Dozey, a sole trader, is the owner of a business called Sleepy Head which specialises in selling mattresses and bed-ware. He has insured the business with Risk Ltd against fire, theft and the like in the sum of $1,000,000.

Five years later, in 2020, Dozey decided to conduct the business via a corporate structure. He incorporated a company called Sleepy Head Pty Ltd which is validly registered with ASIC. Immediately thereafter, in February 2019, Dozey enters into a sale contract with Sleepy Head Pty Ltd which purchases the business from him. As consideration for the purchase price, the company issued the following to Dozey:

a substantial block of shares as fully paid; and

debentures for a further substantial sum secured by a security interest in a noncirculating asset.

After incorporation, Dozey caused the company to take out a workers compensation insurance policy with Compo Ltd.

A series of bad luck accidents followed. In January 2021, burglars broke into the premises of Sleepy Head Pty Ltd and stole stock valued at $250,000. In February 2021, Dozey fell from a ladder in the store while trying to retrieve some stock and injured his back. He has incurred substantial medical costs. As a result of the Global Financial Crisis and a slowing economy, the business has never fully recovered from sluggish sales. As a result of the continuing decline in sales, Sleepy Head Pty Ltd is now insolvent and the company is under the care of a liquidator.

The liquidator has rejected Dozeys claim against Sleepy Head Pty Ltd in relation to the enforcement of the security held by Dozey. Compo Ltd, which has underwritten Sleepy Head Pty Ltds worker compensation policy, has rejected Dozeys claim for payment of his medical bills. Risk Ltd has also refused the insurance claim of Sleepy Head Pty Ltd to recover the value of the goods stolen.

Advise fully, with reference to legal authority, whether Dozey can:

(a) enforce his security interest against Sleepy Head Pty Ltd;

(b) enforce the claim of Sleepy Head Pty Ltd against Risk Ltd to recover the value of the goods stolen; and

(c) enforce his claim against Compo Ltd for the payment of his medical bills. Note: For purposes of this question, assume the business was solvent at the time of sale to Sleepy Head Pty Ltd and that it was sold at market value.

Use Cases:

Salomon v Salomon [1897] AC 22

Lee v Lees Air Farming Ltd [1961] AC 12

Macaura v Northern Assurance Co Ltd [1925] AC 619

Andar Transport Pty Ltd v Brambles Ltd [2004] HCA 28

Pioneer Concrete Services Ltd v Yelnah Pty Ltd (1987) 5 NSWLR 254

Gilford Motor Co. v Horne [1933] 1 Ch 935