Definitive global law guides offering comparative analysis from top-ranked lawyers
CHAMBERS GLOBAL PRACTICE GUIDES
International Fraud & Asset Tracing 2025
Definitive global law guides offering comparative analysis from top-ranked lawyers
Contributing Editor Simon Bushell Seladore Legal Limited
Global Practice Guides
International Fraud & Asset Tracing
Contributing Editor Simon Bushell Seladore Legal
2025
Chambers Global Practice Guides For more than 20 years, Chambers Global Guides have ranked lawyers and law firms across the world. Chambers now offer clients a new series of Global Practice Guides, which contain practical guidance on doing legal business in key jurisdictions. We use our knowledge of the world’s best lawyers to select leading law firms in each jurisdiction to write the ‘Law & Practice’ sections. In addition, the ‘Trends & Developments’ sections analyse trends and developments in local legal markets. Disclaimer: The information in this guide is provided for general reference only, not as specific legal advice. Views expressed by the authors are not necessarily the views of the law firms in which they practise. For specific legal advice, a lawyer should be consulted. Content Management Director Claire Oxborrow Content Manager Jonathan Mendelowitz Senior Content Reviewer Sally McGonigal, Ethne Withers, Deborah Sinclair and Stephen Dinkeldein Content Reviewers Vivienne Button, Lawrence Garrett, Sean Marshall, Marianne Page, Heather Palomino and Adrian Ciechacki Content Coordination Manager Nancy Laidler Senior Content Coordinators Carla Cagnina and Delicia Tasinda Content Coordinator Hannah Leinmüller Head of Production Jasper John Production Coordinator Genevieve Sibayan
Published by Chambers and Partners 165 Fleet Street London EC4A 2AE Tel +44 20 7606 8844 Fax +44 20 7831 5662 Web www.chambers.com
Copyright © 2025 Chambers and Partners
Contents
INTRODUCTION Contributed by Simon Bushell and Gareth Keillor, Seladore Legal p.5
INDIA Law and Practice p.195 Contributed by AZB & Partners Trends and Developments p.223 Contributed by AZB & Partners ITALY Trends and Developments p.231 Contributed by Fornari e Associati
AUSTRALIA Law and Practice p.11 Contributed by HFW
BRAZIL Law and Practice p.36 Contributed by Duarte Forssell Advogados Trends and Developments p.57 Contributed by Duarte Forssell Advogados
LIECHTENSTEIN Law and Practice p.241 Contributed by Niedermüller Attorneys-at-Law MONACO Law and Practice p.264 Contributed by Donald Manasse Law Offices POLAND Law and Practice p.278 Contributed by KW Kruk and Partners Law Firm Trends and Developments p.294 Contributed by KW Kruk and Partners Law Firm SINGAPORE Law and Practice p.297 Contributed by Rajah & Tann Singapore LLP Trends and Developments p.314 Contributed by Rajah & Tann Singapore LLP
CAYMAN ISLANDS Law and Practice p.64 Contributed by Appleby Trends and Developments p.81 Contributed by Appleby
CHILE Law and Practice p.89 Contributed by Bofill Escobar Silva Abogados
Trends and Developments p.104 Contributed by Winter Etcheberry CHINA Trends and Developments p.112 Contributed by Secretariat FRANCE Law and Practice p.121 Contributed by Le 16 Law Trends and Developments p.142 Contributed by Le 16 Law
SOUTH KOREA Law and Practice p.319 Contributed by DR & AJU LLC
SWITZERLAND Law and Practice p.336 Contributed by Monfrini Bitton Klein and Ardenter Law Trends and Developments p.356 Contributed by Canonica Valticos Carnicé & Associés
GREECE Law and Practice p.149 Contributed by ANAGNOSTOPOULOS Trends and Developments p.164 Contributed by Ovvadias S. Namias Law Firm HONG KONG SAR, CHINA Law and Practice p.171 Contributed by Holman Fenwick Willan
UK Law and Practice p.365 Contributed by Seladore Legal Trends and Developments p.385 Contributed by StoneTurn
3 CHAMBERS.COM
Contents
UNITED ARAB EMIRATES Law and Practice p.392
USA – NEW YORK Trends and Developments p.452 Contributed by Quinn Emanuel Urquhart & Sullivan, LLP
Contributed by Herbert Smith Freehills Trends and Developments p.417 Contributed by Herbert Smith Freehills (Dubai)
USA Law and Practice p.424 Contributed by MoloLamken Trends and Developments p.446 Contributed by MoloLamken
4 CHAMBERS.COM
INTRODUCTION Contributed by: Simon Bushell and Gareth Keillor, Seladore Legal
Seladore Legal is a specialist disputes firm, fo - cusing exclusively on litigation, arbitration, and white-collar crime. With 25 practising lawyers based in London and Milan, the firm is recog - nised for handling high-value, multi-party, and cross-border disputes, particularly those in - volving fraud, asset tracing, and enforcement issues. Its team, drawn from leading UK, US, and international firms, acts for corporates, financial institutions, and high net worth indi -
viduals across finance, energy, technology, and professional services. By concentrating solely on disputes, Seladore avoids transactional con - flicts and provides independent representation in contentious matters. Recent work includes defending Antoine Massad in a fraud claim brought by Kuwait’s Public Institution for Social Security (PIFSS) and acting for President Filipe Nyusi of Mozambique in the high-profile “Tuna Bonds” litigation.
Contributing Editor
Co-Author
Simon Bushell is the senior partner at Seladore Legal, specialising in international commercial litigation and arbitration, including civil fraud and asset tracing. Simon has
Gareth Keillor is a partner at Seladore Legal. Gareth has over 20 years’ experience in a wide range of commercial disputes of varying size and complexity, including High Court litigation
over 35 years’ experience in high-stakes commercial litigation. He acts for a broad range of clients, including large corporates, private equity houses, financial institutions, banks and ultra high net worth individuals, in addition to foreign government agencies and state-owned companies. He has undertaken investigations into complex, worldwide frauds, conspiracies and insolvencies, and has broad experience in co-ordinating parallel cross- border disputes and proceedings.
and offshore jurisdictions (most notably BVI, Cayman Islands, Isle of Man, Guernsey, Jersey and Bermuda), as well as in arbitrations. He has acted for a wide variety of international clients, from major companies to ultra high net worth individuals, and has a particular interest in fraud cases, commercial contract disputes, shareholder disputes and disputes involving injunctive relief.
5 CHAMBERS.COM
INTRODUCTION Contributed by: Simon Bushell and Gareth Keillor, Seladore Legal
Seladore Legal 20-22 Bedford Row London WC1R 4EB UK Tel: +44 020 3882 2201 Fax: +44 020 4571 6728
Email: info@seladorelegal.com Web: www.seladorelegal.com
Introduction While 2023 saw major legislative changes aimed at strengthening fraud prevention and enforce - ment, such as the passing of the Financial Ser - vices and Markets Act 2023 and the Economic Crime and Corporate Transparency Act 2023 – which created the corporate offence of failure to prevent fraud – the key trends and develop - ments in 2024 have focused on clarifying legal principles, issuing regulatory guidance, and expanding enforcement tools. For example, over the past year, significant legal developments have emerged across various areas, including the courts providing clearer guidance on freez - ing injunctions and asset tracing in crypto fraud cases. Enforcement has also been the key focus of 2024, with welcomed further clarity on juris - dictional and enforcement issues, including the legal treatment of crypto-assets, and the enforcement of foreign judgments. The continual development and changing land - scape in the area of civil fraud mean that a guide of this nature is invaluable to practitioners in this area, and we commend this publication to you.
Legislative and Regulatory Developments UK ratification of the Hague Convention on foreign judgments On 27 June 2024, the UK government ratified the Hague Convention of 2 July 2019 on the Recog - nition and Enforcement of Foreign Judgments in Civil or Commercial Matters (Hague Convention 2019). This treaty establishes a framework for the recognition and enforcement of court judg - ments in civil and commercial matters among its contracting states (Contracting States). It gov - erns how a judgment issued in one contract - ing state (State of origin) is treated in another (requested State). The Hague Convention 2019 will come into force for the UK on 1 July 2025, providing a uniform mechanism for the enforcement of judgments between the UK and other contracting states, including all EU member states except Denmark. The UK’s ratification is a significant and welcome development, particularly in the post-Brexit landscape, where the broad EU-wide regimes governing the enforcement of judgments no longer apply to the UK. This step will help facili - tate the recognition and enforcement of English judgments abroad, something that is particularly welcomed by fraud practitioners who often need to enforce judgments across a number of juris -
6 CHAMBERS.COM
INTRODUCTION Contributed by: Simon Bushell and Gareth Keillor, Seladore Legal
Judicial clarification of the approach to crypto fraud and asset tracing Since the crypto-asset provisions of the Money Laundering and Terrorist Financing (Amendment) (No 2) Regulations 2022 came into effect on 1 September 2023, UK crypto-asset businesses have been required to collect, verify, and share information about crypto-asset transfers in line with the “Travel Rule”. This mandates that ser - vice providers should exchange originator and beneficiary identifying information during crypto- asset transfers with a view to increasing trans - parency in relation to crypto. While this framework represents a positive step forward, the ever-evolving nature of money laundering continues to present significant chal - lenges, particularly in the realm of crypto-assets. Clear forensic tracing remains crucial to estab - lishing a direct link between stolen funds and the accused, yet tracking digital assets across commingled funds and multiple complex trans - actions poses a substantial barrier for claimants. At the same time, the court must develop a con - sistent and pragmatic approach that reflects the technical complexity inherent in such cases. A recent case in the English High Court has pro - vided important legal clarity on claims against exchanges. D’Aloia v Persons Unknown [2024] EWHC 2342 (Ch) was a rare full trial of a crypto fraud. Unlike previous judgments, which were largely decisions on interim applications, this case offers a detailed analysis of tracing, follow - ing, and unjust enrichment in crypto disputes. A few key points are summarised below: • Need for Forensic Evidence: Mr D’Aloia alleged that GBP2.5 million in Tether, a sta - blecoin tied to the US dollar (USDT) had been fraudulently stolen from him and had then been transferred to a wallet on the Bitkub
dictions, given the often cross-border nature of fraud. The ratification was accompanied by a dec - laration under Article 25/30, limiting the Con - vention’s application to England and Wales. It remains unclear why Scotland and Northern Ire - land have been excluded at this stage. However, as noted in the declaration – and as permitted under Article 30 – the UK retains the option to extend the Convention’s application to these jurisdictions in the future. Although the Hague 2005 Convention on Choice of Court Agreements (Hague Convention 2005) currently allows for the enforcement of English judgments across the EU and other signatories, it is limited to cases where an exclusive English jurisdiction clause was agreed upon after Hague Convention 2005 took effect for the UK. Beyond Hague Convention 2005, enforcement of English judgments currently depends on: • whether a reciprocal enforcement arrange - ment exists between the UK and the relevant country (such as a bilateral treaty); or • the national enforcement rules of the foreign state in question. In this context, Hague Convention 2019 therefore introduces much-needed clarity and consist - ency in the enforcement of English judgments within EU member states. At present, Ukraine and Uruguay are the only non-EU states (aside from the UK) to have ratified Hague Convention 2019. However, the Convention is expected to gain wider international acceptance in due course, attracting further state signatories and strengthening its role in cross-border judicial co- operation.
7 CHAMBERS.COM
INTRODUCTION Contributed by: Simon Bushell and Gareth Keillor, Seladore Legal
exchange. However, his claim failed because expert evidence did not sufficiently prove that his specific USDT had reached that particular wallet with Bitkub (Ms Hlangpan’s wallet). • Nature of USDT: The court confirmed that USDT is property, though not a traditional chose in action or chose in possession. Instead, it falls into a distinct category that can be traced and treated as trust property. Whilst this is consistent with earlier authori - ties, D’Aloia is the first case to hold this fol - lowing a full trial. It is therefore an important decision on this point. • Tracing v Following: The court reaffirmed that tracing and following are legally distinct. “Following” refers to tracking the same asset as it changes hands, maintaining its original identity throughout the process. “Tracing”, on the other hand, involves identifying a new asset that has replaced the original, allowing claimants to pursue its value through a series of transactions. Since the court determined that USDT belongs to a distinct category of property, rather than a chose in action, this meant that it could, in principle, be followed even when mixed with other USDT in a wallet. This was because USDT retains a persis - tent identity, allowing it to be theoretically tracked through transactions. However, the evidence before the court on this issue was limited. While Tether’s own paper stated that only Tether can create or destroy USDT, no evidence was provided to confirm whether individual tokens could be uniquely traced. Crucially, Mr D’Aloia’s expert failed to estab - lish that any specific portion of the USDT in Ms Hlangpan’s wallet originated from him. As a result, the following claim was unsuccess - ful. • Unjust Enrichment: Although the court found that Bitkub had been unjustly enriched, the claim failed because Mr D’Aloia could not
establish that Bitkub had been enriched at his expense. The court also emphasised that exchanges must act in good faith when han - dling suspicious transactions. The judgment confirms that though crypto fraud victims have legal remedies, the success of claims depends on strong forensic evidence and may also turn on the precise rights and proper - ties of the specific crypto-asset (which can vary). The also suggests that different cryptocurren - cies may require different tracing approaches, depending on their characteristics. If the court addressed the complexities of cryp - to-asset tracing in D’Aloia, it grappled with the tricky issue of enforcement of foreign judgments in Tai Mo Shan Ltd v Persons Unknown [2024] EWHC 1514 (Comm). The claimant had brought proceedings in England to seek to enforce a declaration it had obtained from the New York courts on cryptocurrency ownership following a major hack. The claimant sought (and obtained) permission from the English court to serve its claim out of the jurisdiction. The ruling offers ear - ly guidance on how English courts may enforce foreign judgments concerning crypto-assets under common law rules, which apply in the absence of an enforcement treaty or convention. A key issue was the legal “location” of digi - tal assets. The court accepted that the stolen cryptocurrency was situated in New York at the time of the hack, based on the claimant’s central management and control being located there, even though it was a Cayman-registered company. It also held that the recovered assets could now be treated as located in England, as they were held in a wallet controlled by English solicitors. These findings supported the court’s conclusion that England was the most appropri - ate forum for enforcement.
8 CHAMBERS.COM
INTRODUCTION Contributed by: Simon Bushell and Gareth Keillor, Seladore Legal
The judgment also refined the practice of serv - ing crypto-asset claims via non-fungible tokens (NFTs). The court imposed conditions to ensure compliance with foreign laws, given that ser - vice via blockchain could be accessed from anywhere in the world. Additionally, it allowed password protection for confidential documents while ensuring publicly available court docu - ments remained accessible. It is therefore clear that the English courts are becoming increasingly sophisticated in dealing with crypto disputes, and willing to apply crea - tive approaches (such as serving via NFTs) to enable victims of fraud to obtain redress through the English judicial process. Failure to Prevent Fraud (FTP) Guidance published On 6 November 2024, the Home Office issued the anticipated guidance on the Failure to Pre - vent Fraud (FTP Fraud) Offence, introduced as part of the Economic Crime and Corporate Transparency Act 2023 (ECCTA). Taking effect from 1 September 2025, this holds large organi - sations criminally responsible if an associated person commits fraud for their benefit, unless the company can demonstrate it had reasonable fraud prevention measures in place. While not legally binding, the guidance provides clarity on how organisations can implement effective fraud prevention frameworks, particu - larly for those with international operations or complex supply chains. Courts will refer to this guidance when determining whether a compa - ny has taken adequate steps to prevent fraud. Although the offence applies only to large organ - isations, the guidance suggests that smaller businesses may also find its principles useful.
The guidance sets out six key principles for effective fraud prevention: • Commitment from Senior Leadership: Execu - tives and senior management should actively promote a strong anti-fraud culture within the organisation. • Fraud Risk Assessment: Businesses must regularly assess their exposure to fraud risks and keep these evaluations updated. While certain risks may not require immediate measures, failing to conduct any assessment is unlikely to be seen as reasonable. • Tailored Prevention Measures: Fraud pre - vention policies should be appropriate for the organisation’s risk profile, clearly imple - mented, and effectively enforced. If existing controls are already sufficient, additional measures are not required. • Due Diligence: A risk-based approach should be applied when evaluating associated per - sons to reduce fraud risks. • Clear Communication and Training: Fraud prevention policies should be well-commu - nicated within the organisation and to exter - nal stakeholders to ensure awareness and compliance. • Ongoing Monitoring and Improvement: Companies should routinely review their fraud prevention procedures, incorporating insights from investigations, whistleblowing reports, and industry best practices. Whilst this is primarily a development in the criminal sphere, it is of relevance to civil fraud practitioners for a number of reasons. First, the creation of internal rules and guidelines within businesses will likely result in documentation being created which might be of assistance in civil claims. It will also likely be more straight - forward for a civil claimant to demonstrate breaches of duty, which might give rise to claims
9 CHAMBERS.COM
INTRODUCTION Contributed by: Simon Bushell and Gareth Keillor, Seladore Legal
(depending upon the facts and relationships) if a large organisation has failed to comply with its own internal risk assessment processes. It is interesting to note that the government’s guidance includes eight hypothetical examples illustrating the scope of the FTP Fraud Offence,
with three of them focusing on ESG-related fraud. This suggests an increasing regulatory interest in how businesses’ ESG commitments intersect with corporate fraud risks. Companies should be mindful that misleading or fraudulent ESG claims could expose them to potential lia - bility under the new framework.
10 CHAMBERS.COM
AUSTRALIA Law and Practice Contributed by: Joachim Delaney and Ranjani Sundar HFW
Australia
Sydney
Tasmania
Contents 1. Fraud Claims p.14
1.1 General Characteristics of Fraud Claims p.14 1.2 Causes of Action After Receipt of a Bribe p.15 1.3 Claims Against Parties Who Assist or Facilitate Fraudulent Acts p.16 1.4 Limitation Periods p.17 1.5 Proprietary Claims Against Property p.18 1.6 Rules of Pre-Action Conduct p.19 1.7 Prevention of Defendants Dissipating or Secreting Assets p.19 2. Procedures and Trials p.20 2.1 Disclosure of Defendants’ Assets p.20 2.2 Preserving Evidence p.21 2.3 Obtaining Disclosure of Documents and Evidence From Third Parties p.22
2.4 Procedural Orders p.22 2.5 Criminal Redress p.22
2.6 Judgment Without Trial p.23 2.7 Rules for Pleading Fraud p.23
2.8 Claims Against “Unknown” Fraudsters p.24 2.9 Compelling Witnesses to Give Evidence p.25 3. Corporate Entities, Ultimate Beneficial Owners and Shareholders p.25 3.1 Imposing Liability for Fraud on to a Corporate Entity p.25 3.2 Claims Against Ultimate Beneficial Owners p.26 3.3 Shareholders’ Claims Against Fraudulent Directors p.26 4. Overseas Parties in Fraud Claims p.27 4.1 Joining Overseas Parties to Fraud Claims p.27 4.2 Service of Proceedings out of the Jurisdiction p.29 5. Enforcement p.30 5.1 Methods of Enforcement p.30 5.2 Enforcement of Foreign Judgments p.31 6. Privileges p.31 6.1 Invoking the Privilege Against Self-Incrimination p.31 6.2 Undermining the Privilege Over Communications Exempt From Discovery or Disclosure p.31
11 CHAMBERS.COM
AUSTRALIA CONTENTS
7. Special Rules and Laws p.32 7.1 Rules for Claiming Punitive or Exemplary Damages p.32 7.2 Laws to Protect “Banking Secrecy” p.33 7.3 Crypto-Assets p.34
12 CHAMBERS.COM
AUSTRALIA Law and Practice Contributed by: Joachim Delaney and Ranjani Sundar, HFW
HFW is a leading global law firm in the aero - space, commodities, construction, energy and resources, insurance, and shipping sectors. The firm has more than 600 lawyers, including 185 partners, based in offices across the Ameri - cas, Europe, the Middle East and Asia-Pacific. HFW prides itself on its deep industry expertise and its entrepreneurial, creative and collabora - tive culture. HFW’s fraud and insolvency group
comprises experienced commercial litigators with a particular focus on dealing with high-val - ue, cross-border matters. The team’s expertise spans a wide range of sectors and industries, and includes litigation on behalf of adminis - trators, liquidators, provisional liquidators and other office-holders, fraud-related insolvencies, fraud investigations and asset tracing.
Authors
Joachim Delaney is an experienced dispute resolution lawyer with over 25 years’ experience in mediation, expert determination, arbitration and litigation. Jo has extensive
Ranjani Sundar specialises in fraud, insolvency and contentious matters, including advising on corporate
restructurings, cross-border insolvencies, counterparty insolvency risk, formal insolvency procedures, preservation of rights under the Personal Property Securities Act, enforcement remedies, and all aspects of commercial litigation. Ranjani has experience in complex litigation led in the state supreme courts in South Australia, Western Australia and New South Wales, and in the federal and high courts of Australia. Ranjani’s clients include secured and unsecured creditors, financial institutions, mining companies, property developers, insolvency practitioners (receivers, administrators and liquidators), yacht owners and insurers, and debtor companies and individuals.
experience of commercial, construction and investment treaty arbitrations under the ICC, ACICA, SIAC, LCIA, AAA, UNCITRAL and ICSID arbitration rules, across a diverse range of industries, including energy and resources, construction and infrastructure, as well as telecommunications and information technology. Jo was one of Australia’s members of the ICC Court of Arbitration from 2016 to 2024. She is the Chair of ACICA’s Professional Advisory Council, a member of the ACICA Practice and Procedures Board and the ERA Pledge Steering Committee.
13 CHAMBERS.COM
AUSTRALIA Law and Practice Contributed by: Joachim Delaney and Ranjani Sundar, HFW
HFW Level 10, 126 Phillip Street Sydney NSW 2000 Australia
Tel: +61 (0)2 9320 4600 Fax: +61 (0)2 9320 4666 Email: reception.sydney@hfw.com Web: www.hfw.com
1. Fraud Claims 1.1 General Characteristics of Fraud Claims In Australia, fraud is criminalised at a federal and state level, by: • Parts 7.3–7.7 of the Criminal Code Act 1995 (Cth) (the “Criminal Code” ) and • the provisions of the criminal legislation in each state (Criminal Code 2002 (ACT) Part 3.3; Crimes Act 1900 (NSW) Part 4AA; Criminal Code Act 1913 (WA) Section 409; Criminal Code Act 1899 (Qld) Section 408C; Criminal Code Act 1924 (Tas) Section 253A; Criminal Code Act 1983 (NT) Section 43AGA and 43AH-L; Criminal Law Consolidation Act 1935 (SA) Section 139; Crimes Act 1958 (Vic) Sections 81–82). There are many words used to define or cap - ture the act of “fraud” in Australian law, including “dishonesty” , “deception” or “moral turpitude” . Fraud prosecutions are both various and flexible in assisting victims. The main offences that arise in relation to fraud are:
• obtaining property by deception (Section 134.1(1) of the Criminal Code) • obtaining a financial advantage by deception (Section 134.2 (1) of the Criminal Code); • general dishonesty – obtaining a gain (Section 135.1(1) of the Criminal Code); • general dishonesty – causing a loss (Section 135.1(3) of the Criminal Code); and • general dishonesty – causing a loss to anoth - er (Section 135.1(5) of the Criminal Code). Notably, in Nadinic v Drinkwater (2017) 94 NSWLR 518, Leeming JA summarised key con - cepts relevant to a claim of fraud in common law and in equity, as follows (at (22)): “For present purposes, it will suffice to distinguish the two senses in which ‘fraud’ is used in civil litigation which correspond to different meanings at law and in equity. The difference turns on the state of mind of the person said to have committed fraud. At common law, ‘fraud is proved when it is shown that a false representation has been made (1) knowingly, or (2) without belief in its truth, or (3) recklessly, careless whether it be true or false’” Derry v Peek (1889) 14 App Cas 337 at 374. The contrast with equity was explained by Vis - count Haldane LC in Nocton v Lord Ashburton
14 CHAMBERS.COM
AUSTRALIA Law and Practice Contributed by: Joachim Delaney and Ranjani Sundar, HFW
[1914] AC 932 at 953–954 “[i]n Chancery the term ‘fraud’ thus came to be used to describe what fell short of deceit, but imported breach of a duty to which equity had attached its sanc- tion.” His Lordship emphasised that a person who misconceived the extent of the obligation which a court of equity imposed upon him or her, “however innocently because of his ignorance” , was taken to have violated an obligation which he was taken by the Court to have known, and with the result that the conduct was labelled fraudulent. He said of fraud in this sense at 954 that “what it really means in this connection is, not moral fraud in the ordinary sense, but breach of the sort of obligation which is enforced by a Court that from the beginning regarded itself as a court of conscience.” On a smaller scale, the Australian Consumer Law (Schedule 2 of the Competition and Consumer Act 2010 (Cth)) (ACL), provides protections to consumers including, amongst other things, in respect of misleading and deceptive conduct. Since 1 July 2021, a consumer is defined as any person: • who acquires goods or services for an amount not exceeding AUD100,000; or • who, where the amount of goods or services exceeds AUD100,000, acquires the goods or services for personal, domestic or house - hold use (Section 77A of the Treasury Laws Amendment (Acquisition as Consumer – Financial Thresholds) Regulations 2020). Section 18 of the ACL contains a general pro - hibition against a person/company, in trade or commerce, engaging in conduct that is mislead - ing or deceptive, or likely to mislead or deceive. Additionally, Section 29(1)(d) of the ACL con - tains a specific prohibition against a person/ company, in trade or commerce, in connection
with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply of goods or services, making a false or misleading representation that a particular person has agreed to acquire goods or services. Although Section 29 uses “false or misleading” rather than “misleading or decep - tive” , the Australian courts have held that there is no material difference between the two phrases (ACCC v Dukemaster Pty Ltd [2009] FCA 682; ACCC v Coles Supermarkets Australia Pty Ltd (2014) 317 ALR 73) and claimants often plead breaches of both provisions. Common law misrepresentation overlaps with the statutory provisions and is relevant in cir - cumstances where the statutory provisions do not apply, including where the claims exceed the monetary limits stipulated. Common law misrepresentation involves (i) the giving of false information by a party (or their agent) to an inno - cent party before a contract is made; and (ii) the statement inducing the innocent party to enter into a contract. A misrepresentation may be innocent, negligent or fraudulent with the crucial difference being whether the person making the statement believed the statement to be true at the time of making the statement. 1.2 Causes of Action After Receipt of a Bribe The decision of the Supreme Court of the Unit - ed Kingdom in FHR European Ventures LLP & Others v Cedar Capital Partners LLC [2014] UKSC 45 (FHR) resolved the debate in the UK surrounding the rightful owner of a bribe that has been paid to an agent. The Supreme Court unanimously held that where an agent accepts a bribe or secret commission, it is held on trust for the agent’s principal who is entitled to a pro - prietary interest in the benefit. Whilst English law is not binding in Australian courts, the decisions
15 CHAMBERS.COM
AUSTRALIA Law and Practice Contributed by: Joachim Delaney and Ranjani Sundar, HFW
1.3 Claims Against Parties Who Assist or Facilitate Fraudulent Acts It is well established in Australia that a third party can breach a trust either by “knowing receipt” or “knowing assistance” (Barnes v Addy (1874) 9 Ch App 244 ( “Barnes” )). When either is estab - lished, this will create a constructive trust in favour of the claimant (Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 ( “Farah” ) Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41). Liability for knowing receipt is a category of constructive trusteeship which depends on the defendant having received and become charge - able with trust property, and having knowledge of the breach before parting with the property (Barnes, 251–252). Liability for knowing assistance is more compli - cated and, following the Australian High Court’s decision in Farah, can be imposed if one of the following categories of knowledge can be estab - lished: • actual knowledge; • wilfully shutting one’s eyes to the obvious; • wilfully and recklessly failing to make such inquiries as an honest and reasonable person would make; and • knowledge of circumstances which would indicate the facts to an honest and reason - able person. Further, the Farah decision has created uncer - tainty surrounding the requirement that the breach be one that amounts to “dishonest and fraudulent design” in the context of “knowing assistance” . Whereas the Western Australian Court of Appeal in Westpac Banking Corpora - tion v Bell Group Ltd (No 3) [2012] WASCA 157 ( “Bell” ) adopted a more relaxed test, the court in
are nonetheless persuasive and it is likely that the findings in the FHR case would apply equally in Australia. An example of the application of this principle is found in Twigg v Twigg (2022) 402 ALR 119 at 186; [2022] NSWCA 68 [184] where it was observed by Brereton JA (Bell CJ and Payne JA, agreeing) that “In my judgment, a claim for proprietary relief against an accessory is within the analogy: it is a claim for the accessory to account for the trust property it has received, by restoring it to the trust. As the Supreme Court of the United Kingdom has observed, ‘the expres - sion equitable accounting can encompass both proprietary and non-proprietary claims’. The defaulting party is ‘liable, at the option of the ces - tuis que trust, to account either for the value... or... for the thing itself...’ (emphasis added).” The causes of action available to claimants whose agent has received a bribe include: • “Mareva” or freezing orders, and proprietary injunctions to freeze the bribe/commission and their traceable proceeds; • false accounting offences that exist at both the Commonwealth level and state/territory level; • criminal actions for domestic bribery under Divisions 141 and 142 of the Criminal Code when Commonwealth public officials are involved, or under state and territory legisla - tion which makes it a crime to bribe public officials and private individuals; • criminal actions for bribery of foreign public officials under Section 70.2 of the Criminal Code; and • claims for breach of fiduciary duty where an agent is the fiduciary of the principal.
16 CHAMBERS.COM
AUSTRALIA Law and Practice Contributed by: Joachim Delaney and Ranjani Sundar, HFW
Hasler v Singtel Optus Pty Ltd ( “Hasler” ) Curtis v Singtel Optus Pty Ltd; Singtel Optus Pty Ltd v Almad Pty Ltd (2014) 87 NSWLR 609 clarified that the Bell decision did not intend to broaden the class of breaches of fiduciary duty in the context of “knowing assistance” . Notwithstand - ing this, in Hasler, the court found that the rel - evant conduct was caught within the meaning of “dishonest and fraudulent design” on any view. More recently, the Victorian Court of Appeal case, Harstedt Pty Ltd v Tomanek [2018] VSCA 84, has provided guidance as to the liability of parties who assist or facilitate another’s fraudu - lent acts. In a case where a party has, by reason of a breach of fiduciary duty or fraudulent activ - ity, received or otherwise profited from misap - propriated funds, that party may become liable in the following ways: • “knowing assistance” in the breach – where a person knowingly assists with a dishonest and fraudulent scheme; “knowing induce - ment” or immediate procurement of the breach – a third party may be liable as an accessory if they induce or otherwise procure fraudulent conduct or a breach of fiduciary duty; • corporate alter ego – a company will be fully liable for the profits derived as a result of fraudulent conduct or the breach of fiduciary duty if the company is the wrongdoer’s “cor- porate creature or vehicle” ; and • trustee de son tort – a party may be held liable as “trustee de son tort” or “of his own wrong” where they are not a trustee but pre - sume to act as a trustee and then commit a breach of trust or fraudulently profit from their position. With respect to breach of fiduciary duty and knowing assistance claims, a question that may
arise is whether a plaintiff is entitled to obtain both the remedies of equitable compensation and an account of profits from multiple wrong - doers. In Xiao v BCEG International (Australia) Pty Ltd [2023] NSWCA 48, the New South Wales Court of Appeal recently determined that although a plaintiff cannot obtain both equitable compensation and an account of profits from a single defendant, where multiple defendants are involved, a plaintiff is entitled to make “split election” seeking different remedies from differ - ent wrongdoers. This is because the liability of the knowing recipient (who profited from their own misconduct) is different in nature and extent from the liability of the fiduciary (who made no profit from the default), particularly given that the knowing recipient does not owe a duty of loyalty to the principal. For this reason, seeking “a gain-based remedy from a knowing recipient is not inconsistent with a compensation remedy against the defaulting fiduciary” (at [69]). 1.4 Limitation Periods At the federal level, fraud offences have the fol - lowing limitation periods: • no time limitation for offences where the maximum imprisonment for a first offence exceeds six months; • one year after the offence was committed for offences where the maximum imprisonment is six months or less; and • one year for offences where punishment is a pecuniary penalty and no imprisonment (Crimes Act 1914 (Cth) Section 15B). Recently, the Full Federal Court in Walker v Members Equity Bank Ltd [2022] FCAFC 184 also confirmed that there is a three-year limita - tion period on criminal prosecutions brought by the Australian Securities & Investments Com - mission (ASIC) for false or misleading repre -
17 CHAMBERS.COM
AUSTRALIA Law and Practice Contributed by: Joachim Delaney and Ranjani Sundar, HFW
sentations under the Australian Securities and Investments Commission Act 2001 (Cth), where time starts to run from when the alleged offence occurs. At the state level, fraud extends the limitation period in relation to the causes of action avail - able in the Australian jurisdiction to fraud vic - tims, which depends on the cause of action itself (tort, contract, etc) (Limitation of Actions Act 1958 (Vic) Section 27; Limitation of Actions Act 1974 (Qld) Section 38; Limitation Act 1985 (ACT) Section 33; Limitation Act 2005 (WA) Section 38; Limitation of Actions Act 1936 (SA) Section 25; Limitation Act 1974 (Tas) Section 32, Limitation Act 1981 (NT) Section 42; Limitation Act 1969 (NSW) Section 55). For example, Section 55 of the Limitation Act 1969 (NSW) provides that the relevant limitation period for actions based on fraud or deceit, or actions where the identity of a person against whom a cause of action lies is fraudulently con - cealed, only starts running from when “person having (either solely or with others) the cause of action first discovers, or may with reasonable diligence discover, the fraud, deceit or conceal - ment” . 1.5 Proprietary Claims Against Property Where the misappropriated property can be suf - ficiently identified (whether it be within mixed funds, property that is substituted for the origi - nal, or any proceeds from the sale of the prop - erty) and the claimant can establish a proprietary entitlement to that property via tracing rules, the court will exercise its equitable jurisdiction to recognise the proprietary claim and will grant an appropriate remedy in the circumstances. The exception to this is where the claimant seeks a remedy against a bona fide purchaser for value
of the property without notice of the claimant’s equitable interest. In RnD Funding Pty Limited v Roncane Pty Limited [2023] FCAFC 28, the Federal Court of Australia recently confirmed that a pre-existing fiduciary duty between the party asserting the equitable proprietary right and the party who holds or has disposed of the original property is not a requirement for tracing in equity. Rather, it is the nature of the equitable property rights that forms the foundation of tracing. There are complex apportionment and prior - ity rules which exist for the proceeds of fraud that have been mixed with other funds. If the recipient purchases something valuable with misappropriated funds from a mixed account, the claimant may be entitled to claim a charge on the asset purchased, provided the asset is identifiable (Re Oatway [1903] 2 Ch 356 applied recently in Re Renewable Energy Traders Pty Ltd (in liq) (ACN 140 736 849) [2019] 140 ACSR 466; [2019] FCA 1795). If the claimant’s property is traced to a third party, whether the claimant has any proprietary claim depends on whether the third party was a bona fide purchaser of the property or a mere volunteer (Commonwealth Bank of Australia v Saleh & Ors [2007] NSWSC 903). The claimant may not claim against a bona fide purchaser for value, who had no notice of the existence of a prior interest. On the other hand, where third parties receive property as volunteers, they may be liable as constructive trustees. In this case, the claim - ant and third party would share the property in proportion to their contributions (In re Diplock; Diplock v Wintle [1948] Ch 465 cited in Com - monwealth Bank of Australia v Saleh & Ors [2007] NSWSC 903). In circumstances where the third party uses the claimant’s money on improv -
18 CHAMBERS.COM
AUSTRALIA Law and Practice Contributed by: Joachim Delaney and Ranjani Sundar, HFW
ing its own assets, the claimant will not be enti - tled to any proportionate share in the increased value of the asset (In re Diplock; Diplock v Wintle [1948] Ch 465 cited in Commonwealth Bank of Australia v Saleh & Ors [2007] NSWSC 903). 1.6 Rules of Pre-Action Conduct There are no specific rules of pre-action con - duct that apply prior to the commencement of fraud claims. However, jurisdictions do impose formalities that are to be completed prior to or at the time civil proceedings are commenced more generally. Specifically, the Civil Dispute Resolution Act 2011 (Cth) (CDRA) requires applicants to file “genuine steps statement” , which sets out the steps taken by the parties to resolve the dis - pute or otherwise explain why no such steps have been taken (in the case of fraud claims, the urgency of the matter or anonymity of the fraudster may prevent the parties from taking “genuine steps” before commencing proceed - ings). Section 4(1) of the CDRA outlines exam - ples of genuine steps that a person can take to resolve a dispute, including: • notifying the other person of the issues that are, or may be, in dispute, and offering to discuss them, with a view to resolving the dispute; • responding appropriately to any such notifica - tion; • providing relevant information and documents to the other person to enable the other to understand the issues involved and how the dispute might be resolved; • considering whether the dispute could be resolved by a process facilitated by another person, including an alternative dispute reso - lution process; • if such a process is agreed to:
(a) agreeing on a particular person to facili - tate the process; and (b) attending the process; • if such a process is conducted but does not result in resolution of the dispute – consider - ing a different process; and • attempting to negotiate with the other person, with a view to resolving some or all of the issues in dispute, or authorising a representa - tive to do so. A party that does not file a genuine steps state - ment, or that has not taken genuine steps to resolve a dispute, will not be prevented from commencing a claim in the Federal Court of Australia. However, the court may take this into account when exercising its powers, including its discretion to award costs. Generally speaking, the courts of the states/ territories do not impose similar formalities on prospective claimants. 1.7 Prevention of Defendants Dissipating or Secreting Assets Freezing orders can be obtained in each Austral - ian jurisdiction to prevent the loss or dissipation of assets (Uniform Civil Procedure Rules 2005 (NSW) Part 25 Division 2; Uniform Civil Proce - dure Rules 1999 (Qld) Chapter 8 Part 2 Divi - sion 2; Uniform Civil Rules 2020 (SA) Chapter 10 Part 2 Division 5; Supreme Court Rules 1987 (NT) Regulation 37A.02; Rules of Supreme Court 1971 (WA) Order 52A; Supreme Court Rules 2000 (Tas) Part 36 Division 1A; Court Procedure Rules 2006 (ACT) Part 2.9 Division 2.9.4 Sub- division 2.9.4.2; Supreme Court (General Civil Procedure) Rules 2015 (Vic) Order 37A.02). Freezing orders may be obtained on an interim basis pending the outcome of a final hearing. The court has a discretion to grant a freezing
19 CHAMBERS.COM
AUSTRALIA Law and Practice Contributed by: Joachim Delaney and Ranjani Sundar, HFW
order. In accordance with Part 25 Division 2 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), in order to obtain a freezing order, the applicant must: • show that there is a good arguable case against the wrongdoer; • show that there is a real risk the wrongdoer is likely to dissipate the assets; • where an order is sought against a third party, show that the third party is holding, using or is otherwise in possession of the asset; and • address discretionary concerns, such as the form of the order and the value of the relevant assets. Freezing orders are classified as “in personam” orders, meaning that their operation is concerned with individuals rather than with specific assets. This distinction is significant, as it means that orders are not limited to within Australia (that is, “domestic freezing order” ) rather, the orders may also deal with assets that are located overseas (ie, “worldwide freezing order” ) provided that the court is satisfied that the order “is undoubtedly relevant to the exercise of the court’s discretion to grant the order” (Deputy Commissioner of Taxation v Huang [2021] HCA 43 [30]). There are also court fees associated with the granting of a freezing order. The court will not grant a freezing order without the applicant pro - viding the usual undertakings as to damages (Frigo v Culhaci (1988) NSWCA 88; Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1981) 146 CLR 249), as in its absence if the proceedings were to fail, the respondents would have no remedy available to them. The court may require the applicant to make a pay - ment to the court, or to give other security for the performance of the undertaking. It should also
be noted that under Australian law, there is no need to give a cross-undertaking as to damages. In the case where a substantive respondent does not comply with the freezing order, the efficacy of the order depends upon compliance by third parties. This is due to the fact that the effect of a freezing order is not confined to the parties, but extends to include a third party where a freez - ing order has also been made against them or notice of the order is given to the third party. In the latter case, the third party is not bound by the order but will be guilty of contempt of court if it does anything to support the breach. Spe - cifically, the third party may be penalised in the form of a committal, sequestration or fine. Simi - larly, where a defendant refuses or neglects to do any act within the time specified in this order for the doing of the act, or disobeys the order by doing an act which the order requires them to abstain from doing, they will also be liable to imprisonment, sequestration of property or other punishment. 2. Procedures and Trials 2.1 Disclosure of Defendants’ Assets As outlined in Rules 25.12 and 25.13 of the UCPR (NSW), orders ancillary to a freezing order are available to assist in requiring a defendant to disclose their assets. The overarching objective of an ancillary order, similar to that of a freez - ing order, is to prevent events that would frus - trate the court’s processes. The most common form of order is that the respondent discloses the nature, location and details of their assets. By requesting that the defendant disclose the nature of their assets, this allows for the identifi - cation of third parties such as banks and financial intermediaries who have custody of the assets and enables notice of the order to be given to
20 CHAMBERS.COM
AUSTRALIA Law and Practice Contributed by: Joachim Delaney and Ranjani Sundar, HFW
these parties to bind them to the order (Univer - sal Music Pty Ltd v Sharman License Holdings Ltd (2005) 228 ALR 174, 181 [20]) ( “Universal Music” ). In the case where there is a failure on the part of the defendant to disclose their assets at all or in a timely fashion, leave is likely to be granted to cross-examine a deponent on an assets disclo - sure affidavit (Universal Music at 184 [28]). Failure to comply with the requirements to give disclosure, or provision of false or misleading information, is likely to give rise to a charge of contempt. Penalties for a charge of contempt may include the sequestration of assets, the imposition of a fine or even imprisonment. In most cases, it is left up to the offended party to enforce contempt. 2.2 Preserving Evidence There are several forms of key interim relief avail - able to claimants in order to preserve evidence. The two common remedies available to the claimant are known as a freezing order (Mareva injunction) or a search order (Anton Piller order), both of which are sought on an ex parte basis. Details of a freezing order and the requirements that must be met in order for such an order to be granted are outlined in 1.7 Prevention of Defendants Dissipating or Secreting Assets . Additionally, a claimant may obtain a search order, in order to enter premises and inspect, remove or make copies of relevant documents or specified things in circumstances where it is feared that those documents or things might be destroyed or suppressed. The availability of search orders came after the decision in Anton Piller KG v Manufacturing Processes Ltd [1976] Ch 55. The key matters the court will take into
consideration when determining whether or not to grant a search order include whether: • there is a strong prima facie case; • the damage suffered by the applicant is seri - ous; • the defendant is in clear possession of incrim - inating documents or items in general; and • there is a real possibility that the defendant might destroy, or otherwise cause to be una - vailable, important evidentiary material that is in the defendant’s possession. It is incumbent on the applicant of an ex parte search order (or a freezing order) to ensure they have fully disclosed all facts material to the deter - mination of the application to the court, including any defences available to the respondent and any correspondence exchanged between the parties relating to the dispute. This was empha - sised in Direct Flow Pty Ltd t/a Arthur Rubber v Andrew Peterson t/a Maxx Rubber [2023] NSWSC 318, where the New South Wales Court of Appeal refused to grant the plaintiff access to materials collected on the execution of a search order. The Court considered that the plaintiff’s non-disclosure to the Court of communications between the parties prior to the application of the search order was material in that (i) it did not bring to the Court’s attention matters which the defendant may have tendered as evidence; and (ii) if the relevant information had been disclosed, there was a high probability that the Court would have dismissed the original search order appli - cation. A claimant may also seek other forms of interim relief to preserve evidence. Specifically, these orders include detention, custody or preserva - tion of property that is relevant to the proceed - ings by way of an interlocutory injunction or the appointment of a receiver.
21 CHAMBERS.COM
Page i Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64 Page 65 Page 66 Page 67 Page 68 Page 69 Page 70 Page 71 Page 72 Page 73 Page 74 Page 75 Page 76 Page 77 Page 78 Page 79 Page 80 Page 81 Page 82 Page 83 Page 84 Page 85 Page 86 Page 87 Page 88 Page 89 Page 90 Page 91 Page 92 Page 93 Page 94 Page 95 Page 96 Page 97 Page 98 Page 99 Page 100 Page 101 Page 102 Page 103 Page 104 Page 105 Page 106 Page 107 Page 108 Page 109 Page 110 Page 111 Page 112 Page 113 Page 114 Page 115 Page 116 Page 117 Page 118 Page 119 Page 120 Page 121 Page 122 Page 123 Page 124 Page 125 Page 126 Page 127 Page 128 Page 129 Page 130 Page 131 Page 132 Page 133 Page 134 Page 135 Page 136 Page 137 Page 138 Page 139 Page 140 Page 141 Page 142 Page 143 Page 144 Page 145 Page 146 Page 147 Page 148 Page 149 Page 150 Page 151 Page 152 Page 153 Page 154 Page 155 Page 156 Page 157 Page 158 Page 159 Page 160 Page 161 Page 162 Page 163 Page 164 Page 165 Page 166 Page 167 Page 168 Page 169 Page 170 Page 171 Page 172 Page 173 Page 174 Page 175 Page 176 Page 177 Page 178 Page 179 Page 180 Page 181 Page 182 Page 183 Page 184 Page 185 Page 186 Page 187 Page 188 Page 189 Page 190 Page 191 Page 192 Page 193 Page 194 Page 195 Page 196 Page 197 Page 198 Page 199Powered by FlippingBook