Background
John Deere Financial Limited lent Redzel Consulting Pty Ltd, as trustee for the Redzel Pastoral Company Trust, $227,830.36 under a secured commercial loan agreement dated 15 December 2021. The vendor-finance loan funded industrial vehicles and related equipment, was secured by a chattel mortgage, and was guaranteed by Simon John Quinn.
Redzel stopped making monthly repayments in March 2025. John Deere sent demands for repayment to Redzel and then Quinn, but received neither payment nor, after proceedings commenced, delivery of the secured assets. Its June 2025 statement of claim sought the outstanding debt and delivery up of the assets. Receivers and managers had been appointed to Redzel in September 2024, and Redzel entered liquidation in March 2026; both the receivers and managers and the liquidator consented to the orders John Deere sought.
John Deere ultimately pursued only delivery up against Redzel and sought no relief against Quinn, whom the Court understood to be an undischarged bankrupt. It also sought leave to amend its pleading to reflect Redzel’s insolvency status, dispensation from service of the amended pleading, and, if necessary, leave to continue against the company in liquidation.
The Court’s Holding
Elkaim AJ held that John Deere was entitled to possession of the secured assets on two independent bases. At common law, a chattel mortgagee was entitled to possession upon default, consistently with clauses 9.4 and 9.5 of the loan agreement. No defendant disputed Redzel’s default or identified any reason John Deere lacked the right to possession.
John Deere was also entitled to default judgment under r 16.5 of the Uniform Civil Procedure Rules 2005 (NSW). Redzel had filed no defence, the supporting affidavit satisfied the applicable requirements, and the receivers and managers and liquidator affirmatively consented to the requested relief. The Court ordered Redzel to deliver the identified tractor, loader, feed mixer, tank, utility vehicle, bucket, pallet fork, and hay forks within seven days and to pay John Deere’s costs.
The Court considered that s 471C of the Corporations Act 2001 (Cth) meant leave to proceed against Redzel was unnecessary, but granted leave under s 471B to the extent necessary. It permitted the amended pleading, dispensed with its service, dismissed the claim against Quinn under r 29.8(1), and made no costs order between John Deere and Quinn.
Key Takeaways
- A secured lender may obtain possession of mortgaged chattels following the borrower’s default where the agreement and common law confer that right.
- Failure to defend can support default judgment for possession under r 16.5 when the rule’s evidentiary requirements are met.
- Where a corporate defendant is in liquidation, the Court may address uncertainty about the statutory leave requirement by granting leave to proceed to the extent necessary.
Why It Matters
The decision illustrates a direct route for enforcing a chattel mortgage against an insolvent borrower: establish the contractual and common-law right to possession, satisfy the procedural requirements for default judgment, and address any insolvency-related restriction on continuing the proceeding.
It also shows that the Court may streamline uncontested enforcement where insolvency appointees consent, including by allowing amendments, dispensing with further service, and ordering prompt delivery of specifically identified secured property.