Westpac Banking Corporation: Application of Zheng  NSWSC 147
The Supreme Court of NSW has ordered payment to be made in favour of a creditor, despite failure to locate the debtor. Accordingly, debts held in Australia cannot be avoided by leaving the jurisdiction or making yourself difficult to locate.
On 27 February 2023, Robb J held in Westpac Banking Corporation: Application of Zheng  NSWSC 147that funds paid into Court following the sale of one of the debtor’s assets be released to Mr. Zheng (the Applicant) in part satisfaction of a default judgment obtained by the Applicant in a related matter.
In 2019 the Court ordered the freezing of the assets of the debtor, Ms Nina Flynn Zhu and restrained her from disposing of, or dealing with those assets.
In or about October 2021, the debtor’s mortgagee, Westpac Banking Corporation (Westpac), applied to the Court (Westpac Proceedings) to have the balance of proceeds from a sale of the debtor’s property following the debtor’s default of her mortgage, paid into court as Westpac could not locate Ms Zhu.
On 25 August 2022, the Applicant obtained a default judgment against the debtor in separate proceedings and subsequently filed a notice of motion pursuant to rule 55.11 of the Uniform Civil Procedure Rules 2005(NSW) (UCPR) to be joined to the WestpacProceedings to access the funds paid into Court in part satisfaction of the judgment debt.
His Honour, Robb J, gave careful consideration to the orders sought by the Applicant given the risk that other valid claims could in theory, arise from other unsecured creditors. The Applicant submitted that the release of money from funds paid into the Court may still be subject to section 118 of the Bankruptcy Act 1966(Cth) should another creditor apply to have the debtor made bankrupt.
It was held that the practical result of any release of the funds in Court to the Applicant would be no different to a situation where the debtor had made payment to the Applicant on her own account.
Robb J adopted the principles set out by Kunc JinEldsure Pty Ltd v Sheridan Legal Pty Ltd
 NSWSC 1616and held that: “the Court may make an order sought to Mr. Zheng under UCPR r 55.11, or alternatively, the Court may make the same order by analogy with garnishee
Click here to read more.
Click here to learn more about our Sydney, New South Wales, Australia member firm Eakin McCaffery Cox Lawyers.