Australia, June 2 -- New South Wales Land and Environment Court issued text of the following judgement on May 2:

1. By notice of motion filed on 2 April 2025, the applicants seek a stay in respect of particular orders made by Ball J on 11 December 2024 (see Westpac Banking Corporation v Sentox Pty Ltd (No 3) [2024] NSWSC 1578 (Relief Judgment)), which orders are consequential on Ball J's substantive decision in Westpac Banking Corporation v Sentox Pty Ltd (No 2) [2024] NSWSC 783 (Liability Judgment).

2. The applicants on the motion are also the appellants who, on 11 March 2025, filed a notice of appeal which seeks to set aside the orders the subject of the stay application.

3. For the following reasons, I consider that the first applicant (Mrs Kathie Musumeci) should be granted a stay, but different considerations apply to the second and third applicants (i.e. CAO Holdings Pty Ltd and Musumeci Property Investments (Receivers and Managers Appointed) Pty Ltd (MPI), whom I shall refer to collectively as the Corporate Applicants).

Background

4. The respondent (Westpac Banking Corporation) brought successful proceedings against the applicants and others in debt and deceit relating to an invoice discounting facility (IDF) which it provided to Sentox Pty Ltd (in liq). Sentox operated a fruit and vegetable wholesale business from Flemington Markets in Sydney. Mrs Musumeci was previously a director of Sentox and is currently a director of the Corporate Applicants. Westpac claimed damages against Mrs Musumeci for the tort of deceit and in reliance on her guarantee concerning the IDF. Westpac's claims against the Corporate Applicants related to the knowing receipt of funds.

5. During the course of a mediation prior to the hearing of the proceedings below, Mrs Musumeci collapsed and was admitted to hospital. She was later diagnosed by a forensic psychiatrist, Dr Tanveer Ahmed, as suffering from mixed anxiety and depressive disorder which he described as "a serious and debilitating mental health condition". In his report dated 26 April 2024, Dr Ahmed opined that Mrs Musumeci "is not currently fit to participate in the court in litigation and to instruct lawyers due to the volatility of her current mental state". He added that, in his opinion there were reasonable prospects that Mrs Musumeci would be mentally fit to sustain what was then scheduled to be a four-week hearing commencing in May 2024 if it was conducted within a period of three to six months from the date of the report.

6. On 1 May 2024, Mrs Musumeci filed a notice of motion below seeking to vacate the hearing date on the basis that Mrs Musumeci was not fit to participate in the proceeding or instruct lawyers. Ball J dismissed the motion and instead appointed Mrs Musumeci's 24-year-old son (Adrian) as her tutor to instruct during the proceeding. The substantive hearing commenced on 8 May 2024.

7. The Liability Judgment and the Relief Judgment were published on 27 June 2024 and 11 December 2024 respectively.

8. On 17 March 2025, Westpac served a bankruptcy notice on Mrs Musumeci. On 7 April 2025 and 24 April 2025 respectively, the time for compliance with the requirements of the bankruptcy notice were extended and then further extended up to and including 15 May 2025.

*Rest of the document can be viewed at: (https://www.caselaw.nsw.gov.au/decision/1968e4d3123bea66ab1adcb6)

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