HSBC Bank Australia Limited v The Trustee of the Property of Rui Yu, a Bankrupt

[2024] NSWSC 69

Supreme Court

New South Wales

Medium Neutral Citation:

HSBC Bank Australia Limited v The Trustee of the Property of Rui Yu, a Bankrupt [2024] NSWSC 69

Hearing dates:

7 February 2024

Date of orders:

7 February 2024

Decision date:

07 February 2024

Jurisdiction:

Common Law

Before:

Davies J

Decision:

1. Plaintiff to name Mr Mellos as the First Defendant to the proceedings.

2. Plaintiff to file Notice of Discontinuance in relation to the First Defendant in the Registry today.

3. Defence filed 19 October 2023 struck out pursuant to r 14.28 of the Uniform Civil Procedure Rules 2005 (NSW).

4. Any further defence to be filed by second defendant by 22 February 2024.

5. Listed for Directions before Davies J at 9:30am on 23 February 2024.

6. Second Defendant to appear in court on 23 February 2024 or give Mr Jin Yu written authority to appear on behalf of the second defendant.

7. Parties granted liberty to apply on 2 days’ notice to Associate.

Catchwords:

LAND LAW – possession of land – by mortgagee – where defence filed neither signed nor verified – where no defence disclosed – defence struck out

Legislation Cited:

Real Property Act 1900 (NSW) s 90

Uniform Civil Procedure Rules 2005 (NSW) r 14.28

Cases Cited:

Mellos in his capacity as trustee of the bankrupt estate of Rui Yu v Jin Yu [2022] NSWSC 169

Mellos in his capacity as trustee of the bankrupt estate of Rui Yu v Jin Yu (No 2) [2022] NSWSC 341

Texts Cited:

Nil

Category:

Procedural rulings

Parties:

HSBC Bank Australia Limited (Plaintiff)
The Trustee of the Property of Rui Yu, a Bankrupt (First Defendant)
Rui Yu (Second Defendant)

Representation:

Counsel:
K Jacob (Plaintiff)
No appearance (First Defendant)
No appearance (Second Defendant)

Solicitors:
Ashurst Australia (Plaintiff)
Grant Thornton Australia Ltd (First Defendant)
Self-represented (Second Defendant)

File Number(s):

2023/167485

Publication restriction:

Nil

Judgment

1. These proceedings commenced on 25 May 2023 seeking possession of a property known as 43/42 48 Waverley Street, Bondi Junction. The second defendant, Rui Yu, is apparently the registered proprietor of the proceedings at the present time. He had been the registered proprietor of the proceedings up until 2 November 2020. On that day he ceased to be the registered proprietor because he had been made bankrupt, and his trustee, Nick Mellos, had been registered as the proprietor of the land from that date pursuant to s 90 of the Real Property Act 1900 (NSW).

2. A brief history of the matter is contained in my judgment of Mellos in his capacity as trustee of the bankrupt estate of Rui Yu v Jin Yu [2022] NSWSC 169. In that judgment I gave possession of the property to the trustee. The property was at the time occupied by a person named Jin Yu, also known as Eric Yu, who is the son of the second defendant.

3. When the earlier proceedings were commenced, HSBC Bank was named as a defendant to those proceedings because it was the first registered mortgagee of the property as a result of a loan agreement entered into with the second defendant on 10 March 2015 as varied in May 2017. HSBC took no part in those proceedings.

4. I am informed that the bankruptcy of the second defendant has now been annulled and it is in those circumstances that HSBC seeks possession of the property against the second defendant and also judgment for an amount of a little under $1 million said to be owing pursuant to the loan agreement. The basis for seeking the judgment is a default in making repayments under the loan agreement and mortgage given to secure that agreement. Default is first alleged to have occurred on 9 August 2019 with subsequent defaults up to and including 9 November 2022.

5. A defence has been filed on 19 October 2023 prepared, it would seem, by Jin Yu, purportedly acting for the second defendant. The defence is neither signed nor is there an affidavit attesting to the truth of the matters contained in it. The defence also confusingly refers to Jin Yu as being the owner of the property, but also asserts that his father Rui Yu is the owner of the property.

6. As a matter of substance, the defence does not set out anything that constitutes a defence to HSBC's claim. Rather, it asserts that the trustee in bankruptcy is in possession of funds from the sale of another property (Unit 42 in the same block - as to which see Mellos in his capacity as trustee of the bankrupt estate of Rui Yu v Jin Yu (No 2) [2022] NSWSC 341). The defence says that those funds should be transferred to HSBC.

7. There is some evidence from the trustee that he is in possession of an amount of about $61,000 which has been authorised by the second defendant to be paid to HSBC in at least partial satisfaction of the amount that HSBC claims. That is the extent of the evidence, and it leaves outstanding a considerable sum of money in respect of which the defence filed offers no defence to the claim made for either possession or judgment for an amount owing.

8. In those circumstances, the defence filed 19 October 2023 is struck out pursuant to r 14.28 of the Uniform Civil Procedure Rules 2005 (NSW).

9. The second defendant has not appeared today, but Jin Yu has appeared seeking to act on his behalf. There is no authority from the second defendant for Jin Yu so to act. I have, nevertheless, allowed Jin Yu to address me about the matter prior to striking out the defence.

10. The solicitor for the plaintiff intends to file a notice of discontinuance in respect of the claim against the first defendant. Such notice of discontinuance is to be filed today.

11. Given that the second defendant is at the moment unrepresented, I am prepared to grant a short period of time for him to file and swear to a further defence to the claim if such a defence is available. In the circumstances, such defence is to be filed by 22 February 2024, and I stand the proceedings over for further directions before me to Friday, 23 February 2024, at 9.30am.

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Decision last updated: 07 February 2024