Background
The liquidators and Ralan Group companies brought recovery proceedings against Mr Zhang (also known as Geoff Qiu) and Mrs Xiao (also known as Lily Qiu). The pleaded claims concern alleged voidable transactions, payments and property transfers, and alleged involvement in breaches of directors’ duties connected with the release and use of purchaser deposits.
Suichun Lin, an off-the-plan purchaser and asserted unsecured creditor, sought leave under r 2.13 of the Federal Court (Corporations) Rules 2000 to provide a written statement and attachments. Her deposits, totalling $179,500, had been subject to side arrangements under which most of the money was transferred and treated as loans. QCAT had assessed her loss at $179,300 in a Claim Fund matter, and she received that principal entitlement in November 2024.
The Court’s Holding
Justice Cheeseman refused Ms Lin leave to be heard or otherwise participate, refused leave to tender her material, and declined to receive it as a non-party submission. There was no order as to costs.
Assuming Ms Lin had a sufficient interest to seek leave, the Court held that she had not shown how her proposed participation would assist determination of the pleaded claims. Her material did not connect her circumstances to a particular pleaded transaction, duty, alleged act of assistance, knowledge allegation, or company loss. It instead risked expanding the case into collateral purchaser-specific issues.
The Court also held that Ms Lin could not rely on QCAT findings to prove facts that were in issue in the QCAT proceeding, because s 91 of the Evidence Act 1995 (Cth) prohibited that use. Her proposed reliance on an ASIC media release about a separate criminal prosecution was likewise unsupported by an identified relevant and permissible evidentiary use.
Key Takeaways
- A creditor or interested person has no automatic right to participate in a corporations proceeding under r 2.13.
- A non-party must show that proposed material will assist resolution of the pleaded issues on an admissible basis.
- Findings from another proceeding cannot be tendered to prove facts in issue in that earlier proceeding where s 91 applies.
Why It Matters
The decision confirms that insolvency proceedings affecting a broad group of creditors and purchasers do not, without more, justify individual non-party participation. The proposed intervention must be tied to the issues the Court is required to decide.
It also underscores that the overarching purpose of efficient and just resolution does not relax ordinary relevance and admissibility requirements. The substantive claims against the defendants remain to be determined at the February 2027 hearing.