Landcon Civil Pty Ltd (in liq) v Taleb

7. The first defendant pay to the first plaintiff the sum of $72,423.76.
8. The first defendant pay interest on $72,423.76 from 19 April 2018 until the date of judgment pursuant to s 51A of the Federal Court of Australia Act 1976 (Cth) (FCA Act).
9. The first defendant pay compensation to the first plaintiff in the sum of $172,174.00 pursuant to s 1317H of the Act.
10. The first defendant pay interest on the sum of $172,174.00 from 9 March 2020 until the date of judgment pursuant to s 51A of the FCA Act.
11. The second defendant pay to the first plaintiff the sum of $72,146.00.
12. The second defendant pay to the first plaintiff interest on the sum of $28,785.50 from 18 September 2017 until the date of judgment pursuant to s 51A of the FCA Act.
13. The second defendant pay to the first plaintiff interest on the sum of $43,360.50 from 11 October 2017 until the date of judgment pursuant to s 51A of the FCA Act.
14. The second defendant account to the first plaintiff in respect of the application of all funds which are the subject to the Pickles Transactions.
15. The defendants pay the plaintiffs' costs of the proceeding.
16. The defendants pay the plaintiffs' costs of the interlocutory application. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

INTRODUCTION 1 By interlocutory application, the plaintiffs, Landcon Civil Pty Ltd (in liquidation) and its liquidator, Andrew John Scott, seek default judgment or, alternatively, summary judgment against the defendants, Mr Hamza Jamal Taleb, the sole director and shareholder of Landcon, and his father Mr Jamal Taleb, who is alleged to have received a benefit as a result of Hamza's breach of his duties as a director. Without any discourtesy, I will refer to the defendants by their first names to distinguish between them. The plaintiffs seek declaratory relief and judgment in the sum of $316,743.76 (plus interest calculated to the date of judgment) against both defendants. The plaintiffs seek an order that Jamal account to Landcon for the funds received to his benefit as a result of Hamza's breach of duty. The plaintiffs also seek their costs of the proceeding.

THE PROCEEDING 2 Landcon was registered as a company on 2 September 2013. Landcon was wound up in insolvency pursuant to s 459P of the Corporations Act 2001 (Cth) by order of the Supreme Court of New South Wales on 21 November 2017. Mr Scott and Mr Glenn Ian Livingstone were appointed as liquidators of Landcon. Mr Livingstone resigned as a liquidator on 16 July 2018. Mr Scott continued thereafter as the sole liquidator of Landcon. I will refer to Mr Livingstone and Mr Scott as the liquidators in these reasons in relation to the period in which they were joint liquidators. 3 The defendants have not filed a notice of address for service in the proceeding. The defendants have not engaged with the proceeding in any substantive way, save that they appeared in person at the hearing of the application for default/summary judgment which was conducted using the Teams platform. 4 The plaintiffs' claims of insolvent trading and breach of directors duties against Hamza are based on allegations that, after the application to wind up Landcon in insolvency was filed on 25 August 2017, and prior to it being placed in liquidation on 21 November 2017, Hamza caused Landcon to make certain payments: first, to Pickles Auctions Pty Limited on behalf of Jamal (the Pickles Transactions); and secondly, to himself directly. 5 The Pickles Transactions involved two payments by Landcon for assets purchased at auction by Jamal - on 18 September 2017 a payment of $28,785.50 and on 11 October 2017 a payment of $43,360.50. Jamal received a total benefit of $72,146. The liquidator has not identified any benefit flowing to Landcon from the Pickles Transactions. Jamal took delivery of the assets for which Landcon paid. Landcon's records do not reveal any asset being purchased from Pickles Auctions, or any evidence of a debt owing to Pickles Auctions by Landcon at or about the time of the Pickles Transactions. Further, as at the date of liquidation, Landcon was not in possession of any assets that could be identified as having been purchased from Pickles Auctions in or about September 2017 and October 2017. 6 On 24 October 2017, Landcon transferred $100,028 to Hamza. Landcon's records do not reveal any basis for the payment of $100,028 to Hamza. Hamza has not sought to advance any explanation to justify this transaction. 7 In addition, the liquidators' investigations show four debts incurred by Landcon that remained unpaid at the date of liquidation, which amount to $72,423.76. On 23 October 2018, a dividend of 6.5 cents in one dollar was paid to the creditors reducing the total amount of the debts owed to $66,248.12. The liquidators have completed their investigations and concluded that there will be no further dividends to the creditors.

PROCEDURAL HISTORY 8 Prior to the commencement of the proceeding, there were communications between the plaintiffs' lawyers and Mr Majed Kheir, a lawyer then acting for Hamza. 9 The present proceeding was commenced against Hamza on 8 March 2022 by the filing of an originating process, supported by an affidavit of Mr William Honner of PricewaterhouseCoopers, who has day to day conduct of the liquidation under the supervision of the liquidator (Honner Affidavit). 10 On 13 October 2022, the plaintiffs were granted leave to file an amended originating process which, inter alia, named Jamal as second defendant. The plaintiffs were ordered to serve, inter alia, the amended originating process on Hamza and Jamal by 20 October 2022: Landcon Civil Pty Ltd (in liq) v Taleb [2022] FCA 1218. 11 On 14 October 2022, the amended originating process was filed. The amended originating process was ultimately served at 17 Belmont St, Penshurst New South Wales (the Penshurst Address). During case management it emerged that that address was identified as the address associated with the defendants as a result of the inquiries undertaken by the plaintiffs. Between February and April 2022, the plaintiffs' lawyers initially arranged for an ASIC historical search for Landcon, a search of Hamza's residential holdings and a skip trace to be undertaken in order to locate Hamza. Those searches did not produce a current address for Hamza. Following a discussion with the legal counsel of Pickles Auctions on 4 May 2022, the plaintiffs' lawyers formed the view that the originating documents would come to the attention of Hamza if they were served on the purchaser identified by the documents held by Pickles Auctions, which were ultimately the subject of a subpoena in the proceedings. In or around late June 2022, following receipt of the documents subpoenaed from Pickles Auctions which identified Jamal as the purchaser, the plaintiffs' lawyers caused a process server to make enquiries into the whereabouts of Jamal. Based on those enquiries the plaintiffs' lawyers sent a demand to Jamal dated 31 August 2022 at the Penshurst Address. 12 On 18 October 2022, a process server handed the amended originating process to a man who identified himself as Hamza and who fitted Hamza's general description at the Penshurst Address. The process server deposed to attending the Penshurst Address and having a conversation with a person described as "a male in his mid-40s who was approximately 5'10" with a medium build" to the following effect: Process server: I'm looking for Hamza Jamal Taleb. Do you know him? Man: That's me. Process server: I have documents to serve on you. The process server thereafter handed a copy of the relevant documents to the man who had identified himself as Hamza. The conversation continued: Process server: Is Jamal Taleb here? I have documents for him. Man: No. Process server: Do you know when Jamal Taleb will be back? Man: No, but I can take the documents for him. He lets me take things for him. The process server then handed a copy of the documents addressed to Jamal to the man who had identified himself as Hamza. 13 Also on 18 October 2022, the process server attended a neighbouring property to the Penshurst Address, and confirmed with a neighbour that the people who lived at the Penshurst Address, whose names the neighbour did not know, had resided there for at least 12 months. 14 The process server had on an earlier occasion personally served a man who identified himself as Hamza with the originating documents as originally filed at the Penshurst Address. He deposed to a conversation on 26 July 2022 in similar terms to that which occurred on 18 October 2022. In that earlier conversation, the man who identified himself as Hamza also stated that "Jamal is my son. He lives here too". The reference to Jamal being Hamza's "son" is an anomaly that is not explained by the evidence. That Hamza is the son of Jamal was confirmed at the hearing of 6 April 2023. 15 On 20 October 2022, the process server returned to the Penshurst Address. He deposed to a further conversation with the man who identified himself as Hamza: Male: I gave Jamal the documents you gave me. Process server: Thank you but I need to give the documents to Jamal (Taleb) personally. That's why I am back. Male: Jamal does not live here anymore. Process server: Okay, where he does he live now? Male: I don't know where he lives. Good luck finding him. 16 On 17 November 2022, I made orders deeming that the amended originating process had been served on Jamal on 20 October 2022. Those orders were made on the basis of the evidence of the process server which detailed his attempts to effect personal service on Jamal, and, inter alia, the aforementioned conversations with Hamza. I was satisfied through the evidence of the process server that personal service had been attempted but not proved practicable, and that the amended originating process had been brought to the attention of Jamal by 20 October 2022. 17 As mentioned, at no stage have Hamza or Jamal filed or served a notice of address for service in the proceeding. As mentioned above, save for appearing at the hearing on 6 April 2023, Hamza and Jamal have not taken any steps to defend the proceeding. The proceeding has been before the Court on multiple occasions, on which the plaintiffs have appeared, but no appearance has been made by or on behalf of Hamza and Jamal, including most recently on 2 March 2023 for case management. 18 The hearing of the present application was originally listed for hearing on 9 March 2023. On or around 13 January 2023, the plaintiffs' lawyers sent letters to both Hamza and Jamal at the Penshurst Address by express post enclosing the interlocutory application and notifying them of the case management hearing of 2 March 2023 and the interlocutory hearing of 9 March 2023. Hamza and Jamal did not respond to these letters. For various reasons, the interlocutory application was adjourned for hearing to 23 March 2023, and then subsequently re-listed for hearing on 6 April 2023. 19 On 7 March 2023, the plaintiffs' lawyers sent letters addressed to both Hamza and Jamal at the Penshurst Address by express post. The letters enclosed, amongst other things, a copy of the orders made on 2 March 2023 that re-listed the interlocutory application for hearing on 23 March 2023. 20 Hamza and Jamal did not personally respond to the correspondence sent on 7 March 2023. However, the plaintiffs' lawyers received an email on 15 March 2023 from Mr Kheir, the solicitor who had represented Hamza in communications with the liquidators prior to the commencement of the proceeding. In that email, Mr Kheir referred to the letter from the plaintiffs' lawyers' to "our client dated 25 January 2023" and sought confirmation as to whether both Hamza and Jamal were defendants to the proceeding and the return date for the amended originating process and any interlocutory application filed in the proceeding. 21 On 21 March 2023, the plaintiffs' lawyers responded confirming that both Hamza and Jamal were defendants to the proceeding and that the interlocutory hearing was listed on 23 March 2023. The plaintiffs' solicitors also stated that: (1) the last communication between Mr Kheir and the plaintiffs' lawyers was in late October 2020, in which Mr Kheir indicated that he did not have further instructions in the matter, and was content for the plaintiffs' lawyers to contact Hamza directly; (2) Mr Kheir had not filed a notice of address for service in the proceeding to date; (3) they were unsure whether Mr Kheir had instructions to act in the matter, and if so, for whom; and (4) Mr Kheir should file a "notice of appearance" if he was instructed to act in the proceeding. 22 That same day, Mr Kheir responded confirming that his office had "obtained preliminary telephone instructions from Jamal and Hamza Taleb on 15 March 2023", but that they were "yet to obtain detailed instructions from them and until that occurs, we are reluctant to file an appearance". Mr Kheir stated that his law firm would "endeavour to obtain urgent instructions" prior to the listing of the interlocutory hearing on 23 March 2023, but that it had "been difficult to get hold of our clients and if we are in a position to file an appearance we will do so immediately". 23 When the interlocutory application was called for hearing, Hamza and Jamal dialled in to the hearing remotely and made oral submissions opposing the application. Although Hamza and Jamal did not adduce any evidence, they each asserted that: (1) they do not, and have never, resided at the Penshurst Address; (2) Jamal's brother, with whom they are not on terms, resides at that address; and (3) an unnamed family member dropped the documents at the front of Jamal's house in January 2023. I infer that Jamal thereafter gave the documents to Hamza. 24 Hamza and Jamal agreed that they received the relevant court documents in January 2023. I infer from Mr Kheir's email of 15 March 2023, referred to in paragraph [20] above, that Hamza and Jamal were aware of the proceeding from at least about January 2023 and by that time were in receipt of the relevant originating documents. Both Hamza and Jamal said that they consulted Mr Kheir in relation to the proceeding but that they could not afford to retain him. Neither defendant has taken steps to file and serve a notice of address for service. They are in default of the obligation to do so imposed by rr 5.02, 11.06 and 11.08 of the Federal Court Rules 2011 (Cth). 25 Hamza and Jamal have not satisfactorily explained the circumstances in which they allege they became aware of the proceeding. They have not provided any evidence in support of their contention that they have never resided at the Penshurst Address and that another family member resides at the Penshurst Address. Those are matters which could readily have been established by evidence. They were not. On the evidence that has been read in the proceedings, I am satisfied that: Hamza was served with the originating process and the Honner affidavit on 26 July 2022; Hamza was then served with the amended originating process in the course of October 2022; and Jamal was deemed to have been served in the course of October 2022 in the circumstances outlined above. 26 In relation to the substance of the claims based on the Pickles Transactions, Jamal asserted that he was owed money by Hamza, that he had worked for Landcon and had not been paid: [Hamza] owed me the money. And that's the only way, your Honour, I could have got some of my wage - some of my money from Hamza because he was very short of money and the company wasn't making money, and the lockdown and, I don't know, the headache he had - problems, he wasn't making money and I wasn't getting paid, and I went to the auction and I saw, you know, I bought those equipment and I said that's the only way I probably can get some money out of my son, which is Hamza Taleb. And I rang him up and I said, "Listen, I've bought the machine and the truck and you have to pay for them". 27 Jamal acknowledges that he did not lodge any claim in the liquidation of Landcon in respect of any debt owed to him by Landcon. The report as to Landcon's affairs dated 23 January 2018 signed by Hamza does not identify any claims by any employees. 28 Hamza vaguely echoed the assertions made by Jamal. He said that he owed his father a significant debt - a couple of hundred thousand dollars - and that he caused Landcon to pay for the equipment Jamal had purchased at auction. Neither Hamza nor Jamal provided any specific detail in relation to the alleged debt or employment. 29 The plaintiffs allege, and the supporting affidavit relied upon demonstrates, that the transfers to Pickles Auctions were made from Landcon's bank account. Jamal acknowledged that he understood that Landcon was not profitable at that time and was in financial difficulty. Jamal accepted that he had not put in any claim with the liquidator for the wages he alleges he is owed, or any other debt he asserts may be due from Hamza and / or Landcon. I do not consider that Jamal's explanation, even if it had been supported by evidence, which it was not, exposes any reasonable defence to the plaintiffs' claim against him. To the contrary, the defendants' submissions reinforce that Hamza and Jamal do not have a reasonable defence in respect of the allegations based on the Pickles Transactions. 30 In relation to the substance of the claim based on the transfer made to Hamza, Hamza did not address any submissions which sought to justify or explain the payment of $100,028 from Landcon's bank account to himself.

Default judgment 31 The plaintiffs bring their application for default judgment under r 5.23(2)(b) to (c) of the Rules. 32 Rule 5.23(2)(b) to (c) of the Rules relevantly provides: If a respondent is in default, an applicant may apply to the Court for: … (b) if the claim against the respondent is for a debt or liquidated damages - an order giving judgment against the respondent for: (i) the debt or liquidated damages; and (ii) if appropriate, interest and costs in a sum fixed by the Court or to be taxed; or (c) if the proceeding was started by an originating application supported by a statement of claim or an alternative accompanying document referred to in rule 8.05, or if the Court has ordered that the proceeding continue on pleadings - an order giving judgment against the respondent for the relief claimed in the statement of claim or alternative accompanying document to which the Court is satisfied that the applicant is entitled; … 33 Rule 5.22 provides that a party is in default in the following instances: A party is in default if the party fails to: (a) do an act required to be done, or to do an act in the time required, by these Rules; or (b) comply with an order of the Court; or (c) attend a hearing in the proceeding; or (d) prosecute or defend the proceeding with due diligence. 34 Rule 5.01 of the Rules is as follows: A party, or the party's lawyer, must attend the Court on the return date fixed in the originating application. … 35 Rule 5.02 of the Rules is as follows: A respondent who has been served with an originating application must file a notice of address for service, in accordance with Form 10, before the return date fixed in the originating application. 36 Schedule 1 of the Rules relevantly defines an "originating application" as an application starting a proceeding. 37 I adopt and apply the established principles relevant to the discretion to enter default judgment, which I have recently set out in GCTR Investments Pty Ltd v DJD Family Holdings [2023] FCA 260 at [19] to [20] and reproduce for convenience of reference: 19 In Deputy Commissioner of Taxation v Sibai [2015] FCA 1465, Gleeson J stated the principles relevant to the discretion to enter default judgment as follows (at [7]-[8]): 7 In Speedo Holdings BV v Evans (No 2) [2011] FCA 1227, the Court outlined a number of principles relevant to the discretion to enter default judgment, including the following (at [20]-[25]): First, the power … remains discretionary. … Just as the discretion must be exercised [cautiously] where it is the applicant that is in default … the same caution must be exercised where it is the applicant who is seeking orders as against a defaulting respondent. Second, the discretionary power to enter a default judgment is enlivened when (as in the present case) an applicant applies to the Court for an order. Rule 5.23(2) provides that where a respondent is in default "an applicant may apply to the Court". … Third, there is a difference in the terms in which the ambit of the power conferred by the former r 3(2)(c) ("the relief… that the applicant appears entitled to on the statement of claim") and the wording of the current r 5.23(2)(c) ("the relief claimed in the statement of claim to which the Court is satisfied that the applicant is entitled"). Notwithstanding that difference in language, the requirement imposed is not that an applicant prove by way of evidence the claim sought to be advanced; the requirement is that the Court needs to be "satisfied" on the face of the statement of claim that the applicant is entitled to the "relief" claimed…. The facts as alleged in the statement of claim are deemed to have been admitted by a respondent: Australian Competition and Consumer Commission v Dataline.net.au Pty Ltd [2007] FCAFC 146 at [42], 161 FCR 513 at 523 per Moore, Dowsett and Greenwood JJ. … Fourth, to be satisfied that an applicant "is entitled" to the relief claimed in the statement of claim, the Court needs to be satisfied that "each element of the relevant civil wrong involved is properly and discretely pleaded in the statement of claim": Macquarie Bank Ltd v Seagle [2005] FCA 1239 at [24], 146 FCR 400 at 406 to 407 per Conti J …. Fifth, in addition to the facts alleged in a statement of claim, the Court may permit recourse to limited further evidence. But it may not admit evidence which would alter the case as pleaded. 8 The above approach was followed in Placitum Pty Ltd v Andreotta [2014] FCA 726 at [12] and Electrolux Home Products Pty Ltd v Delap Impex KFT [2015] FCA 62; (2015) 110 IPR 164 at [24]. 20 Pursuant to r 5.23(2)(c), the Court must be satisfied that the applicant is entitled to the relief claimed in the statement of claim. In this respect, I note the observations of Yates J in Chamberlain Group, Inc v Giant Alarm System Co, Ltd (No 2) [2019] FCA 1606 (at [13]-[14]): 13 The power to give judgment against a defaulting party is undoubtedly discretionary. The discretion must be exercised cautiously. Where the defaulting party is a respondent to a pleaded claim, the giving of judgment for final relief on the application will deliver complete success to the applicant without investigation of the merits of the pleaded claim: ACOHS Pty Ltd v Ucorp Pty Ltd [2009] FCA 577 at [27]. There is no requirement that the act or acts of default be intentional or amount to contumelious conduct. There is no requirement that the act or acts of default result in inordinate or inexcusable delay. That said, such features, if present, will be relevant to the exercise of the Court's discretion. So too will conduct that persuades the Court that the defaulting party is manifesting an inability or unwillingness to cooperate with the Court and the other party or parties to the proceeding. 14 Rule 5.23(2)(c) requires the Court to be satisfied that the applicant is entitled to the relief claimed in the statement of claim. This requirement has been interpreted as meaning that the Court must be satisfied that "on the face of the statement of claim" the applicant is entitled to the relief that is claimed. It is not a requirement that the applicant prove its claim by way of evidence. Put another way, the facts alleged in the statement of claim are taken to have been admitted: Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2007] FCAFC 146; 161 FCR 513 at [42]. If, on inspection of the statement of claim, the Court is satisfied that the applicant would be entitled to the relief sought then this requirement of r 5.23(2)(c) will be met: CNIP Pty Ltd v Chan & Naylor Norwest Pty Ltd (No 2) [2011] FCA 1170 at [18] - [19]; Speedo Holdings B.V. v Evans (No 2) [2011] FCA 1227 at [23]. The Court may permit further evidence to be adduced, but not evidence that would alter the pleaded case: Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2006] FCA 1427; 236 ALR 665 at [45], [48] - [50]; United Broadcasting International Pty Ltd v Turkplus Pty Ltd (No 2) [2010] FCA 1413 at [42] - [44]; Australian Competition and Consumer Commission v Yellow Page Marketing BV (No 2) [2011] FCA 352; 195 FCR 1 at [62] - [63].

Summary judgment 38 In the alternative, the plaintiffs submit that they are entitled to relief based on a combination of default judgment in respect of what they contend are liquidated damages or claims in the nature of a debt under r 5.23(2)(b) of the Rules and summary judgment for the declaratory relief claimed under r 26.01(e) of the Rules on the basis that Hamza and Jamal have no reasonable prospects of successfully defending the proceeding. 39 Section 31A(1) of the Federal Court of Australia Act 1976 (Cth) provides that: (1) The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if: (a) the first party is prosecuting the proceeding or that part of the proceeding; and (b) the Court is satisfied that the other party has no reasonable prospect of successfully defending the proceeding or that part of the proceeding. 40 Rule 26.01 is in the following terms: (1) A party may apply to the Court for an order that judgment be given against another party because: … (e) the respondent has no reasonable prospect of successfully defending the proceeding or part of the proceeding. … 41 The relevant principles relating to an application for summary judgment are well settled: see Spencer v Commonwealth of Australia [2010] HCA 28; 241 CLR 118; Dandaven v Harbeth Holdings Pty Ltd [2008] FCA 955; Rana v Google Australia Pty Ltd [2013] FCA 60; C v Commonwealth of Australia [2015] FCAFC 113; 234 FCR 81; Quach v Commissioner of Taxation [2019] FCA 1729 at [12]. The party seeking summary judgment bears the onus of persuading the Court that the proceeding should be determined summarily: Windsor v Sydney Medical Service Co-operative Ltd (No 2) [2009] FCA 704 at [38]. The power to dismiss an action summarily must be exercised with caution and is not to be exercised lightly: Spencer v Commonwealth at [24], [60].

CONSIDERATION 42 The plaintiffs brings their claim on the primary basis that they are entitled to relief in the form of default judgment for all of the relief sought in the amended originating process supported by the Honner Affidavit. For the reasons which follow, I am satisfied that it is appropriate to make orders for default judgment against each of Hamza and Jamal under r 5.23(2)(c) of the Rules, this being a proceeding commenced by originating application and supported by an accompanying affidavit permitted by r 8.05(1)(c). The Commercial and Corporations Practice Note relevantly provides that a party may file an affidavit in support of an originating process for corporations matters and that it will be treated as a statement of the applicant's substantive factual case in the proceeding. Here the alternative accompanying document is the Honner Affidavit which satisfactorily sets out the material facts which form the basis of the plaintiffs' claim and that are necessary to give the defendant fair notice of the case to be made against the defendant at trial. 43 The originating process and the Honner Affidavit were served on Hamza on 26 July 2022. The amended originating process was served on Hamza on 18 October 2022. Service was deemed to be effected on Jamal on 20 October 2022. 44 The amended originating process as filed contains a time and date for hearing "To Be Advised". The first return date for the proceeding following the filing of the amended originating process was the case management hearing of 17 November 2022. 45 Hamza and Jamal did not appear at that listing and were accordingly in default of the obligation to do so imposed by r 5.01. They similarly did not appear at a subsequent case management hearing on 2 March 2023. They were notified of both listings by letters sent to the Penshurst Address by express post. The defendants also failed to file a notice of address for service and are accordingly in default of the obligations imposed by the Rules to file a notice of address for service and to appear on the occasions on which the proceeding has been listed before the Court. The discretion to make an order for default judgment under r 5.23 is accordingly enlivened. 46 For completeness, I add that I do not accept the bare assertions by Hamza and Jamal in which they denied being served with, or becoming aware, of the proceeding prior to January 2023. Those assertions were made without any evidentiary support and were highly generalised. Corroborative evidence would have been readily available but was not adduced. On the basis of their own assertions, they had consulted a solicitor and had been on notice of the proceeding for about eight weeks. That they did not seek to put forward a detailed verified account is telling. But even had I been satisfied that Hamza and Jamal did not become aware of the proceeding until January 2023, I would in any event have concluded that their failure to attend the case management hearing on 2 March 2023 and to file a notice of address for service after becoming aware of the proceeding, if that had been in January 2023, demonstrated a lack of due diligence and was relevantly a default for the purpose of r 5.22(a), (c) and (d). 47 The plaintiffs seek default judgment in respect of the entirety of the relief in the amended originating process on the basis that r 5.23(c) applies to the proceeding. I am satisfied that r 5.23(c) applies to this proceeding. The amended originating process is an "an application starting a proceeding" and therefore an "originating application" within the meaning of Sch 1 of the Rules. This proceeding is one started by an originating process supported by an alternative accompanying document referred to in r 8.05. 48 The claim for relief for the purpose of applying r 5.23(2)(c) is understood by reference to the amended originating process and the relevant alternative accompany document, namely the Honner Affidavit. Accepting that the discretion to enter default judgment must be exercised cautiously, I am satisfied that the plaintiffs are entitled to the relief sought in the amended originating process on the basis of the substantive statement of the plaintiffs' factual case put forward in the Honner Affidavit which the defendants have not sought to traverse. 49 I am further satisfied that it is appropriate to exercise the discretion having regard to the defendants' default and taking into account as relevant to the exercise of the discretion the absence of any suggestion of a reasonable defence. In so far as the relief sought is declaratory in nature, I am satisfied that the declarations have utility, are supported by the Honner Affidavit and that the plaintiffs have a real interest in seeking that declaratory relief. The declarations are closely confined and aligned to the substantive monetary relief claimed against each of the defendants. The Honner Affidavit outlines in detail that Landcon, having been registered as a company on 2 September 2013, was subject to winding up orders of the Supreme Court of New South Wales on 21 November 2017 and remained trading as at the date of liquidation. The Honner Affidavit details that the liquidators through their investigations have identified a number of debts which remained unpaid at the date of liquidation, the amounts of those debts and to whom they are owed. Further, Mr Honner sets out the Pickles Transactions and payment to Hamza, the relevant amounts of those transactions, and the specific dates they were made in September and October 2017, and notes that, amongst other things, he has not been able to identify any benefit to Landcon from those transactions. The declarations in respect of Hamza's contravention of his duties as a director and in causing Landcon to trade while insolvent are supported by the Honner Affidavit. 50 In accordance with the principles stated by Yates J in Chamberlain Group, Inc v Giant Alarm System Co, Ltd (No 2) [2019] FCA 1606 (at [13] to [14]), I am satisfied that it is appropriate to enter default judgment for the plaintiffs substantially in the form sought in the amended originating process. 51 Having reached this conclusion, it is not necessary for me to address in detail the alternative basis for the plaintiffs' application. Suffice to say on the basis of the defendants' submissions detailed at paragraphs [23] to [30] above and having regard to evidence comprised in the Honner Affidavit, I am satisfied that if default judgment had not been entered it would be appropriate to make an order for summary judgment on the basis that the defendants had no reasonable prospect of successfully defending the proceeding.

CONCLUSION 52 For these reasons, I make orders granting the relief sought by the plaintiffs in the amended originating process. I further order that Hamza and Jamal pay the plaintiffs' costs of the interlocutory application. I certify that the preceding fifty-two (52) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Cheeseman.