Alleged undocumented transactions held to be a 'contrivance'

A recent Federal Court case concerned the liquidator of Bellpac Pty Ltd contesting the beneficial ownership of convertible bonds issued in relation to a transaction between Bellpac and several other entities. In Warner v Hung, re Bellpac Pty Ltd (Receivers and Managers Appointed) (In Liquidation) [2011] FCA 1123, Ken Hung claimed to be entitled to a beneficial interest in $2 million of convertible bonds by reason of an alleged series of undocumented transactions involving at least five intermediaries.

The court held that Hung did not acquire a beneficial interest in the convertible bonds and, accordingly, granted a declaration that Bellpac was the true owner of the bonds. The court reached its decision due to the defendant's inability to provide the court with any documentary proof evidencing the transactions. The court considered that the alleged transactions were 'no more than a contrivance pieced together in an attempt to justify a transfer of property... after Bellpac had gone into liquidation.'