|DEBT RECOVERY INa CRYPTOCURRENCY MATTERS – RETRIEVING ERRONEOUS TRANSFERS
CASE: FORIS GFS AUSTRALIA PTY LTD V MANIVEL  VSC 482
Foris GFS Australia Pty Ltd and Foris AU Pty Ltd (Plaintiffs) are part of the corporate group that operates the cryptocurrency trading platform, Crypto.com.
The proceeding related to a mistaken payment allegedly made to one of its customers, the first defendant (Manivel). It was alleged that in May 2021, instead of refunding $100.00 as intended, $10,474,143.00 was erroneously transferred (the Wrongful Payment) to Manivel after an account number was accidentally entered into the payment amount field by a representative of the Plaintiffs.
Extraordinarily, the Plaintiffs allegedly did not realise this significant error until some seven months later, in late December 2021.
After making various enquiries of the Commonwealth Bank of Australia (the Bank), the Plaintiffs commenced proceedings in early February 2022. The following day, without notice to Manivel, it sought, and obtained, freezing orders over Manivel’s bank account and assets in an amount reflecting the Wrongful Payment.
The Plaintiffs submitted subsequent applications to join additional defendants and sought freezing orders in respect of each of them. The Plaintiffs produced evidence to the effect that Manivel had transferred the bulk of the Wrongful Payment by various payments to the third to eighth defendants, some of which had been used to purchase real estate (Property) and was the basis for the joinder against the other defendants.
What were the causes of action?
The claim was, substantially, a claim for restitution on the basis that the defendants were unjustly enriched. The Plaintiffs claimed (among other things):
- The sum equal to the purchase price of the Property from the second defendant payable to either of the Plaintiffs;
- A declaration that the Property was held on trust by the second defendant for the benefit of the Plaintiffs; and
- Orders requiring the Property to be transferred to, or alternatively sold for the benefit of the Plaintiffs.
What was the outcome?
On 13 May 2022, judgment was entered for the First Plaintiff and the following orders and declarations were made:
- Manivel’s sister (also a defendant in the proceedings) to pay the Plaintiffs the sum of $1,350,000.00;
- A declaration was also made that the Property was acquired by Manivel’s sister on trust for the First Plaintiff. Further, an order was granted that set out arrangements by which the First Plaintiff was to sell the Property and awarded interest and costs in favour of Plaintiffs.
Salerno Law’s services
Salerno Law regularly advises and provides debt recovery advice and services to cryptocurrency exchanges and users of these exchanges (among others). Salerno Law also has a dedicated cryptocurrency legal team that can assist with navigating the legal cryptocurrency environment. If you have any debt recovery matters, are the victim of a cryptocurrency scam, or require legal advice for your crypto business start-up, please contact Matt Krog and Inoke Faletau.
Author Inoke Faletau