In the matter of ENA Developments Pty Ltd (in liq)

[2022] NSWSC 1478

Supreme Court

New South Wales

Medium Neutral Citation:

In the matter of ENA Developments Pty Ltd (in liq) [2022] NSWSC 1478

Hearing dates:

21 October 2022

Date of orders:

21 October 2022

Decision date:

21 October 2022

Jurisdiction:

Equity - Corporations List

Before:

Black J

Decision:

(i) The Amended Notice of Motion filed by Mr Sebie on 26 September 2022 is dismissed, with Mr Sebie to pay the liquidator’s costs of and incidental to that motion as agreed or as assessed.
(ii) Leave is granted to liquidator and Court-appointed receiver to file and serve a Further Amended Interlocutory Process and related orders made.

(iii) Orders made for the possession of the Homebush Property by the liquidator and Court-appointed receiver.

(iv) The balance of these proceedings are transferred to the Federal Circuit and Family Court of Australia

Catchwords:

CIVIL PROCEDURE — Parties — Joinder — Of defendants — Where a person applies to be joined to proceedings involving a company in liquidation, largely on the basis that he occupied a property owned by the company — Where that person also applies for an order setting aside previous orders affecting the property.

CIVIL PROCEDURE — Cross-vesting — Transfer to Family Court of Australia — Whether these proceedings should be transferred to the Family Court where there is an overlap of issues with proceedings in that Court.

LAND LAW — Possession — Where the company’s liquidator seeks an order for the possession of the property.

Legislation Cited:

Corporations Act 2001 (Cth), s 482

Cases Cited:

- Metcash Ltd v Jardim (No 2) [2010] NSWSC 1042

Re Beechworth Land Estates Pty Ltd (In Liq) and - Griffith Estates Pty Ltd (in liq) [2018] NSWSC 1703

- Re Double Bay Property Management Pty Ltd (in liq) [2020] NSWSC 203

- Re Glenvine Pty Ltd (in liq) [2020] NSWSC 866

- Re Peak Invest Pty Ltd (admins apptd) [2021] NSWSC 1714

- Re Raejoe Pty Ltd (rec and mgr apptd) (admins apptd) as trustee for Coe Family Trust [2012] NSWSC 1457

- Re Sails Corp Pty Ltd [2021] NSWSC 1241

- Re Stansfield DIY Wealth Pty Ltd (in liq) (2014) 291 FCR 17; (2014) 103 ACSR 401; [2014] NSWSC 1484

Category:

Principal judgment

Parties:

Peter Krejci in his capacity as liquidator of ENA Development Pty Ltd (in liq) (Plaintiff)
ENA Development Pty Ltd (in liq) (First Defendant)
One T Development Pty Ltd (Second Defendant)
Robert Sebie (Interested Party/Respondent)

Representation:

Counsel:
D R Stack (Mr P Krejci (liquidator) and ENA Developments Pty Ltd)
J Polese (One T Development Pty Ltd)
R Sebie (self-represented)

Solicitors:
ERA Legal ((Mr P Krejci (liquidator) and ENA Developments Pty Ltd)
Kazi & Associates (One T Development Pty Ltd)
R Sebie (self-represented)

File Number(s):

2022/32115

JudgmentS – ex tempore (Revised 24 October 2022)

Background

1. On 21 October 2022, I delivered several ex tempore judgments dealing with matters arising from the liquidation of ENA Development Pty Ltd (in liq) (“ENA”). Those matters were brought before the Court by Mr Robert Sebie, who sought to be joined in the proceedings, and Mr Krejci, who is both the liquidator of ENA and the Court-appointed receiver of assets of the ENA Development Trust (“ENA Trust”). I will refer to Mr Krejci in both of those capacities as “Mr Krejci” or “the liquidator” as the context requires. This judgment deals with Mr Sebie’s Amended Notice of Motion filed on 26 September 2022, which sought his joinder to the proceedings and orders concerning a property in Homebush, New South Wales (“Homebush Property”); Mr Krejci’s application for leave to file and serve a Further Amended Interlocutory Process, which sought orders in relation to Mr Sebie’s caveat on the Homebush Property; Mr Krejci’s Further Amended Interlocutory Process filed on 19 October 2022, which sought an order for possession of the Homebush Property; and Mr Krejci’s Amended Interlocutory Process filed on 27 September 2022, which sought the transfer of the balance of these proceedings to Federal Circuit and Family Court of Australia (“Family Court”).

Mr Robert Sebie’s Amended Notice of Motion

2. By Amended Notice of Motion filed on 26 September 2022, Mr Sebie initially sought some ten orders, of which four are now pressed. The orders that are now pressed are that Mr Sebie be joined to these proceedings as the Third Defendant; that orders in these proceedings affecting the Homebush Property be set aside; that the liquidator and his solicitors return all items which they “purloined” from that property on the exercise of a search warrant; and a declaration that Mr Krejci has a conflict of interest in performing his duties as liquidator of ENA. Several other applications for relief were not pressed and will, in the ordinary way, be dismissed where no attempt has been made to establish their basis on the merits. I will deal with each of the orders that are pressed in turn, after having identified the relatively voluminous evidence that was read in respect of the application.

Affidavit evidence

3. Mr Sebie relies, first, on his affidavit dated 28 August 2022, which relates to correspondence concerning a hearing or hearings that took place in August 2022, and refers to his request that he be added as a defendant in the proceedings, on the basis of his occupation of the Homebush Property, although no evidence was led at this hearing that he had a legal entitlement to do so. He also refers to the circumstances of execution of a search warrant (issued by Hammerschlag CJ in Eq at the liquidator’s request) at the Homebush Property.

4. By a second affidavit dated 7 September 2022, Mr Sebie refers to matters relating to Mr Krejci, including that Mr Krejci and members of the Sebie family at one point lived in the same street in the inner west of New South Wales. Mr Sebie refers to several matters which appear to have caused discontent within the relevant street, which he characterises as involving conflict between members of his family and Mr Krejci, although he fairly observed in the course of submissions that he personally had no difficulty with Mr Krejci. He also refers to connections between Mr Krejci and Mr Pham, who has been party to associated proceedings in this Court, which appear to have arisen from a dispute concerning Mr Pham’s acquisition of Mr Sebie’s former residence in Chiswick, New South Wales (“Chiswick Property”). Mr Sebie there contends that Mr Krejci should not have consented to be liquidator of ENA. I will explain below why it is not necessary for me to address those contentions, which are, not surprisingly, denied by Mr Krejci.

5. By a further affidavit dated 17 October 2022, Mr Sebie refers to the service of certain documents, and to an appearance before Hammerschlag CJ in Eq during which he says he handed up documents. He also refers to the purchase of the Chiswick Property with the assistance of his parents and brother, and addresses matters relating to his relationship with Ms Musabwasoni, which are in issue in proceedings in the Family Court to which I will refer in another application that I address below.

6. By a further affidavit dated 6 October 2022, Mr Sebie addresses the suggested provision of funds by Mr Richard Sebie and Ms Rose Sebie to the ENA Trust, by the provision of funds to ENA in its capacity as then trustee of that trust, and addresses matters relating to the sale of the Chiswick Property, which, as I noted above, were the subject of other proceedings in the Court. He drew attention, in the course of submissions, to a document headed “Money Flow Chart” which appears to be intended to establish the way in which moneys were provided to the ENA Trust by various members of the Sebie family. I will return to any significance of that matter for these proceedings below.

7. Mr Sebie also tendered a bundle of documents, on which it appears other parties also rely in other aspects of the application, including correspondence concerning the proceedings; documents relating to the establishment of One T Developments Pty Ltd (“One T”), which claims to have become trustee of the ENA Trust in place of ENA; and what appears (given its content) to be an extract from an affidavit of Mr Jemmott, relating to the conduct of other proceedings in the Court of Appeal, which goes no further than to show that Mr Jemmott had there claimed, as he has also claimed in these proceedings, that One T was later appointed as the new trustee of the ENA Trust in place of ENA. Mr Sebie also tenders a valuation of the Homebush Property which seeks to establish that it has substantial value. That is in turn invoked, it appears, to seek to establish that an earlier winding up of ENA should not have occurred or should be set aside. I will return to that contention below.

8. Mr Krejci reads his affidavit dated 2 August 2022, which relates to the execution of a search warrant granted by a judge of the Court which was executed at the Homebush Property. He also reads the affidavit dated 29 August 2022 of his solicitor, Mr Chase Berry, which refers to aspects of the conduct of the proceedings including correspondence between the parties. By a further affidavit dated 16 September 2022, Mr Krejci responds to other affidavit evidence filed in the proceedings, some of which was read by Mr Sebie in this application. He also responds to Mr Sebie’s allegations concerning his contact with Mr Pham and denies the allegations of conflict of interest made by Mr Sebie against him.

Mr Sebie’s application to be joined as party to the proceedings

9. Turning now to the aspects of the application which are pressed by Mr Sebie, Mr Sebie first seeks an order that he should be joined as the Third Defendant to the proceedings. Mr Stack, who appears for the liquidator, recognises that the Court has power to add Mr Sebie as a party under, for example, r 6.24 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”), if the Court concluded that Mr Sebie is a person whose joinder as a party is necessary to the determination of the matters in dispute. I should add to my oral ex tempore judgment that, in Metcash Ltd v Jardim (No 2) [2010] NSWSC 1042 at [7], Ball J summarised the relevant principle as being that a person “ought to be joined as a party if its legal rights are directly affected by the orders sought but not otherwise”. I adopted the same approach in Re Raejoe Pty Ltd (rec and mgr apptd) (admins apptd) as trustee for Coe Family Trust [2012] NSWSC 1457 and Re Beechworth Land Estates Pty Ltd (in liq) and Griffith Estates Pty Ltd (in liq) [2018] NSWSC 1703 at [28]. Mr Stack points out that Mr Sebie appears to rely upon his occupancy of the Homebush Property to assert that his joinder is necessary to the proceedings. It does not seem to me that that supports his joinder to the proceedings, or has the consequence that he is either a necessary or proper party to the proceedings, where no legal basis on which he is entitled to occupation is identified.

10. Mr Sebie has been, and will be, afforded procedural fairness to the extent that he has been heard in the proceedings under r 2.13 of the Supreme Court (Corporations) Rules 1999 (NSW). I should add to my oral ex tempore reasons that, to the extent that any relief is sought that would bind Mr Sebie, he would need to be joined as a respondent to any application that sought such relief, as distinct from a party to the proceedings generally, and that has occurred in respect of one aspect of this hearing. For those reasons I would not make the first order sought in Mr Sebie’s application.

Mr Sebie’s application for an order setting aside orders affecting the Homebush Property

11. The second order sought in the application, which was not addressed in Mr Sebie's written submissions because he had initially indicated he would not press it, is an order:

"That orders in these proceedings, case number 2022/00032115, affecting the 'Homebush [P]roperty' [identifying details omitted] to be set aside."

12. Obviously enough, that order does not identify which orders in the proceedings are to be set aside, although it is broadly possible to identify the class of orders that Mr Sebie seeks to have set aside from his submissions. Mr Stack responds, in respect of that application, by noting that the motion and affidavit evidence in support does not identify the basis on which the relief is sought, although that was clarified by Mr Sebie's submissions. Mr Stack points to the fact that, on previous occasions, Mr Sebie has asserted that the Homebush Property was a trust asset of the ENA Trust; to documentary evidence which indicates the identity of unitholders of the ENA Trust; to the claim that One T replaced ENA as the trustee of the ENA Trust on 30 March 2021; and, significantly, to an application heard before Stevenson J, in which One T participated, where his Honour gave advice that the liquidator was justified in proceeding on the basis that the Homebush Property was beneficially owned by ENA rather than being a trust asset of the ENA Trust.

13. Mr Sebie also drew attention, in submissions, to a number of documents which relate to this matter. I bear in mind that these documents were largely tendered in a manner that isolated them from their context and were also unsupported by evidence to establish their authenticity or the circumstances in which they were prepared. It is not apparent that those documents would, individually or as a whole, establish what Mr Sebie would need to establish, had he sought more specific relief addressed to the particular orders that have been made in the proceedings. That position will emerge further from my observations below.

14. First, it appears that Mr Sebie seeks, as one of the orders affecting the property, to set aside the orders winding up ENA. A similar order was previously sought and abandoned by other persons associated with ENA, on the basis that ENA has a substantial asset, namely the Homebush Property. Mr Sebie submits that that asset could be readily realised to raise funds to repay the creditor who long ago sought and obtained the winding up application. Mr Sebie also submits that funds could also be raised to repay the liquidator's costs. The first difficulty with that proposition is that s 482 of the Corporations Act 2001 (Cth) (“Act”) provides a specified mechanism to terminate a winding up and the authorities establish what is necessary to obtain such an order. I should add to my oral ex tempore judgment that I had summarised those principles in Re Sails Corp Pty Ltd [2021] NSWSC 1241 at [19] as follows:

“… a person who seeks an order to terminate a winding up under s 482 of the Act must establish that order is appropriate, and referred to the well-known factors relevant to whether a winding up should be stayed or terminated as summarised by Master Lee QC in Re Warbler Pty Ltd (1982) 6 ACLR 526 at 533 and to Austin J’s summary of the relevant factors in Mercy & Sons Pty Ltd v Wanari Pty Ltd [2000] 35 ACSR 70; [2000] NSWSC 756 at [47]–[51] . I also referred to the identification of relevant factors by Austin J in Vero Workers Compensation (NSW) Ltd v Ferretti Pty Ltd (2006) 57 ACSR 103; [2006] NSWSC 292 at [17] as including the interests of the company’s creditors, including future creditors; the interest of the liquidator, particularly with regard to costs; the interests of contributories and the interests of the public, including the public interest in matters of commercial morality; and the public interest that insolvent companies should be wound up. The relevant principles were in turn summarised by Brereton J in Re Glass Recycling Pty Ltd [2014] NSWSC 439 , to which I have also had regard, including the importance of solvency in determining such an application, which Bergin CJ in Eq emphasised in Re SNL Group Pty Ltd (in liq) [2010] NSWSC 797.”

15. No application has been brought by Mr Sebie for such an order and an application which was brought by other persons for such an order was abandoned. Second, the fact that ENA has, whether as trustee or as absolute owner, a substantial property does not have the consequence it is solvent, because solvency depends on the application of a cash flow test. The proposition that ENA is solvent is hardly self-evident where, over a long period, it has in fact failed to repay the moneys due to Mr Pham, the creditor who sought and obtained its winding up. If Mr Sebie seeks to terminate the winding up, and if he has standing to bring such an application, it would need to made under s 482 of the Act and be supported by evidence of ENA's cash flow solvency in the usual way. I would not make that order in that application.

16. Second, it appears that Mr Sebie seeks, under this general heading, an order that the appointment of Mr Krejci as receiver to the assets of the ENA Trust be set aside. The principles on which such an appointment is made are well-established: see, for example, Re Stansfield DIY Wealth Pty Ltd (in liq) (2014) 291 FCR 17; (2014) 103 ACSR 401; [2014] NSWSC 1484; Re Glenvine Pty Ltd (in liq) [2020] NSWSC 866; Re Double Bay Property Management Pty Ltd (in liq) [2020] NSWSC 203; Re Peak Invest Pty Ltd (admins apptd) [2021] NSWSC 1714 at [19]ff. Here, Mr Sebie concedes all of the matters which supported that appointment, namely that ENA was and is the registered owner of the Homebush Property; that ENA was at least formerly the trustee of the ENA Trust, although Mr Sebie contends that One T is now its trustee; that, as former trustee of the trust, ENA has a right of indemnity against the trust assets (including the Homebush Property, if, contrary to Stevenson J’s later direction, it was trust property) for liabilities which it had properly incurred as trustee; and that there are now many cases in this Court, other State Courts and the Federal Court of Australia where liquidators of former trustees have been appointed as receivers of trust property, to support the exercise of that right of indemnity. The appointment of Mr Krejci as receiver of the assets of the ENA Trusts reflected an orthodox application of those principles.

17. It seems to me that the position is, at best for Mr Sebie’s application, that ENA was the former trustee of the ENA Trust, and, at worst for that application, that it is absolute owner of the property consistent with the advice given by Stevenson J. Neither position would support an order setting aside the appointment of Mr Krejci as receiver of the assets of the ENA Trust including the Homebush Property (if it was trust property) in the relevant circumstances. The fact that One T is now purportedly or actually the trustee of the ENA Trust, a matter on which Mr Sebie places great emphasis, does not assist him, because an order appointing a liquidator as receiver of trust assets in this way is ordinarily made in circumstances where a new trustee has been appointed or purportedly appointed to a trust. That is a reason to make the order, rather than a reason to set it aside. I would not make the second order that may be sought by Mr Sebie in this application.

18. Third, it seems that Mr Sebie also seeks to set aside the judicial advice given by Stevenson J in an application brought by the liquidator, in which One T had taken an active role. Mr Sebie points to documents which, he says, might have led to a different conclusion (I interpolate, if they were authentic, which was not established here; and were given particular weight and isolated their context) to the conclusions that Stevenson J had reached, in a contested hearing in which One T participated as a contradictor, as set out in his Honour’s detailed judgment. Recognising that Mr Sebie takes a different view from that which Stevenson J had taken, it seems to me that nothing to which Mr Sebie has drawn attention has the consequence that Stevenson J's judgment should be set aside, even if I have power to do so.

19. I should add to my oral judgment that Mr Sebie’s reference to suggested money flows from Mr Richard Sebie and Mrs Rose Sebie to the ENA Trust may have been intended to support a claim for a resulting or constructive trust, although he did not develop that point in submissions. That proposition does not assist Mr Sebie, because there is no evidence that the alleged “money flows” were of a nature that could establish a constructive or resulting trust, rather than a debt, still less that Mr Sebie is the beneficiary of or has standing to enforce such a trust in respect of any monies paid by Mrs Rose Sebie or Mr Richard Sebie.

15. There is a further and wider difficulty with the application for this order. Mr Sebie does not identify any basis on which the Court has power to, or should, set aside the relevant orders. No doubt, the Court has power in some circumstances to set aside orders under UCPR r 36.16, but these are orders made, and entered, long ago and it is not apparent that any relevant jurisdiction to set aside them exists under that rule. A judge sitting at first instance in this Court does not exercise an unlimited jurisdiction to set aside, at will, orders that either he or she or other judges have made at earlier points in time, and such a course would be inconsistent with the public interest in the finality of litigation. For these reasons, this order should not be made.

Mr Sebie’s application in respect of the search warrant

21. The third order sought by Mr Sebie can be dealt with briefly. Mr Sebie seeks an order that ERA Legal, the solicitors acting for the liquidator, and the liquidator “return all items which they purloined from the relevant premises, at the time of exercise of a search warrant”. Mr Stack responds, by reference to evidence, that the liquidator and his solicitors deny that they hold any documents to which they are not entitled under the warrant. He submits, and I accept, that there is no reason not to accept the evidence of the liquidator and the solicitors in that respect. In any event, an order in the form sought could not be made. It would be obviously unenforceable, not least because the solicitors and the liquidator would no doubt take the view that there are no documents which they “purloined” (in the sense of improperly removed) from the Homebush Property, where their conduct took place in the exercise of a search warrant authorised by a judge of the Court. The formulation of the order assumes, without evidentiary basis, that that search warrant was not properly executed. The Court could not make orders to enforce such an order, if it were even made it, because of the uncertainty as to what, if anything, would be required to be returned under it. I would not make that order.

Mr Sebie’s application for a declaration of conflict of interest

22. Finally, Mr Sebie seeks a declaration that Mr Krejci has a conflict of interest in performing his duties as liquidator of ENA. I have referred to the contest in the evidence as to that matter, with Mr Sebie referring to the fact that Mr Krejci had lived in the same street as members of the Sebie family, and Mr Krejci denying that such a conflict exists. Mr Stack responds to this matter in some length, referring to Mr Krejci's affidavit evidence, and submitting that there is no admissible evidence that would support the existence of a conflict or any lack of independence affecting Mr Krejci. I consider it preferable in the circumstances not to determine that question, where the Insolvency Practice Schedule (Corporations) establishes a mechanism for the removal of the liquidator which Mr Sebie has not invoked. The Court should not make a declaration of the kind sought by Mr Sebie, where that declaration would have no consequence, since it does not seek Mr Krejci's removal as liquidator, and Mr Krejci's removal would not follow from making it. I should add that those observations, and the fact that I have not determined this issue, should not be taken as suggesting that the claims in respect of Mr Krejci have any merit. It might be thought that the proposition that a liquidator has lived in the same street or the same suburb as a person or family associated with an entity to which he is appointed as liquidator would generally be a very weak basis upon which to make a serious allegation of this character.

23. For these reasons, the Amended Notice of Motion filed by Mr Sebie on 26 September 2022 should be dismissed.

Costs of Mr Sebie’s Amended Notice of Motion

24. I then heard the liquidator and Mr Sebie as to the costs of Mr Sebie’s Amended Notice of Motion and now determine that matter. As I noted above, Mr Sebie pursued his Amended Notice of Motion dated 26 September 2022 in his capacity as an interested person, heard in the proceedings under r 2.13 of the Supreme Court (Corporations) Rules. I recognise that the usual position is that a person who appears under r 2.13 is not the subject of an order for costs. However, the case law establishes that such an order may be made where that person's appearance has resulted in additional costs for any party, which should be borne by the person to whom the leave is granted, and that order may more readily be made where the proceedings, as they develop, are closer in character to adversarial proceedings.

25. Mr Stack submits that the motion nonetheless proceeded as an adversarial application, with all of the features of an adversarial application, where each party read affidavits and advanced opposing positions, which I have had to determine in this judgment. Mr Sebie responds that he sought to conduct the matters as efficiently as possible. I proceed on that basis, but nonetheless note that the application has taken some two hours to determine, and that is not insignificant so far as the costs of litigation are concerned. I am satisfied that Mr Sebie's intervention, by way of the Amended Notice of Motion, has exposed the liquidator to additional costs, not least the costs of preparation of affidavits to respond to Mr Sebie's allegations, including serious allegations as to conflict of interest, and the costs of lengthy submissions this morning.

26. For these reasons, I am satisfied that there is reason to depart from the usual position under r 2.13 of the Supreme Court (Corporations) Rules. I also order that these costs be payable forthwith, where this application has no connection with any other aspect of the proceedings and will have been finally determined by this judgment.

27. Accordingly, I order that Mr Sebie pay the liquidator’s costs of and incidental to the Amended Notice of Motion filed on 26 September 2022, as agreed or as assessed, such costs to be payable forthwith.

The liquidator’s application for leave to file and serve a Further Amended Interlocutory Process

28. The liquidator seeks leave, nunc pro tunc, to file and serve a Further Amended Interlocutory Process, which adds paragraphs 14A and 14B, by which he seeks orders under s 74MA of the Real Property Act 1919 (NSW) that Mr Sebie withdraw a caveat in respect of the Homebush Property and that, if he does not do so within two business days of the Court’s order, the Registrar in Equity be authorised to do so. That caveat is dated, possibly, 23 September 2022. It is not clear when Mr Sebie lodged it but it was not notified to the liquidator until 14 October 2022. The caveat claims that, by virtue of Mr Sebie contributing to the purchase price of the land in 2013, he holds a beneficial interest in the Homebush Property pursuant to a constructive trust and that Mr Sebie also holds a lease dated 1 November 2019 in the land.

29. The matters claimed in the caveat overlap, to a substantial extent, with the matters already in issue in this hearing, particularly the liquidator’s application for an order for possession of the Homebush Property which I address below. I am satisfied that there should be given leave to amend to seek this relief and it should be dealt with on an urgent basis. I have pointed out to Mr Sebie that, in an application under s 74MA of the Real Property Act, he bears the onus of supporting the caveat. I would have been inclined to deal with it at the same time as the other issues in this hearing, where it involves similar or the same issues that are raised in other aspects of the application. However, Mr Sebie contends that procedural fairness requires that he be allowed further time to prepare the application and seek legal advice. Notwithstanding that the issue has arisen from the lodgement, or at least the notification, of a caveat not long before this hearing, I am satisfied that further time can be provided to him without causing detriment to the court process or the liquidator.

30. I will grant that further time on condition that no further documents may be filed in the proceedings without leave of the Court, so that this adjournment cannot be used, by any party, to multiply the issues already in dispute in the proceedings, nor can documents be filed in respect of this application without the Court making an assessment of whether they are relevant to the application. Accordingly, to the extent that Mr Sebie, or anyone else, wishes to rely on any evidence relating to the caveat, it should be served between the parties prior to the hearing and then filed or tendered in Court at the hearing. I will also join Mr Sebie as party to the Interlocutory Process, as is contemplated by the fact that he is named as a respondent to it.

31. In respect of the liquidator’s application to file the Further Amended Interlocutory Process, I make the following orders:

1. Grant leave to Mr Peter Krejci in his capacity as liquidator of ENA Development Pty Ltd (in liq), nunc pro tunc, to file and serve the Further Amended Interlocutory Process that was filed on 19 October 2022.

2. For the avoidance of doubt, join Mr Robert Sebie as a respondent to the Further Amended Interlocutory Process.

3. Paragraphs 1–14 and 15–16 be heard prior to, and separately from, paragraphs 14A–14B of the Further Amended Interlocutory Process, the hearing of paragraphs 14A–14B of the Further Amended Interlocutory Process to be listed before Black J at noon on 24 October 2022.

4. No party may file and serve any further application, evidence, submissions or other document in these proceedings, or in any other proceedings which seek relief affecting the conduct of these proceedings, without leave of the Court, with the intent that any affidavit or submission made in these proceedings be served between the parties by 8am on 24 October 2022 and be filed in Court at the hearing of paragraphs 14A and 14B on 24 October 2022.

The liquidator’s application for possession of the Homebush property

32. By Further Amended Interlocutory Process filed on 19 October 2022, Mr Krejci in his capacity as liquidator of ENA and receiver of assets of the ENA Trust seeks orders for possession of the Homebush Property, identified as “unit 36”, and associated orders. As I noted above, a further question as to the status of the caveat lodged by Mr Sebie over the Homebush Property has been deferred to be determined as a separate matter at a specially fixed hearing on 24 October 2022.

Affidavit evidence

33. Mr Krejci reads several affidavits establishing the exclusion of ENA and Mr Krejci in his capacity as ENA's liquidator and as receiver of the assets of the ENA Trust from the Homebush Property, and service of the relevant proceedings upon affected parties, at least including One T Developments Pty Ltd (“One T”), which appears to oppose the relief sought, and Mr Sebie, where there is evidence that Mr Sebie has occupied the premises.

34. One T, for whom Mr Polese appears, tenders an affidavit dated 10 September 2022 of Mr Jemmott, which partly deals with other matters, and also refers to a claim that certain trust deeds have been executed, to dealings with the Office of State Revenue, and to trust assets. Mr Polese also tenders a bundle of documents, which include minutes of a meeting of unitholders of ENA Development dated 31 March 2021 which purportedly resolved that ENA retire as trustee of the ENA Trust and One T be appointed as trustee of the ENA Trust. That bundle of documents also contains a purported Commercial Lease Agreement dated 20 April 2021 which refers to the grant of a lease by One T (not then the registered owner of the Homebush Property) over a “unit 36A”, which is not the unit number of the Homebush Property.

35. Mr Sebie also tendered additional evidence, and I referred in my oral judgment and above to the question of the authenticity of the several leases tendered. It is not necessary to repeat those observations here, where they are not necessary to my decision below. Mr Sebie in turn refers to an extract of an unidentified affidavit, to deny an allegation that the Homebush Property was wrongly used as a residential premises, but I can draw little from that document, and the question whether the premises were being used as a residence is ultimately of little significance in this application.

36. Mr Sebie also tenders two further Commercial Lease Agreements. The first is between ENA as trustee of the ENA Trust and Enterprise INT Pty Ltd purportedly dated 12 March 2021, then stated as amended 15 March 2021. That agreement again referred to “unit 36A” rather than to the Homebush Property, and was purportedly executed by Ms Rose Sebie over the description “trustee”. The second agreement is purportedly dated 29 April 2021 between One T as trustee for the ENA Trust and One T in its own right, and again refers to “unit 36A” rather than the Homebush Property and is purportedly executed by Mr Jemmott above the description “trustee”. I also referred in my oral judgment to the multiplication of purported leases in this matter, the nature of the evidence and questions of authenticity, but it is also not necessary to repeater those observations here where they are not necessary to the conclusions I have reached. Mr Sebie also draws attention to a document tendered in earlier proceedings on which he relies on to assert that there are several areas of the premises. I proceed on that basis, but it is notable that those areas are all referred to in that document as “PT36”, and there is no reference to any unit 36A (to which the several leases relate) in that document.

The parties’ submissions and determination

37. The application for possession is, notwithstanding the detailed oral submissions that were put, a straightforward one. The liquidator submits that ENA is the registered owner of the premises and the evidence establishes that matter. It submits, and I accept, that it does not matter for present purposes whether it is the absolute owner, as earlier judicial advice given by Stevenson J indicates, or is the registered owner as bare trustee, where One T was appointed as a subsequent trustee for the ENA Trust. In either case, ENA as the registered owner of the property is entitled to possession of it, unless a third party has established its right to possession.

38. Mr Stack also addresses several purported leases over the property. There are several difficulties with those leases. The first relates to questions of authenticity of the documents and, more widely, whether they were intended to have or were given commercial or operative effect. I do not address that question further in this judgment, where it is not necessary to my decision. Second, Mr Stack points out that, irrespective of any question as to authenticity, the leases are directed to a “unit 36A” and that is not the property as to which the liquidator and receiver seeks possession. Third, Mr Stack points out, and I accept, that the ENA Trust is not a legal entity capable of granting a lease, although I recognise that the purported lease documents generally identify the legal entity that executed them. although I also referred in my oral judgment to the question of the capacity in which persons have executed the lease, described as director trustee or as trustee. It is not necessary to address that issue further, where it is also not necessary to my decision. Fourth, Mr Stack points to the issue, which again impacts on the question of authenticity in a wider sense, that at least some of the leases record the address of the ENA Trust, as lessor, as a different address to that of the registered office of ENA, raising a question whether ENA granted the lease to which it is alleged to be party in its capacity as trustee of the ENA Trust.

39. Fifth, and most importantly, Mr Stack points to the terms of the relevant leases, which, quite apart from the reference to “unit 36A” rather than the Homebush Property, to which I have referred above, contain provisions as to permitted use, the payment of rent without setoff, and a prohibition on subletting. The evidence indicates those provisions have been breached, where the property is not being used for the permitted use of the conduct of the relevant businesses, but apparently as a residence by Mr Sebie, irrespective of whether that is also in breach of zoning requirements. On the liquidator's evidence, no rent has been paid to ENA, whether as absolute owner of the Homebush Property, or as owner of that property in its capacity as trustee or bare trustee over the relevant period. Mr Stack submits, and I accept, that that provides a proper basis on which ENA can, without more, terminate the relevant leases, if they are authentic and were properly executed in a manner that was binding upon it, without the need to take further steps, and then re-enter the premises. That matter, subject to the submissions advanced by Mr Polese for One T, provides a proper basis for an order for possession in favour of ENA.

40. Mr Polese submits that the application for possession is premature, and characterises that application as a form of summary judgment application. I do not understand the basis of that characterisation. It seems to me that Mr Krejci, in his capacity as liquidator of ENA and receiver of the trust assets, is here doing no more than to contend that ENA is the registered owner of the Homebush Property, whether absolutely or as trustee or bare trustee; no other person has established a claim for the property, a proposition which is established by the purported lessees’ failure to give effect to or comply with the leases including by paying rent, which I have set out above; and, in those circumstances, ENA is entitled to possession of the property, to the exclusion of those persons who claim under the purported leases, or Mr Sebie, who appears to be resident in the premises, but has not established any legal right supporting that residence. This is not a question of delivering summary judgment, if that is intended to refer to a judgment at an earlier stage of more substantive proceedings. It is instead a finding on the merits, in a possession application, that the owner of a property is entitled to possession of the property to the exclusion of persons wrongly in possession of it.

41. Second, Mr Polese submits that the making of an order for possession would be inconsistent with the exercise of the jurisdiction of the Family Court where Mr Krejci also seeks an order for the transfer of the balance of the proceedings to the Family Court. That submission can be dealt with shortly. There is no such inconsistency, since this Court's orders will allow Mr Krejci to take possession of the Homebush Property in his capacity as liquidator of ENA and receiver of the trust assets. The Family Court retains such powers as it would have, in respect of making further orders in respect of the property, and those powers are not diminished by the fact that ENA, as the rightful owner of the Homebush Property, is then in possession of it unless and until such orders are made by that Court.

42. Finally, Mr Polese developed a submission that there may exist some form of postponing conduct by ENA that would defeat infeasibility. I do not understand that proposition. It seems to me to depend, first, on the proposition that a trust exists and that One T is the new trustee of that trust. That has not been established as a matter of fact and Mr Krejci has been given judicial advice to the contrary by Stevenson J. Even if it were open to be established, and was established, that does not seem to me to affect the fact that ENA is the registered owner of the Homebush Property and One T would not be entitled to insist on any transfer of that property to itself unless the rights of ENA as former trustee by way of indemnity were satisfied or protected. One T cannot be in a better position, in that respect, by way of any suggestion of postponing conduct than it would be if it sought to insist on a transfer of the property to itself.

37. For these reasons, I am satisfied that the orders for possession that are sought by Mr Krejci and ENA should be made. Given the history of these proceedings, they should also be entered forthwith. For these reasons, I make orders 12-14 of the orders set out in the Further Amended Interlocutory Process filed on 19 October 2022 and I make a further order that these orders be entered forthwith.

38. One T opposed the relief sought and, as events developed and notwithstanding that I drew to his attention the risk that a costs order could be made against him as he expanded his role in the application, Mr Sebie also did so at some length. I am satisfied that, in those circumstances, each of One T and Mr Sebie must jointly and severally pay the costs of and incidental to the application for possession.

Application to transfer proceedings to the Family Court

45. By Amended Interlocutory Process filed on 27 September 2022, Mr Krejci, in his capacity as liquidator of ENA and receiver of the trust assets, seeks the transfer of the balance of these proceedings to Family Court. Mr Krejci reads his affidavit dated 11 August 2022 in support of that application. One T did not seek to be heard as to this application and Mr Sebie did not opposed the order sought.

46. The issues raised in this application correspond to those raised in an application in associated proceedings which I determined last week. I am satisfied that there is a plain overlap between the issues in these proceedings, to the extent they remain on foot, and the issues in the Family Court proceedings between Mr Sebie and his former wife. In particular, the question as to any reallocation of property interests between the parties to the Family Court proceedings should properly be determined in those proceedings. It would plainly raise the risk of inconsistent findings, and duplication of costs, if the proceedings continued in two different courts. For these reasons, the proceedings should be transferred to the Family Court, subject to this Court determining the issues as to the caveat lodged by Mr Sebie raised by paragraphs 14A-14B of Mr Krejci’s Further Amended Interlocutory Process, which have been deferred for separate hearing on 24 October 2022. Subject to that matter, I make orders in accordance with paragraphs 1 and 2 of the Amended Interlocutory Process dated 27 September 2022.

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Decision last updated: 07 November 2022