Perpetual Corporate Trust Ltd v RZHZ Enterprises Pty Ltd

[2022] NSWSC 1141

Supreme Court

New South Wales

Medium Neutral Citation:

Perpetual Corporate Trust Ltd v RZHZ Enterprises Pty Ltd [2022] NSWSC 1141

Hearing dates:

26 August 2022

Date of orders:

26 August 2022

Decision date:

26 August 2022

Jurisdiction:

Common Law

Before:

Davies J

Decision:

1. Leave to lawyers acting for the first defendant to cease to act.

2. In accordance with Practice Note 17 of SC CL 6, the First Defendant's Amended Defence filed on or about 27 June 2022 is struck out.

3. No order as to costs.

Catchwords:

CIVIL PROCEDURE – claim for debt against a company – where company filed a defence that did not disclose a defence to the claim – where company subsequently wound up – whether defence could be struck out

Legislation Cited:

Corporations Act 2001 (Cth) ss 471B, 471C, 474

Cases Cited:

Hanshaw v National Australia Bank Ltd [2012] NSWCA 100

National Australia Bank Limited v Strik [2009] NSWSC 184

Scott v Wondal [2015] NSWSC 1577

Texts Cited:

Nil

Category:

Procedural rulings

Parties:

Perpetual Corporate Trust Ltd (Plaintiff)
RZHZ Enterprises Pty Ltd (In Liquidation (First Defendant)

Representation:

Counsel:
P Nagam (Plaintiff)

Solicitors:
Thomson Geer (Plaintiff)

File Number(s):

2022/45898

Publication restriction:

Nil

Judgment

1. These proceedings commenced on 16 February 2022. The plaintiff claimed possession of land at Earlwood (“the property”) which had been provided as security for a loan, and claimed judgment for what was outstanding under the loan. The loan was made to the first defendant, RZHZ Enterprises Pty Limited, and the second and third defendants gave a mortgage over the property to secure the loan.

2. No defence has been filed by either of the second and third defendants. They were served with the statement of claim on 21 July 2022 and the plaintiff intends to seek default judgment against them.

3. In relation to the first defendant, a defence was filed, and subsequently an amended defence was filed pursuant to orders that I made on 24 June 2022. On or about 3 August 2022 a liquidator was appointed to the first defendant.

4. The plaintiff now seeks that the first defendant’s amended defence be struck out. The liquidator has indicated that he does not intend to defend the proceedings. His former solicitors have appeared today seeking leave to cease to act.

5. On the making of a winding up order, a party cannot bring or proceed with a proceeding in a court against the company: s 471B of the Corporations Act 2001 (Cth). Further, s 474 of the Corporations Act provides for the vesting of the company’s property in the liquidator. However, s 471C protects a secured creditor’s right to realise or otherwise deal with the security interest.

6. Where a defendant has his or her estate sequestrated, that person has no standing to appear to defend proceedings brought for possession of land: Hanshaw v National Australia Bank Ltd [2012] NSWCA 100; National Australia Bank Limited v Strik [2009] NSWSC 184 at [9]; Scott v Wondal [2015] NSWSC 1577 at [4].

7. The provisions of the Corporations Law, to which reference have been made, point strongly to the same conclusion for a company which has been wound up, where the company is the mortgagor. However, the plaintiff is not a secured creditor of the company.

8. In the circumstances the plaintiff is unable to continue with its action against the first defendant. The issue is whether the plaintiff can proceed to strike out the defence.

9. The amended defence admits the loan, the giving of the mortgage and the default. It then pleads that it wishes to refinance, and that it will do so within 21 days of the filing of the amended defence.

10. The defence pleads no defence to the plaintiff’s claim. It should not be allowed to stand in the circumstances. The striking out of the defence does not contravene s 471B of the Corporations Act, but the plaintiff is otherwise constrained by that provision.

11. I make the following orders:

1. Leave to lawyers acting for the first defendant to cease to act.

2. In accordance with Practice Note 17 of SC CL 6, the First Defendant's Amended Defence filed on or about 27 June 2022 is struck out.

3. No order as to costs.

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Decision last updated: 05 September 2022