Atkinson v Jeffrey, in the matter of Atkinson [2026] FCA 427

1. Nicole Deberoah Atkinson, the applicant, seeks an order setting aside bankruptcy notice no. BN280826 issued on 18 August 2025 (Bankruptcy Notice) on the application of Trevor Stanley Jeffrey and Dina Lorraine Jeffrey (together, the respondents).
2. In her amended application filed on 1 October 2025 Ms Atkinson contends that the Bankruptcy Notice should be set aside because it is an abuse of process in that it was issued for an improper purpose rather than to invoke the Court's jurisdiction in relation to insolvency. Ms Atkinson says that the improper purpose is enforcement by the respondents of the debt they allege she owes to them and/or to "pressure, harass, discourage, hinder and prevent" Ms Atkinson from continuing to pursue her legitimate rights and claims against the respondents in relation to the registration and construction of an easement granted in Supreme Court of New South Wales proceeding no. 2021/257029 and/or for some purpose other than her insolvency. Ms Atkinson also contends that she is solvent.
3. In her written submissions in support of her application to set aside the Bankruptcy Notice Ms Atkinson put the grounds on which she seeks to set aside the Bankruptcy Notice in different terms, raising three grounds. However, at the hearing Ms Atkinson's solicitor informed the Court that Ms Atkinson:

(1) only pressed one of those grounds, namely that the Bankruptcy Notice is an abuse of process because she is solvent; and

(2) raised a new ground based on evidence given by Mr Jeffrey in cross-examination, namely that the Bankruptcy Notice is liable to be set aside because at the time it was issued Mr Jeffrey did not understand the effect or purpose of a bankruptcy notice and the effect of bankruptcy, and the Bankruptcy Notice was issued solely for the purpose of seeking to obtain payment of a debt.

1. Before proceeding to address those grounds, it is convenient to set out the background to the issue and service of the Bankruptcy Notice as well as the evidence given by Ms Atkinson about her financial position.

Events leading up to service of the Bankruptcy Notice

1. The Supreme Court proceeding was commenced by the respondents (as plaintiffs in that proceeding) against four defendants, including Ms Atkinson as the fourth defendant. As described by the trial judge it concerned the operation of various registered rights of carriageway affecting neighbouring properties in South Boambee, New South Wales: Jeffery v Adams [2023] NSWSC 1270 at [1]. That proceeding was resolved in favour of the respondents and a costs order was made in their favour.
2. Ms Atkinson purported to appeal against the orders made in the Supreme Court proceeding. The appeal was dismissed as incompetent and a notice of motion filed in that proceeding by Ms Atkinson was also dismissed. Ms Atkinson was ordered to pay the respondents' costs: see Atkinson v Jeffery [2024] NSWCA 96 (Atkinson v Jeffery (No 1)).
3. Ms Atkinson then filed two further applications in the New South Wales Court of Appeal. The first was an amended summons seeking leave to appeal from the orders made in Jeffery v Adams and the second was an application seeking the discharge of the order made in Atkinson v Jeffery (No 1) dismissing Ms Atkinson's notice of appeal as incompetent. On 14 June 2024 the Court of Appeal made orders dismissing those applications and for Ms Atkinson to pay the respondents' costs: see Atkinson v Jeffery [2024] NSWCA 149 (Atkinson v Jeffery (No 2)).
4. The costs which were the subject of the costs orders made in favour of the respondents in Atkinson v Jeffery (No 1) and Atkinson v Jeffery (No 2) were assessed and on 24 February 2025 certificates of determination of costs and of determination of manager's assessment costs (First Costs Certificates) were issued to the respondents as costs applicants and Ms Atkinson as costs respondent. The First Costs Certificates certified:

(1) the total costs payable by Ms Atkinson for the costs subject of the costs orders (including interest) and costs of the costs assessment to be $105,395.34; and

(2) the costs payable by Ms Atkinson for the remuneration of the costs assessor to be $3,905.

Thus the total amount payable by Ms Atkinson to the respondents based on those costs certificates was $109,300.34. On 4 March 2025 the respondents registered the First Costs Certificates as a judgment.

1. On 14 April 2025 Ms Atkinson applied for a review of the First Costs Certificates. As her application was out of time, she also sought an extension of time, which was granted. On review the assessed costs were reduced to reflect minor arithmetic corrections and on 1 August 2025 the review panel issued two certificates of determination of review (Second Costs Certificates), the first of which assessed the amount of costs payable by Ms Atkinson to the respondents (including interest) and costs of the assessment pursuant to the costs orders to be $102,573.89, and the second of which assessed the amount of costs payable by Ms Atkinson for the remuneration of the review panel to be $6,931.37. Thus the total costs payable by Ms Atkinson to the respondents pursuant to the Second Costs Certificates was $109,505.26.
2. On 14 August 2025 the respondents registered the Second Costs Certificates in the District Court of New South Wales and a judgment for the amount of $109,505.26 was issued by that Court. Relying upon that judgment the Bankruptcy Notice was issued and subsequently served on Ms Atkinson.

1. Ms Atkinson describes herself as an invalid pensioner but says that she is able to pay her debts. In an affidavit sworn by Ms Atkinson on 7 September 2025, she gives the following evidence about her assets, income and liabilities:

4. My personal assets are as follows:

(a) I have a motor vehicle and personal property worth a few thousand dollars

(b) I have a tenancy agreement in relation to the self contained dwelling situated on the upper level of my house; and

(c) I own the property at 225C South Boambee Road Boambee NSW 2450 being lot 132 DP1042485 which was valued at $1.1 million by Vanguard Valuations (per Michael Pung) as at 27 March 2025 (sic). That valuation was obtained through my solicitor Christopher Michael Adamson (Chris) for the purpose of filing and service upon the respondents in Supreme Court of NSW Court of Appeal proceedings (sic) appeal case number 2023/00361086.

I was advised by Chris that the Vanguard Valuation was duly filed and served on the respondents as part of my appeal case number 2023/00361086.

1. I am able to pay my debts. My current liabilities (paid as follows) are as follows

(a) Mortgage balance $149,535.10: monthly repayment $1250

(b) Rates $120.00 per fortnight

(c) Power $150.00 per fortnight

(d) Phone $85.00 per fortnight

(e) Gas $83.00 per fortnight

(f) Water $50 per fortnight

(g) Medical $200 per fortnight

(h) Credit card $110.00 per fortnight

(i) Foxtel $45.00 per fortnight

(j) Deisel $150.00 per fortnight

(k) Insurances $455.00 per fortnight

(l) Food $250.00 per fortnight

(m) Misc. expenses (estimated) $150.00 per fortnight

Legal Costs

1. I also have an outstanding invoice for legal costs owed to Paclaw Pty Ltd for $66,000.00 which is not presently due for payment.
2. In order to meet my liabilities, including that owed to the respondents if the [Bankruptcy Notice] is not set aside, I have made an application to my bank for an extension of my mortgage loan of between $200,00.00 and $300,000.00

1. In an affidavit sworn on 29 March 2026 Ms Atkinson:

(1) says her bank, BCU Bank, has now approved her loan application for $300,000 subject to satisfactory documentation and registration of its standard mortgage contracts;

(2) provides a copy of a statement for an account she holds at BCU Bank with a balance as at 29 March 2026 of $110,000; and

(3) undertakes to keep that sum in that account "pending the Courts (sic) determination of these proceedings and the orders made and without any admissions or prejudice to [her] case that [she] was not at any time insolvent".

1. Mr Jeffrey gave evidence that at the time of issuing the Bankruptcy Notice he and Mrs Jeffrey were aware that Ms Atkinson owned the property at 225C South Boambee Road, Boambee NSW 2450 (Boambee Property) but beyond that had no knowledge of Ms Atkinson's financial position. In particular they were unaware of the amount of equity Ms Atkinson had in the Boambee Property or what other debts she may have had. Mr Jeffrey's understanding was that Ms Atkinson is a disabled pensioner.
2. In causing the Bankruptcy Notice to be issued Mr Jeffrey did not know Ms Atkinson's financial position and he caused the Bankruptcy Notice to be issued in the hope that Ms Atkinson would comply with it but with a view to commencing bankruptcy proceedings if she did not.
3. In cross-examination Mr Jeffrey was asked about the purpose of issuing the Bankruptcy Notice. Mr Jeffrey responded that it was for the unpaid legal fees and that "if you don't pay something... someone else takes over". Thereafter Ms Atkinson's solicitor, Chris Adamson, put to him that he did not "know why the Bankruptcy Notice was issued, other than to enforce payment of the costs judgment". Mr Jeffrey responded that he did not know and that he did not understand what Mr Adamson was talking about.
4. Mr Adamson and Mr Jeffrey had the following exchange:

Mr Adamson: Who made the decision to issue a bankruptcy notice against the applicant, Nicole?

Mr Jeffrey: I don't know. That's what happens when you do - you don't pay your bill. I get them too. If I don't pay my bill, I get - someone comes after me.

Mr Adamson: All right. It's usually the sheriff, isn't it, or somebody who's chasing the bill up for the person that you owe money to, correct?

Mr Jeffrey: I suppose so, yes, as you tell them.

Mr Adamson: Why didn't you pursue Nicole by - through the courts or through the local court or through the sheriff for the amount that you say that was owing to you?

Mr Jeffrey: I don't know, just the way it is. I have a lawyer, so I just handed it to the lawyer.

1. Mr Jeffrey gave evidence that the decision to issue the Bankruptcy Notice was made by him and Mrs Jeffrey. Mr Jeffrey then had the following exchange with Mr Adamson:

Mr Adamson: And what is a bankruptcy notice? What do you think a bankruptcy notice means?

Mr Jeffrey: If someone don't pay their bill or whatever, someone else goes and does it for you, a bit higher up.

Mr Adamson: So?

Mr Jeffrey: Because I can't do it.

Mr Adamson: So your understanding of a bankruptcy notice is that it's used to enforce payment of bills, correct?

Mr Jeffrey: Well, as I know it is.

Mr Adamson: Maybe I've - perhaps I've asked you this before, but I just want to ask you once more. Do you have any reason to doubt that the applicant, Nicole, could not pay her bills?

Mr Jeffrey: I don't - I've got no - I've got not her financials. I do not know what she can and what she can't do. It has got nothing to do with me.

...

Mr Adamson: As far as you were concerned, the bankruptcy notice was a way of enforcing the cost order in your favour, correct?

Mr Jeffrey: I don't know. As I know - that's what you do, don't you? I'm not a lawyer, sorry.

1. I turn to consider the grounds now relied on by Ms Atkinson to set aside the Bankruptcy Notice (see [3] above). They can be addressed together.
2. In her written submissions Ms Atkinson submits that before the costs certificates were "wrongfully" filed and entered and the Bankruptcy Notice served, she had sought to apply for a loan sufficient to pay all of her debts including any debt owed to the respondents. She contends that the "wrongfully filed judgments ... are likely to delay and damaged (sic) and continue to delay and damage [her] ability to borrow" and contends that the respondents gave her no opportunity to clarify that she had equity in her property and her ability to borrow or even sell her property before the costs certificates were filed, judgment entered and the Bankruptcy Notice served.
3. To the extent this submission (and the one that follows) suggest that the Bankruptcy Notice should be set aside because of some irregularity in the registration of the Second Costs Certificates as a judgment, it cannot succeed. In Amos v Brisbane TV Ltd [2000] FCA 825; (2000) 100 FCR 82 the debtor, among other things, challenged the bankruptcy notice on technical grounds including because the certificate of taxation relied on did not comply with a particular rule in the Supreme Court Rules 1900 (QLD). Justice Drummond rejected that ground finding that the defect was not sufficient to deprive the certificate of its effectiveness to quantify the amount of the debtor's liability: at [23]. His Honour relevantly said at [24]:

When the question is whether there is a judgment sufficient for the purposes of s 40(1)(g) of the Bankruptcy Act 1966 (Cth), the Bankruptcy Court is not concerned with technicalities, for example, with whether it has been obtained in accordance with the procedural requirements of the court which pronounced it, or whether it has been given in the wrong form: Re Skaff; Ex parte Farrow Mortgage Services Pty Ltd [1993] FCA 118; (1993) 41 FCR 331 at 336 ; [1993] FCA 118; 113 ALR 715 and Re Ferguson; Ex parte EN Thorne & Co Pty Ltd (in liq) (1969) 14 FLR 311 at 320 and cf McIntosh v Shashoua [1931] HCA 56; (1931) 46 CLR 494 at 520. ...

1. Ms Atkinson submits that where the respondents sought no clarity and gave her no opportunity to clarify her solvency, they cannot now be allowed to complain that no such information was given. Ms Atkinson contends that the respondents obtained judgment in the District Court on 14 August 2025 and within a few days applied for and served the Bankruptcy Notice without any notice or any attempted enforcement. She submits that there can be little doubt that, had the Court been made aware prior to the filing of the Second Costs Certificates that the respondents had filed the First Costs Certificates and obtained a judgment on 4 March 2025, the Court would not have entered the judgment on 14 August 2025 which was relied upon in issuing the Bankruptcy Notice.
2. In oral submissions Mr Adamson, on behalf of Ms Atkinson, made further submissions (not previously raised in her written submissions) focusing principally on the second ground set out at [3] above. Ms Atkinson submits that the case law in relation bankruptcy notices and the Bankruptcy Act 1966 (Cth) require the person who applies for a bankruptcy notice to at least know what he or she is doing. In relation to this argument, Ms Atkinson submits that:

(1) Mr Jeffrey had no understanding of the effect of a bankruptcy notice and did not understand what he was doing; and

(2) Mr Jeffrey misunderstood the process as a mechanism for enforcing the costs judgment, which is not a permissible purpose. In particular, she relies on his evidence that he thought the issue of a bankruptcy notice was a good way to enforce the costs judgment and get paid. Ms Atkinson contends that is not good enough, given the serious consequences of bankruptcy.

1. Ms Atkinson also relied generally on notions of fairness and public interest stating that it was neither fair nor in the public interest to permit the respondents to serve the Bankruptcy Notice where they have other available avenues of enforcement.
2. In considering these submissions it is convenient first to set out the relevant legal principles.
3. In Australian Securities and Investments Commission v Forge [2003] FCAFC 274; (2003) 133 FCR 487 Emmett J (with whom Branson and Stone JJ agreed), after observing that the power to set aside a bankruptcy notice is derived from s 30 of the Bankruptcy Act, stated at [27]:

However, the [Bankruptcy] Act gives no general discretion to set aside bankruptcy notices that are valid in form and not an abuse of process. The [Bankruptcy] Act permits the issue of a bankruptcy notice and, if the notice is valid, prescribes the consequences to the bankrupt of non-compliance. The grounds upon which a bankruptcy notice may be set aside must relate to the form or content of the notice, service of the notice or the existence of the debt upon which the judgment, and, in turn, the notice, is founded. Reference to the existence of a debt includes the existence of a counter claim, set off or cross demand equal to or exceeding the amount of the debt: Re Briggs; Ex parte Briggs v Deputy Commissioner of Taxation (WA) (1986) 12 FCR 310 at 312; Re Athans; Ex parte Athans (1991) 29 FCR 302 at 310. Since jurisdiction to set aside a defective bankruptcy notice is not a general discretionary jurisdiction, it differs from the jurisdiction to make a sequestration order under s 52(1), which is expressly discretionary.

1. Central to Ms Atkinson's grounds is the contention that the Bankruptcy Notice should be set aside as an abuse of process. In Nobarani v Mariconte [2021] FCAFC 96 a Full Court of this Court (Allsop CJ, Farrell and Derrington JJ) summarised the principles relevant to establishing that a bankruptcy notice should be set aside as an abuse of process at [32]-[33]. Relevantly:

(1) on an application to set aside a bankruptcy notice the applicant bears the onus of establishing the purpose for which the bankruptcy notice was issued and that it was improper;

(2) an allegation of an abuse of process is a serious one which cannot be made without a sufficient factual foundation. The party alleging bears a "heavy onus" in establishing its existence; and

(3) the time at which to ascertain whether a bankruptcy notice is an abuse of process is the time when it is issued.

1. At [42]-[43] the Full Court, referring to the decision in Cavoli v Etl [2007] FCA 1191; (2007) 5 ABC(NS) 363, accepted the proposition that it is not an improper purpose to issue a bankruptcy notice for the purpose of having a debt paid, so long as the creditor intends to invoke the Court's bankruptcy jurisdiction if it is not. The Full Court put the matter in the following way at [49]:

Where, as here, it cannot be said that the creditor issued the bankruptcy notice without an intention to file a petition if the notice is not complied with nor that he believed the debtor was solvent, there is possibly some inconsistency in seeking to ascertain whether there existed some collateral motive. In the circumstances, it must be assumed that there was some degree of regularity in the creditor resorting to the bankruptcy process such that it would be a most unusual case in which the Court will conclude that there existed an improper purpose. Where a party has regularly invoked the Court's bankruptcy jurisdiction for the purpose for which it is intended, it might be assumed that exceptional circumstances need to be shown to deprive them of their entitlement to enforce their rights. In Slack v Bottoms English Solicitors [2002] FCA 1445 at [21], Spender J regarded it as being unarguable that the issuing of a bankruptcy notice might be an abuse of process once an intention existed to utilise the bankruptcy process if the relevant debt was not paid. See also Young v Cooke [2017] FCA 26 at [105] ; cf Royal v Nazloomian at [67]; Prentice v Fewin Pty Ltd at [54].

1. In Amos Drummond J observed (at [20]-[21]) that a bankruptcy notice can only be set aside on the ground that a debtor is solvent if the creditor's use of the notice, in all the circumstances, can be characterised as an abuse of process.
2. I am not satisfied that there is any basis upon which I would infer that the Bankruptcy Notice was issued for an improper purpose and should therefore be set aside as an abuse of process. That is for the following reasons.
3. At the time of issue of the Bankruptcy Notice, the respondents were not aware of Ms Atkinson's financial position. At its highest, the evidence establishes the respondents knew that Ms Atkinson owned the Boambee Property which was valued as at March 2024 at $1.1 million. However, they did not know if that property was encumbered and were unaware of Ms Atkinson's sources of income, whether she owned any other assets or the nature of any of her liabilities. The evidence given by Ms Atkinson in support of this application does not assist in establishing what the respondents knew about her financial position at the time the Bankruptcy Notice was issued.
4. There is no requirement that a creditor make a prior demand or otherwise seek to enforce their debt before applying for the issue of a bankruptcy notice or later presenting a creditor's petition: see Nobarani at [44]. Nor is it an improper purpose for a creditor to issue a bankruptcy notice for the purpose of seeking payment of a debt provided the creditor seeks to invoke the Court's jurisdiction in bankruptcy if it is not. Here the evidence is that, if the Bankruptcy Notice was not satisfied, the respondents intend to do just that.
5. Ms Atkinson suggested that Mr Jeffrey's alleged lack of understanding of a bankruptcy notice and its consequences was, in effect, an improper purpose. As I understand her submission, it was that if a person does not understand the nature of a bankruptcy notice or the bankruptcy process, he or she cannot apply for the issue of a bankruptcy notice and/or invoke the Court's jurisdiction in bankruptcy. No principle was cited in support of this submission. Even if I were to accept it as a proper basis on which to set aside the Bankruptcy Notice, which I do not in light of the authorities set out above, it fails in this case.
6. Mr Jeffrey's evidence was not as characterised by Ms Atkinson. While Mr Jeffrey admitted in cross examination that he was not conversant with the bankruptcy process, I accept that he at least broadly understood that a bankruptcy notice could be used to enforce a debt owing and that if someone does not pay then "someone else goes and does it for you, a bit higher up". That is, a trustee can be appointed to administer the bankrupt estate. It is true that at times Mr Jeffrey stated that he did not know and is not a lawyer. However, based on the whole of his evidence, Mr Jeffrey had an understanding, albeit limited, of a bankruptcy notice and its effect. I do not accept that he had no knowledge of the purpose underlying a bankruptcy notice or the steps being taken vis-a-vis Ms Atkinson in relation to recovery of the amount owing to him and Mrs Jeffrey.
7. In any event, as I have already observed Ms Atkinson's submission is not supported by any authority and, indeed, is contrary to authority: see for example Nobarani at [44]-[45].
8. Finally, while Ms Atkinson took the Court to several authorities by way of oral submissions, none of them assisted her case.
9. First, Ms Atkinson relied on Seller v Deputy Commissioner of Taxation [2011] FCA 865; (2011) 282 ALR 80 at [15] where Flick J set out the principles in relation to setting aside a bankruptcy notice as an abuse of process. In particular she focussed on the extract included from Clyne v Deputy Commissioner of Taxation (NSW) (No 4) (1982) 66 FLR 301 at 307 where Lockhart J referred to the source of the Court's power to set aside a bankruptcy notice. There is no dispute that the Court has power to set aside a bankruptcy notice. It is completely opaque how this case assists Ms Atkinson to make good the proposition that, because Mr Jeffrey did not understand what a bankruptcy notice is and its effect (which is a proposition not made out on the facts), the respondents engaged in an abuse of process. It does not.
10. Secondly, Ms Atkinson referred to Toogood v Gott [2023] FCA 1521 which was an appeal from a sequestration order made against the appellants' estates. Ms Atkinson relied in particular on [117] where Rangiah J, in considering whether the primary judge ought to have refused to make the sequestration order because the appellants were solvent, observed among other things that "[w]here it is shown that there are assets to which a judgment creditor might readily resort under civil judgment enforcement proceedings, then it is those processes which should be followed, not sequestration" referring to Kitay, in the matter of Frigger (No 2) [2018] FCA 1032 at [107]. That is so. However, Toogood concerned the making of a sequestration order and consideration of the application s 52(2)(a) of the Bankruptcy Act which empowers the Court to dismiss a creditor's petition where it is satisfied that the debtor is able to pay his or her debts. The principles that apply to setting aside a bankruptcy notice as an abuse of process are set out above. Accordingly, that case does not assist.
11. Finally, Ms Atkinson referred to Sandell v Porter [1966] HCA 28; (1966) 115 CLR 666 to submit that "the invocation of the Bankruptcy Act should not be invoked... unless there's ... clear evidence of insolvency". While Ms Atkinson did not provide any pinpoint references to support this proposition, she is likely referring to the statement by Barwick CJ (McTiernan and Windeyer JJ agreeing) at 670 that the conclusion of bankruptcy "ought to be clear from a consideration of the debtor's financial position in its entirety and generally speaking not to be drawn simply from evidence of temporary lack of liquidity." It is difficult to see how this case has any bearing on the issues before this Court for resolution. The Bankruptcy Notice was served on Ms Atkinson because judgment was obtained by the respondents in the District Court and because the respondents wished to enforce that judgment. That is a valid basis on which to serve a Bankruptcy Notice.

1. It follows from the above that I am not satisfied that Ms Atkinson has discharged her "heavy onus" in establishing that the Bankruptcy Notice was issue for an improper purpose and should be set aside as an abuse of process or that there is any other basis upon which it should be set aside.
2. Ms Atkinson's application to set aside the Bankruptcy Notice should be dismissed. As she has been unsuccessful, I will make an order that Ms Atkinson pay the respondents' costs of that application.
3. At the conclusion of the hearing before me, the respondents foreshadowed an application for their costs be assessed in a lump sum. Ms Atkinson indicated opposition to that course. If the respondents intend to seek an order that their costs be paid on a lump sum basis they should file and serve their submissions, not exceeding two pages in length with size 12 font and 1.5 line spacing, in support of that application within 14 days after publication of these reasons. If Ms Atkinson maintains her opposition to that course, she should file and serve her submissions in response, not exceeding two pages in length with size 12 font and 1.5 line spacing, within 28 days after publication of these reasons. If that occurs the question of whether the respondents' costs should be assessed on a lump sum basis will be determined on the papers. The quantification of those costs, should the respondents be successful will, subject to consideration of any contrary view, be referred to a registrar acting as a referee for determination.
4. I will make orders accordingly.

I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Markovic.