ACT Supreme Court: Pepper Finance Possession Application Dismissed, New Filing Required

• The ACT Supreme Court required a separate local application for possession of ACT apartments, despite a Victorian Supreme Court order for possession.
• The Victorian judgment, registered in the ACT, was deemed enforceable for monetary components but not for orders in rem concerning ACT land.
• Justice Muller raised concerns about the Victorian Supreme Court's jurisdiction to make in rem orders beyond its state limits and the enforceability under the Service and Execution of Process Act 1992.
• The ACT court found that Section 105(5) of SEPA limited enforcement to judgments capable of enforcement by the originating Victorian court.
• The plaintiff was directed to file a new application for possession, supported by an affidavit, adhering to specific ACT Court Procedures Rules.

The ACT Supreme Court determined that while a monetary judgment from another jurisdiction could be registered and enforced as a debt, orders for the delivery of possession of land required a distinct, local application, even after interstate registration.

The ACT Supreme Court recently ruled that a plaintiff seeking possession of two apartments located in the Australian Capital Territory must file a distinct application within the ACT, notwithstanding a prior order for possession granted by the Supreme Court of Victoria (VSC). This decision, in the case of Pepper Finance Corporation Ltd v The Barrow-Yu Trading Pty Ltd [2026] ACTSC 346, underscores the complexities of interstate judgment enforcement, particularly concerning orders in rem jurisdiction over real property.

The plaintiff, Pepper Finance Corporation Ltd, aimed to enforce a default judgment from the VSC, entered on 7 November 2025, which included orders for the defendant, The Barrow-Yu Trading Pty Ltd, to deliver possession of two apartments at State Circle, Forrest, ACT. This Victorian judgment was subsequently registered in the ACT Supreme Court on 18 February 2026, under rule 2010A of the Court Procedures Rules 2006 (ACT). However, the ACT court, presided over by Justice Muller, raised fundamental questions regarding the VSC's authority to issue orders affecting land outside Victoria's borders and the scope of enforceability under the Service and Execution of Process Act 1992 (Cth) (SEPA).

Justice Muller directed the plaintiff to provide written submissions addressing these jurisdictional and enforcement concerns. Ultimately, on 5 August 2026, the ACT Supreme Court dismissed the application that had been lodged in the proceeding, without awarding application costs. The court then explicitly instructed Pepper Finance to initiate and serve a new application specifically for possession, ensuring it complied with the ACT's own procedural requirements.

The ACT Supreme Court drew a clear distinction between the enforceability of different components of the Victorian judgment. While the VSC's order for a sum of money, interest, and costs (referred to as order 3) was confirmed as registered in the ACT and enforceable as a debt, the orders pertaining to the delivery of possession of land (orders 1 and 2) faced significant hurdles. The court mandated that for these possession orders, the plaintiff must file a separate application supported by an affidavit that met the specific criteria outlined in rules 1118, 1119, and 1124 of the ACT Court Procedures Rules.

The court found that the evidence presented at that stage was insufficient to support a direct application for possession based solely on the registered interstate judgment. This highlights that even with an interstate judgment registered under r 2010A, the enforcement of orders in rem, such as those for the delivery of possession of land, requires adherence to the local jurisdiction's specific procedural rules and evidentiary standards for a new ACT Supreme Court Pepper Finance possession application.

Central to the ACT Supreme Court's decision were the limitations on interstate judgment enforcement under SEPA and the VSC's inherent jurisdictional boundaries. The court explained that section 105(5) of SEPA restricts the enforcement of a registered judgment to what would be enforceable by the originating court in Victoria or another Victorian court. If a judgment is not enforceable by the court of its inception, then section 105(5) does not render it enforceable in the ACT.

Furthermore, the ACT Supreme Court determined that section 85 of the Constitution Act 1975 (Vic) does not extend the VSC's power to make orders in rem beyond Victoria's geographical limits. Although the court acknowledged the potential for an alternative pathway through the cross-vested jurisdiction available in superior state-based courts, it concluded that this avenue was not applicable in the present circumstances. This ruling clarifies that while SEPA facilitates interstate judgment enforcement Australia, it does not automatically grant extraterritorial effect to orders in rem, particularly those concerning real property.

This case serves as a crucial reminder for legal practitioners navigating property disputes across Australian state and territory borders. It firmly establishes that even when an interstate judgment for possession of land has been registered, it does not automatically translate into direct enforcement in the jurisdiction where the property is located. Instead, a separate, local application for possession, fully compliant with the ACT Court Procedures Rules possession requirements, is necessary.

The ACT Supreme Court's stance emphasizes that the jurisdictional limits of originating courts, particularly concerning orders in rem, remain a significant consideration, even with mechanisms like SEPA designed to streamline interstate enforcement. Lawyers advising on such matters must meticulously plan procedural steps, ensuring that all local rules and evidentiary requirements are met to successfully enforce property-related orders across different Australian jurisdictions.

Lawyers advising on property disputes across Australian state borders must understand that even registered interstate judgments for possession of land (in rem orders) require separate local applications and compliance with local procedural rules, as jurisdictional limits may prevent direct enforcement under SEPA. This highlights the need for careful procedural planning when seeking to enforce property-related orders across jurisdictions.

Source: Based on a recent legal news report.