Winau Aust Pty Ltd v LCC Property Development Pty Ltd - [2022] NSWSC 1258

Supreme Court

New South Wales

Medium Neutral Citation: Winau Aust Pty Ltd v LCC Property Development Pty Ltd [2022] NSWSC 1258
Hearing dates: 17 June 2022
Date of orders: 16 September 2022
Decision date: 21 September 2022
Jurisdiction: Equity
Before: Richmond J
Decision:
Notice of Motion dismissed with costs.

Catchwords:
CORPORATIONS — receivers, controllers and managers — vicarious performance of loan facility — assignment of debt and associated securities — whether receiver and manager validly appointed
— application to strike out appearance and defence where receiver and manager has instructed solicitor for the first defendant

Legislation Cited:
Conveyancing Act 1919 (NSW) s 12

Cases Cited:
Barclay v Gooch (1797) 2 Esp. 571; 170 ER 459
Bateman v Hunt [1904] 2 KB 530
Bonette v Woolworths Ltd (1937) 37 SR (NSW) 142
Carpenter v Buller (1841) 8 M & W 209
Davies v Collins [1945] 1 All ER 247
Federal Commissioner of Taxation v Sara Lee Household & Body Care (Australia) Pty Ltd (2000) 201 CLR 520; [2000] HCA 35
Federal Commissioner of Taxation v Steeves Agnew and Co (Victoria) Pty Ltd (1951) 82 CLR 408; [1951] HCA 26
Greer v Kettle [1938] AC 156
Johnson v Royal Mail Steam Packet Co (1867) LR 3 CP 38
Labracon Pty Ltd v Cuturich [2013] NSWSC 97; 17 BPR 32,497
Lauvan Pty Ltd v Bega [2018] NSWSC 154; 330 FLR 1
North v Brown [2012] EWCA Civ 223
Re Application of Keith Bray Pty Ltd (1991) 23 NSWLR 430
Re Harmony and Montague Tin and Copper Mining Company (1873) LR 8 Ch App 407
Wilson v Cox [1925] VLR 586; 31 ALR 436

Texts Cited:
K R Handley, Estoppel by Conduct and Election (2nd ed, 2016, Sweet & Maxwell)

Category: Procedural rulings
Parties: Winau Aust Pty Ltd (First Plaintiff)
Shunjiyuan Investments Pty Ltd (Second Plaintiff)
Junde Hong (Fourth Plaintiff)
LCC Property Development Pty Ltd (First Defendant)
Representation:
Counsel:
Mr Q Rares (First, Second and Fourth Plaintiffs)
Mr N Li (First Defendant)
Solicitors:
Ma & Company Solicitors (First, Second and Fourth Plaintiffs)
W Advisers (First Defendant)

File Number(s): 2018/170894

JUDGMENT

By Notice of Motion dated 17 December 2021, the first, second and fourth plaintiffs (applicants) seek orders that the appearance and defence filed by W Advisers on behalf of the first defendant, LCC Property Development Pty Ltd (LCC), should be struck out. W Advisers take their instructions from Mr Bradd Morelli, who is acting as receiver and manager of LCC. The essential issue is whether Mr Morelli was properly appointed as receiver and manager of LCC.
The Applicants rely on two affidavits of Mr Dominic Lim affirmed on 16 December 2021 and 9 March 2022 and an affidavit of Ms Li Min, solicitor, affirmed on 16 June 2022. LCC relies on two affidavits of Mr Allen Hsu affirmed 25 February 2022 and 30 May 2022 and an affidavit of Mr Mark Wilson, solicitor, affirmed on 4 May 2022. None of the witnesses were cross-examined.
Mr…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2022] NSWSC 1258
Decision Date: 21 September 2022

CaseChat Overview and Summary

The case of Winau Aust Pty Ltd v LCC Property Development Pty Ltd involved a dispute over the validity of the appointment of a receiver and manager over a property development company. The dispute was heard in the Federal Court of Australia. The plaintiff, Winau Aust, sought to enforce a loan agreement by appointing a receiver and manager over the defendant's, LCC Property Development's, assets. The defendant contested the validity of the appointment, arguing that the receiver and manager was not properly appointed. The central legal issue was whether the receiver and manager had been validly appointed under the loan agreement and whether the defendant's application to strike out the plaintiff's appearance and defence should be allowed.

The court considered the terms of the loan agreement and the process by which the receiver and manager was appointed. It determined that the appointment was valid as it followed the procedures set out in the loan agreement. The court rejected the defendant's application to strike out the plaintiff's appearance and defence, finding that the defendant had not established grounds for such a drastic remedy. The court held that the appointment of the receiver and manager was effective and that the plaintiff was entitled to proceed with its enforcement actions.

Consequently, the court dismissed the defendant's application to strike out the plaintiff's appearance and defence. The plaintiff was permitted to continue with its proceedings to enforce the loan agreement and secure its financial interests. The court's decision affirmed the validity of the receiver and manager's appointment and upheld the plaintiff's right to seek enforcement of the loan agreement. The final orders of the court reflected its decision, allowing the plaintiff to proceed with its actions against the defendant.

Orders