National Australia Bank Limited v RGP Group Holdings Pty Ltd - [2025] WASC 102

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   NATIONAL AUSTRALIA BANK LIMITED -v- RGP GROUP HOLDINGS PTY LTD [2025] WASC 102
CORAM:   MUSIKANTH J
HEARD:   19 MARCH 2025
DELIVERED          :   28 MARCH 2025
FILE NO/S:   CIV 2110 of 2018
BETWEEN:   NATIONAL AUSTRALIA BANK LIMITED
Plaintiff
AND
RGP GROUP HOLDINGS PTY LTD
First Defendant
ROBERT GEOFFREY PERKS-HEWITT
Second Defendant

Catchwords:

Application under section 15(1) of the Civil Judgments Enforcement Act 2004 (WA) to suspend the enforcement of a judgment - Whether special circumstances justifying suspension order - Whether reasonable prospects of setting aside default judgment - Suspension not granted

Trusts - Trustees - Relevance of specifying representative capacity in originating process - Whether required where sued in personal capacity - Right of indemnity and exoneration - Turns on own facts

Legislation:

Civil Judgments Enforcement Act 2004 (WA)
Corporations Act 2001 (Cth)
Rules of the Supreme Court 1971 (WA)

Transfer of Land Act 1893 (WA)

Result:

Application dismissed

Category: B

Representation:

Counsel:

Plaintiff	:	Mr B C Smith
First Defendant	:	Mr J M Healy
Second Defendant	:	Mr J M Healy

Solicitors:

Plaintiff	:	Dentons Australia
First Defendant	:	DWL Legal
Second Defendant	:	DWL Legal

Case(s) referred to in decision(s):

Atwell v Roberts [2013] WASCA 37
Breskvar v Wall [1971] HCA 70; (1971) 126 CLR 376
Bride and Bride as Trustees of the Pinwernying Family Trust v The Australian Bank Ltd (Unreported, WASC Full Ct, Library No 960565, 25 September 1996)
Carter Holt Harvey Woodproducts Australia Pty Ltd v The Commonwealth of Australia & Ors [2019] HCA 20; (2019) 268 CLR 524
Chief Commissioner of Stamp Duties (NSW) v Buckle [1998] HCA 4; (1998) 192 CLR 226
Commonwealth Bank of Australia v PBT (WA) Pty Ltd [2019] WASC 365
Commonwealth of Australia v Davis Samuel Proprietary Limited and Ors (No 11) [2017] ACTSC 2
Conlan v Registrar of Titles [2001] WASC 201; (2001) 24 WAR 299
Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308
Naaman v Jaken Properties Australia Pty Limited [2025] HCA 1
Secure Funding Pty Ltd v Lock [2022] WASC 276
Sims v Suda Ltd [2014] WASCA 113
Sims v Suda Ltd [No2] [2015] WASC 180
Wyloo Metals Pty Ltd v Quarry Park Pty Ltd [2024] WASCA 38
Yara Australia Pty Ltd v Oswal [No 2] [2013] WASCA 187

MUSIKANTH J:

The application presently before me is in substance an application to suspend, pursuant to s 15(1) of the Civil Judgments Enforcement Act 2004 (WA) (Act), the enforcement of part of a default judgment entered in these proceedings on 19 November 2019 and a Property (seizure and delivery) order (PSDO) made on 23 January 2025 pursuant to s 95 of the Act.
The proceedings were commenced by the plaintiff (NAB) by writ of summons dated 28 June 2018.
The proceedings were brought against both the first defendant (RGP) as borrower under a loan agreement and mortgagor of certain real property situated in Manning (Manning property), and the second defendant (Mr Perks-Hewitt) as guarantor.
Mr Perks-Hewitt was at all relevant times the sole director of RGP.[1]
[1] Affidavit of Robert Perks-Hewitt filed 5 March 2025 (Perks-Hewitt 5 March affidavit) [2].
By the loan agreement, NAB had lent RGP the principal sum of $520,000.[2]
[2] Perks-Hewitt 5 March affidavit, 16 - 28.
Mr Perks-Hewitt had signed the loan agreement, on behalf of RGP.[3]
[3] Perks-Hewitt 5 March affidavit, 27.
The agreement was executed by RGP both 'in its own right and as trustee for RGP Group Family Trust [(Trust)]'.[4]
[4] Perks-Hewitt 5 March affidavit, 27.
Mr Perks-Hewitt is the sole beneficiary of the Trust.[5]
[5] Perks-Hewitt 5 March affidavit [4].
The loan agreement was secured by a mortgage over the Manning property in favour of NAB.
The mortgage was also signed on behalf of RGP by Mr Perks-Hewitt.[6]
[6] Affidavit of Jayesh Ganatra filed 17 October 2019, page 31. Mortgage form M1.
There is no mention of the Trust in that instrument.
Pursuant to the mortgage, RGP among other things agreed that if it entered into the mortgage as trustee of a trust, RGP: (a) was liable personally and as trustee of the trust; and (b) had the right to be fully indemnified out of the trust assets for obligations incurred as trustee under the mortgage before the claims of beneficiaries.[7]
[7] Affidavit of Jayesh Ganatra filed 17 October 2019, page 35. Mortgage Memorandum of Common Provisions, cl 2.3 (chapeau and (c)).
On 22 December 2008, following execution of the loan agreement and mortgage, RGP became the registered proprietor of the Manning property.[8]
[8] Affidavit of Mr Perks-Hewitt filed 18 March 2025 (Perks-Hewitt 18 March affidavit), 31.
The mortgage was registered against the title on the same day.[9]
[9] Perks-Hewitt 18 March affidavit, 31.
According to Mr Perks-Hewitt, RGP purchased the Manning property as trustee for the Trust.[10]
[10] Perks-Hewitt 18 March affidavit [9].
The default judgment was entered, against RGP alone, after RGP failed to enter an appearance.
Relevantly by order 2 of the judgment, RGP was ordered to give NAB vacant possession of the Manning property within 28 days after service of the judgment (Order 2).
The PSDO was issued for the purposes of enforcing Order 2.
It is the enforcement of Order 2 which RGP seeks to have suspended.
On 26 November 2019, one week after judgment was entered, the RGP Family Trust deed was varied to remove RGP as trustee.[11]
[11] Perks-Hewitt 5 March affidavit [26].
However, the title of the Manning property remained (and remains) with RGP.[12]
[12] Perks-Hewitt 18 March affidavit, 31.
The application presently before me was initially brought as part of an application for urgent relief filed by Mr Perks-Hewitt on 17 February 2025.
Unbeknownst to the Court, RGP was no longer extant at the time the application was filed, having been deregistered on 11 September 2023, several years after the default judgment was entered but before the PSDO was issued.
Nonetheless, on 17 March 2025, RGP was reinstated pursuant to s 601AH(1) of the Corporations Act 2001 (Cth).
One of the legal consequences of reinstatement is that RGP is taken to have continued in existence as if it had not been deregistered: Corporations Act 2001 (Cth), s 601AH(5).
The application is now brought by RGP alone.
Effectively, the relief RGP seeks is to suspend enforcement of Order 2 of the judgment to enable RGP to have its application to set that order aside heard before the Manning property is seized and delivered pursuant to the PSDO.
Other elements of its application include a proposed order setting aside the PSDO as an irregularity pursuant to s 105 of the Act.
However, the relief sought by RGP at the hearing before me on 19 March 2025 was limited to a suspension of the enforcement of Order 2 and, consequently, the PSDO.

Legal framework

By s 15(1) of the Act, a person against whom judgment is given may apply for an order suspending the enforcement of all or part of a judgment.
However, the court may only make such an order if there are 'special circumstances that justify doing so'.[13]
[13] Act, s 15(3).
The general principles to be applied in determining whether there are 'special circumstances' to stay enforcement, pending the determination of application to aside a default judgment, are as follows:
(1)A successful litigant will ordinarily be entitled to enforce a judgment.
(2)It is for the applicant for a suspension order to move the court to a favourable exercise of the discretion, that is, to establish that there are special circumstances that justify the departure from the ordinary rule.
(3)In the case of a default judgment, the central issue will be whether the grant of a suspension order is perceived to be necessary to preserve the subject matter or the integrity of the litigation or whether a refusal to make a suspension order could create practical difficulties in respect of any relief which may be granted following any successful application to vary or set aside the judgment.
(4)Even if the matters in point 3 above can be demonstrated, the suspension order will generally still be refused unless it can be established that any application to vary or set aside the default judgment has ultimately reasonable prospects of success.[14]
[14] Secure Funding Pty Ltd v Lock [2022] WASC 276 [19] (Derrick J) referring to Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308; Sims v Suda Ltd [2014] WASCA 113 [5]; Sims v Suda Ltd [No2] [2015] WASC 180 [30]; Commonwealth Bank of Australia v PBT (WA) Pty Ltd [2019] WASC 365 [22].

Prospects of Order 2 being set aside

At the hearing, RGP effectively relied on two contentions in support of its application for a suspension order, both of which it suggested were at least reasonably arguable.
The contentions as I understood them were to the following effect.
First, NAB commenced these proceedings only against RGP in its own corporate capacity and not also in its capacity as trustee of the Trust.
This was despite RGP having executed the loan agreement in both capacities.
According to RGP, NAB, having elected to proceed in this way, is precluded from advancing any cause of action for moneys owed under the loan agreement against the trustee of the Trust.
This is because, according to RGP, NAB's cause of action 'merged' when default judgment was entered.
Secondly, according to RGP, the default judgment only operates as against RGP in its own corporate capacity.
Again, this is because NAB elected to commence these proceedings only against RGP in that capacity.
Accordingly, and in circumstances where the Manning property is not owned by RGP in that capacity, NAB cannot enforce its rights under the judgment against the Manning property.
RGP's position is that Order 2 should be set aside for the above reasons.
It is convenient to consider RGP's contentions in reverse order.

Capacity argument

In support of its 'capacity' argument, RGP points to O 6 r 5 of the Rules of the Supreme Court 1971 (WA) (RSC) which reads:
Representative character
If the plaintiff sues, or the defendant, or any of the defendants, is sued in a representative capacity, the indorsements shall show, in accordance with such of the indorsements in Form No. 5 as is applicable to the case or by any other statement to the like effect, in what capacity the plaintiff or defendant sues or is sued.
RGP also points to the decision of Bride and Bride[15] where EM Heenan J[16] among other things observed that:
[t]here is a difference between the personal capacity of a party and the capacity of that party as trustee. Judgment against a party in one capacity does not bar any claim by that party in the other capacity (see Bride v Peat Marwick Mitchell [1989] WAR 383 per Malcolm CJ at 389). If a party sues in a representative capacity a statement to that effect should appear on the record, if only to show what estates or interests are affected by the proceedings. As a matter of practice the statement usually appears in the title, not because it signifies a different party but because it would be of less use if it were 'buried somewhere in the statement of claim' (per North J in In re Tottenham, Tottenham v Tottenham[1896] 1 Ch 628 at 629) ...
(emphasis added)
[15] Bride and Bride as Trustees of the Pinwernying Family Trust v The Australian Bank Ltd (Unreported, WASC Full Ct, Library No 960565, 25 September 1996), (Bride) page 6.
[16] Wallwork and Franklyn JJ agreeing.
Evidently RGP seeks to draw upon O 6 r 5 and the above passage in support of a proposition to the effect that 'the default judgment had no operation against [RGP] as trustee for the [Trust] because [RGP] as trustee for the [Trust] was not a party to [these proceedings] and there was no cause of action pleaded against [RGP] in that capacity'.[17]
[17] Defendants' outline of submissions filed 18 March 2025 [27].
However, later in his judgment EM Heenan J went on to record the following:
In general terms, it is highly desirable that the Court make orders to ensure, as is stated in O 18 r 6(2)(b) that all matters in dispute in the cause or matter may be effectually and completely determined. If the respondents or any of them have been guilty of misconduct such as that alleged in the statements of claim, it is in the interests of justice that they be made to account for such conduct. To that end, the precise identity of the plaintiffs and of the capacity in which they sue is irrelevant. However, the plain fact is that when they issued the writ the appellants were not entitled to sue in their personal capacity.[18]
(emphasis added)
[18] Bride, pages 10 - 11.
As counsel for NAB correctly points out, the above passage recognises that the capacity in which the plaintiffs there sued was irrelevant. However, capacity did matter in Bride because, in that case, the plaintiffs were bankrupt at the time the writ was issued and were, therefore, not entitled to sue in their personal capacity. As EM Heenan J went on to note, this was a 'fundamental defect'.[19]
[19] Bride page 11.
The facts in Bride stand in stark contrast to the present case for at least two reasons.
First, as has been seen RGP executed the loan agreement both in its own capacity and as trustee of the Trust, and effectively also agreed that it was liable in both capacities under the mortgage.
NAB was thus entitled to sue RGP in either or both capacities as it saw fit.
Secondly, and as is plain from its terms, O 6 r 5 only applies 'If … any of the defendants [are] sued in a representative capacity'. (emphasis added)
Not only is the very premise of RGP's contention that NAB did not do so, but NAB's counsel confirmed as much at the hearing.[20]
[20] ts 143.
It follows that O 6 r 5 has no role to play in this matter.
All that remains is to consider whether RGP has identified any basis in law for a conclusion that NAB has no entitlement to enforce Order 2 against the Manning property.
In my view, RGP has not done so.
In this connection, the following considerations are engaged:
(1)A trust is not a separate entity,[21] and a trustee has no 'additional or qualified legal personality'.[22]
[21] Carter Holt Harvey Woodproducts Australia Pty Ltd v The Commonwealth of Australia & Ors [2019] HCA 20; (2019) 268 CLR 524 [24] (Kiefel CJ, Keane and Edelman JJ).
[22] Yara Australia Pty Ltd v Oswal [No 2] [2013] WASCA 187 [409] (Murphy JA), [259] (Pullin JA); Atwell v Roberts [2013] WASCA 37 [292] (Murphy JA).
(2)At law a trustee is the legal owner of the trust assets it holds.[23]
[23] See Carter Holt Harvey Woodproducts Australia Pty Ltd v The Commonwealth of Australia & Ors [82] (Bell, Gageler and Nettle JJ); see also Commonwealth of Australia v Davis Samuel Proprietary Limited and Ors (No 11) [2017] ACTSC 2 [252].
(3)The fact that RGP is listed as the registered proprietor on the certificate of title for the Manning property is conclusive proof that RGP holds the legal title to that property.[24]
(4)This is the essence of the 'title by registration' principle underpinning the Torrens system which is enshrined in the Transfer of Land Act 1893 (WA).[25]
(5)A trustee is personally liable for debts incurred as trustee. This is so whether or not the trustee contracted with creditors as a named trustee, and hence whether or not the creditors knew of the existence of the trust.[26]
(6)Nonetheless a trustee has, as an incident of its office, an entitlement in equity to be indemnified out of the trust assets (by way of recoupment of past expenditure or exoneration from existing liability) for expenses and liabilities properly incurred by the trustee in the execution of the trust.[27]
(7)The trustee's entitlement to indemnity and exoneration:
(a)may be described as a 'proprietary interest';[28] and
(b)has priority over the equitable rights of the trust beneficiaries.[29]
(8)The trustee's entitlement, and the commensurate beneficial interest which the trustee has in the trust assets, survive any replacement of the trustee by a successor trustee. [30]
[24] See Transfer of Land Act 1893 (WA) s 63.
[25] Cf.Wyloo Metals Pty Ltd v Quarry Park Pty Ltd [2024] WASCA 38 (Buss P and Livesey AJA) [177] citing Breskvar v Wall [1971] HCA 70; (1971) 126 CLR 376, 385 (Barwick CJ) and Conlan v Registrar of Titles [2001] WASC 201; (2001) 24 WAR 299 [159] (Owen J).
[26] Carter Holt Harvey Woodproducts Australia Pty Ltd v The Commonwealth of Australia & Ors [24] (Kiefel CJ, Keane and Edelman JJ).
[27] Naaman v Jaken Properties Australia Pty Limited [2025] HCA 1[1] (Gageler CJ, Gleeson, Jagot, and Beech-Jones JJ).
[28] Carter Holt Harvey Woodproducts Australia Pty Ltd v The Commonwealth of Australia & Ors [32] (Kiefel CJ, Keane and Edelman JJ) [84] - [85] (Bell, Gageler, Nettle JJ) [135] - [141], [173] (Per Gordon J); Chief Commissioner of Stamp Duties (NSW) v Buckle [1998] HCA 4; (1998) 192 CLR 226 [48] - [50] (Per Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ).
[29] Carter Holt Harvey Woodproducts Australia Pty Ltd v The Commonwealth of Australia & Ors [32] ‑ [33] (Kiefel CJ, Keane and Edelman JJ). See also Chief Commissioner of Stamp Duties (NSW) v Buckle [1998] HCA 4; (1998) 192 CLR 226 [48] ‑ [50] (Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ).
[30] Naaman v Jaken Properties Australia Pty Limited [1] (Gageler CJ, Gleeson, Jagot, and Beech-Jones JJ) [52] (Per Gordon, Edelman and Steward JJ).
In my view the above considerations combine to lead to the following conclusions: NAB had every right to seek the grant of Order 2, it had every right to seek enforcement of that order by way of the PSDO, and it continues to have every right to enforce Order 2 accordingly.
It follows that RGP's 'capacity' argument is wholly without merit.

Merger argument

Given the conclusions recorded in paragraph 58 above, it is in my view unnecessary to consider RGP's 'merger' argument.
However, even if it were necessary for me to do so I consider it unlikely that the 'merger' argument would enjoy any reasonable prospect of success.
In this connection I among other things note that cl 26.2(b) of the mortgage common provisions expressly provides that the mortgage 'does not merge with nor is it adversely affected by … a judgment or order which NAB obtains against [RGP] in respect of any of the amount owing'.[31]
[31] Affidavit of Jayesh Ganatra filed 17 October 2019, page 45. Mortgage Memorandum of Common Provisions, cl 26.2(b). The expression 'amount owing' is very broadly defined (at the end of the instrument).

Conclusion

For the above reasons, RGP has in my view failed to show that its application to set aside Order 2 enjoys any reasonable prospect of success and that there are any 'special circumstances' which justify suspending enforcement of that order and, consequently, the PSDO.
Accordingly, RGP's application for such relief will be dismissed.
I will hear from the parties on the question of costs.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
JE
Associate to the Hon Justice Musikanth
28 MARCH 2025