Milbrook Finance Pty Ltd v Kekpek Pty Ltd (In Liq)

[2014] NSWSC 1115

Supreme Court

New South Wales

Medium Neutral Citation:	Milbrook Finance Pty Ltd v Kekpek Pty Ltd (In Liq) [2014] NSWSC 1115
Hearing dates:	13 August 2014
Decision date:	13 August 2014
Before:	McCallum J
Decision:	Plaintiff given leave pursuant to s 500(2) of the Corporations Act to proceed with the proceedings; defendant's defence struck out pursuant to 14.28(1)(a) of the Uniform Civil Procedure Rules on the basis that it does not disclose a reasonable defence.
Catchwords:	PRACTICE AND PROCEDURE - application for leave to proceed against company in liquidation in proceedings for possession - no question of principle
Legislation Cited:	Corporations Act 2001 Uniform Civil Procedure Rules 2005
Cases Cited:	Phisci v Green Frog Nominees Pty Limited (In liquidation) No 3 [2009] FCA 43
Category:	Interlocutory applications
Parties:	Milbrook Finance Pty Ltd (plaintiff) Kekpek Pty Ltd (defendant)
Representation:	Counsel: R Higgins (plaintiff - ex parte) Solicitors: Lauren Siobhan Crowe, Solicitor (plaintiff)
File Number(s):	2013214355
Publication restriction:	None

Judgment

1. HER HONOUR: These are proceedings for possession commenced by Milbrook Finance Pty limited against Kekpek Pty Limited (In liquidation). At the time the proceedings were commenced on 15 July 2013 Kekpek was not in liquidation.

1. The relief sought in the statement of claim is judgment for possession of land of which Kekpek is the registered proprietor. On 3 April 2014 Kekpek filed a defence. However, the only defence asserted in that pleading is:

"The mortgage is void or voidable for the reason that the defendant is entitled to relief in equity under the Contract Review Act and the Australian consumer law, which will be pleaded in a cross-claim."

1. No cross-claim has been filed or served since the date on which the defence was filed.

1. By further amended notice of motion filed in court today Milbrook seeks leave pursuant to s 500(2) of the Corporations Act to proceed against the company in liquidation and an order that the defence be struck out pursuant to r 14.28.(1)(a) of the Uniform Civil Procedure Rules on the basis that it does not disclose a reasonable defence.

1. Mr Higgins, who appears for Milbrook, has tendered correspondence on the strength of which I am satisfied that the company, by which I mean any former director and the liquidator, are on notice of the motion and the fact that it is listed for hearing today.

1. The liquidator was in fact served with an earlier notice of motion, but that motion adequately identified the relief sought today, the only change in the further amended notice of motion being the identification of a different section of the Corporations Act pursuant to which leave is sought, which is explained by the fact that the company was previously in administration before being placed in liquidation. The correspondence was sent to the administrator and he is now the liquidator. I am satisfied that it is appropriate to proceed notwithstanding the fact that there is no appearance for the company today.

1. The requirement for leave to proceed against the company in liquidation is explained in a decision of Finkelstein J in the Federal Court handed up by Mr Rogers: Phisci v Green Frog Nominees Pty Limited( In liquidation)No 3 (2009) FCA 43. His Honour there explained that the policy that lies behind the requirement for leave is that, without such a restriction, a company in liquidation could be subjected to a multiplicity of actions which would be both expensive and time-consuming, as well as in some cases being unnecessary.

1. However, his Honour noted at [7] that different considerations arise when a party is seeking to recover his own property from a company that is in liquidation. His Honour gave the example of a mortgagee seeking to enforce his security by taking action to recover mortgaged property, stating that in such a case leave is normally granted. That is the case here.

1. I am satisfied on the strength of the evidence read on behalf of Milbrook, and the authority to which I have referred, that it is appropriate to grant leave. In coming to that conclusion I indicate, as I have already stated, that the only relief sought in the proceedings is the enforcement against the company in liquidation of a mortgage granted by that company before it was in liquidation.

1. The other relief sought in the further amended notice of motion is to strike out the defence. As already indicated, the defence is entirely dependent upon the terms of a cross claim which has never been filed or served. It is plainly incapable of standing alone and in my view plainly liable to be struck out under r 14.28.

1. For those reasons I make orders 1 and 2 in the further amended notice of motion.

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Decision last updated: 10 November 2014