In Re Robin Hood

8/6/2019 In Re Robin Hood

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In Re Robin Hood

Motion to discover accounts abroad, require an accounting, and

impose a constructive trust for 16,000 alleged victims abroad

pursuant the extraterritorial equitable authority ofnited

States of America v A Ltd [2001]

nited States of America v A Ltd [2001]

CKHC 4; Plaint 5 of 1!!! "4 #ecem$er

2001%

H&'H C( )* (+ *H, C((K &SLA-#S

)A)(*(-'A

"C&.&L #&.&S&(-%

4 &*,L) !

Plaint no 5/1!!!

-&*,# S*A*,S (+ A,)&CA

v

A L&&*,#

'),&' C

U#',-* #A*, 4 #,C,3,) 2001

Conflict of las Coo6 &slands P7$lic las r7le +orei8n stat7te

alloin8 recover9: restit7tion and rearation at instance of 7$lic

a8enc9 otentiall9 in ement A8enc9 o$tains


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=7d8ment in US: t>en s7es for restit7tion of f7nds in Coo6 &slands

tr7st ?>et>er @7$lic la@ and 7nenforcea$le in forei8n

=7risdiction +ederal *rade Commission Act 1!14 "US%: s 45"a%"2%

*>e +ederal *rade Commission "+*C% o$tained =7d8ment a8ainst a

$7siness in t>e US on t>e 8ro7nd t>at it >ad defra7ded n7mero7s

c7stomers *>e US co7rt made an order for t>e $7siness to a9 over

BUS 20m to t>e +*C *>is as to $e 7sed rimaril9 for rovidin8

comensation to defra7ded c7stomers C7stomers ere not necessaril9

to $e derived of an9 ot>er aven7e of redress: criminal or civil &n

t>e event t>at rearation roved imractical or t>e amo7nt aarded

roved to eat as re7ired for rearation: t>e $alance as to

$e aid into t>e US *reas7r9 as an @e7ita$le disco7ra8e remed9@ *>e

+*C s7ed in t>e Coo6 &slands for some BUS 225m >eld in a tr7st f7nd

to $e aid to t>e +*C as mone9 ac7ired fra7d7lentl9 and disosed of

to t>e tr7st *>e tr7stee o$=ected t>at t>is amo7nted to t>e

enforcement of a 7$lic la of a forei8n state

H,L#

*>e +ederal *rade Commission Act 1!14 "US% as a re87lator9 rovision

to revent and control tradin8 t>at as fra7d7lent or ot>erise

ille8al ?ide oers ere 8iven to t>e +*C to enforce t>ose

re87lations incl7din8 $9 o$tainin8 =7d8ments for s7ms in ee a9ment of f7nds in >ole or in

art into t>e US *reas7r9 &t as t>e s7$stance of t>e interest

so78>t to $e enforced >ic> determined >et>er t>is as a 7$lic la

rat>er t>an t>e form of action *>e action ta6en $9 t>e +*C as ta6en

to enforce t>e la and as at least in art enal &t as also a7$lic la so78>t to $e enforced $9 a forei8n state for re87lator9

7roses and it as not to $e enforced in t>e Coo6 &slands "see D02

eto D0E e: ost% Attorne9'eneral v (rtiF[1!D4] AC 1 and Attorne9

'eneral v Heinemann P7$lis>ers "1!DD% 1G5 CL) E0alied

Coo6 &slands

Cases referred to in =7d8ment
http://austlii.edu.au/au/cases/cth/high_ct/165clr30.htmlhttp://austlii.edu.au/au/cases/cth/high_ct/165clr30.html


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A' for t>e United Kin8dom v Heinemann P7$lis>ers A7stralia Pt9 Ltd

"1!D% 10 -S?L) DG: 5 AL) E5E: -S? CA; affd "1!DD% 1G5 CL) E0: D

AL) 44!: A7s HC

A' for t>e United Kin8dom v ?ellin8ton -esaers Ltd [1!DD] 1 -L)

12!: - HC and CA

A' of -e ealand v (rtiF [1!D4] AC 1: [1!D2] E All ,) 4E2: CA; affd

[1!D4] AC 1: [1!DE] 2 All ,) !E: HL

H7ntin8ton v Attrill [1D!E] AC 150: PC

oore v itc>ell "1!2!% E0 + "2d% G00: US Ct of As "2nd Cir%

?isconsin v Pelican &ns7rance Co "1DDD% 12 US 2G5: US SC

Co7nsel

A anaran8ifor t>e US 8overnment

3 'i$sonfor t>e tr7st coman9

'),&' C

*>is is an alication to stri6e o7t t>e laintiff@s action &t is

made 7rs7ant to )7le 1E1 of t>e Code of Civil Proced7re of t>e Hi8>

Co7rt 1!D1 on t>e 8ro7nds t>at t>e roceedin8s disclose no reasona$le

ca7se of action *>e rincial fo7ndation for t>is alication is

$ased on conflict of las and rivate international la rincilesand in artic7lar >o t>e rincile or r7le: >ic> is stated as

follos "see #ice9 and orris Conflict of Las"12t> edn: 1!!E% )7le

E !%: is alied

@,n8lis> co7rts >ave no =7risdiction to entertain an action

"1% for t>e enforcement: eit>er directl9 or indirectl9: of a enal:

reven7e or ot>er 7$lic la of a forei8n State; or

"2% fo7nded 7on an act of state@
http://austlii.edu.au/au/cases/cth/high_ct/165clr30.htmlhttp://austlii.edu.au/au/cases/cth/high_ct/165clr30.html


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A secondar9 8ro7nd is $ased on s 1E# of t>e &nternational *r7st Act

1!D4

39 a8reement of co7nsel t>is matter as dealt it> $9 s7$missions:

t>e last s7$mission $ein8 filed in t>e co7rt on 24 (cto$er 2001 *>e

defendant is t>e tr7stee of a tr7st settled $9 to American citiFens

"t>e settlors% $9 a deed of tr7st dated 10 7l9 1!!5 39 its amended

statement of claim dated 2! 7ne 2001: t>e laintiff ma6es its claim

on $e>alf of t>e US +ederal *rade Commission "+*C% esta$lis>ed in

1!14 7nder t>e rovisions of t>e +ederal *rade Commission Act &t is

alle8ed t>at t>e +*C enforces t>at Act >ic> ro>i$its false:

fra7d7lent and decetive acts of or ractices in commerce: and t>e

*elemar6etin8 Sales )7le *>at r7le ro>i$its decetive or a$7sive

telemar6etin8 acts or ractices in commerce &t is alle8ed t>at t>e

+*C ma9 initiate +ederal or #istrict Co7rt roceedin8s to en=oin

violations of t>e Act or t>e r7le and to sec7re e7ita$le relief as

is aroriate in see6in8 redress and restit7tion

(n 2E Aril 1!!D t>e +*C commenced an action in t>e US #istrict Co7rt

in -evada a8ainst t>e settlors and ot>ers for contravention of t>e

Act and t>e r7le &t as alle8ed t>at since a9 1!! t>e settlors and

ot>ers >ad made false: fra7d7lent and misleadin8 reresentations in a

telemar6etin8 sc>eme in >ic> media 7nits ere sold alle8edl9 to

rovide an oort7nit9 for receit of rofits 8enerated from s7osed

and otential sales of some rod7cts to television commercials *>e

sc>eme as a >ole is descri$ed as a PonFi sc>eme: named after a

C>arles PonFi of 3oston >o in 1!20 offered romissor9 notes >ic>

deended on t>e tradin8 of international ostal rel9 co7onsAlt>o78> t>e 7nderl9in8 mar6etin8 asect of t>e sc>eme as

7ns7staina$le: and t>e receit of mone9 contin7ed: it seems t>at some

a9ments ere made to investors o7t of t>e mone9s received $9 ne

investors

*>e laintiff alle8ed a8ainst t>e settlors t>at t>e9 >ad received a

45I commission from eac> investment its telemar6eters roc7red *>e

$an6 records indicated t>at some BUS !:2D:415 as received $9 a9

of t>ese commissions &t as t>7s calc7lated t>at t>e total sales for


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>ic> t>e settlors ere alle8edl9 resonsi$le amo7nted to BUS

20:G1D:D2E &t as said t>at as a conservative estimate $7t t>e

laintiff so78>t a monetar9 =7d8ment a8ainst t>e settlors and ot>ers

concerned in t>at art of t>e sc>eme +7rt>er: it is alle8ed t>at BUS

225m as transferred to t>e settlors@ tr7st in t>e Coo6 &slands on 2

arc> 2000 *>e #istrict Co7rt in -evada entered a final order for

=7d8ment and ermanent in=7nction a8ainst t>e settlors and ot>er

entities involved in t>at art of t>is PonFi sc>eme "see +*C v

Afforda$le edia LLC C.!D00GG!L#' ")LH% "1 7ne 1!!D:

7nreorted%% *>at order as 7>eld in t>e United States Co7rt of

Aeals for t>e !t> Circ7it "see +*C v Afforda$le edia LLC "1!!!% 2

&*,L) E: 1! + Ed 122D%

*>e final order for =7d8ment and ermanent in=7nction 8ranted in t>e

#istrict Co7rt in -evada ma6es a n7m$er of findin8s and orders *>e

findin8s incl7de t>e findin8 t>at t>e settlors amon8 ot>ers >ad made

false reresentations: and >ad en8a8ed in decetive acts or ractices

in violation of s 5"a% of t>e +ederal *rade Commission Act and >ad

violated rovisions of t>e telemar6etin8 r7le

*>e co7rt fo7nd t>at it >ad oer to iss7e in=7nctive and ot>er

relief a8ainst violations of t>e +ederal *rade Commission Act: and in

t>e ee in=7red cons7mers: to order dis8or8ement of

rofits res7ltin8 from t>e defendants@ 7nlaf7l acts or ractices and

iss7e ot>er ancillar9 e7ita$le relief *>e co7rt entered a monetar9

=7d8ment a8ainst t>e settlors and ot>ers for BUS 20:G1D:G2E it>

ost=7d8ment interest @for e7ita$le monetar9 relief: incl7din8 $7t

not limited to cons7mer redress: and for a9in8 an9 attendantee +*C ere to $e aid into a redress f7nd for otentiall9 eli8i$le

cons7mers entitled to t>e f7nd *>e order rovided >oever as

follos

@&f: >oever: t>e Commission: in its sole discretion: determines t>at

redress is >oll9 or artiall9 imractical an9 f7nds not so 7sed

s>all $e deosited into t>e United States *reas7r9 as an e7ita$le

dis8or8ement remed9 *>e en=oined defendants s>all >ave no ri8>t to


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contest t>e manner of distri$7tion c>osen $9 t>e Commission or its

desi8nated a8ent@

*>ere ere t>en f7rt>er rovisions: order and in=7nctions for orders

descri$ed as t>e t7rnover of assets and reatriation of f7nds

overseas incl7din8 in artic7lar f7nds in t>e Coo6 &slands and

vario7s ot>er in=7nctions and a7t>orities to enforce comliance it>

t>e orders and t>e o$tainin8 of t>e control over all t>e assets of

t>e settlors and ot>ers

*>e laintiff in t>ese roceedin8s in t>e Coo6 &slands see6s to

enforce t>ese orders made in t>e United States #istrict Co7rt and in

artic7lar t>at t>e defendant deliver 7 to t>e laintiff @for

redress and restit7tion to t>e settlors@ defra7ded investors:

c7stod9: ossession and control of t>e assets and mone9s ac7ired

fra7d7lentl9 $9 t>e settlers [sic] and disosed of to t>e tr7st

to8et>er it> all acc7m7lation t>ereto >eld in c7stod9 ossession and

control of t>e defendant@

*>e +ederal *rade Commission Act of 1!14 >ic> is titled 15 UnitedStates Code ss 41 to 51: esta$lis>ed a commission of five

commissioners aointed $9 t>e President $9 and it> t>e advice and

consent of t>e Senate &t as rovided t>at not more t>an t>ree of

t>e commissioners ere to $e mem$ers of t>e same olitical art9

Under s 45"a%"2% t>e +*C is emoered to revent ersons:

artners>is or cororations eods or cometition in or affectin8 commerce *>e +*C

as entitled to ta6e roceedin8s if it aeared to t>e +*C t>at s7c>

a roceedin8 o7ld $e in t>e interest of t>e 7$lic *>e =7risdiction

of t>e co7rts in 8rantin8 temorar9 restrainin8 orders and ot>er

orders as on t>e $asis of t>e interest of t>e 7$lic rat>er t>an on

an9 stricter 8ro7nd s7c> as reasona$le ca7se *>is as noted in an

earlier aeal on t>e 8rant of t>e reliminar9 in=7nction in t>e

United States Co7rt of Aeals for t>e !t> Circ7it decision of 7ne

15 1!!! -o !D1GED *>is section laces a li8>ter $7rden on t>e +*C

t>an t>at imosed on rivate liti8ants $9 t>e traditional e7it9

standard *>e +*C need not s>o irreara$le >arm to o$tain a


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reliminar9 in=7nction

*>e defendant claims t>at in t>is case t>e enforcement of t>e

=7d8ment and of t>e la of t>e United States ill amo7nt to t>e

enforcement directl9 or indirectl9 of a enal or ot>er 7$lic la of

a forei8n state as descri$ed in r7le E in #ice9 and orris *>at is

not a r7le of stat7te $7t is: 7nder t>e s9stem adoted in t>at

teic> >as $een reco8niFed over time in t>e

co7rts of ,n8land: A7stralia and -e ealand &t is & t>in6: a

rincile >ic> alies e7all9 in t>e Coo6 &slands &n #ice9 and

orris" 101% it is said

@&nH7ntin8ton v Attrill[1D!E] AC 150 at 15G t>e Priv9 Co7ncil

defined enal to incl7de not onl9 crimes in t>e strict sense: $7t

Jall $reac>es of 7$lic la 7nis>a$le $9 ec7niar9 m7lct or

ot>erise: at t>e instance of t>e state 8overnment: or someone

reresentin8 t>e 7$licJ: and "adotin8 t>e test laid don $9 t>e

United States S7reme Co7rt [in ?isconsin v Pelican &ns7rance Co

"1DDD% 12 US 2G5 at 2!2]% Jall s7its in favo7r of t>e state for t>e

recover9 of ec7niar9 enalties for an9 violation of stat7tes for t>e

rotection of its reven7e or ot>er m7nicial las: and to all=7d8ments for s7c> enaltiesJ @

So inAttorne9'eneral of -e ealand v (rtiF [1!D4]AC 1 at E4E5:

[1!D2] E All ,) 4E2 at 4G t>e stat7tor9 rovisions in -e ealand

for forfeitin8 >istoric articles ille8all9 eeld to $e

enal t>o78> not art of t>e Criminal code *>e cate8or9 of ot>er

7$lic la referred to in t>e r7le is descri$ed in #ice9 and orris

" 10E%

@*>e eer 7$lic laJ refers to all t>ose r7les "ot>er

t>an enal and reven7e las% >ic> are enforced as an assertion of

t>e a7t>orit9 of t>e central or local 8overnment@

*>at art of t>e r7le >as $een s7$=ect to disc7ssion and criticism

and t>ere >ave $een conflictin8 dicta in vario7s co7rts in t>e


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is contrar9 to t>e Act and ot>er Acts ?ide oers are 8iven to t>e

+*C and to t>e co7rts to en=oin cond7ct >ic> is said to $e contrar9

to t>e Act or )7les and to ta6e stes for t>e enforcement of t>ese

re87lations and reventative meas7res $ot> ersonall9 and ot>erise

t>ro78>o7t t>e orld Poer is 8iven to 8ive =7d8ments in mone9s

>ic> ma9 eic> in t>e end ma9 in

art or >ole $ecome art of t>e 8eneral 7$lic f7nds of t>e US

*reas7r9

*>e action ta6en >ere $9 t>e laintiff is to enforce t>ese re87lator9

ri8>ts and oers *>e9 are or >ave a flavo7r of 7nis>ment and &

concl7de t>at t>ese are: at least in art: enal rovisions and fall

it>in t>e relevant rincile &t is also a 7$lic la >ic> is

so78>t to $e enforced $9 t>e state or t>e soverei8n alone for

re87lator9 7roses and is one >ic> o78>t not to $e enforced >ere

As & mentioned at t>e o7tset t>e defendant also claims t>e $enefit of

s 1E# of t>e &nternational *r7st Act Hoever it did not ma6e an9

claim ot>er t>an t>at alied to t>e enforcement directl9 or

indirectl9 of t>e enal or 7$lic las of t>e forei8n state &t is

not t>erefore a 8ro7nd >ic> is searate or indeendent of t>e

rincial 8ro7nd alread9 dealt it>

&n t>e res7lt t>en t>ere ill $e an order stri6in8 o7t t>e claim of

t>e laintiff Costs ill follo t>e event & ill receive

s7$missions from t>e co7nsel as to t>e 7ant7m

Claim str7c6 o7t

In Re Robin Hood

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Transcript of In Re Robin Hood