Ralan Question and Answer

1. Could we sue several parties together? If we lost one of the cases, would that affect our claims against other defendants?

You can sue multiple parties together if the evidence is the same or similar. Each case is won or lost on its own evidence and do not prejudice other cases.

2. For those who have not registered, will they be allowed to share the profits with us if we win the case?

We are doing a video on class actions and litigation funding. In summary anyone who has suffered a loss will automatically be included in an open class action unless they choose not to participate. However if investors do not register there may never be an action. The number of registrations is 373 as at 4 September 2019. According to Grant Thornton there are 2,300 unsecured creditors claiming a total amount of $292,000,000. The fact that many people are not registering is so strange it may prevent proceedings ever beginning because it will scare away litigation funders. I will be doing a video warning of the danger.

3. What kind of evidence would be helpful for you to prove that it is a Ponzi scheme?

I do not need to prove it is a Ponzi scheme.

4. Are our contracts and the additional contracts still binding?

The loan contracts are binding but because the company is insolvent will not be honoured. The pre-sales contracts are binding on you if Wingate chooses to enforce them but not binding on Wingate if you choose to enforce them. However Wingate must give credit for the deposit that was released, definitely on Arncliffe and most likely on Ruby 1.

5. In our case, what are the differences among the words “unsecured creditor”, “investor” and “buyer”? How would these definitions affect our future litigations?

An unsecured creditor is someone who is owed money but has no mortgage – that is you.

An investor is someone who bought a unit or loaned money to Ralan – that is you.

A buyer is a buyer of the units – that is you.

The name chosen is irrelevant.

6. What are the principles and cases for us to challenge the bank and Wingate’s position as the first mortgagees?

Our case theory is that Westpac and Wingate were aware, as a result of their due diligence on the pre-sales or because they were told, that Ralan was borrowing off the public. They were benefiting from this because it allowed Ralan to do developments which they financed. As such they are liable as accessories to Ralan’s illegal borrowing. Ralan’s borrowing was illegal because they lacked the necessary licence.

7. Please investigate the number of victims who are trapped into signing the contract, I believe there are many similar cases: each victim first signed a formal contract (main contract) with the presence of a lawyer, and then paid the money. On the other day, an employee from Ralan would send the deposit release contract to victims by email and asked them to sign it and send it back. At the time of signing this additional contract, the victims have already relaxed their vigilance (because they thought anyways they had signed the main contract).

Thank you. This is correct. We have seen this in the documents. According to Grant Thornton there are 2,300 victims of this behavior claiming a total amount of $292,000,000.

8. Ralan signed two additional documents with the buyers: using 15% high interest rate to induce the buyers to release the money and then Ralan used the money for the other purpose; using one-thousandth of the contract purchase prise as the weekly rental return to induce the buyers to agree Ralan to manage their money. Are these two documents legal? What are principles and cases? Is this Ponzi scheme?

The rental guarantee is legal so far as I am aware. The loaning of the deposit and other loans were illegal. Ralan was not allow to borrow from the public without a Australian Financial Services licence.

9. If we win the class action, is there a possibility to claim the mental loss damage? Then the money we could get back is $280 million plus the mental loss damage. Moreover, if we win the class action, who will be sentenced to the jail?

There is no possibility of claiming for mental loss. The class action is a civil action brought by the victims. To send someone to jail ASIC must bring criminal proceedings.

10. Is there any time or period limitation for the validity of your registration? If we have other better choices after registration, could we withdraw our registration? do we need to pay any fees?

There is no legal effect of registration. It is a signal to the litigation funder of how many people will ultimately step forward for the court proceedings. I will be warning all victims of the danger involved in only a small percentage of the victims registering. I will not charge fees unless they are paid by a litigation funder. I have a current agreement with a litigation funder to pay out of pocket expenses such as barristers fees but not to pay my fees.

11. We cannot sue the two funds because there is no contract between us and them. Can we sue Ralan and then add the two funds as the co-defendants?

We are not going to sue in contract we will sue on a breach of the Corporations Act.

12. Do we still need to make the complaints on ASIC website?

I encourage as many people as possible to complain. The more complaints they get the more resources they are likely to allocate to investigation. The more investigation the more evidence will be uncovered. The more evidence the greater the chance you win the class action.

13. The amount of money in the contract is different with the money that I actually gave to Ralan. I have the invoice that shows the actual amount of money I gave to Ralan. Can I get the compensation for this actual amount? On the day of payment, I was persuaded to pay some extra money.

If you can prove the actual amount by banking records and receipts then you can recover based on that.

14. The lawyers on behalf of the bank are probably very famous. Would they shift the blame to us? Does Mr Matthew have any preparation for this?

There is no defence to breaching the Corporations Act which allows the wrongdoer to point to anything done by the victims of a scam. I recommend you visit the website of IMF Bentham and ICP.

15. Is there a conflict between bringing the class action and finding someone to take over the properties? Is there any conflict between bringing the class action and continuing to construct the Arncliffe project?

No one will take over the properties they will be sold by the financiers holding the mortgages. Arncliffe will be finished by the financiers and nothing related to the class action will stop it. Even if Wingate goes insolvent a liquidator will have to finish the development.

16. The loan of Westpac is secured. The bank would lend the money to Ralan as long as Ralan have securities. The bank does not have responsibilities for our purchasers. What are the grounds for us to sue the bank then?

Our case theory is that Westpac and Wingate were aware, as a result of their due diligence on the pre-sales or because they were told, that Ralan was borrowing off the public. They were benefiting from this because it allowed Ralan to do developments which they financed. As such they are liable as accessories to Ralan’s illegal borrowing. Ralan’s borrowing was illegal because they lacked the necessary licence.

17. GT said that the Arncliffe project would continue till completion. It that bragging or true?

Wingate has appointed Deloitte to finish it.

18. Please analyse the impacts of the reorganisation on the unsecured creditors:
a) Whether the deposit we released could be recognised?

If Wingate want you to settle Arncliffe they will have to recognise the deposit.

b) Whether 8+8 lease and 5% rental return + CPI could be recognised?

This is gone with Ralan.

c) Due to the market fluctuations and the damage of the reputation of Ralan, the evaluation of the properties has fallen sharply. We cannot get the money and settle. Would the properties be auctioned and we be asked to pay the price difference?

This is a possibility. However in my opinion it is likely to earn Wingate more money to sell Arncliffe on the open market.

d) Can we terminate the contract for breach of the contract on Ralan’s half.

Possibly, I would have to look at that but I do not think at this stage it is likely. Time is on our side because Arncliffe will not be complete for several months.

19. Ralan is looking for someone to take over its business. If they find it, what will be the impact on us? Would we be forced to continue the contract and pay the deposit again? Why?

This is a fantasy.

20. If we decide to go with other law firm and ask you to quit the class action, do we still need to pay you for answering these questions?

No, but you will need to buy me a meal at my favourite Chinese restaurant.

21. How would the money be divide among the following parties if we win the case:
• Funder
• Bransgrove Lawyers
• Barristers
• Disbursement
• Victims

Lawyers are forbidden to share in winnings. Whichever layer takes the case will only get legal fees. The issue is the funder who often take 35% of the winnings. However there is a possibility that strong evidence will attract multiple funders or a large law firm who will compete against each other. There is a chance that the share lost will be much smaller.

22. Can we file with the tax bureau so that we could have the cost of the litigation and the money returned via taxation in case we could recover the full loss in the litigation?

You should consult your accountant about the situation. I believe that the class action is so uncertain that you can tell the ATO that you have lost this money for good and seek a deduction. If in 2 years time the class action is won then you can repay the ATO.

23. Does the class action includes the matters about Arncliffe project? Or this is the class action only for the victims of Ruby 2, 3, 4?

All Ralan victims.

24. Did the bank lend the money first or we lend the money first? For each investor the answer to this question may be different, but it will have an essential impact on our case. What are you going to do for this issue? It is the company the bank lent the money to same as the company we lent money to? If not, how could we break the barriers between different companies?

It seems to me that it will not have an essential impact on our case. As soon as Westpac and Wingate became aware of the unlicenced debenture scheme all monies loaned after that date they may be liable for. I suspect it was before the current debt was incurred.

25. If we lose the case, are there any potential costs we need to bear? Would the funder pay all the cost?

The litigation funder pays all costs. For this he requires a special insurance policy.

26. Ralan only left $100 in trust account. They spent investors’ money by signing the additional contracts with us. Is it legal at all?

Ralan was not allowed to borrow from the public without a licence so what they did was illegal.

27. Who are going to be sued?

Westpac, Wingate and Deloitte – we hope.

28. What can we claim?

All your losses.

29. How is the chance of winning?

It depends on the evidence. You can be sure that if litigation funder or funders take it on then it is a very strong case.

30. Does “no win no fee” include the attorney fee, investigation fee and travel expense etc incurred during the litigation and execution phases?

Yes, you will not have to pay anything at anytime out of your pocket. Anything you do pay will be deducted from your winnings.

31. Can you lower the charging standard if the value of the object of the litigation in this case is huge?

Legal fees are done on an hourly rate. If the object is huge I will sometimes charge more. However legal fees will be very small compared to the amount awarded. The litigation funder will lower its commission if there is competition from other funders.

32. Is the law unreliable? Do the rest 150 investors have a better way to get the principle back? There are a lot of victims, but only few people are willing to believe in the fairness and justice of Australian law. Could the lawyer please explain what is going to happen next? Many thanks for the work you’ve done. Really appreciate!

The law is reliable but the big issues are, will the victims help recover? Will we uncover the evidence needed. I have another 5 videos or so then I will be asking for assistance from the victims to get information from Grant Thornton.

33. I just invested the money in Ralan rather than buying the property. Are there any differences in the court between the victims buying the properties and the victims only investing the money?

This is a difference that will have no effect.

34. Why are we going to sue the bank rather than William himself? William is the culprit.

William will have no money. Grant Thornton should find out what William has so we have confirmation.

35. When we signed the contract, we were told that $100 is the administration fee and that need to be put into a different account. We have no idea that actually they left $100 in the trust account for the purpose of exploiting the loopholes in QLD property law. We signed the deposit release contract without the knowledge of the truth. This contract was singed outside the law firm. Our lawyers did not inform us even though they knew what happened. Some of us signed the contracts in the office of sale agencies. Some of us just signed the contracts by email. Does it constitute a misleading or fraudulent conduct?

I think it was.

36. Once we chose the plan of reorganisation, we could not bring the case to the court. Is it right?

Not correct.

37. Would the reorganisation proposal be overthrown if most people oppose this?


38. Are the one-thousandth sale price rental guarantee agreement still binding?

The contract is worthless because Ralan is insolvent.

39. If we do not make the deal, in addition to the loss of the deposit, do we need to pay any other costs?

With Arncliffe Wingate must uphold the deposit. This means it will most likely not want to complete. With Ruby 1 victims should contact me direct so I can consider the position.

40. Some of the salesmen have very poor English skill. They could not understand the content in the contract but just let the buyers who cannot understand the English as well sign the contracts which are full of pitfalls. Could we say that the contract is fundamentally invalid?

All that would achieve is create a debt owing to you by the insolvent company. This is what you already have.

41. Could the salesmen be sued for they are the executors of the Ponzi scheme?

If you ask, could salesmen be sued because they are accessories to a unlicensed debenture scheme the answer is yes. However it will be hard to get a litigation funder because their assets are so small.

42. Does the class action include the matters of Sapphire 1?

All Ralan victims.

43. If Bransgroves Lawyers took the case and chose ICP as the funder, would the barrister be chosen by ICP or by Bransgroves Lawyers? Or Bransgroves Lawyers have their own barrister?

These choices are settled by agreement. There would be many barristers and they will be very experienced in the different areas needed.

44. Is Australian class action regimes are “Opt-out “regimes only? Or “Opt-in” could be chosen as well now. What is the main different between “Opt-Out” and “Opt -in”?

Mostly Opt out but if only one funder is involved Opt in is still possible. I will be doing a video which explains this.

45. Ralan Part 5 mentioned that ASIC dose not know that Ralan borrowed money illegally. However, both the solicitor and salesmen have the knowledge of it, especially the solicitors, who are supposed to protect the clients’ deposit. Are those lawyers breaching the laws as they just let those illegal things happen?

I have seen no evidence that the solicitor who Ralan recommended knew about the loans. If anyone has this evidence please send it to me.

46. Can we recover any money from Ralan’s Insurances?

No. If William O’Dwyer had directors & officers insurance it would not cover his guarantee.

47. In Ralan Part 5, Matthew said that we can bring an action against Wingate if we have the evidence that Wingate has the knowledge of the shortfall of Ralan’s fund and Ralan raising the fund from the public illegally. However, Wingate has publicly denied that they have the knowledge of this and they have a bunch of good lawyers. Does our team have the successful cases in class action? Why do you have the confidence to win Wingate?

Cases are won or lost based on evidence. If we get strong evidence many litigation funders will appear and there will be a competition. It will all be good for the victims. Wingate’s lawyers do not scare me and will not scare any funder. If we do not get evidence that will be the problem.

48. The strong legal team of the other party will certainly raise the argument that the signatures of the creditors are valid.

There is no defence to breaching the Corporations Act which allows the wrongdoer to point to anything done by the victims of a scam.

49. Therefore, I think we have to ask WR and Bransgroves Lawyers:
1) Ralan’s boss, William, personally guaranteed 277 million without the actual financial capacity, did he commit a crime by doing so? Which kind of offence it is?

No. The Chief Judge of the Australian High Court was once bankrupted because he guaranteed a debt. It did not stop him being Chief Judge.

2) Is the civil outcome still valid even if it was produced by a crime?

The civil outcome is possible because it is a crime. The Bank and Wingate, if found guilty, will be accessories to a crime. That crime has both civil and criminal penalties.

3) Is there any law that can invalidate the signature of the Chinese clients with poor English skill and unlicensed agents?

No. Use a lawyer in future. Bransgroves Lawyers have three paralegals and one solicitor who were born in China. We would have saved you.

4) How did the 500 million debts happen? Where did the money go? What did Ralan’s balance sheet show?

According to a judgment just posted on the Internet
The debt is made up as follows:
The administrators have identified 2,635 creditors who together claim to be owed approximately $515 million. These comprise:
a. four creditors who have registered a security interest over the property of the companies, together claiming a total of $222,505,374, and who comprise primarily financial institutions or non-bank lenders who have provided loans to entities within the Ralan Group;
b. 331 priority creditors (including employees); and
c. approximately 2,300 unsecured creditors claiming a total amount of $292,000,000, comprising primarily purchasers of property in the various ‘completed’, ‘in-progress’ and ‘future’ projects of the Ralan Group and suppliers to the Ralan Group.

5) The goal of the class action is to get the money back and punish the offenders. What is the key to achieve this goal?

The goal for me is to get the money back. ASIC will punish the offenders. The key is to get the help of the victims in uncovering evidence. Soon I will ask victims to authorise me to obtain evidence on their behalf. If there is little co-operation the whole effort will die then. If the victims act together and mostly give me authority then the next key is for me to get the evidence.

6) At the beginning, the 10% purchase money was put into Ralan Trust account which is supervised by the government. Why did the government stand still when such a large amount of money like 277 million dollar was released from the trust account?

It was regulated by the government but not supervised. I am curious to see what Deloitte who did the tax accounts for Ralan knew.

7) The Corporation Act provides that Ralan should go through a series of assessment before borrowing the money from the public. It is obvious that Ralan is insolvent and it is illegal that Ralan did not go through the assessment. All the people who knew this including the boss and financial staff cannot get away with it. They had been operating like this for more than 10 years. The solicitor knew about this. Is she also responsible for this as she has the duty to protect the client’s interest?

I would like to see some evidence the solicitors recommended by Ralan knew about the borrowing. This may be of great assistance in recovering your money. Anyone who has such written evidence should email it to me.

8) According what Matthew said in Ralan Part 5, all the assets under William’s name has been mortgaged to the bank. He has no money. Some suspect that he has put the money in his family trust. Is there any way to find out evidence that he transferred the company’s money to the family trust?

That is the number 1 job of an administrator or liquidator. It is called an unfair preference. Grant Thornton should be able to answer this question. My suspicion is the money was used on his crazy business ambition to be the biggest unit builder in Australia and was not used to fund his lifestyle.

9) If creditors’ money has been transferred to his family fund, we still cannot touch the money in the family trust, can we?

Yes. Any money transferred once Ralan was insolvent (which I think was 2014) can be recovered as an unfair preference.

10) Can we sue the solicitors who acted for us in contract exchanging? Because the solicitors had never explained the risks of the contract and releasing deposit?

I would like to see some evidence the solicitors recommended by Ralan knew about the borrowing. This may be of great assistance in recovering your money. Anyone who has such written evidence should email it to me.

50. In Ralan case, neither the salesmen nor the lawyers told we buyers that the deposit we released would be unsecured debts and what kind of risks it would take. Did they commit a fraud? Could they be added as co-defendants in the class action?

The class action will be funded by the litigation funder. The litigation funder is only interested in suing people with enough money to pay damages.

51. The contract was signed in early June. The time is very close to the time that Ralan voluntarily went into the administration. But they did not disclose any information on their financial situation but lured us to release the deposit. Can we sue Ralan and its salesmen for fraud?

You cannot sue Ralan it is insolvent. You may be able to sue salesmen for fraud. That would not be a class action. I am focused on the class action but you could consult another solicitor. However it may be best to see what evidence my efforts uncover first.

52. If Ralan was not eligible to borrow the money from the public, would our additional contract be invalid? What is the legal position of the deposit we released be characterised? Dose Ralan possess the deposit illegally? In this situation, are we still the unsecured debtors in liquidation (as we were pay deposit for the properties and not aware of the risks and how the money were used)? If we could find that the missing money of 277 million was diverted to repay its debts, can we say it is a Ponzi scheme? In that situation how is the legal position of our deposit and how we would be characterised in liquidation?

Under the Corporations Act there is a provision that allows a victim to to reverse an illegal financial contract like this. However then Ralan would owe you the money and Ralan is insolvent. It would make no difference how the debt is characterized, a debt is a debt and there is no money to pay the debts.

53. Does Bransgroves have the lawyer license in QLD?

We have an office in Queensland! Our managing director Kate Cooper works there. In Australia a lawyer only needs to be admitted in one state and can practice in any state.

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