Gleneagle Securities Nominees Pty Limited v Kirkham International Pte Limited

[2025] NSWSC 934

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Gleneagle Securities Nominees Pty Limited v Kirkham International Pte Limited [2025] NSWSC 934

Hearing dates:

15 August 2025

Date of orders:

15 August 2025

Decision date:

15 August 2025

Jurisdiction:

Equity - Commercial List

Before:

Peden J

Decision:

At [34]

Catchwords:

JUDGMENTS AND ORDERS — Amending, varying and setting aside – Setting aside judgment entered irregularly and in absence of party — UCPR rr 35.15(1) and 36.16(2)(b) — Whether judgment entered irregularly — Where delay of nine months in bringing application and insufficient reason for delay — Whether bona fide defence on merits

Legislation Cited:

Civil Procedure Act 2005 (NSW)

Uniform Civil Procedure Rules 2005 (NSW) rr 36.15, 36.16

Cases Cited:

D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1

Dai v Zhu [2013] NSWCA 412

Dunwoodie v Teachers Mutual Bank Ltd [2014] NSWCA 24

Manhari Recycling Pty Ltd v Compass Global Holdings Pty Ltd [2021] NSWCA 252

Northey v Bega Valley Shire Council [2012] NSWCA 28

Pham v Gall (2020) 102 NSWLR 269

Robson as former trustee of the estate of Samsakopoulos v Body Corporate for Sanderling at Kings Beach CTS 2942 [2021] FCAFC 143

Taylor v Taylor (1979) 143 CLR 1

Vacuum Oil Pty Co Ltd v Stockdale (1942) 42 SR (NSW) 239

Violi v Commonwealth Bank of Australia [2015] NSWCA 152

Category:

Procedural rulings

Parties:

Gleneagle Securities Nominees Pty Ltd (Plaintiff)
Kirkham International Pte Limited (First Defendant)
PT Borneo Prima Coal Indonesia (Second Defendant)

Representation:

Counsel:
D Weinberger (Plaintiff)
L Hamzi (Second Defendant)

Solicitors:
Chedid Storey Legal (Plaintiff)
Robinson Gill Lawyers (Second Defendant)

File Number(s):

2019/00207796

Publication restriction:

Nil

EX TEMPORE JUDGMENT (REVISED)

1. PT Borneo Prima Coal Indonesia, the second defendant, seeks by way of motion filed on 11 February 2025, to set aside a judgment in the sum of USD16,000,000 entered against it on 8 December 2022. I refuse that application for the following reasons.

Principles – rules 36.15(1) and 36.16(2)(b)

2. PT Borneo relies upon either r 36.15(1) or r 36.16(2)(b) Uniform Civil Procedure Rules 2005 (NSW) (UCPR or the Rules).

3. Rule 36.15(1) provides:

36.15 General power to set aside judgment or order

(1) A judgment or order of the court in any proceedings may, on sufficient cause being shown, be set aside by order of the court if the judgment was given or entered, or the order was made, irregularly, illegally or against good faith.

4. PT Borneo relies on an “irregularity” in the form of what it claims was defective service of the Amended Summons and Amended List Statement: see sections 63(1) and (2) Civil Procedure Act 2005 (NSW); Robson as former trustee of the estate of Samsakopoulos v Body Corporate for Sanderling at Kings Beach CTS 2942 [2021] FCAFC 143 at [246] (Colvin J, Allsop CJ, Markovic, Derrington and Anastassiou JJ agreeing); Violi v Commonwealth Bank of Australia [2015] NSWCA 152 (Violi) at [71] (Emmett JA). Ms Hamzi, who appeared for PT Borneo, accepted that it was necessary to serve her client in accordance with the Rules. I will return to that point.

5. Even where a judgment is shown to be irregular, the Court retains a discretion as to whether to exercise the power under r 36.15 to set aside that judgment, which must be exercised judicially: see eg Manhari Recycling Pty Ltd v Compass Global Holdings Pty Ltd [2021] NSWCA 252 (Manhari Recycling) at [17]-[19] (Payne JA, Bell P and Beech-Jones CJ in CL agreeing); see also Violi at [76].

6. The requirement that “sufficient cause [be] shown” requires a consideration as to whether the exercise of the discretion would be futile: Manhari Recycling at [18]. The question is “whether it is in the interests of justice to allow the party seeking to set aside the default judgment to be permitted to defend the proceedings on the merits”: Violi at [76], citing Dunwoodie v Teachers Mutual Bank Ltd [2014] NSWCA 24 at [43] (McColl JA).

7. Rule 36.16(2) provides:

36.16 Further power to set aside or vary judgment or order

…

(2) The court may set aside or vary a judgment or order after it has been entered if—

…

(b) it has been given or made in the absence of a party, whether or not the absent party had notice of the relevant hearing or of the application for the judgment or order …

8. The judicial exercise of the discretion under r 36.16(2) requires the Court to consider whether any useful purpose would be served by setting aside the judgment, and how it came about that PT Borneo found itself bound by the judgment which was regularly obtained: Vacuum Oil Pty Co Ltd v Stockdale (1942) 42 SR (NSW) 239 at 243 (Jordan CJ, Davidson and Roper JJ agreeing). The central question is whether it is unjust to let the perfected order stand: Northey v Bega Valley Shire Council [2012] NSWCA 28 at [16] (Barrett JA). Exercise of the discretion requires a broad evaluative judgment, involving consideration of the strength of any defence, the adequacy of the explanation for the failure to defend the proceedings, and the length of, and reason for, any delay: Pham v Gall (2020) 102 NSWLR 269 (Pham) at [108]-[110] (Payne JA, Leeming and McCallum JJA agreeing). Another consideration is the importance of finality of litigation, such that “controversies, once resolved, are not to be reopened except in a few, narrowly defined, circumstances”: D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [34] (Gleeson CJ, Gummow, Hayne and Heydon JJ).

PT Borneo’s submissions

9. PT Borneo relied on two reasons for the exercise of the power in either rule:

1. The judgment was irregularly entered because it was not effectively served, because it was served at its old registered office or was not served at the correct level of the building, being its old registered office. This was disputed.

2. The judgment was given in its absence, which is not disputed. However, the plaintiff claims there is nevertheless no injustice to PT Borneo.

10. Further, the plaintiff resists the setting aside of the judgment on the basis that there is insufficient evidence of a good reason for the delay in bringing the motion.

Service

11. There is no dispute that the original pleadings were served on PT Borneo, and the first defendant, Kirkham International Pte Limited, on 5 July 2019. At the time, Kirkham owned 95% of the shares in PT Borneo, and there were common directors, including a Mr Garry Taylor.

12. Kirkham’s directors instructed solicitors, Horton Rhodes, to act on behalf of it and PT Borneo. Horton Rhodes then filed a notice of appearance and a Commercial List Response for both defendants, when a Mr Crawford and Mr Smith were directors of both Kirkham and PT Borneo.

13. On 24 April 2020, Mr Taylor, then a director of PT Borneo, executed an affidavit on behalf of both defendants.

14. On 15 December 2020, Horton Rhodes filed a notice of intention to file a notice of ceasing to act, indicating that the address “Graha Iskandarsyah Raya 66 Kebayoran Baru Jakarta Selatan, Indonesia” would remain the address for service, unless a notice advising the address of a new solicitor was filed. No such notice was ever filed. The notice of intention to file a notice of ceasing to act must have been served on PT Borneo, because service is required by UCPR 7.29, and PT Borneo does not suggest that the solicitors failed to comply with that requirement.

15. In a notice of ceasing to act Horton Rhodes filed on 15 January 2021, again the Graha address was stated as PT Borneo’s address for service, until PT Borneo specified otherwise.

16. On 9 June 2021, Mr Taylor executed consent orders on behalf of PT Borneo with the company seal of PT Borneo, and therefore at that point in time PT Borneo was still aware of the proceedings and was taken to be aware of Horton Rhodes’ notices, including the specified address for service.

17. On 28 July 2022, the plaintiff served amended pleadings on the Graha address by providing them to an individual who has been identified as a security guard in the building.

18. On 8 December 2022, default judgment was entered against PT Borneo. I note that Ball J (as his Honour then was) was satisfied that PT Borneo had been served with the pleading

19. On 11 February 2025 PT Borneo filed its motion.

PT Borneo’s complaints about service

20. PT Borneo now complains that Horton Rhodes had no authority to act for it. I reject that submission in circumstances where Ball J was satisfied with service, and there was no contemporaneous complaint by anyone from PT Borneo, or Kirkham, which owned 95% of PT Borneo. PT Borneo does not bring forward Mr Taylor or any former director to explain the circumstances in which Horton Rhodes received instructions. In contrast, there are emails from solicitors at Horton Rhodes stating that they received instructions from the various directors and acted accordingly.

21. PT Borneo also complains that the amended pleadings were served at its old registered office at the Graha address, rather than its then current office. It also takes issue with the fact that the old registered office of PT Borneo was on level 11 of the building and it submits that the documents were served on the ground floor of the building.

22. The question is what the proper address for service was in accordance with the Rules as accepted by counsel for PT Borneo.

23. After a solicitor files an appearance for a party, there is a process in the UCPRs for the solicitor to cease acting, which requires the solicitor, unless leave is granted otherwise, to file and serve on her client a notice of intention under UCPR 7.29(3), and then a notice of ceasing to act. Both notices must provide a warning to the client and the other parties in the proceedings, including by indicating an appropriate place for service – the residential or business address of the client last known to the solicitor. Indeed, that is the address to which the solicitor may post the notice of intention to serve it on the client under rule 7.29(4). Here, those notices were provided to PT Borneo and the plaintiff and indicated a street address rather than a level at that street address.

24. While it may be the case that the address was not current at the relevant time, it was the address last known to the solicitor and thus specified for service under the Rules. I do not accept the submission that PT Borneo was not properly served with the amended pleadings when they were left at the specified address. I therefore do not accept that the judgment was entered irregularly.

Injustice in maintaining the default judgment?

25. I do not accept there is any injustice in the judgment being maintained here, where PT Borneo was represented for over two years by lawyers and its directors were aware of the proceedings.

26. No explanation is provided as to why PT Borneo did not seek alternative legal advice, including as to the defence it would seek to rely upon. PT Borneo’s liability under a 2017 guarantee was the basis for the judgment. PT Borneo now submits that it would seek to have that guarantee set aside under Indonesian law. If it is the case that the guarantee is unenforceable under Indonesian law then PT Borneo may have rights against the plaintiff, despite the judgment.

27. This was not a situation where PT Borneo failed to appear and defend through no fault of its own: cf Taylor v Taylor (1979) 143 CLR 1 at 16 (Mason J) and 22 (Aickin J). Here, PT Borneo has not provided any satisfactory explanation for its non-appearance in the proceedings before Ball J in light of the notices filed by Horton Rhodes. Whether there is a sufficient explanation for non-appearance is an important factor going to the discretion under r 36.16(2)(b): see eg Pham at [149] (Payne JA, Leeming and McCallum JJA agreeing). In this case, PT Borneo was aware of the proceedings, had lawyers engaged, and when those lawyers ceased to act, chose not to engage new lawyers or represent itself through an agent. However, director Mr Taylor continued to take steps in the litigation apparently for PT Borneo.

28. Further, I consider there is insufficient explanation for the delay in bringing the motion.

29. It may be that PT Borneo did not become aware of the judgment until mid 2024. However, that was because its directors chose not to engage with the proceedings, of which it was aware. At any time between Horton Rhodes ceasing to act and mid 2024, PT Borneo could have sought alternative representation and sought information about the proceedings. Mr Taylor was aware of the contact details of the plaintiffs’ lawyers as he had engaged in the litigation while a director. There are emails sent to him from those lawyers.

30. I also consider that the delay in seeking the Court file, seeking advice and bringing the motion is excessive. The principles concerning setting aside a default judgment are not complex and the motion sought one substantive order and therefore was also not complex.

31. I note that at the hearing of a motion such as this, it is not necessary for finalised evidence to support a defence, in order for a Court to find there is a bona fide defence on the merits: Dai v Zhu [2013] NSWCA 412 at [89]-[92] (Sackville AJA, Barrett and Leeming JJA agreeing).

32. Here, PT Borneo claims it may be able to have the guarantee set aside under Indonesian law, and that may or may not be correct. It has taken no step to do so as at the date of the hearing and there is no evidence about how long those proceedings may take. It would be inappropriate to attempt to interpret how such a claim might be determined. Even if there is a bona fide reasonably arguable defence on the merits, I do not accept there is an adequate explanation for the delay in bringing such a defence or the delay in bringing the motion.

Conclusion

33. Exercising the broad evaluative discretion, for the reasons above, I consider that PT Borneo has not demonstrated that it would be “unjust” to allow the judgment to stand.

34. The appropriate order is:

1. PT Borneo’s motion is dismissed with costs.

**********

Amendments

19 August 2025 - Judgment details amended in [1].

Decision last updated: 19 August 2025