Special Gold Pty Ltd (in liq) v Dyldam Developments Pty Limited

Solicitors for Persephone Company Pty Limited (Receivers and Managers Appointed) (Interested party):

IN THE MATTER OF SPECIAL GOLD PTY LTD (IN LIQ) v DYLDAM DEVELOPMENTS PTY LIMITED (SUBJECT TO A DEED OF COMPANY ARRANGEMENT)

DYLDAM DEVELOPMENTS PTY LIMITED (SUBJECT TO A DEED OF COMPANY ARRANGEMENT)

ACN 616 965 390 PTY LTD (and others named in the Schedule)

1. Special Gold Pty Ltd (in liquidation) (ACN 078 553 321) have leave to continue and take fresh steps in the Federal Court proceedings numbered NSD369 of 2025 (Federal Court Proceedings) against Sam Fayad, Fayad-Lee Fayad and Remon Fayad (each a Bankrupt), subject to the condition in Order 2 below.
2. It is a condition of the leave given that Special Gold Pty Ltd (in liquidation) (ACN 078 553 321) not enforce any judgment obtained by it as a result of the Federal Court Proceedings insofar as it relates to the Bankrupt's property or a provable debt against the Bankrupt's property that is divisible amongst the creditors of his bankrupt estate pursuant to s 116(1) of the Bankruptcy Act 1966 (Cth) (Act) other than by way of lodgement of a proof of debt with the Trustee for the Bankrupt Estate of each of Sam Fayad, Fayad-Lee Fayad and Remon Fayad respectively without the leave of the Federal Court of Australia and/or the Federal Circuit and Family Court of Australia pursuant to s 58(3) of the Act.
3. Each party pay his, her or its own costs of the proceedings.

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

Delivered ex tempore, revised from transcript

1. By interlocutory process dated yesterday, the plaintiff seeks orders that it be granted leave pursuant to s 58(3)(b) of the Bankruptcy Act 1966 (Cth) (the Bankruptcy Act) to continue these proceedings against the sixth and seventh defendants, being Mr Fayad-Lee Fayad and Mr Remon Fayad, respectively. Leave is also sought to proceed against Mr Sam Fayad in paragraph 1 of the originating process.
2. On 4 July 2025, the sixth and seventh defendants filed written submissions in which their solicitor said that on 2 July 2025, debtors' petitions were signed by the sixth and seventh defendants which were filed with the Australian Financial Security Authority, which in turn issued Certificates of Appointment of Trustee dated 3 July 2025, naming Mr Benjamin Ho as trustee. Further, a sequestration order was made against Mr Sam Fayad by the Court on 14 September 2023. Accordingly, s 58(3)(b) has the effect of preventing the plaintiff from taking any fresh step in these proceedings against the fifth, sixth and seventh defendants unless the Court grants leave for it to do so. The provision has the purpose of ensuring that a bankrupt is not subject to the expense of money and time involved in a multiplicity of proceedings except where the issues will be more suitably dealt with by a trial in a Court proceeding rather than the creditor being required to lodge a proof of debt in the debtor's bankruptcy. The present proceedings raise issues concerning breach of fiduciary and statutory duties against the fifth and sixth defendants and knowing assistance and involvement in breaches of fiduciary and statutory directors' duties by the seventh defendant. Proprietary remedies are sought against the fifth to seventh defendants which are not subject to any requirement for leave.
3. Contestable questions of law and fact are likely to arise, whichever process is adopted for their resolution. In my view, they are more appropriately dealt with in these Court proceedings rather than left to a dispute over whether proofs of debt should be accepted by the trustee in bankruptcy. The matter has been fully prepared for hearing this week, and the Court is able to provide certainty to the parties promptly and efficiently if leave is granted to the plaintiff to continue with these proceedings. Further, there is substantial overlap between the claims for personal remedies which require leave, and the claims for proprietary remedies which do not.
4. Accordingly, I make orders in accordance with the draft provided by the plaintiff, which I have amended as discussed with the plaintiff's Senior Counsel this morning.

I certify that the preceding four (4) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Jackman.

PARKLEA MARKETS CORPORATION PTY LTD (ACN 643 560 105)

RAINBOW NORTH ROCKS ONE PTY LTD (ACN 604 121 235)