Project Noah Holdings Pty Ltd (in liq) v Jacka

Project Noah Holdings Pty Ltd (in liquidation) brought proceedings against four defendants, seeking recovery of property of the company in liquidation under Part 5.7B of the Corporations Act 2001 (Cth). The plaintiffs alleged that the defendants were liable for insolvent trading, uncommercial transactions, and unreasonable director-related transactions. The court was required to determine whether the plaintiffs were entitled to judgment against the defendants given their failure to file a defence or notice of address for service. The plaintiffs filed an application for judgment in default of pleading under Rule 5.23 of the Federal Court Rules 2011.

The court found that the plaintiffs had established their entitlement to judgment as claimed. The defendants had all failed to file a defence or notice of address for service, and the allegations in the statement of claim and evidence from the liquidator were sufficient to establish the plaintiffs' entitlement to relief. The court noted that the power to give judgment against a defaulting party is discretionary and must be exercised cautiously. However, in this case, the court was satisfied that the plaintiffs were entitled to the relief claimed in the statement of claim. The court also noted that the defendants' failure to file a defence or notice of address for service did not necessarily mean that they were unable or unwilling to cooperate with the court and the other parties to the proceeding. The court held that the plaintiffs were entitled to judgment as claimed, subject to the defendants being given an opportunity to defend the proceedings.

The court made orders granting the plaintiffs judgment against the defendants as follows: the first defendant was ordered to pay the first plaintiff $172,647, the second plaintiff $830,601, and the first plaintiff $210,289; the second defendant was ordered to pay the first plaintiff $223,761.00 and the first plaintiff $13,484.30; the third defendant was ordered to pay the first plaintiff $17,112.45; and the fourth defendant was ordered to pay the first plaintiff $67,406. The defendants were also ordered to pay the plaintiffs' costs of the proceedings as agreed or taxed. The court deferred the granting of judgment against the defendants for a period of time to allow them to defend the proceedings.