Supreme Court New South Wales Medium Neutral Citation: Patel v Lal [2011] NSWSC 603 Hearing dates: 30-31 May, 1 June 2011 Decision date: 22 June 2011 Jurisdiction: Equity Division Before: Biscoe AJ Decision: Claim upheld that transfer of property was with intent to defraud creditors and is voidable under s 37A Conveyancing Act 1919. Catchwords: CONVEYANCING:- fraudulent conveyance - intention to defraud creditors - avoiding transfer - Conveyancing Act 1919 s37A. CORPORATIONS:- winding-up - leave to proceed nunc pro tunc against company in liquidation - Corporations Act 2001 (Cth) s 471B. Legislation Cited: Bankruptcy Act 1966 (Cth) s 58(3)(b) Conveyancing Act s 37A Corporations Act 2001 (Cth) ss 471A, 471B, 473, 601AD, 601AE, 601AF Cases Cited: Commonwealth of Australia v Davis Samuel Pty Ltd [No 5] [2008] ACTSC 124, 164 ACTR 1 Green v Official Trustee in Bankruptcy; in the matter of Schneller (Bankrupt) [2001] FCA 1644 Hewlett Packard Australia Pty Ltd v Siltek Holdings Pty Ltd [2005] NSWSC 672 Lal v Patel (Supreme Court of New South Wales, Schmidt J, 1 February 2010, unreported) Lal v Patel (Supreme Court of New South Wales, Davies J, 12 February 2010, unreported) Langdon v Gruber [2001] NSWSC 276 Marcolongo v Chen [2011] HCA 3, 85 ALJR 380 Patel v H Lal & Associates Pty Ltd [2008] NSWSC 964 Sihota v Pacific Sands Motel [2003] NSWSC 119, 56 NSWLR 721 Webforge Australia Pty Ltd v Tecniskill Co-operation Pty Ltd [2008] NSWSC 517 Category: Principal judgment Parties: Jenny (also known as Jaswanti) Patel (Plaintiff) Patricia Lal (First Defendant) H Lal & Associates Pty Ltd (Second Defendant) Hasmukh Lal (Third Defendant) Commonwealth Bank of Australia (Fourth Defendant) Representation: COUNSEL: Jenny (also known as Jaswanti) Patel in person (Plaintiff) Patricia Lal in person (First Defendant) N/A (Third Defendant) Hasmukh Lal in person (Third Defendant) Ms N Bearup (Fourth Defendant) SOLICITORS: Gadens Lawyers (Fourth Defendant) File Number(s): 2009/00290378 Judgment 1This is a claim by the plaintiff, Jenny (also known as Jaswanti) Patel, for: (a)leave to proceed against the second defendant H Lal & Associates Pty Ltd (in liquidation) ( the Company ) under s 471B of the Corporations Act 2001 (Cth); (b)an order pursuant to s 37A of the Conveyancing Act 1919 that a transfer of a residential property at 49 O'Neill St, Brighton - Le - Sands ( the Property ) on 7 November 2008 by the Company to the first defendant Mrs Patricia Lal for a consideration of $1 is voidable because it was made with intent to avoid creditors; and (c)a declaration that the Company or Mrs Lal holds the Property subject to a charge, trust or other equitable interest to secure the payment of $23,045.12 plus interest to the plaintiff. 2The third defendant, Hasmukh Lal, is Mrs Lal's husband. In 1996 the Company was registered (under the name Nigel Trading Company Pty Ltd). Mr and Mrs Lal were the Company's directors and shareholders. Since 1999 Mr Lal has been the sole director, sole secretary and sole shareholder of the Company. The fourth defendant is the Commonwealth Bank of Australia ( CBA ) which has a registered first mortgage over the Property. No cause of action is raised against the CBA. Its only interest in the proceedings is to protect its priority as first mortgagee by appropriate orders if the plaintiff is successful. 3The plaintiff, Mr and Mrs Lal and the Company did not have legal representation at the hearing. Mr Lal made submissions on behalf of Mrs Lal and himself. Mrs Lal was the only person who gave evidence at the hearing. 4At all material times Mr Lal controlled the Company, and it is apparent from his wife's evidence that he relevantly controlled her. SECTION 37A FRAUDULENT TRANSFER CLAIM 5The plaintiff's case is that the transfer of the Property by the Company to Mrs Lal for $1 was made with intent to avoid creditors and is therefore voidable under s 37A of the Conveyancing Act , which provides as follows: 37A Voluntary alienation to defraud creditors voidable (1) Save as provided in this section, every alienation of property, made whether before or after the commencement of the Conveyancing (Amendment) Act 1930, with intent to defraud creditors, shall be voidable at the instance of any person thereby prejudiced. (2) This section does not affect the law of bankruptcy for the time being in force. (3) This section does not extend to any estate or interest in property alienated to a purchaser in good faith not having, at the time of the alienation, notice of the intent to defraud creditors. 6Section 37A should receive a liberal construction in effecting its purpose of suppressing fraud. The term "defraud" in s 37A means to delay, hinder or otherwise defraud: Marcolongo v Chen [2011] HCA 3, 85 ALJR 380 at [19], [20], [58]. It is unnecessary to show that the debtor wanted creditors to suffer a loss or that the debtor had a purpose of causing loss. It is necessary to show the existence of an intention to hinder, delay or defeat creditors and in that sense to show that accordingly the debtor had acted dishonestly. If the debtor disposes of an asset which would be available to creditors with the intention of prejudicing them by putting it, or its worth, beyond their reach, he is in the ordinary case acting in a fashion not honest in the context of the relationship of debtor and creditor. In cases of voluntary disposition that intention may be inferred: at [32]. A person may have acted dishonestly, judged by the standards of ordinary, decent people, without appreciating that the act in question was dishonest: at [33]. The party seeking to avoid the disposition bears the onus of proving an intent to defraud. While the existence of the intent may be inferred from the evidence, it is to be found as a fact: at [34]. Sections 37A does not require the intent to defraud to be the sole or predominant intent: at [57]. 7In Langdon v Gruber [2001] NSWSC 276 at [54] - [57] Austin J said (omitting most citations): 54 ...it is not necessary for the plaintiff to bring actual proof that the debtor had in his or her mind an intention to defraud creditors; if it appears from evidence of all the circumstances that the transfer might be expected to have that effect, and has had that effect, the Court will attribute fraudulent intention to the debtor. However, the onus of proof of intent to defraud is on the plaintiff. 55 If the conveyance is voluntary, it is easier to infer a dishonest intention than when it is made for consideration. And if the defendant chooses not to give evidence, the Court can be bold in drawing inferences along the lines considered in Jones v Dunkel (1959) 101 CLR 298. 56 There is Canadian authority for the proposition that, where the parties to the conveyance of property are related and the circumstances are suspicious, there is a presumption that the transfer is voidable. This probably means no more than that a transferor and transferee being related is a factor relevant to the court's decision on the transferor's intention. 57 As a matter of construction of the section, the relevant intention is the intention of the transferor, although the intention of the transferee is relevant to the defence in s 37A(3), because a transferee who shares the transferor's intention to defraud creditors cannot be a purchaser in good faith without notice. 8The defence mounted by Mr and Mrs Lal is that the Company held the Property as trustee for the Lal Property Family Trust ( the Trust ) and that the Company transferred the Property to Mrs Lal as the new trustee. That is said to explain why the transfer to her was for a nominal consideration, notwithstanding that at the same time she borrowed about $1 million from the CBA secured by a mortgage over the Property. For good measure, they also contend that the Company incurred liabilities in its own right and therefore the Property is not available to the Company's creditors such as the plaintiff in the Company's liquidation. 9The plaintiff was unaware of any suggestion that the Company was trustee for a trust. She only became aware of that claim after the winding up of the Company after Mr Lal made that contention to the liquidator upon the winding up of the Company. 10The background to the transfer is as follows. The Company carried on business as a mortgage broker and provider of tax and accounting services from about 1996. 11The Company purchased the Property in 2003 for $1,050,000. Mr and Mrs Lal and their children subsequently resided, and still reside, there. 12On 19 May 2008 the plaintiff commenced Local Court proceedings against the Company and Mr Lal claiming the sum of $23,045.12, and interest, being the balance outstanding of the sum of $72,208.06 lent between January 2002 and March 2003. 13On 24 July 2009 the Local Court gave judgment for the plaintiff against the Company and Mr Lal jointly and severally in the sum of $58,296.73 representing money lent in the sum of $23,045.12 and interest. Costs were also awarded to the plaintiff on an indemnity basis. 14Meanwhile, on 7 November 2008, after the commencement of the plaintiff's Local Court proceedings, Mr Lal caused the Company to transfer the Property to his wife for $1 and caused his wife to borrow about $1 million from the CBA secured by a mortgage over the Property. 15At the time of the transfer to Mrs Lal, the Company was indebted to the plaintiff and had other substantial creditors. 16On 16 December 2009 the Company was wound up pursuant to an order of the Federal Court, on the plaintiff's application. Thereafter Mr and Mrs Lal attempted to sell the Property. On 16 July 2010 Mr Lal was made bankrupt. Apart from the Property, at the time of the transfer to Mrs Lal the Company appears to have had no substantial asset in which it had any significant equity. It did own a commercial property at Marrickville which was subject to a mortgage, but appears to have had little or no equity in it. Consequently, the plaintiff's only chance of obtaining payment of her judgment debt may rest with the outcome of these proceedings. 17As noted earlier, Mr Lal, who controlled the Company and relevantly controlled his wife, did not give evidence. It is apparent from Mrs Lal's evidence that in financial matters she did what her husband asked or told her to do, including purportedly becoming trustee for the Trust. She said in the context of the 2008 transfer that she had to protect her two children, and the Company could not get a loan anywhere. 18On 28 August 2008 Mrs Lal signed a CBA Loan Declaration in which she applied for a loan relating to "Film Biz International". She declared that either this entity or she (it is not clear from the document) had assets of $900,000, liabilities of $10,000 and a net profit before tax of $250,000. In cross - examination Mrs Lal professed to be unable to cast any light on what this was all about except that her husband had an association with Film Biz International, a business which showed Indian films, and that she had worked for that company, on occasions, selling movie tickets. This is indicative of the extent to which she was apparently prepared to do her husband's bidding whilst having little, if any, understanding of a transaction. 19On the evidence, in my opinion, the intention of the Company and Mrs Lal at the time the Company transferred the Property to Mrs Lal was the intention of Mr Lal. His intention in relation to the transfer is at the heart of the case, yet he did not give evidence and I infer that he could have said nothing to assist the defendants' case. I infer that he organised his wife to give evidence instead of himself and that his hand is all over her affidavits. At one point in the plaintiff's cross - examination of Mrs Lal, Mr Lal was observed to be signalling an answer to his wife and I had to issue a warning. 20In my opinion, the prima facie inference from the circumstances referred to above, in the absence of competing evidence or explanation, is that the transfer of the Property which Mr Lal caused the Company to make to his wife for $1 was done with intent to defraud creditors and that she was not a purchaser in good faith without notice. 21I turn to the defence that the 2008 transfer merely replaced the Company with Mrs Lal as the trustee for the Trust: see [ 8 ] above. The following evidence is relevant to that defence. 22On 5 December 2001 Mr Lal caused a trust deed of the Trust to be executed. The named trustee was H Lal Property Developments Pty Ltd on whose behalf Mr Lal executed the deed. 23Mr Lal caused to be executed an undated deed under which the Company replaced H Lal Property Developments Pty Ltd as trustee for the Trust. Mr Lal submitted that this deed was executed on 5 December 2001 by reference to the date appearing on the third page. I reject the submission. The copy of the deed that Mr Lal tendered comprises four pages. The fourth page is an execution page signed by Mr Lal on behalf of H Lal Property Developments Pty Ltd, the Company and himself. That page says that it was executed on the date set out in Schedule 1. In fact, no date is set out in Schedule 1. The third page is the only page on which a date appears. This third page does not appear in the copy of the deed attached to the report of the Company's liquidator which is also in evidence. In fact, this third page is merely a photocopy of the execution page of the original trust deed of 5 December 2001. Why it should have been interleaved within the copy of the second deed tendered by Mr Lal was not explained. Mr Lal did not give evidence. The inference is open that it was interleaved because otherwise Mr Lal lacked documentary evidence to establish that it was executed, as he submitted, on 5 December 2001. It is highly unlikely that the second deed was executed on 5 December 2001 because that was the date of the earlier deed appointing another Lal company as trustee. I conclude that the second deed was executed later but I cannot say when. 24In early 2002 the Company settled on its purchase of a commercial property at Marrickville financed at least in part by a loan from the CBA secured by a mortgage over that property and an equitable mortgage over its assets and undertakings dated 7 February 2002. 25On 30 May 2003 the Company entered into a contract to purchase the Property for $1,050,000. 26The stamped copy of the contract has struck out beneath the name of the Company the words " Hasmukh Lal Patricia Lal or nominees on behalf of a company to be formed known as H Lal & Associates (No 4) Pty Ltd". Above this appear the words "Lal Property Family Trust". This may be compared with another contract for the sale of the Property of the same date tendered by Mr Lal which the Company's contract apparently replaced. It is not executed by the vendor and identifies the purchaser as "Hasmukh Lal Patricia Lal or nominees". It does not contain the struck out words in the Company's contract "on behalf of a company to be formed known as H Lal & Associates (No 4) Pty Ltd" and "Lal Property Family Trust". I understood Mr Lal to submit that the latter contract assisted the conclusion that the Company purchased the Property as trustee for the Trust. I disagree. 27On 24 June 2003 the Bank of Western Australia ( BankWest ) approved a refinancing facility, to replace the Company's CBA facility, of $1,050,000 to the Company as trustee for the Trust secured by a mortgage over its commercial property at Marrickville. 28On 25 July 2003 Challenger Mortgage Management Pty Ltd ( Challenger ) trading as Perpetual Trustees Victoria Ltd ( Perpetual ) lent $750,000 to the Company secured by a mortgage over the Property and guaranteed by Mr Lal. In contrast to the BankWest refinancing facility secured by a mortgage over the Marrickville property, there was no reference in the Challenger loan documents to the loan being to the Company in its capacity as a trustee. Challenger had no evidence to suggest that its loan was to the Company in its capacity as a trustee. 29On 25 July 2003 settlement took place of the purchase of the Property by the Company for $1,050,000. 30Nothing in the contract of sale of the Property or related documents in evidence suggests that the Company purchased the Property as trustee. 31On settlement, the balance of the purchase price payable after deducting the deposit paid of $105,000 and adjustments, was $950,017.73. This was financed as follows: (a)$745,3472.10 borrowed from Challenger secured by a mortgage over the Property; (b)a CBA line of credit of $53,085.86; and (c)$151,559.77, being the balance of the BankWest refinancing loan of $717,313.65 after repayment of $565,753.88 to the CBA, secured by a mortgage over the Marrickville property. 32On settlement, the CBA discharged an equitable mortgage dated 7 February 2002 over the Company's assets and undertakings including property held as trustee for the Trust. 33According to Mrs Lal's evidence, the 10 per cent deposit of $105,000 for the Property was funded by deposits to the Company's CBA overdraft cheque account of $19,000, $65,000 and $20,000. Mrs Lal said that the source of these deposits was not the plaintiff. The plaintiff submits that money lent by her to the Company went towards the deposit on the purchase of the Property or ancillary costs. The evidence is murky and it is unnecessary to resolve this issue. Even if unsecured money lent by the plaintiff to the Company went towards the purchase of the Property and even if $23,045.12 thereof (being the principal component of the plaintiff's judgment debt) has not been repaid, it does not effect my determination of the issues in these proceedings. However, I note that the overdraft cheque account to which the deposits were made was not designated as a trust account. This is of some relevance to the question whether the Company purchased the Property as trustee for the Trust. 34On or about 23 July 2008, after the plaintiff commenced Local Court proceedings against the Company and Mr Lal (see [ 12 ] above), Mrs Lal lodged a home loan application with the CBA to purchase the Property from the Company. In support, she provided the CBA with an undated contract for the sale of the Property by the Company to her prepared by a solicitor who was acting for both parties. The sale price on the contract was $1.3 million. 35A letter dated 16 November 2007 from a solicitor to the Company enclosed a draft contract for sale of the Property but the enclosure is not in evidence. It may have been the contract later provided to the CBA. There was affidavit evidence from Mrs Lal that the agreement whereby she became the owner was executed in April 2008, conveniently a month before the plaintiff instituted the Local Court proceedings. Given that the copy provided to the CBA was undated and having regard to all the evidence, I am not prepared to accept that evidence as reliable. 36Neither this contract nor the loan application indicated that the sale was by a retiring trustee to an incoming trustee for the Trust. On the contrary, the sale price suggested an arm's length transaction for realistic consideration. 37On 24 July 2008 the loan application appears to have been approved internally by the CBA. 38Later that day Mrs Lal contacted the CBA and requested a change to her application. The change was that the loan be documented in her name as trustee for the Trust. 39The CBA obtained a valuation for the Property of $1.25 million as at 31 July 2008. A CBA approval record dated 31 July 2008 for a loan to her as trustee for the Trust stated that the purchase price was $1.3 million and that the stamp duty on the transfer would be $59,990. Thus, the CBA was not told that the vendor was the trustee for the Trust, that the consideration would therefore be $1, and that the stamp duty would thereby be insignificant. The CBA record also contains seriously incorrect information, including the following, concerning Mrs Lal: (a)her monthly income was $20,000 - in fact it was one - tenth of that amount; (b)she owned assets of $959,000 - in fact her assets were worth very little. 40Mr Lal caused a deed to be executed dated 31 October 2008 whereby Mrs Lal replaced the Company as trustee for the Trust. He also caused her to sign a notice to the Company dated 31 October 2008 stating that she wished to exclude herself as a beneficiary of the Trust. 41On 7 November 2008 Mr Lal caused the Company to transfer the Property to Mrs Lal for a consideration of $1. This masqueraded as, but can hardly be described as, settlement of the sale contract because the sale price in the sale contract was $1.3 million. How that came to be substituted by $1 in the transfer was not explained in evidence. There is no evidence that the CBA was made aware of the substitution. 42At the same time Mr Lal caused Mrs Lal to draw down the CBA loan of about $1 million and to give the CBA a mortgage over the Property. This loan was used to repay the secured debt of $777,526.90 due to Perpetual (Challenger) and other debts, and $150,000 went, according to Mrs Lal's oral evidence, to pay for her purchase of a coffee shop. 43In his closing submissions, Mr Lal put that when the 2008 CBA refinancing occurred, the Company only had one creditor, the plaintiff. When I asked him to explain why, if that were so, other substantial creditors were paid out on settlement (including a company "P & H L Pty Ltd") he replied that they were creditors of "the trust". Why they should have been creditors of "the trust" when, according to Mr Lal's submission, the plaintiff was not, was not explained. On the evidence, I cannot see any reason for relevantly distinguishing between other creditors and the plaintiff. 44There are no financial accounts for the Trust except for the period 1 July 2007 to 31 March 2008, which Mr Lal provided to the liquidator of the Company. They list the Property as an asset of the Trust. The compilation report attached to those accounts indicate that they were prepared by Allan Porter & Associates. That firm has indicated that it has never acted on behalf of or prepared any documents for the Company or the Trust. I do not regard the accounts as reliable and give them no weight. 45Mr and Mrs Lal rely on two letters from the NSW Office of State Revenue to Mrs Lal dated 6 August 2010 and 24 January 2011. The first referred to information received indicating that the Property was acquired in 2003 by the Company on behalf of the Trust and that Mrs Lal took over as trustee on 31 October 2008. As neither she nor the Company had ever advised the Office that the Property was held on behalf of a special trust, land tax was reassessed at a higher rate from 2004 to 2010. The second letter concluded that in the 2004 to 2008 tax years the Property was owned by the Company and later by Mrs Lal as trustee for the Trust and that as they owned the Property as trustee of a special trust they were not eligible for exemption from land tax. I do not attach significant weight to those letters. They contain an expression of opinion by a government agency and the information on which it was based is unclear. A submission to the agency that the Property was not trust property could hardly have been made - and was not made - given that Mr Lal had contended to the liquidator of the Company that it was trust property, and therefore beyond the reach of creditors. The question is whether, on the evidence before the Court, the Company held the Property as trustee for the Trust. 46Having regard to the circumstances that I have recounted, I conclude that the Property was at no point trust property. My principal reasons are as follows: (a)Nothing in the 1993 contract for sale of the Property or related documents in evidence indicate that the Company purchased the Property as trustee for the Trust. The purchase was financed primarily by a loan from Challenger secured by a mortgage over the Property. Nothing in the Challenger loan documentation in evidence indicated that Challenger was lending money to the Company in its capacity as trustee or was taking trust property as security. Challenger had no evidence that the Company was acting as trustee. (b)This is in contrast to the Company's contemporaneous 2003 refinancing by BankWest of the CBA loan secured by the Marrickville property, which was to the Company in its capacity as trustee for the Trust. Thus, a distinction appears to have been drawn between the Company's purchase of the Marrickville property as trustee for the Trust and the Company's purchase of the Property in the Company's own right. (c)If Mr and Mrs Lal's contention is correct that the deposit on the Company's 2003 purchase of the Property was funded by deposits to its CBA overdraft cheque account, then it is notable that that account was not designated as a trust account. (d)The 2008 contract for sale of the Property from the Company to Mrs Lal for $1.3 million does not indicate that either was trustee for the Trust. That contract was provided to the CBA in support of the 2008 loan application which Mr Lal caused his wife to lodge with the CBA to finance the purchase of the Property from the Company. After the CBA loan was approved internally, she requested the CBA to put the loan in her name as trustee for the Trust. There is no evidence that the CBA was informed that the vendor Company was the current trustee for the Trust nor that the transfer would be for a nominal consideration. The notion of a transfer for a nominal consideration from one trustee to another had the advantage to Mr and Mrs Lal of insulating their home (the Property) from creditors of the Company and avoiding any significant stamp duty on the transfer. (e)Mr Lal, who pulled all the strings, did not give evidence and I infer that he could not have given any evidence that would have assisted the defendant's case. 47Mr Lal arranged for the Company, which he controlled, to transfer his family home (the Property) to his wife, whom he also relevantly controlled, for $1: see [ 10 ] - [ 20 ] above. The defence that this was a transfer from a retiring trustee to an incoming trustee has been rejected. In my opinion: (a) the Company transferred the Property with the intention of defrauding its creditors in the sense of hindering, delaying or defeating creditors and with the intention of prejudicing them by putting the Property, or its worth, beyond their reach; (b) the plaintiff was thereby prejudiced; and (c) in terms of s 37A(3), Mrs Lal was not a purchaser in good faith not having, at the time of the transfer, notice of that intent. It does not matter if the motive or intention was also to avoid stamp duty or, as Mrs Lal may have intimated, to facilitate refinancing of the Property and enable her to purchase a coffee shop. Section 37A does not require the intent to hinder, delay or defeat creditors to be the sole purpose: Marcolongo at [57]. Nor does s 37A "postulate a mixture of motives from which there must be extracted...a predominant intent to defraud": Marcolongo at [57]. The actual intent to defraud creditors, which I have inferred from the circumstances, is sufficient. 48Accordingly, I uphold the s 37A fraudulent transfer claim. THE SECURITY CLAIM 49The plaintiff claims that the Company or Mrs Lal holds the Property subject to a charge, trust or other equitable interest to secure payment of $23,045.12 plus interest to the plaintiff. The Local Court judgment establishes that the sum of $23,045.12 was lent by the plaintiff to the Company and guaranteed by Mr Lal. The plaintiff alleges that the Company applied her loan money to the deposit on the purchase of the Property in 2003. Whether or not that is so, there is no evidence at all of a charge, trust or other equitable interest to secure the payment of any money to the plaintiff. In earlier proceedings brought by the plaintiff against the Company relating to her loan, she sought an order to extend a caveat she had lodged on the title to the Property. Here it was similarly held that there was absolutely no evidence to suggest that it was a term of the loan that security would be provided and that the evidence did not disclose the slightest basis for supposing that she had a caveatable interest in the Property: Patel v H Lal & Associates Pty Ltd [2008] NSWSC 964 at [6] per Brereton J. The plaintiff has also twice applied unsuccessfully to this Court for an order that security be provided for her judgment debt. On both occasions the Court made clear that there was no basis upon which it could make such an order: Lal v Patel (Supreme Court of New South Wales, 14143/09, Schmidt J, 1 February 2010, unreported); Lal v Patel (Supreme Court of New South Wales, 295921/09, Davies J, 12 February 2010, unreported). 50Accordingly, I dismiss the security claim. LEAVE TO PROCEED AGAINST THE COMPANY 51The plaintiff seeks leave to proceed against the Company under s 471B of the Corporations Act . Section 471B provides: 471B Stay of proceedings and suspension of enforcement process While a company is being wound up in insolvency or by the Court, or a provisional liquidator of a company is acting, a person cannot begin or proceed with: (a) a proceeding in a court against the company or in relation to property of the company; or (b) enforcement process in relation to such property; except with the leave of the Court and in accordance with such terms (if any) as the Court imposes. 52The current proceedings were automatically stayed against the company upon the making of the Federal Court's winding up order. That order was made on 16 December 2009 after the commencement of proceedings. Although the winding up order was made by the Federal Court, leave under s 471B can be granted by this Court nunc pro tunc: Sihota v Pacific Sands Motel [2003] NSWSC 119, 56 NSWLR 721 at [2] per Austin J; Webforge Australia Pty Ltd v Tecniskill Co - operation Pty Ltd [2008] NSWSC 517 at [5] per Barrett J; Commonwealth of Australia v Davis Samuel Pty Ltd [No 5] [2008] ACTSC 124, 164 ACTR 1 at [1] per Refshauge J. In Hewlett Packard Australia Pty Ltd v Siltek Holdings Pty Ltd [2005] NSWSC 672 Barrett J granted leave to the applicant to pursue essentially proprietary claims against two companies in liquidation, stating: "Claims of that nature go beyond the money - based concepts relevant to proof of debts in a winding up. They entail an inquiry into the asset base available to the liquidator. There are accordingly features which take the case outside the province of the proof of debt system": at [7]. His Honour commented that it was noteworthy that neither liquidator opposed the grant of leave: at [9]. In Webforge at [8] his Honour made a similar comment. In Green v Official Trustee in Bankruptcy; in the matter of Schneller (Bankrupt) [2001] FCA 1644 Hill J granted the applicant leave, subject to conditions, under s 58(3)(b) of the Bankruptcy Act 1966 (Cth) to continue with proceedings against a bankrupt for orders pursuant to s 37A of the Conveyancing Act. 53A complicating factor in this case is that the liquidator of the Company lodged a form with the Australian Securities and Investment Commission ( ASIC ) indicating that his appointment as liquidator ceased on 13 April 2011. He applied to ASIC for the deregistration of the Company on the basis that the Company's affairs had been fully wound up and there was not sufficient property available to pay the costs of obtaining an order of the Court dissolving the Company. Once the liquidator resigns, the Company not only lacks a liquidator but also has no - one who can perform the functions of as an officer of the Company, such as the execution of a transfer of the Property. However, the Court may give the director approval to act: s 471A(1A). I do not know whether the liquidator has in fact resigned under s 473 of the Corporations Act. 54On 29 April 2011 ASIC wrote to the plaintiff approving deferral of deregistration of the Company for 180 days. It is therefore unnecessary to consider the position if the Company had been deregistered: ss 601AD - 601AF of the Corporations Act. 55The defendants have not expressed any opposition to leave to proceed against the Company being granted nunc pro tunc. I consider that it is appropriate to grant such leave against the Company, subject to considering any contrary submission by the liquidator or ASIC (as may be appropriate). ORDERS 56The plaintiff has succeeded on her claim under s 37A of the Conveyancing Act . I will give the liquidator of the Company and ASIC (or either as may be appropriate) the opportunity to make submissions as to whether to grant leave to proceed against the Company nunc pro tunc and as to the appropriate orders to give effect to my reasons for judgment. I will also hear the parties as to the appropriate orders. 57At the conclusion of the hearing, the CBA proposed an order, if the parties agreed, that the CBA sell the Property and pay the net proceeds, after payment of the amount owing to the CBA under its mortgage, to the liquidator for distribution among the Company's creditors. In the absence of such an agreement, orders to the following effect might be appropriate: (1)Declaration that the transfer of the Property at 49 O'Neill St, Brighton - Le - Sands is voidable under s 37A of the Conveyancing Act 1919 at the instance of the plaintiff as a person thereby prejudiced. (2)Order that the fourth defendant deliver to the first defendant within three working days a transfer to the second defendant in registrable form of the title to the Property subject to the registered mortgage held by the fourth defendant No AE 385830C. (3)Order that the first defendant execute the transfer and deliver it to the liquidator of the second defendant within three working days thereafter. (4)If the first defendant fails to comply with Order 3, the Registrar of the Court is to execute the transfer upon application by the plaintiff, liquidator of the second defendant or the fourth defendant. (5)Grant leave to the plaintiff to proceed with these proceedings nunc pro tunc against the second defendant. (6)Order that the first, second and third defendants pay the plaintiff's costs of the proceedings. (7)Liberty to apply on two days notice. 58I direct the fourth defendant to promptly serve the liquidator of the Company and ASIC with a copy of these reasons for judgment. The proceedings will be listed before me at 4.00pm on Tuesday 28 June 2011 when I will hear the parties, the liquidator and ASIC (or either as may be appropriate) as to the orders that should be made. Before that time, they are to provide my Associate, preferably electronically, with their proposed orders. 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: 23 June 2011