Macquarie Leasing Pty Ltd v Prime Land Securities Pty Ltd

[2012] VCC 1207

IN THE COUNTY COURT OF VICTORIA Revised
(Not) Restricted

AT MELBOURNE

COMMERCIAL LIST
GENERAL DIVISION

Case No. CI-11-04602

MACQUARIE LEASING PTY LTD	Plaintiff
v.
PRIME LAND SECURITIES PTY LTD & ORS	Defendants

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JUDGE:	His Honour Judge Anderson
WHERE HELD:	Melbourne
DATE OF HEARING:	27 August 2012
DATE OF JUDGMENT:	27 August 2012 (revised 28 August 2012)
CASE MAY BE CITED AS:	Macquarie Leasing Pty Ltd v. Prime Land Securities Pty Ltd & Ors
MEDIUM NEUTRAL CITATION:	[2012] VCC 1207

REASONS FOR JUDGMENT

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Catchwords:             Practice and procedure – Application to set aside judgment – Applicant made bankrupt after application issued – Proceeding stayed to allow Trustees in bankruptcy to make a decision whether to prosecute or discontinue the application – s.60(2) Bankruptcy Act 1966.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Ms E. Glover	Douros Jackson Lawyers
For the Defendant	Mr J. Perri in person

HIS HONOUR:

1Mr James Perri is the third defendant to this proceeding. The first defendant, Prime Land Securities Pty Ltd, is a company of which he was formerly a director. Upon the hearing of the plaintiff’s summons for final judgment on 26 March 2012, Her Honour Judge Kennedy ordered that there be judgment for the plaintiff against three defendants, the second defendant also being a company of which the third defendant was a director, in the sum of $176,728.60, together with interest of $9,252.83 and the costs of the proceeding.

2Mr Perri issued a summons on 18 April 2012 seeking orders that, “The orders made ex parte on 26 March 2012 [be] stayed and the proceedings to be re-listed for trial; Court to list it for directions hearing before set down for trial”. It is clear that Mr Perri intended his application to include an order that the judgment entered by Judge Kennedy on 26 March 2012 should be set aside.

3On 31 July 2012, Mr Perri was made bankrupt and trustees were appointed. On 4 July 2012, the first and second defendants were wound up by order of the Supreme Court of Victoria and liquidators appointed. As a consequence of the liquidation of the companies, relevantly the first defendant, the powers of Mr Perri as a director of the companies were, pursuant to s.471A of the Corporations Act 2001, suspended during the winding up. The liquidators of both companies have indicated in correspondence to the plaintiff’s solicitors that they do not wish to proceed with the summons and consent to the summons issued by Mr Perri on 18 April 2012 being dismissed.

4Mr Perri has been made bankrupt subsequent to the issue of the summons. There is ample authority that if a person becomes bankrupt following the issue of proceedings, that pursuant to s.60(2) of the Bankruptcy Act 1966, the proceeding is stayed until “the trustee makes election in writing to prosecute or discontinue the action” and if such an election is not made within 28 days after service of notice of the action by the other party, the trustee “shall be deemed to have abandoned the action”.

5Mr Perri’s trustees in bankruptcy were given notice of the summons dated 18 April 2012 by the plaintiff’s solicitors, by letter dated 15 August 2012. Pursuant to s.60(3) of the Bankruptcy Act 1966, the trustees have 28 days, until 12 September 2012, to determine whether or not to make an election to prosecute or discontinue Mr Perri’s summons. Mr Michael Carrafa, one of Mr Perri’s trustees, was in court today. He informed me that he had sought information from Mr Perri in relation to the application, but had not received any response. He said that, at present, he was not able to say whether the trustees would make an election pursuant to the Bankruptcy Act 1966 in relation to the summons, prior to 12 September 2012.

6Ordinarily, if a judgment is entered against a party, the matter cannot be reviewed or reheard. An exception is under Rule 22.15, which provides that the Court may set aside or vary a judgment against a party who has not attended the hearing of a summary judgment application. The plaintiff’s solicitor, Ms Kordanovksi, in an affidavit sworn 23 August 2012, set out what occurred at the hearing of the summary judgment application on 26 March 2012. On that day, Her Honour Judge Kennedy gave leave to the defendants’ solicitor, Mr Barry Fried, to file a notice of ceasing to act. Before that order was made, Mr Perri “addressed the Court upon request of Her Honour and advised the Court that [his] defence to the proceeding was that he had not been given the opportunity to sell the vehicle the subject of the proceeding as set out in the defence already filed in the proceeding”.

7After Mr Fried was given leave to withdraw, Mr Perri made an application to further adjourn the summary judgment application. The application for adjournment was refused. Mr Perri “excused himself” and the summary judgment application “was heard in his absence”. It is doubtful, in my view, that Rule 22.15 applies in circumstances where defendants voluntarily absent themselves from Court prior to the hearing and determination of the application. In any event, one of the critical factors the Court must consider upon the hearing of such an application is the reason the defendant allowed judgment to be entered.

8Further, the matters presently relied upon by way of defence would appear to have little merit. It is asserted that the writ was not served on the corporate defendants, although there is evidence of service by post at the relevant registered office of each company. Subsequently, an appearance was filed on behalf of the three defendants by solicitors. Mr Perri states in an affidavit sworn 15 August 2012, “My defence will be based on that the mortgage documents that Macquarie Bank is relying on are forgery and I have signed any loan agreements personally or on behalf of the companies, therefore any documents they are relying on are fraudulent”. This allegation is inconsistent with the defence filed on behalf of the three defendants and admissions consequential upon the defendants’ failure to relevantly respond to specific paragraphs of a notice to admit.

9Mr Perri said further in his affidavit, “My previous affidavits that I signed were prepared by my ex-lawyer while I was away overseas and I signed it without reading its contents. Until I was put on notice now and I realised now that those affidavits are wrong”. It would appear on the basis of the present material that even if Mr Perri were able to proceed with his summons, filed 18 April 2012, either on behalf of himself personally or for the first defendant that there would be little basis for the Court to make an order.

10Mr Perri, however, presently has no standing to proceed with the application either on his own behalf or on behalf of the corporate defendants. In relation to Mr Perri’s personal position, his trustees in bankruptcy have until 12 September 2012, to make an election pursuant to s.60(2) of the Bankruptcy Act 1966 as to whether they will “prosecute or discontinue” the summons issued by Mr Perri.

11In the circumstances, I propose to make the following orders:

a.The summons dated 18 April 2012, insofar as it is issued on behalf of the first defendant, is dismissed.

b.Insofar as the summons is issued on behalf of the third defendant, unless the third defendant’s trustees in bankruptcy, Mr Michael Carrafa and Mr Terry Van Der Velde elect to prosecute the said summons within the period of 28 days after notice of the summons was served upon them by the plaintiff’s solicitors, the plaintiff may, by application to His Honour Judge Anderson or, in his absence, to the Commercial List Duty Judge, in chambers and upon written notice being given to the trustees, seek an order to be made “on the papers” noting that the summons filed 18 April 2012 is deemed to have been abandoned pursuant to s.60(3) of the Bankruptcy Act 1966.

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Certificate

I certify that these 3 pages are a true copy of the reasons for decision of His Honour Judge Anderson delivered on 27 August 2012 and revised on 28 August 2012.

Dated: 28 August 2012

Caroline Dawes

Associate to His Honour Judge Anderson