Sheahan v Ren

[2017] FCA 1163

FEDERAL COURT OF AUSTRALIA

Sheahan v Ren [2017] FCA 1163

File number:

SAD 302 of 2016

Judge:

BESANKO J

Date of judgment:

29 September 2017

Catchwords:

PRACTICE AND PROCEDURE – Consideration of an application seeking summary judgment pursuant to r 26.01(1)(e) of the Federal Court Rules 2011 (Cth) and s 31A of the Federal Court of Australia Act 1976 (Cth) – where the respondent was a director of each company and each company was insolvent at the time a debt was incurred or became insolvent by incurring the debt – where neither company had any books or records – where the companies had no assets and had not commenced any business activity – where the respondent either was aware, or a reasonable person in his position would be aware that the companies would become insolvent on incurring the debts – where the amount claimed by the applicants reflects the loss or damage within s 588M of the Corporation Act 2001 (Cth).

PRACTICE AND PROCEDURE – Consideration of an application seeking default judgment pursuant to r 5.23(2)(b) or (2)(c) of the Rules – where the respondent failed to comply with an order of the Court and did not attend a number of hearings without explanation.

Legislation:

Corporations Act 2001 (Cth) ss 286, 588E, 588G, 588M

Federal Court of Australia Act 1976 (Cth) s 31A

Federal Court Rules 2011 (Cth) rr 5.22, 5.23, 26.01

Cases cited:

Spencer v The Commonwealth of Australia (2010) 241 CLR 118

Date of hearing:

29 June 2017

Registry:

South Australia

Division:

General Division

National Practice Area:

Commercial and Corporations

Sub-area:

Corporations and Corporate Insolvency

Category:

Catchwords

Number of paragraphs:

48

Counsel for the Applicants:

Mr J Cudmore

Solicitor for the Applicants:

Cosoff Cudmore Knox

Counsel for the Respondent:

The Respondent did not appear

ORDERS

SAD 302 of 2016

BETWEEN:

JOHN SHEAHAN AND IAN RUSSELL LOCK AS JOINT AND SEVERAL LIQUIDATORS OF TERRITORY HEAVY INDUSTRIES LIMITED (IN LIQUIDATION) ACN 149 466 142

First Applicant

JOHN SHEAHAN AND IAN RUSSELL LOCK AS JOINT AND SEVERAL LIQUIDATORS OF CASCADE INFRASTRUCTURE PTY LIMITED (IN LIQUIDATION) ACN 147 019 654

Second Applicant

AND:

JERRY REN

Respondent

JUDGE:	BESANKO J
DATE OF ORDER:	29 SEPTEMBER 2017

THE COURT ORDERS THAT:

1.The applicants be heard on interest before final judgment is entered.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

BESANKO J:

1. The two applicants in this proceeding are Mr John Sheahan and Mr Ian Russell Lock as joint and several liquidators of Territory Heavy Industries Limited (in liquidation) (Territory) and Mr John Sheahan and Mr Ian Russell Lock as joint and several liquidators of Cascade Infrastructure Pty Limited (in liquidation) (Cascade).  On 30 July 2015, a company called Opus International Consultants (Australia) Pty Limited (Opus) lodged petitions for the winding up of Territory and Cascade and, on 23 September 2015, this Court made a winding up order in relation to each company and appointed Messrs Sheahan and Lock liquidators of each…