D) of the original Undertaking.

83 I consider it appropriate to make orders set out in those terms.

COSTS

84 Finally, there is some disagreement between the parties as to costs orders. ASIC has submitted (in summary) that no order should be made in respect of costs, whereas the position of Mr Brown is that costs should be reserved. In circumstances where the costs of the parties remain a live issue, the better approach is for me to order that costs be reserved pending future argument.

Associate:

Dated:    19 October 2026

SCHEDULE OF PARTIES