Vrkic as Liquidator of v Health Plus Corporation Pty Ltd v Singh

Case [2020] FCA 385

FEDERAL COURT OF AUSTRALIA

Vrkic as Liquidator of V Health Plus Corporation Pty Ltd v Singh [2020] FCA 385

File number: NSD 1342 of 2019
Judge: GLEESON J
Date of judgment: 5 March 2020
Catchwords:

PRACTICE AND PROCEDURE – application for summary judgment under s 31A of the Federal Court of Australia Act 1976 (Cth) and r 26.01 of the Federal Court Rules 2011 – application granted

PRACTICE AND PROCEDURE – application for default judgment under r 5.23(2)(c) of the Federal Court Rules 2011 – not necessary to consider where summary judgment granted
Legislation: Corporations Act 2001 (Cth) ss 286, 588E, 588G, 588M, 1317H
Federal Court of Australia Act 1976 (Cth) s 31A
Evidence Act 1995 (Cth) s 81
Federal Court Rules 2011 rr 5.22, 5.23(2)(c), 8.21(1)(c), 15.05, 26.01, Pt 40
Cases cited: Elliott v Australian Securities and Investments Act [2004] VSCA 54; 185 FLR 245
Maylord Equity Management Pty Ltd v Parazelsus Ltd [2014] FCA 979
Tolkien Estate Limited v Saltalamacchia [2016] FCA 944
Date of hearing: 20 February 2020
Registry: New South Wales
Division: General Division
National Practice Area: Commercial and Corporations
Sub-area: Corporations and Corporate Insolvency
Category: Catchwords
Number of paragraphs: 79
Solicitor for the Plaintiff: J Inan of Access Law Group
Solicitor for the First Defendant: The first defendant was not represented and did not appear

ORDERS

NSD 1342 of 2019
BETWEEN:

DANNY TONY VRKIC AS LIQUIDATOR OF V HEALTH PLUS CORPORATION PTY LTD (ACN 167 843 085)

Plaintiff
AND:

ROSELYN SINGH (ALSO OR FORMERLY KNOWN AS SIMIRAN SINGH)

First Defendant

MIRZA SALMAN BAIG

Second Defendant

JUDGE:

GLEESON J

DATE OF ORDER:

5 MARCH 2020

THE COURT ORDERS THAT:

1.The notice of cross-claim and the statement of claim, each filed on 28 February 2020, each be struck out insofar as it purports to be filed on behalf of the first defendant.

2.The second defendant file and serve any interlocutory process and supporting affidavit seeking leave to file the notice of cross-claim out of time pursuant to r 15.05 of the Federal Court Rules 2011 by 19 March 2020, such application to be made returnable on 2 April 2020 at 9:30 am before Gleeson J.

3.The name of the first defendant be changed to ‘Simran Roselyne Singh’.

4.Compliance with r 26.01(2) of the Federal Court Rules 2011 in relation to the affidavit of John Inan filed 6 February 2020 be dispensed with.

5.Judgment be given in favour of the plaintiff against the first defendant in the amount of $160,720.80.

6.The first defendant pay the plaintiff’s costs of the application for summary judgment.

7.Any interlocutory process filed by the plaintiff seeking payment by the first defendant of:

(a)interest on the amount of $160,720.80;

(b)a lump sum costs order against the first defendant pursuant to Pt 40 of the Federal Court Rules 2011;

be made returnable on 2 April 2020 at 9:30 am before Gleeson J.

8.A copy of these orders be served on the first defendant by 9 March 2020, service to be effected by:

(a)email sent…

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Vrkic as Liquidator of v Health Plus Corporation Pty Ltd v Singh [2020] FCA 385
Case
[2020] FCA 385
Decision Date

CaseChat Overview and Summary

The case of Vrkic as Liquidator of v Health Plus Corporation Pty Ltd v Singh involved a dispute between the liquidator of Health Plus Corporation Pty Ltd and the first defendant, Simran Roselyne Singh. The liquidator sought summary judgment against Singh for the sum of $160,720.80, along with interest and costs. The matter was heard in the Federal Court of Australia. The central legal issue was whether the liquidator could be granted summary judgment against Singh, who had failed to respond to the proceedings.

The court assessed the matter by referring to the principles outlined in Tolkien Estate Limited v Saltalamacchia, particularly focusing on the onus being on the applicant to demonstrate that the respondent had no reasonable prospect of successfully defending the proceeding. The court considered the strength of the allegations based on the pleadings and affidavits. The liquidator needed to establish a prima facie case for summary judgment, and Singh had to identify factual or evidentiary matters that necessitated a trial. The court noted that the respondent's prospects of success had to be "real" and not merely arguable. In light of Singh's default, the court also considered the provisions under the Federal Court Rules 2011 for default judgments.

The Federal Court granted the application for summary judgment. The court found that the liquidator had established a prima facie case, and Singh had not provided any evidence or arguments to show a reasonable prospect of successfully defending the proceeding. Consequently, the court ordered judgment in favour of the liquidator for the sum of $160,720.80, with Singh to pay the costs of the application. Additionally, the court ordered Singh to pay interest on the judgment amount and directed the liquidator to file further interlocutory processes regarding these additional claims. The court also made several procedural orders, including the striking out of certain documents and the amendment of the defendant's name.

Orders

Orders of the court

1. The notice of cross-claim and the statement of claim, each filed on 28 February 2020, each be struck out insofar as it purports to be filed on behalf of the first defendant.

2. The second defendant file and serve any interlocutory process and supporting affidavit seeking leave to file the notice of cross-claim out of time pursuant to r 15.05 of the Federal Court Rules 2011 by 19 March 2020, such application to be made returnable on 2 April 2020 at 9:30 am before Gleeson J.

3. The name of the first defendant be changed to ‘Simran Roselyne Singh’.

4. Compliance with r 26.01(2) of the Federal Court Rules 2011 in relation to the affidavit of John Inan filed 6 February 2020 be dispensed with.

5. Judgment be given in favour of the plaintiff against the first defendant in the amount of $160,720.80.

6. The first defendant pay the plaintiff’s costs of the application for summary judgment.

7. Any interlocutory process filed by the plaintiff seeking payment by the first defendant of:

(a) interest on the amount of $160,720.80;

(b) a lump sum costs order against the first defendant pursuant to Pt 40 of the Federal Court Rules 2011;

be made returnable on 2 April 2020 at 9:30 am before Gleeson J.

8. A copy of these orders be served on the first defendant by 9 March 2020, service to be effected by:

(a) email sent to the following addresses:

(i) mirzab@aryshealth.com.au;

(ii) rss.sings@hotmail.com.

(b) Letter sent by registered post to the following addresses:

(i) 48 Hay Street, Collaroy NSW 2097;

(ii) 15/110 Sussex Street, Sydney NSW 2000.

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

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

In Tolkien Estate Limited v Saltalamacchia [2016] FCA 944 at [21], Beach J identified the following principles applicable to the grant of summary judgment:(a)The Court must assess the strength of the allegations made by reference to the pleadings, the affidavits and any other evidence adduced.(b)The applicant bears the onus of demonstrating that the respondent has no reasonable prospect of successfully defending the proceeding. However, if the applicant establishes a prima facie case for summary judgment, the respondent must identify factual or evidentiary matters which necessitate a trial. ….(c)In order to have reasonable prospects of success, the respondent must have prospects of success that are “real” and not “fanciful” or even “merely arguable”.Default judgment Rule 5.22 of the Rules provides that a party is in default if, relevantly, the party fails to comply with an order of the Court. Rule 5.23(2)(c) provides relevantly:(2) If a respondent is in default, an applicant may apply to the Court for:…(c)if the proceeding was started by an originating application supported by a statement of claim … an order giving judgment against the respondent for the relief claimed in the statement of claim … to which the Court is satisfied that the applicant is entitled; In Maylord Equity Management Pty Ltd v Parazelsus Ltd [2014] FCA 979, I recorded the following relevant principles at [10]-[14]:[10] The condition in rule 5.23(2)(c) of the Rules, that the Court be satisfied that the applicant is entitled to relief before judgment is entered against the respondent, does not require proof by way of evidence of the applicant’s claim, although evidence may be adduced: Australian Competition and Consumer Commission v Dataline Net AU Pty Ltd (2006) 236 ALR 665, [2006] FCA 1427 at [44]; Yeo v Damos Earthmoving Pty Ltd, Re Beachwood Developments Pty Ltd (in liq) [2011] FCA 1129 at [9].[11] However, the applicant must demonstrate, on the face of the statement of claim:a. a claim for relief sought; andb. that the court has jurisdiction to grant that relief.See Luna Park Sydney Pty Ltd v Bose [2006] FCA 94 at [20].[12] An applicant will appear to be entitled to the relief sought in the statement of claim if each element of the relevant civil wrong is properly and discretely pleaded: Macquarie Bank Ltd v Seagle [2005] FCA 1239; (2005) 146 FCR 400 at [24]; Macquarie Bank Ltd v Seagle (2008) 79 IPR 7, [2008] FCA 1417 at [20].[13] The Court may permit recourse to further limited evidence but cannot admit evidence that would alter the case as pleaded: Speedo Holdings BV v Evans (No 2) [2011] FCA 1227 at [25] (“Speedo”).[14] If an order for relief under rule 5.23(2)(c) is made, it gives the applicant a special privilege to gain judgment without proof of the applicant’s claim – a severe disadvantage to the respondent. As a result, the rules governing default judgment are strictly construed and the discretion must be exercised cautiously: Clayton v Thomas C Denton & Co Pty Ltd [1972] VicRp 5; [1972] VR 46 at 49; Speedo at [20].LIQUIDATOR’S CASE

Ratio Decidendi

Legal Principle Established

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