The Court held that a Facility, Security & Guarantee Deed, an unregistered mortgage, and Chinese loan and mortgage contracts were all shams, and identified the true transaction as an agreement for the payment of Australian dollars in return for equivalent Chinese Yuan, guaranteed and secured by mortgage over Australian and Chinese properties. The Court held that the true transaction was not unenforceable for statutory illegality under the Proceeds of Crime Act 2002 (Cth) because, in the absence of evidence that the plaintiff's assets were proceeds of crime or that there were reasonable grounds for a restraining order application, the plaintiff's subjective fear that assets might be frozen did not establish that the transaction was made in furtherance of a purpose of frustrating the operation of that Act. The unregistered mortgage, construed according to its true terms, created an equitable mortgage held on trust for the plaintiffs, entitling them to the net sale proceeds of the secured property paid into court.
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