Bank of Queensland Limited v Star Trek Pty Ltd

Supreme Court of NSW|2019-12-03|Before: Adamson J

Solicitors: Mills Oakley (Plaintiff) File Number(s): 2019/356468

Introduction

The Bank of Queensland Limited, the plaintiff (the Bank), commenced proceedings by summons filed on 13 November 2019, seeking declarations and orders designed to authorise and facilitate the enforcement of its security interests over commercial personal property owned by Star Trek Pty Ltd, the first defendant (Star Trek). The property sought is located on land which was owned by Maria and George Papadeas but which has passed to Louise Thomson, the second defendant (the Trustee), upon her appointment as their trustee in bankruptcy: s 58 of the Bankruptcy Act 1966 (Cth).
Neither defendant filed an appearance in the proceedings. Mr Pokoney, who appeared on behalf of the Bank, established that each of the defendants had been served. Star Trek can be taken to oppose the orders sought although it has not, as referred to above, taken any part in the proceedings. The Trustee does not oppose the orders sought.

Relevant legislation and jurisdiction

The Act relevantly provides, by s 123, that a secured party may seize collateral, by any method permitted by law, if the debtor is in default of the security agreement.
Part 6.2 of the Act is entitled "Judicial proceedings generally". Section 206 defines a "PPS matter" as including a matter arising under the Act or otherwise arising in relation to a security agreement or a security interest. I am satisfied that the present proceeding is a PPS matter as defined in the Act. Section 207 confers jurisdiction on various courts, including this Court, to deal with PPS matters. Jurisdiction on this Court is conferred subject to the following limits of jurisdiction: "The court's general jurisdictional limits, including (but not limited to) limits as to locality and subject matter, to the extent that the Constitution permits."
As the Matraville Property and the Secured Property are both located in New South Wales, I am satisfied that this Court has jurisdiction over the matter: s 23 of the Supreme Court Act 1970 (NSW).

Consideration

In order to enforce its right under s 123 of the Act to seize the Secured Property, it will be necessary for the Bank to enter onto the Matraville Property, which is owned by the Trustee and, potentially, disturb the operation of Star Trek and the business conducted on the Matraville Property. The Bank has taken the view that it ought obtain authority from this Court for this course so that its methods are unquestionably "permitted by law" within the meaning of s 123. There is support for the Bank's approach in the following passage from Anthony Duggan, David Brown, Australian Personal Property Securities Law (2nd ed, 2016, LexisNexis Butterworths) at 12.36: "According to subs 123(1), the secured party may seize the collateral 'by any method permitted by law'. At general law the main limitations are to be found in the laws governing breach of the peace and trespass. The secured party or its agent may not use unlawful force to seize the collateral. For example, if the grantor is present and resists the seizure, the secured party may not resort to violence. The appropriate response is to back down and obtain a court order for seizure of the collateral."
I am satisfied that the Bank has established that declarations ought be made that it holds a security interest in all present and after-acquired property pursuant to the Agreement as recorded in the PPS Register and that it is entitled to seize the Secured Property. These declarations confirm the Bank's rights to the Secured Property which are conferred by s 123 of the Act.
The Bank also seeks an order that it be granted entry and access to the Matraville Property for the purposes of seizing the Secured Property pursuant to s 123 of the Act and an order that Star Trek be restrained from interfering or otherwise impeding the Bank's access to the Matraville Property for those purposes. I regard these orders as appropriate ancillary orders to permit the Bank to enforce its security, to require Star Trek to allow this to occur and to require the Trustee to grant entry and access to the Matraville Property for that purpose.
Although the Bank has taken a prudent course in approaching the Court for declarations and orders for access, it has not been necessary to consider whether the Bank would have, but for such declarations and orders, been entitled to enter the Matraville Property to seize the Secured Property. It had a contractual right to do so pursuant to s 11.2(c) of the Agreement (to which the Guarantors were also parties), which may have been sufficient to authorise the Bank's proposed course of action absent these proceedings. Accordingly, I express no view on the subject.

Costs

The Bank also seeks its costs of the proceedings from Star Trek. As it is the successful party, it is entitled to its costs in accordance with the usual rule: Uniform Civil Procedure Rules 2005 (NSW), r 42.1. Although Star Trek has not filed an appearance, it has not consented to the Bank's application which has made it desirable, and potentially necessary, for the Bank to bring these proceedings. In these circumstances, I am persuaded that it is appropriate to order Star Trek to pay the Bank's costs of the proceedings.

Orders

For the reasons given above, I made the following orders at the conclusion of the oral hearing on 3 December 2019: 1. Declare that the plaintiff holds a valid security interest in all present and after-acquired property of the first defendant, pursuant to the terms of the Master Asset Finance Agreement and associated documentation as recorded in the register maintained under the Personal Property Securities Act 2009 (Cth) (Security Interest). 2. Declare that the plaintiff is entitled, pursuant to s 123 of the Personal Property Securities Act 2009 (Cth), to seize the personal property of the first defendant as collateral under the Security Interest, including without limitation the fixtures, fittings and equipment financed by the plaintiff and set out in Annexure A to the Master Asset Finance Agreement dated 15 March 2016. 3. Order that the plaintiff (including by its agents), be granted entry and access to the premises located at xxx xxxxxx xxxx, Matraville NSW, for the purpose of seizing the personal property of the first defendant, pursuant to s 123 of the Personal Property Securities Act 2009 (Cth). 4. Order that the first defendant (including by its officers, employees, agents or assigns) be restrained from interfering or otherwise impeding the plaintiff's access in order (3) above. 5. Order the first defendant to pay the plaintiff's costs on the ordinary basis, as agreed or assessed.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 03 December 2019

Personal Properties Securities Act 2009(Cth)

At a glance

Court

Decision date

Before

Source

Judgment (8 paragraphs)

Parties

Legislation Cited (5)

Cited By (3)