BNY Trust Company of Australia Limited v Banksia Finance and Leasing Co Pty Ltd

BNY Trust Company of Australia Limited (the plaintiff) applied for judgment against Banksia Finance and Leasing Co Pty Ltd (the first defendant) and four other companies (the guarantors) for monies owed under a loan facility. The first defendant defaulted in its obligations, leading to the plaintiff's application for a default judgment under rule 16.3 of the Uniform Civil Procedure Rules 2005 (NSW). The guarantors were served with the application, but they did not file a defence. The plaintiff was granted a default judgment against the first defendant for the amount owed under the loan facility.

The plaintiff further sought summary judgment against the guarantors for the debt guaranteed. The guarantors argued that the guarantees and deeds of forbearance were not properly executed under the Corporations Act 2001 (Cth). They contended that the documents did not explicitly state that the party executing the document was relying on the provisions of section 127, and no evidence of a declaration in terms of section 238B(2) was provided. The court found that the documents complied with section 127 of the Corporations Act 2001 (Cth) and that the pleaded defence based on section 127 did not raise any viable defence of fact or law. The fifth defendant pleaded that the plaintiff was an accessory to breaches of trustee fiduciary obligations. The court granted leave to amend the pleadings but the fifth defendant chose not to do so. Applying the principle in General Steel Industries, the pleadings did not raise any arguable defence. The court entered summary judgment in favour of the plaintiff.