Boensch v Somerville Legal

The factual background 9 As noted above, the Bankruptcy Notice was based on the Local Court Judgments which, in turn, were based on certificates of determination of costs that were issued following completion of a costs assessment process. 10 The relationship between Mr Boensch and Somerville Legal was one of client and solicitor. The relationship was formed in about March 2015 when Mr Boensch first approached Somerville Legal enquiring whether it would act for him in connection with proceedings commenced in the Supreme Court of New South Wales (Supreme Court) against Scott Pascoe (Pascoe Proceeding). As we understand it, the Pascoe Proceeding was concerned with whether, at a time when he was the trustee of Mr Boensch's bankrupt estate, Mr Pascoe was entitled to lodge and/or maintain a caveat over a property in Rydalmere, New South Wales (Rydalmere Property). 11 The details of the relationship between Mr Boensch and Somerville Legal, particularly in relation to the issue of legal costs, are set out in an affidavit sworn by Benjamin Hemsworth, the managing director of Somerville Legal, on 10 December 2019 (Hemsworth Affidavit), which was in evidence before the primary judge, and in documents included in the appeal book. We understand that those documents were also tendered in the court below (becoming exhibits B to L in that proceeding in the circumstances described below at [94]-[95]) and that Mr ‍Boensch relied on them. In these reasons we refer to the material comprised in those exhibits as the Boensch ‍Exhibit. 12 Somerville Legal acted for Mr Boensch in the Pascoe Proceeding until 19 February 2016 when it filed a notice of ceasing to act because Mr Boensch had failed to pay a number of its accounts. We set out below the events which led to that. 13 On 9 March 2015 Somerville Legal forwarded its costs agreement to Mr Boensch. 14 On 12 March 2015 Mr Hemsworth sent an email to Mr Boensch in which he informed Mr Boensch that Somerville Legal required funds in trust to continue acting for him in the Pascoe Proceeding. While Mr Boensch had paid an initial sum of $3,500 in advance, the value of work in progress had reached $3,300 (excluding GST). Somerville Legal advised that, unless further funds were paid into trust, it could not undertake any further work. On 13 and 20 March 2015 Somerville Legal made further requests for funds to be paid into its trust account. It is apparent from an email from Talia Smith, the solicitor at Somerville Legal with the day to day conduct of the Pascoe Proceeding on behalf of Mr Boensch, that by 20 March 2015 Mr Boensch did so. 15 On 27 April 2015 Mr Hemsworth sent an email to Mr Boensch informing him that there was then $5,949 (plus GST) in work in progress for the month of April and $4,646 in trust and that Mr Boensch was required to pay further monies into Somerville Legal's trust account before it would undertake any further work. The Pascoe Proceeding was listed the following day in the Supreme Court. Mr Hemsworth indicated that he would appear but that, after doing so, no further work would be undertaken until $4,000 was paid into Somerville Legal's trust account. 16 According to Mr Boensch, the nature of the Pascoe Proceeding changed in April 2015. In an email dated 28 April 2015 from Mr Boensch to Ms Smith, he explained that he had understood that liability was not in issue but that Mr Pascoe's position had changed as a result of an affidavit Mr Pascoe had filed. In any event, at a directions hearing on 15 May 2015, it was suggested that the issue of whether Mr Pascoe had acted reasonably in maintaining the caveat should be determined as a separate question before all other issues in the proceeding. 17 On 4 May 2015 Ms Smith sent an email to Mr Boensch recommending that counsel be briefed and informing Mr Boensch that, if he required the matter to proceed and for Somerville Legal to do so, he would need to pay $10,000 into Somerville Legal's trust account. 18 We infer that payment was made given the appearance by Mr Muston of counsel on behalf of Mr Boensch when the Pascoe Proceeding was before the Supreme Court on 15 May 2015. At that time an order was made for a separate trial to determine, among other things, whether Mr Pascoe had reasonable cause to lodge the caveat and whether, without reasonable cause, he refused or failed to withdraw the caveat after being requested to do so (the Separate Questions). The hearing of the Separate Questions was set down for two days commencing on 21 September 2015. 19 On 16 June 2015 Somerville Legal required Mr Boensch to pay a further $7,000 into its trust account so that it could prepare a "brief to Jeremy" to enable him to prepare advice. It is not clear whether "Jeremy" was briefed to undertake any work. However it is apparent that at some point prior to mid July 2015 Christopher Bevan of counsel was asked to appear for Mr Boensch in the Pascoe Proceeding. 20 On 13 July 2015 Mr Bevan sent an email to Ms Smith enclosing an interim advice on evidence, a costs disclosure letter and a proposed costs agreement which she, in turn, forwarded by email to Mr Boensch. Mr Bevan estimated his fees up to the conclusion of the hearing of the Separate Questions on 21 and 22 September 2015 to be $35,000 plus GST. In his costs agreement Mr Bevan specified that, if it became apparent to him that his estimate would be exceeded, he would inform Somerville Legal of the new estimate in writing at the earliest opportunity. After referring to Mr Bevan's estimate, Ms Smith's email continued as follows: … As per our previous correspondence, this amount, plus we estimate $10,000 plus GST for our fees, will need to be paid two weeks prior to the hearing. You will see from Mr Bevan's advice that we need to put on evidence. As previously discussed, we held up preparing evidence because we wanted to see whether counsel was of the opinion we needed evidence or whether relying on Mr Pascoe's evidence was enough. Mr Bevan has advised we need to prepare evidence as soon as possible. So we can begin preparing this affidavit we will require the amount of $6,000 to be paid into our trust account, forthwith. Please advise when such payment has been made. 21 On 6 August 2015 Mr Bevan sent a letter to Somerville Legal under cover of which he enclosed a tax invoice of the same date for $38,775 (incl GST) for work done by him in the matter to that date, his revised cost disclosure letter for the completion of the hearing of the Separate Questions and his revised costs agreement. Relevantly, in his revised costs agreement, Mr Bevan provided a revised estimate of $37,500 for the total costs payable from that date up to the conclusion of the hearing of the Separate Questions which was, by that time, listed for hearing commencing on 21 September 2015 for three days. 22 On 13 August 2015 Ms Smith sent an email to Mr Boensch in which she wrote: I refer to the three day hearing in this matter set down to commence on 21 September 2015. It is the policy of this firm to obtain all costs associated with a hearing prior to the hearing commencing. On that basis we require the following funds to be paid into our trust account on or before 11 September 2015: - 1. $43,678.20 which is the current amount outstanding of our fees and the fees of Chris Bevan; 2. $11,000 to meet the fees of this firm to prepare and appear at the final hearing; 3. $41,250.00 to meet the fees of Chris Bevan to prepare and appear at the final hearing. Total: $95,928.20 This firm contracts directly with Chris Bevan and is therefore liable to him for his fees. On that basis we require his fees to be paid in advance to ensure we have adequate funds to pay his invoice when it is issued. Chris Bevan charges of $5,000 per day plus GST. As a general rule a barrister requires one days preparation for each day of the hearing. On that basis we require $41,250.00 in trust which is in line with Chris Bevan's most recent fee estimate. Should any costs remain outstanding at the time of the hearing they will be required to be paid prior to the commencement of the hearing. 23 Understandably, Mr Boensch expressed some concern at the increase in the estimate of costs for the hearing of the Separate Questions. At his request a meeting was arranged. After that meeting, on 1 September 2015, Ms Smith sent an email to Mr Boensch in which she wrote: As per our meeting with Chris Bevan on 18 August 2015, we require $50,000 to be paid before 11 September 2015. We have agreed to secure the remaining legal costs by registering a mortgage over the Rydalmere Property. To this effect, we enclose a Deed of Agreement and Mortgage setting out the terms of this security. We require you to obtain independent legal advice on this Deed and Mortgage and to obtain, in writing, from the solicitor you have seen, that they have advised you on this Deed and that you understand the Deed's contents. (Original emphasis.) A draft deed of agreement and mortgage (Deed) was attached. 24 By email dated 5 September 2015, Ms Smith requested Mr Boensch to advise as a matter of urgency whether he agreed to Somerville Legal's payment terms and whether he would obtain independent legal advice on the draft Deed prior to the following Friday, 11 September 2015. Ms Smith noted that Somerville Legal required $50,000 to be paid into its trust account by 11 September 2015 in order for it to continue to act for Mr Boensch at the upcoming hearing of the Separate Questions. 25 On 8 September 2015 Ms Smith sent a further email to Mr Boensch indicating that he was required by an order of the Supreme Court to pay $2,000 to Mr Pascoe for his compliance with multiple notices to produce issued to him and requesting transfer of that amount to them. She also again indicated that, in order for Somerville Legal to continue to act for Mr Boensch, it would require $50,000 to be paid to it by the end of the week and the return of the signed Deed, on which Mr Boensch was required to obtain independent legal advice. 26 By email dated 9 September 2015 from Ms Smith to Mr Boensch, Ms Smith again addressed the topic of the Deed. Relevantly, she wrote: Responding to your email below, the agreement does allow you more time. As you know, our firm policy is that we require all fees to be paid up front for the hearing, before the hearing, which means, usually we request the approx. $95,000 two weeks before the hearing. Because of the increased fees in this case, this is why we've put forward the agreement. We always required approximately $50,000 by 11 September, this is what was originally estimated the entire separate hearing would cost (then the huge amount of extra work involved saw that be increased). We still require $50,000 by this Friday with the second half of the costs to be paid after the hearing, we will render an invoice at the beginning of October, as per our costs agreement and this will have our usual payment terms and the mortgage will act as security for this payment. If the $50,000 is not received by this Friday, we do stress that we will not act for you at the separate trial. On 14 July 2015, we wrote to you and advised you that we required the amount of $45,000 plus GST to be paid two weeks prior to the hearing, further, as you know, we also require money to be held in trust prior to undertaking any legal work however, given your financial position, we continued to work on your matter and prepare all evidence without money in trust. We enclose a copy of this email. The $50,000 by the end of the week is not negotiable. 27 On 11 September 2015 Mr Boensch sent an email to Ms Smith which included (without alteration): To your last paragraph: I acknowledge the email requesting $45000 plus GST being $49500. I also Note that I made the first payment towards that amount on the 6 August being $8000. That should leave $41500 to be paid today. Add $500 to $42000 as remaining payment towards the sum of $50 000 for today and to match the paperwork. $42000 are available for you/Somerville to deduct instantly today in the usual way from the Visa card I understand that being the full amount for the preliminary case including the preparation and 3 court days on your firms part. As far as the other payment for Chris. I will sign and email the deed and relating paperwork through tonight when my son is back from work. 28 By email dated 16 September 2015 Ms Smith informed Mr Boensch, among other things, that: The $42,000 will be apportioned both what is outstanding from Chris' first invoice and for what is outstanding to our firm. It is not enough to cover the preparation and appearance of the 3 days in court. As previously explained to you, if we required the full amount for the preparation and appearance you would be required to pay, up front, you would be required to pay double what we are asking. This is because we (our firm and Chris) have undertaken a significant amount more work than expected, as previously explained. This is the entire purpose of the Deed. To assist you financially and to give you some help so we can still act for you at the hearing but secure our costs for doing so at the same time. The Deed is for both Chris' payment and also our payment for preparing/appearing at the hearing. As at today's date, you are indebted to us as follows: Our firm: $12,017.50 (plus GST) Chris Bevan: $38,775.00 The $42,000 will be used to clear the $12,000 owed to us and the remainder will be provided to Chris Bevan. As you will recall, our policy is to have funds in trust at all times before we do any work, because of the urgency of your matter and to assist you in your financial circumstances, we continued to do work without having any funds in trust. We did this in a true attempt to assist you. Similarly, this is why we have requested the Deed, in a true attempt to assist you to pay for us in preparing for and appearing at the hearing. You must have written acknowledgement that you have received legal advice on the Deed. Are you able to return the Deed and this confirmation sooner than Friday? If we don't have the signed Deed and written acknowledgement that you have received legal advice on same, we will not be doing any further work on your matter. It is very important we receive this. 29 On 17 September 2015 Ms Smith once again reminded Mr Boensch to bring the signed Deed and written confirmation that he had received independent legal advice in relation to it with him the following day, when they were to meet. She noted that it was "very important" that Mr Boensch do so as Somerville Legal was not prepared to appear at the hearing without it. 30 On 21 September 2015 Mr Boensch signed the Deed. The version of the Deed he signed had been altered from the draft originally sent to him by Ms Smith under cover of her email dated 1 September 2015. The differences were principally to be found in cl 2. Relevantly, the Deed provided: (1) a definition of Principal Sum as "at any given time, all money owned by [Mr Boensch] to [Somerville Legal] and includes any interest payable pursuant to the Costs Agreement"; (2) in cl 2 titled "Payments of Costs" that: 2.1 On or before 11 December 2015 [Mr Boensch] will pay [Somerville Legal] the Principal Sum into the following bank account in cleared funds: … 2.2 If [Mr Boensch] fails to observe any provision of this Deed or the Costs Agreement which he is required to observe, then [Mr Boensch] will pay to [Somerville Legal] forthwith upon demand such part of the Principal Sum as for the time being is unpaid. (3) in cl 3, that Mr Boensch granted Somerville Legal a second registered mortgage over the Rydalmere Property as security for payment of the Principal Sum as set out in Schedule 1; and (4) in cl 10, titled "Whole Deed", that the Deed together with any other document referred to in it was the whole deed between the parties and that it superseded all oral and written communication by, or on behalf of, any of the parties. 31 The hearing of the Separate Questions took place on 21, 22 and 23 September 2015. 32 On 1 October 2015 Ms Smith sent an email to Mr Boensch enclosing Mr Bevan's tax invoice dated 29 September 2015 for $67,650 (incl GST) (September Tax Invoice). She noted that Somerville Legal would write to Mr Bevan and dispute the September Tax Invoice because it far exceeded the estimate he provided. 33 As foreshadowed, on 6 October 2015 Somerville Legal wrote to Mr Bevan in relation to the September Tax Invoice expressing its displeasure at receiving an invoice for an amount of $26,400 more than his estimate and requesting that he amend his tax invoice to reflect his estimate of $40,500 (incl GST). 34 On 7 October 2015 Mr Bevan responded to Somerville Legal's letter. Mr Bevan set out the reasons for the increased costs, noted that he had agreed to be paid when funds became available from Mr Boensch, and made an offer in the following terms (October Offer): Having reminded you of those further facts in my own defence, I make the following bona fide proposal to preserve my relationship with you (23 years) and the client (12 years) and also your own relationship with the client (recent but, hopefully, a lasting one), namely: (a) pay my outstanding fees as billed up to my original and revised estimates, when funds are available; (b) await delivery of judgment on the separate questions; (c) if the client succeeds on one or more separate questions, the balance of my fees will become payable when funds become available under your security arrangements; (d) if the separate questions are answered adversely to the client, and subject to my advice as to reasonable prospects of success of an appeal being forthcoming, the payment of the balance of my fees for the separate questions in excess of both estimates will be carried forward and thereafter become subject to Mr Boensch's success on an appeal, as will my fees for the appeal itself, pursuant to sections 181 and 182 of the Legal Profession Uniform Law (NSW) 2015, including an uplift (success) fee payable pursuant to s. 182 - that is, my fees for the separate questions, to the extent they are rendered in excess of my two estimates, plus any fees incurred for an appeal, will be payable contingent on the success of the appeal on the separate questions. That is, Mr Boensch only pays my fees to that defined extent if successful. If this proposal is acceptable then I will reduce it to writing in a new costs agreement in the event that the separate questions are determined adversely to the client. If the separate questions are determined in his favour then I will wait for payment of the amount which exceeds the two estimates until funds have been raised by the client on a second mortgage or from other sources, such as his business income, to cover the excess. Kindly seek instructions and get back to me with Mr Boensch's response to this proposal. 35 On 21 October 2015 Somerville Legal wrote to Mr Bevan responding to the October Offer in the following terms: We have recently received instructions from our client to make the following offer in relation to your outstanding fees: 1. Our client to pay your outstanding fees in the amount of $37,500 plus GST (your revised estimate) when funds are available. 2. The amount of your revised estimate, being $26,400 (including GST), is only payable if: (a) Our client succeeds on one or more separate questions; (b) Receives a costs order in his favour; and (c) Recovers $26,400 from the defendant. 3. If our client recovers an amount less than $26,400 pursuant to the costs order, then your claim is to be reduced to that amount. 36 By letter dated 3 October 2015, Mr Bevan rejected the offer set out in Somerville Legal's letter and explained why that offer was not acceptable. In doing so, among other things, Mr Bevan wrote: 3. …The only conditions which I am prepared to entertain for the payment of the fees which exceed the estimate are those stated in my letter dated 7 October 2015, namely, the success of the claim for compensation under s. 74P if the separate questions are answered favourably to the client and, if not, then the success of an appeal against the decision on the separate questions and success on the claim for compensation on remitter of quantification of the compensation to the Supreme Court after the separate questions have been answered in the Court of Appeal. As far as I am concerned there is no purpose in pursuing this process. Either the client wishes to continue to retain me in this proceeding, including any necessary proceeding in the Court of Appeal, in which case the assessment of my fees can await the end of the brief, and I will give the necessary disclosures and estimates of fees to conclude the brief, or he treats the brief as being now at an end, which should be confirmed by you forthwith, in which case I will proceed to assessment of my fees and leave these issues for a costs assessor to determine. 37 On 14 December 2015 Somerville Legal wrote to Mr Boensch noting that, despite his agreement to pay all outstanding monies owing by 11 December 2015, their fees had not been paid. They also reported that judgment in the Pascoe Proceeding had been delivered, and enclosed a copy of the judgment. Somerville Legal noted that the Supreme Court had ruled in favour of Mr Pascoe and ordered Mr Boensch to pay his costs. Mr Boensch had 28 days to lodge a notice of appeal but, as a result of the predicament in which Somerville Legal had been placed in relation to its outstanding fees, it would not lodge any notice of appeal or undertake any further work until its costs had been paid in cleared funds. Somerville Legal went on to say that, if its costs were not paid in cleared funds within 28 days, it would have no choice but to commence proceedings to recover the outstanding amount, currently $35,016.40. 38 As things turned out, Somerville Legal's letter, insofar as it informed Mr Boensch of the outstanding fees, was not correct. Somerville Legal had failed to include the fees outstanding to Mr Bevan. 39 On 16 and 21 December 2015 Ms Smith again informed Mr Boensch that Somerville Legal was unwilling to do any further work in the Pascoe Proceeding, including discussing the judgment, until such time as he had made payment of the outstanding fees. 40 On 26 February 2016 Somerville Legal issued a tax invoice to Mr Boensch which recorded a balance due and payable of $99,336.61. The tax invoice included as a disbursement Mr Bevan's fees recorded in the September Tax Invoice. 41 On 17 March 2016 Mr Bevan sent an email to Mr Boensch with subject line "Pascoe" in which he wrote, omitting formal parts: Mike has just told me about the decision last December by the Judge. Somervilles never told me about the decision. Please call me today or tomorrow to let me know what is the current position in the matter. 42 On 18 March 2018 Mr Bevan sent a further email to Mr Boensch which attached Somerville Legal's letter dated 6 October 2015, the October Offer and Somerville Legal's letter dated 21 October 2015. Mr Bevan noted that the important passages in the October Offer were highlighted in green underlining with "Xs" in the margins for ease of reference and that both offers to conduct Mr Boensch's appeal "on spec" were rejected by Mr Hemsworth which he had assumed, at the time, was based on Mr Boensch's instructions but that he "now [knew] that is not the case from what you have told me by telephone today". The email continued as follows: Please advise your new solicitors that I remain willing to assist with the appeal by advising and appearing, preferably with the assistance of Mr Chrysostomou as my junior, but alone if need be, on a contingent fee basis. I note that you may well need to apply for leave to appeal and (probably will) need to apply for leave to (substantially) amend the notice of appeal, from what you told me this afternoon about the appeal grounds. Both applications should be made as soon as possible in the same notice of motion to the Court of Appeal. I also confirm that I retain custody of my entire brief, which consists of about 23 lever arch folders plus some loose materials in manila folders, which I suspect is a partial duplicate of Ben's file, lest Ben be exercising a lien over his file for unpaid costs. I understand that, if I am briefed in the appeal, I am permitted by the Bar Rules to allow you and the new instructing solicitors to have access to my trial brief, whilst I retain custody of it, and to copy it to assist with the conduct of the appeal and for the preparation of the Appeal Books, notwithstanding the exercise of a lien over the solicitor's file by Ben and his firm. I consent to you sending a copy of this email to either Mr Korakis, the new solicitor, and Mr Chrysostomou, the new Counsel, if need be to save repeating what I have said in this email. 43 On 20 March 2016 Mr Boensch sent an email to Mr Bevan in the following terms: I will compare the correspondence tonight but I never been told or discussed this option with [Ms Smith] or [Mr Hemsworth]. I will see that I can have a meeting with Arthur Korakis in the coming weeks to discuss this issue. I attaché (sic) the Notice of appeal as it stands now fyi

Steps taken by Somerville Legal to recover the outstanding costs and disbursements 44 According to Mr Hemsworth, between the period 1 April 2015 and 26 February 2016, Somerville Legal had rendered invoices to Mr Boensch in a total amount of $184,169.11 but Mr Boensch had only paid fees of $89,500, leaving $99,336.61 owing. 45 As Mr Boensch failed to pay the outstanding amount, on 14 April 2016 Somerville Legal filed an application in the Supreme Court (Costs Assessment Application) seeking assessment of its unpaid bills. The bill of costs filed in the Costs Assessment Application sought total costs of $101,747.90 made up as follows: Professional Fees $31,984.70 (incl GST) Disbursements $119,763.20 (incl GST) Sub total $151,747.90 Payment received on 14 January 2016 $8,000 Payment received on 18 September 2016 $42,000 Total outstanding $101,747.90

Insofar as that calculation is concerned, we make two observations. First, the discrepancy between the amount which Mr Hemsworth says was claimed in the bill of costs with his evidence about the invoices rendered and the amounts paid by Mr Boensch from time to time is explained by the fact that Somerville Legal only sought assessment of its unpaid costs and disbursements including counsel's fees. Thus the Costs Assessment Application was in relation to costs and disbursements incurred from 30 July 2015. Secondly, the reference to a payment of $42,000 made on 18 September 2016 is obviously incorrect. Given other evidence, that payment was likely made in September 2015. 46 On 2 August 2016 a costs assessor, Peter Rosier, determined the amount of reasonable costs and disbursements payable by Mr Boensch to be $144,339.01. According to Mr Hemsworth, of that amount $96,219.02 remained unpaid. Mr Rosier issued a certificate of determination of costs for $96,219.02 and a certificate of determination of manager's assessment costs for $2,425.50. 47 On 15 August 2016 Somerville Legal registered the certificate of determination of costs as a judgment of the Supreme Court and, on 16 August 2016, applied to the Australian Financial Security Authority for the issue of a bankruptcy notice against Mr Boensch. Bankruptcy notice BN194789 was issued and later served on Mr Boensch (the 2016 Bankruptcy Notice). 48 On 31 August 2016 Mr Boensch filed an application for review of the costs assessment (Costs Review) and, on 5 September 2016, commenced a proceeding in the Circuit Court seeking an order setting aside the 2016 Bankruptcy Notice (2016 Bankruptcy Notice Proceeding). 49 On 13 December 2016 the panel appointed for the Costs Review (Panel) informed Mr Boensch and Somerville Legal that the review had been finalised and, on 12 January 2017 upon payment of the costs of the Costs Review, the Panel issued a certificate of determination of costs by costs review panel and a certificate of determination of the costs of the review (Costs Certificates). The Panel reduced the amount of costs determined to be reasonable to $141,212.35 and the amount payable by Mr Boensch to Somerville Legal to $91,212.35. It also determined that the costs of the Costs Review in the amount of $4,061.75 was payable by Mr Boensch. 50 By consent, on 17 January 2017 orders were made in the 2016 Bankruptcy Notice Proceeding and Somerville Legal withdrew the 2016 Bankruptcy Notice. 51 On 18 January 2017 Somerville Legal applied to the Local Court to register the Costs ‍Certificates as judgments. The Local Court issued a judgment in proceeding no 2017/17687 in the sum of $91,212.35 and a judgment in proceeding no 2017/17674 in the sum of $4,061.75 (together these are the Local Court Judgments referred to at [3] above). 52 On or about 8 February 2017 Mr Boensch commenced a proceeding in the District Court of New South Wales (District Court) by way of summons seeking to appeal the decision of the Panel (District Court Proceeding). 53 In the meantime, on the application of Somerville Legal, bankruptcy notice BN 211447 was issued and served on Mr Boensch on 19 January 2017 (the 2017 Bankruptcy Notice). Mr Boensch commenced a proceeding in the Circuit Court seeking an order setting aside the 2017 Bankruptcy Notice (the 2017 Bankruptcy Notice Proceeding) and in the Local Court seeking a stay of the Local Court Judgments. 54 On or about 8 March 2017 the Local Court made orders, including an order staying the execution of the Local Court Judgments until the determination of the District Court Proceeding. 55 On 3 October 2017 an order was made in the 2017 Bankruptcy Notice Proceeding by which Somerville Legal agreed to withdraw the 2017 Bankruptcy Notice. 56 On 30 June 2017 the District Court Proceeding was adjourned pending the determination of a proceeding commenced by Somerville Legal in the Supreme Court (Supreme Court Proceeding) on 28 February 2017 in which Somerville Legal sought interim orders extending a caveat which it had lodged over the Rydalmere Property pursuant to the Deed. 57 On 13 March 2019 the Supreme Court Proceeding was resolved. According to Mr Hemsworth, Somerville Legal withdrew its amended statement of claim and undertook to withdraw the caveat over the Rydalmere Property. Orders to that effect were made in the Supreme Court Proceeding as well as an order that the Deed be set aside and that Somerville Legal pay Mr Boensch's costs including the costs of the hearing on 13 March 2019, except where Mr Boensch had otherwise been ordered to pay Somerville Legal's costs pursuant to prior orders of the Court: see Somerville Legal Pty Limited v Franz Boensch [2019] NSWSC 267. 58 Given what Mr Hemsworth describes as delays in the conduct of the Supreme Court Proceeding, the order adjourning the District Court Proceeding (see [56] above) was vacated. Subsequently: (1) on 14 December 2018 orders were made including orders striking out the District Court Proceeding for want of prosecution and for Mr Boensch to pay Somerville Legal's costs (District Court Costs Order); (2) Mr Boensch filed a notice of motion seeking to set aside those orders; and (3) on 10 July 2019 Mr Boensch's notice of motion was dismissed with costs. 59 Somerville Legal filed an application for assessment of the costs incurred pursuant to the District Court Costs Order. A certificate of determination of costs and a certificate of determination of manager's assessment costs were issued. Somerville Legal applied to register those certificates as judgments and the Local Court subsequently issued a judgment in proceeding no 2019/273903 in the sum of $23,915.15 and a judgment in proceeding no 2019/273910 in the sum of $548.63. 60 On 10 January 2019 the Local Court made orders which had the effect of lifting the stay of the Local Court Judgments (see [54] above). 61 As set out at [3] above, the Bankruptcy Notice was issued on 7 February 2019. Mr Boensch filed an application in the Circuit Court seeking to set aside the Bankruptcy Notice. On 4 April 2019 orders were made dismissing that application with costs fixed in the sum of $5,000 (FCCA Costs Order). 62 On 5 April 2019 Somerville Legal filed the creditor's petition. 63 On 29 July 2019 Mr Boensch filed a summons in the Supreme Court seeking orders in the nature of certiorari to quash the decision dismissing Mr Boensch's notice of motion filed in the District Court Proceeding (see [58(3)] above). On 23 October 2019 orders were made dismissing that summons with costs.

The proceeding before the primary judge 64 The creditor's petition was listed for hearing on 12 December 2019. Mr Boensch relied on his amended notice of opposition which comprised 16 paragraphs and was discursive in nature. In summary, Mr Boensch contended that: (1) he did not commit an act of bankruptcy and does not owe the money claimed by Somerville Legal. He said he could pay the amount claimed if necessary "in a timely and agreed manner" but would not as he does not owe the money; (2) the Local Court Judgments were based on the certificates issued by the Panel which were described by the Panel as "not final" but which Somerville Legal presented to the Local Court as a final amount in order to obtain the Local Court Judgments. Mr Boensch described this as "fraudulent, misleading, deceptive and unconscionable conduct"; (3) the invoices relied on by Somerville Legal in the Costs Review were outside the contractual arrangement between Mr Boensch and Somerville Legal and were not disclosed as required by legislation; (4) the creditor's petition is based on the Local Court Judgments which are based on the "unfinished certificates" which, in turn, are based on the "unlawful invoices"; (5) there were two costs agreements with Somerville Legal, one dated 6 March 2015 and a second dated 21 September 2015 which Mr Boensch contends replaced the earlier agreement and which did not nominate a due date for the remaining "capped payment". Somerville Legal issued the invoices which were the subject of the Costs Review "outside the agreement" and the capped costs agreement was changed after it was signed by Somerville Legal; (6) as the invoices and the amounts claimed were not disclosed or agreed to after Somerville Legal's engagement ended on or about 23 September 2015, Somerville Legal breached s 39 and s 40 of the Competition and Consumer Act 2010 (Cth) and analogous sections in the Fair Trading Act 1987 (NSW); and (7) he has a counter-claim because he has a costs order in his favour made in the Supreme ‍Court Proceeding, which he estimates to be in the order of $40,000 to $60,000; the costs order in favour of Somerville Legal which is part of its claim cannot be relied on because of the decision in Bell Lawyers v Pentelow [2019] HCA 291; (2019) 372 ALR 555; and he has a claim for damages based on the alleged negligence of Somerville Legal. 65 According to the transcript, the hearing commenced at 9.34 am and concluded at 11.23 am. The primary judge delivered an ex tempore judgment and, after doing so, made a sequestration order against Mr Boensch's estate. 66 The primary judge's reasons are brief. His Honour addressed the requirements of s 52(1) of the Act and, based on the evidence relied on by Somerville Legal, was satisfied of the proof of those matters. 67 The primary judge then turned to consider whether Mr Boensch had satisfied the Court of either of the matters in s 52(2) of the Act, namely, that he was able to pay his debts or that there was other sufficient cause why a sequestration ought not to be made. 68 First, his Honour found that no evidence which would demonstrate that Mr Boensch was able to pay his debts had been adduced. Rather, the evidence was to the contrary: Somerville (No 1) at [5]. 69 The primary judge then noted that Mr Boensch sought to establish that there was other sufficient cause why a sequestration ought not be made. In that regard, while in the creditor's petition Somerville Legal relied on the Local Court Judgments as well as the FCCA Costs Order, at the commencement of the hearing it indicated that it only relied on the former and not the latter which, it seems, was at the time the subject of ongoing challenges in this Court. 70 The primary judge briefly referred to some of the history of the proceedings between Mr Boensch and Somerville Legal, as recited by Mr Boensch, and at [10] observed that there had been no appeal from the Local Court Judgments. His Honour found that those judgments were not the subject of any "identified basis why the Court should go behind [them]". Similarly, the primary judge was not persuaded that there was any counterclaim or set-off for alleged incompetent services, that no such proceeding had been commenced and that there was no proper basis on the material to which the Court had been taken to support that contention: Somerville (No 1) at [6], [11]. 71 Insofar as Mr Boensch suggested that the amounts sought in the Local Court Judgments were not due and payable because he disagreed that the costs assessment was a final certificate, the primary judge observed that it was not the assessment that was the final order but rather the orders of the Local Court and that it was apparent that there was a costs assessment to support the Local Court Judgments: Somerville (No 1) at [12]. 72 The primary judge also dismissed Mr Boensch's argument that the Deed included provisions relating to service. His Honour noted that those provisions were not relevant to the requirements of the Federal Circuit Court (Bankruptcy) Rules 2016 (Cth), that Mr Boensch had been validly served with the Bankruptcy Notice, and that he had unsuccessfully applied to set aside the Bankruptcy Notice: Somerville (No 1) at [13]. 73 At [14]-[15] of Somerville (No 1) the primary judge said the following about the course of the hearing: 14. At the commencement of the hearing, the Court explained to Mr Boensch the nature of the hearing and that the Court would have identified the evidence and then his submissions. Mr Boensch identified that he had provided some exhibits in support of his affidavits to the Court but the Court had no such exhibits before it. Mr Boensch delivered up to the Court the exhibits that he contended he provided to the Court registry, and the Court accepted the same into evidence. 15. The Court heard submissions from Mr Boensch for approximately 20 minutes, none of which identified any basis why a sequestration order ought not to be made. The Court indicated that it would provide Mr Boensch a further 10 minutes. In fact, the Court provided Mr Boensch a further half an hour to put submissions in relation to why other sufficient cause had been made out why a sequestration order should not be made. Nothing said in those submissions identified any proper basis why there was other sufficient cause not to make a sequestration order. The Court is satisfied that Mr Boensch had a real and meaningful opportunity to present his case submissions in answer to the creditor's petition.

The appeal 74 Mr Boensch relies on an amended notice of appeal in which he raises 10 grounds of appeal each of which has detailed particulars. The grounds of appeal (omitting particulars) are (without alteration): FIRST GROUND OF APPEAL Judge Street erred in law when he failed to find the Local court Judgement was a "miscarriage of justice" … SECOND GROUND OF APPEAL Judge Street did not apply s41(6) of the bankruptcy act 1966 correctly and failed to find compliance with the Bankruptcy Notice No. BN 234046 of 7 Feb 2019. … THIRD GROUND OF APPEAL Judge Street erred in law when he miss-interpreted the evidence before him … FOURTH GROUND OF APPEAL Judge Street erred in law when he failed to consider contract law, the requirements under the Legal Professional Act, UCPR rules, the ACA 2010 and the amended contract/cost agreement and 1st Deed. … FIFT GROUND OF APPEAL Judge Street erred in law when he failed to consider contract, the requirements under the Legal Professional Act, and the requirements under ACA 2010 in terms of the instructions and performance leading to the engagement. … SIXTH GROUND OF APPEAL Judge Street erred in Law when he used his discretion to allow amending the Petition … Seventh GROUND OF APPEAL Judge Street erred in law when he failed to find on the evidence before him that a service of the Bankruptcy Notice by email was not proper service under the circumstances. … EIGHTH GROUND OF APPEAL Judge Street erred in Law by overruling an objection to allow hearsay of a 3rd party not being available for cross-examination. … NINTH GROUND OF APPEAL The lower court proceedings SYG865 of 2019 conducted by Judge Street were lacking procedural fairness to the point of perjures against the self represented defendant Boensch. … TENTH GROUND OF APPEAL Judge Street erred in law when he failed to apply s52 of the Bankruptcy Act 1966 and to ask for proof of debt of the petitioning Creditor as required under the statutory rules of the Bankruptcy Act 1966 and case law. … (Original emphasis.) 75 Somerville Legal has filed a notice of contention. It contends that the judgment of the Circuit Court should be affirmed on the following ground: If the primary judge should have gone behind the judgments of the Local Court of New South Wales upon which the creditor's petition filed 5 April 2019 was based (which is denied), the primary judge should have nonetheless been satisfied that a debt was still owing by the appellant to the respondent, in accordance with ss 41(1) and 52(1)(c) of the Bankruptcy Act 1966 (Cth), at the time of the presentation of the creditor's petition and the hearing of the creditor's petition respectively. 76 The Trustees, who were granted leave to intervene in the appeal, made submissions as to the form of the orders that should be made in the event that the appeal is allowed.

The issues 77 There is a good deal of overlap in the grounds of appeal as particularised. The issues, however, emerging from the particulars and the written submissions are these: (1) whether the primary judge should have looked behind the Local Court Judgments in order to determine whether there was "other sufficient cause" for a sequestration order not to be made; (2) whether, if his Honour had done so, he should have found that the debt the subject of the bankruptcy notice was not owing to Somerville Legal; (3) whether the primary judge's discretion miscarried by allowing Somerville Legal to amend its petition; (4) whether the bankruptcy notice had been properly served on Mr Boensch; (5) whether inadmissible hearsay was admitted into evidence; (6) whether the conduct of the trial was procedurally unfair; and (7) whether the primary judge erred by failing to ask for proof of the debt. 78 Issues (1) and (2) are raised by grounds 1 to 5 and 10 of the amended notice of appeal, issue (3) is the subject of ground 6, and issues (4), (5), (6) and (7) are raised by grounds 7, 8, 9 and 10 respectively.

Was the conduct of the trial procedurally unfair (ground 9)? 79 As this ground of appeal raises an allegation of procedural unfairness on the part of the primary judge it is necessary to address this first. 80 Mr Boensch contended that the primary judge failed to provide proper assistance to him as a self-represented litigant. He alleged that, upon identifying that the material upon which he wished to rely and which had been filed with the Circuit Court was not available in court, the primary judge failed to consider whether to take a short adjournment so that the material could be located and made available to the primary judge. In those circumstances Mr Boensch was faced with the choice of either tendering no evidence or surrendering his copy of the materials (the Boensch Exhibit) to the primary judge and running his case without access to the material. Having elected to take the latter course he was left to make submissions without the ability to refer to his copy of the Boensch Exhibit. He also alleged that the primary judge limited the time in which he could make submissions, placing him under undue pressure and leaving him with insufficient time to present his case, which affected its outcome.

Parties' submissions 81 Mr Boensch submitted that he had prepared his case based on the Boensch Exhibit which he lodged with the Circuit Court prior to the hearing but which that court's registry failed to send to the primary judge. He contended that the primary judge did not adjourn to obtain the Boensch Exhibit from the registry and he had to surrender his copy, which he required to run his case, to the primary judge. Mr Boensch was left to make submissions without his copy "just of (sic) the top of [his] head" and he could not make reference, or draw attention, to important documents for the benefit of the court. 82 Mr Boensch observed that, although the primary judge handed back the Boensch Exhibit, he was told shortly after that occurred that his case was to stop which, he argued, denied him the ability to address the court with the benefit of those materials. Mr Boensch submitted that he was not given the necessary time to present his case and was constantly interrupted by the primary judge which caused him to lose on important points and related evidence. Mr Boensch submitted that, even given sufficient time, it would be of little value if a litigant is unable to point to a document on which he or she relies and to make relevant submissions about it. 83 Somerville Legal submitted that, at a factual level, Mr Boensch's complaints that he did not have an opportunity to review his own evidentiary material throughout the course of the hearing and that he was not afforded an adequate time to present his arguments are incorrect. Somerville Legal relied on the transcript of the hearing before the primary judge to make good that proposition. 84 Somerville Legal submitted that Mr Boensch was provided with a substantial opportunity to address the court and, as recorded in Somerville (No 1) at [15], was given almost an hour, including a number of opportunities to put forward any further arguments he wished to make. Somerville Legal submitted that Mr Boensch was afforded ample time to make submissions but simply failed to put forward a persuasive case. It contended that, in any event, Mr Boensch has failed to demonstrate how either being afforded further time to make submissions or given further access to the Boensch Exhibit deprived him of a practical opportunity which may have changed the result of the proceeding.

Legal principles 85 It is axiomatic that, in the exercise of judicial power, a judge is obliged to accord procedural fairness to litigants appearing before him or her and that the requirements of procedural fairness include the provision of a reasonable opportunity for litigants to present evidence and to make submissions: see Shrestha v Migration Review Tribunal (2015) 229 FCR 301 (Shrestha) at [37]-[38]. In Shrestha at [49] a Full Court of this Court (Mansfield, Tracey and Mortimer JJ) observed that: It is always necessary, … , to assess whether a process meets the necessary standards of fairness by examining the particular circumstances in which that process occurs, including (but not limited to) the statutory setting, the characteristics of the parties involved, what is at stake for them, the nature of the decision to be made, and steps already taken in the process. 86 The obligations of a court to a litigant in person were recently summarised by a Full Court of this Court (Markovic, Derrington and Anastassiou JJ) in Flightdeck Geelong Pty Ltd v All Options Pty Ltd [2020] FCAFC 138; 147 ACSR 227 (Flightdeck) at [51]-[57] including that: [51] … Though the principles might be succinctly stated at a high level of generality, their application in a particular case is somewhat more problematic. Statements to the effect that, "Courts have an overriding duty to ensure that a trial is fair": see, eg, Dietrich v R (1992) 177 CLR 292 at 330, 362; 109 ALR 385 at 411, 436; or that judges must ensure that trials are conducted fairly and in accordance with law: MacPherson v R (1981) 147 CLR 512 at 523; 37 ALR 81 at 88 (MacPherson), are axiomatic but do not offer any great assistance in the particular circumstances of a trial. On the other hand, the observations of Mason J (as his Honour then was) in MacPherson at CLR 534; ALR 98 that the general duty to ensure that litigants do not suffer any disadvantage from exercising their right to be self-represented, includes the obligation to ensure that they do not remain in ignorance of a fundamental principle which, if invoked, may prove advantageous to them, do offer assistance at a more granular level. The disadvantages to which Mason J referred are usually identified as a lack of knowledge (both of the law and the processes of the court) and a lack of objectivity: Tomasevic v Travaglini (2007) 17 VR 100; [2007] VSC 337 at [140] (Bell J). [52] As acknowledged by the High Court in Neil v Nott (1994) 121 ALR 148 at 150; 68 ALJR 509, "[a] frequent consequence of self-representation is that the court must assume the burden of endeavouring to ascertain the rights of parties which are obfuscated by their own advocacy". In addition, litigants-in-person commonly fail to lodge documents in the correct form, observe court formalities and procedures, understand the significance of court processes, put the relevant evidence or law before the Court; and understand the role of the Court in adjudicating the matter. [53] However, whilst disadvantages exist and the Court is obliged to act to ameliorate them by giving assistance to the unrepresented litigant, its role is constrained by its concurrent duty to remain an impartial adjudicator: see, eg, Barghouthi v Transfield Pty Ltd (2002) 122 FCR 19; [2002] FCA 666 at [10]. Indeed, the Court must strike a fine balance between providing assistance to a litigant-in-person, and ensuring a fair trial for all parties: … [54] The assistance provided to a litigant-in-person must therefore be limited to that which is necessary to diminish the disadvantage which he or she will ordinarily suffer, and the Court should be wary to avoid placing a litigant-in-person in a position of advantage or privilege over a represented opponent. As acknowledged by Samuels JA in Rajski v Scitec Corporation Pty Ltd (unreported, NSWCA, Kirby P, Samuels and Mahoney JJA, 16 June 1986, BC8601930) at 27 (Rajski), and cited with approval by the High Court in Nobarani v Mariconte (2018) 265 CLR 236; 359 ALR 31; [2018] HCA 36 (Nobarani) at [47]: [T]he absence of legal representation on one side ought not to induce a court to deprive the other side of one jot of its lawful entitlement …An unrepresented party is as much subject to the rules as any other litigant. The court must be patient in explaining them and may be lenient in the standard of compliance which it exacts. But it must see that the rules are obeyed, subject to any proper exceptions. To do otherwise, or to regard a litigant in person as enjoying a privileged status, would be quite unfair to the represented opponent. [55] In practical terms, the Court may find it appropriate to provide the following kinds of assistance to a litigant-in-person: (a) Ensuring the litigant has sufficient information about the practice and procedure of the Court to make effective choices in the conduct of the matter: Hamod at [311]. For example, failing to explain the difference between formal sworn testimony and statements made from the bar table, and the significance of failing to file an affidavit, to enable a litigant-in-person to choose whether or not to give oral evidence, may amount to a denial of procedural fairness: SZRUR at [39]. Additionally, failing to explain the risks in not leading evidence where adverse inferences might be drawn may also constitute a denial of procedural fairness: Downes v Maxwell Richard Rhys & Co Pty Ltd (in liq) (2014) 46 VR 283; 313 ALR 383; [2014] VSCA 193. (b) Ensuring the litigant is informed of procedures which, if invoked, may prove to be advantageous: MacPherson at CLR 534; ALR 98. For example, failing to inform a litigant-in-person of their ability to apply for an adjournment may amount to a denial of procedural fairness: AMF15 at [47]. (c) Ensuring the litigant has not, because of a lack of legal skill, failed to claim rights or put forward arguments: Rajski. [56] The duty of the Court does not extend to providing judicial advice, counselling a litigant on how to exercise their rights, or conducting the case on their behalf: … Nor does the duty of the Court require it to view a litigant-in-person's case with a favourable eye. As stated by the High Court in Northern Territory v Sangare (2019) 265 CLR 164; 372 ALR 117; 60 Fam LR 71; [2019] HCA 25 at [27], albeit in the context of a determination on costs, "unmeritorious litigation is no less unmeritorious because it is pursued by a person who is … a litigant-in-person". [57] It seems to be well accepted that the extent of the Court's obligation to assist an unrepresented litigant is factually idiosyncratic and, significantly, depends upon "the litigant, the nature of the case, and the litigant's intelligence and understanding of the case": Abram v Bank of New Zealand (1996) ATPR 41-507 at 42,347.

Consideration 87 Having regard to the nature and course of the hearing the primary judge failed to afford Mr Boensch natural justice. Our reasons for reaching that conclusion follow. 88 The nature of the hearing before the primary judge was for sequestration of Mr Boensch's estate. As a Full Court of this Court (Allsop CJ, Dowsett and Besanko JJ) in Culleton v Balwyn Nominees Pty Ltd [2017] FCAFC 8; (2017) 343 ALR 632 observed at [40]: Bankruptcy is not just a variety of inter partes litigation; it does not deal only with the private rights and obligations of the debtor and creditor; it is not a form of judgment execution. It is directed to the estate of a person who is insolvent. In that sense it has a public interest, through the general body of creditors and potential creditors of the debtor and prospective bankrupt, and through what is referred to as the change of status of the person who becomes a bankrupt. That status is changed because of the provisions of the Act which inhibit conduct and affect rights and obligations of the bankrupt, including making the bankrupt susceptible to criminal punishment for what would otherwise be innocent conduct. 89 That context is relevant to, and provides the setting in which, an assessment of whether the process undertaken by the primary judge met the necessary standards of fairness. 90 The transcript of the hearing before the primary judge was before us. It is instructive to have regard to it. 91 As noted at [65] above, the hearing began at 9.34 am and concluded at 11.23 am. This included a three minute adjournment at 10.11 am to allow the primary judge to deal with another matter and the time taken by the primary judge to deliver ex tempore reasons and make orders. 92 After dealing with preliminary matters, the hearing commenced with the primary judge asking the parties to identify the evidence on which they each relied. 93 Somerville Legal read its affidavits. In the course of doing so, Mr Boensch objected to paras 18, 21, 37, 40, 50, 170 and 235 of the Hemsworth Affidavit. With the exception of para 50, in relation to which Mr Boensch had a hearsay objection, in each case Mr Boensch objected to the evidence because its contents "were not true" or it was "incorrect". The primary judge rejected the objections on the basis that they were not proper objections and allowed the evidence. In doing so, the primary judge did not explain why he made his ruling beyond stating "that's not a basis to object". Somerville Legal also tendered an exhibit to the Hemsworth Affidavit. 94 It was then Mr Boensch's turn. In the course of dealing with his evidence the following exchanges took place between the primary judge and Mr Boensch: Mr Boensch: There's also two folders for - in court for my affidavit - supporting my affidavit. His Honour: Do you have those with you? Mr Boensch: Well, I left them on here - on the counter. They were put into court for the hearing today. His Honour: No. There's nothing before me, so unless you have a copy, it's not going to be in evidence before me. Mr Boensch: All I have with me is the receipt that it has been - that it has been put in court. His Honour: That's not going to be evidence of anything. Mr Boensch: Yes. Well, it's the evidence His Honour: So if you have a document you want to put before me, you will need to put the document before me. But just before we come to that, and I will give you an opportunity to address that, I think there were affidavits - there were some affidavits filed by Mr John Bingham. Do you want those affidavits? … His Honour: So do you have copies of any documents that you say were annexed to your affidavits? Mr Boensch: I have one copy here which I - which I - well, there should be His Honour: Have you been served with an exhibit? Mr Graham: We've been served with an assortment of documents but not an exhibit. The most productive course may be for Mr Boensch to tender the specific documents to which he wishes to take the court. His Honour: Mr Boensch, do you have some documents you want to take me to? They should have been annexed to your affidavit. But is there a bundle Mr Boensch: I - sorry. I was told to tender in the court so they would be available for the hearing today, so I did that, and I - and I've got one copy here which I wanted to use for work and - His Honour: Well, I can look at the bundle that you want to show me, and I can decide whether or not to admit it into evidence, and it can be handed back to you to use to address me. Mr Boensch: All right. 95 Mr Boensch then provided the primary judge with his own copies of the documents which comprised the Boensch Exhibit. Those documents were admitted into evidence and marked as exhibits B to L inclusive. 96 Having dealt with the evidence, the primary judge confirmed the date of the act of bankruptcy with Mr Graham, the solicitor who appeared for Somerville Legal, and put the following proposition to Mr Graham, with which he agreed: "[a]nd you say you've met the formal requirements in respect of - you're entitled to a sequestration order". The primary judge then said to Mr Boensch: His Honour: Yes. Very well. Yes. Mr Boensch, what do you want to say in support of your notice of opposition or as to why other sufficient cause has been shown why a sequestration order should not be made. And if you want me to hand you back these documents for the purpose of addressing, provided they're kept in a separate bundle, I will do so. Mr Boensch: Yes. I might need them, but to start off not - but I might need them. 97 Mr Boensch proceeded to make his submissions. He did so without the benefit of the Boensch Exhibit which remained with the primary judge. After he had been addressing the court for a short period of time the primary judge began to question Mr Boensch. His Honour informed Mr Boensch that he had another ten minutes to identify what he wished to say as to why there was other sufficient cause not to make a sequestration order; he asked Mr Boensch several times what else he wished to say; and subsequently informed Mr Boensch that he had another five minutes to address the court. 98 At a later stage of the hearing the primary judge handed the Boensch Exhibit back to Mr Boensch. The following exchange took place: His Honour: Mr Boensch, I will give you a further five minutes to put any further submissions as to why a sequestration order ought not to be made, why you're solvent or why the court should go behind the judgment or why you have an offsetting claim. If you want the bundle of documents, I will hand them back down. Mr Boensch: I probably need them to - but anyway, let me - His Honour: Please don't remove them. Please move away papers that you have so that you have this bundle on its own, and so it can be kept discretely from all the other papers. Mr Boensch: Yes. His Honour: So move your other papers aside so that you do not lose any of the documents that are now being handed back, because they are now exhibits and - Mr Boensch: Yes. His Honour: they need to be kept separate from anything else you - Mr Boensch: All right. Okay. I understand. Yes. His Honour: Mr Graham, can you please just keep an eye on the exhibits so… 99 Towards the end of the hearing the primary judge informed Mr Boensch that he had gone 20 minutes beyond the 10 minutes that had originally been permitted and that his Honour did not propose to permit Mr Boensch "to put submissions at large". The primary judge then inquired of Mr Boensch whether he wished to tell the court why he alleged he was solvent noting that he "put not one iota of evidence on to support that contention". The following exchanges took place: His Honour: Yes, Mr Boensch, I think that has given you an ample opportunity - Mr Boensch: Well, let me go - His Honour: and fair opportunity to present your case. Mr Boensch: Let me - at least let me go through at least the points that I have them in front of me and make reference to the exhibits I got back on the table. In tab 3 - … His Honour: Mr Boensch, nothing you're saying has advanced a reason why a sequestration order ought not to be made. I don't propose to permit you to continue. You had more than 20 minutes beyond the 10 minutes that I identified as a further extension of time. Associate, will you please - Mr Boensch: Well, it's too important, your Honour. If you will please give me ..... bit more patience. I worked till 4.30 this morning to get everything ready. His Honour: Mr Boensch, I understand you've worked till 4.30, but not a word you've said identifies a proper basis why this court would deprive the - a petitioning creditor of a sequestration order. I understand you have a dispute and disagree with what has happened in the past, but none of that gives rise to a basis why the court would, in the circumstances of the present case, take the view that you have another offsetting claim or that the court should go behind the judgment or that you're solvent or that there's other sufficient cause on what you've said so far. So is there something you - Mr Boensch: Well - His Honour: wish to say? Mr Boensch: I have to say, in business terms, there would be good enough reasons. I don't know about the basis of what you're looking for. If I knew, I probably could respond better and more direct. But if - His Honour: I've read the material - Mr Boensch: Yes. His Honour: that you've handed up, Mr Boensch. I understand the dispute. I understand you had a partial success in respect of a mortgage instrument. I understand the reference to your deed, and I've understood what you've said. But sadly, nothing that you've said so far identifies a proper basis not to make a sequestration order. The court has a duty to deal with these matters efficiently. Is there anything else new you wish to say? Mr Boensch: Well, I just have to go through with what I wish to say is - His Honour: I'm not going to let you keep going at large. I'm not going to spend further time beyond asking you now, can you articulate anything new that you wish to say? Mr Boensch: Well, your Honour, it would prejudice me if I don't even have the time to present my case - His Honour: Mr Applicant - Mr Boensch: for the better or worse. His Honour: Mr Boensch, you've had proper time - Mr Boensch: What you make of it - His Honour: to present your case. What I'm trying to explain to you at the moment is nothing you've presented identifies that you have a case in opposition. So unless there's something new you want to point to - is there something new? Mr Boensch: Well, the - what's new is what I wanted to tell you. Is that the - what I - that the - for example, in the cost assessment under 1012, the cost assessor says itself that the finding is not binding to the party. So the - as far as the certificate is concerned which the judgment relies on, it's not a final certificate. His Honour: Yes. Very well. Associate, will you please uplift the exhibits. Please return the exhibits, Mr Boensch. Mr Boensch: Well, I'm not finished, your Honour. His Honour: No, Mr Boensch, you are. Mr Boensch: Well, I'm not finished, your Honour. His Honour: Mr Boensch, please hand the exhibits back to my associate now. You're being directed by me to do so. You must hand them back to the associate including the one that's in front of you on your right. (Emphasis added.) 100 After informing Mr Boensch that he did not intend to hear him further and asking Mr Graham if there was anything he wished to add, which he did not, the primary judge delivered an ex ‍tempore judgment and made orders. 101 There are a number of aspects about the course of the hearing before the primary judge which lead us to conclude that Mr Boensch was denied procedural fairness. 102 The first concerns the way in which the primary judge dealt with objections by Mr Boensch to the Hemsworth Affidavit. As noted at [93] above, Mr Boensch objected to paras 18, 21, 37, 40, 170 and 235 of that affidavit on the basis that they were incorrect. In those paragraphs Mr Hemsworth deposed that: 18. I unfortunately cannot, at the time of swearing, locate the email confirming such instructions in our e-file. However, Mr Boensch was carbon copied in communications between Somerville Legal and Mr Muston, including communications where Mr Boensch had responded to such emails. … 21. On 23 June 2015, Ms Smith and I had a meeting with Boensch. We had a conversation with words to the following effect: Me: I repeat my advice that you should try and settle this matter. Boensch: Michael Heath previously acted as my barrister. I owe him a lot of money but please speak to him. I do not want to settle I want to proceed to hearing. Me: I will contact Michael Heath. But Franz, there are no funds in trust. We need money upfront to continue to work and if the matter does proceed to hearing we will need all preparation and attendance costs paid upfront before the hearing otherwise we will not appear at the hearing. Boensch: Yes, I know your policy. I will have the money. … 37. On 5 September 2015, Ms Smith sent an email to Boensch asking him to provide Somerville Legal with a copy of the signed Deed. A copy of this email appears at page 62 of exhibit BH-1. … 40. On 8 September 2015, Ms Smith sent a further email to Boensch requesting that Boensch provide the signed Deed by close of business 11 September 2015. A copy of this email appears at page 65 of exhibit BH-1. … 170. Boensch did not appoint a tutor. … 235. As at the time of swearing this affidavit, Somerville has not been served with a complete copy of exhibit sbFB-1. 103 In each case the primary judge rejected the objections. His Honour stated that Mr Boensch's ground for objecting, because the evidence was incorrect, was not a proper basis for objection. 104 There is a general duty to ensure that a litigant in person does not suffer any disadvantage from exercising his or her right to be self-represented. This includes an obligation to ensure that the litigant does not remain ignorant of a fundamental principle which, if invoked, might prove advantageous to his or her case. It has been recognised that in providing assistance the court should be concerned not to place the litigant in person in a position of advantage over his or her represented opponent. The assistance is to be limited to diminishing the disadvantage in which the litigant in person might otherwise find him or herself. That includes taking appropriate steps to ensure that the litigant in person has sufficient information about the practice and procedure of the court to enable the litigant to make effective choices about the conduct of his or her case. 105 In rejecting Mr Boensch's objections to the parts of the Hemsworth Affidavit set out at [102] above, the primary judge did not provide any explanation or assistance about the practice and procedures available to a litigant where the veracity of evidence is challenged. For example, the primary judge could have provided a more detailed explanation of why he had rejected the objections and could have explained to Mr Boensch that, where he challenged the truth of the evidence in the Hemsworth Affidavit, it was open to him to make an application to cross-examine Mr Hemsworth on his affidavit. To do so would have provided Mr Boensch with an understanding of the practices of the court and enabled him to make an informed decision about the conduct of his own case. An explanation of that nature would not have constituted the provision of advice by the court to Mr Boensch, would have ensured that Mr Boensch was aware of the options available to him to run his case and would have ensured a fair trial. 106 Somerville Legal submitted that Mr Boensch is an experienced litigant who knows his way around a courtroom and how to cross-examine, if required to do so. It submitted that it was incumbent on Mr Boensch, who had brought the matter before the court, to know that he needed to cross-examine witnesses if that is what he wished to do. But that submission misses the point. First, Mr Boensch had not brought the matter before the court. Rather, he was opposing Somerville Legal's application for a sequestration order to be made against his estate. Secondly, it matters not that Mr Boensch has been involved in numerous proceedings. He is not a lawyer and cannot be expected to have a working knowledge, let alone an understanding, of the practice and procedure of the courts. Thirdly, the position taken by Somerville Legal is contrary to authority. As we have already said, it is the role of the judge to ensure that a litigant in person has sufficient information about the practice and procedure of the court to enable him or her to make effective choices about the conduct of his or her case. It follows that in this instance it was incumbent on the judge to inform Mr Boensch of the availability of cross-examination and, indeed, of his duty to do so if he intended to argue that the evidence he was challenging was incorrect or untrue. 107 The second aspect concerns the Boensch Exhibit and the time given to Mr Boensch to make his submissions. 108 It is clear from a review of the transcript that the Boensch Exhibit had been filed. However, for reasons that were not explained or explored by the primary judge, the copy as filed was not before the primary judge. Understandably, having filed the Boensch Exhibit, Mr Boensch did not have a second copy with him to provide to the court. He was given the choice by the primary judge of tendering his own copy or not having that material before the court in support of the grounds in his notice of opposition. Unsurprisingly, Mr Boensch chose the former. But, in doing so, he was left without a copy of the Boensch Exhibit for a significant part of the time during which he was permitted to address the court. 109 In making his submissions Mr Boensch was subjected to timing constraints that were imposed in a piecemeal fashion. Mr Boensch was given 50 minutes in total to make submissions in support of his notice of opposition: Somerville (No 1) at [15]. A review of the transcript reveals that the primary judge imposed time limits on Mr Boensch during the course of the hearing, rather than explaining to Mr Boensch at the outset that he would have a fixed and identified amount of time to present his submissions. 110 The requirements of procedural fairness include providing a litigant in person with a reasonable opportunity to present evidence and make submissions: see Shrestha at [38]. In this case, because of the matters described at [108]-[109] above, that did not occur. 111 Mr Boensch did not have the benefit of the Boensch Exhibit for the whole of the time that he was making his oral submissions. Somerville Legal says that the primary judge informed Mr Boensch that he could have access to the Boensch Exhibit if he so wished. That is so. However, putting aside whether the solicitor appearing for Somerville Legal had a copy of that exhibit, there was only one copy as between the court and Mr Boensch. If Mr Boensch had the Boensch Exhibit with him, the primary judge could not consider it while Mr Boensch was making his submissions and, while the primary judge had the copy with him, Mr Boensch was left to address without access to the underlying documents on which he relied. Given the volume of the Boensch Exhibit (see [115] below) and, as is apparent from the transcript, the fact and the extent to which Mr Boensch relied on it to support his grounds of opposition, he ought not to have been required to make such a choice. That issue could have been avoided had the primary judge taken a short adjournment to locate the filed copy of the Boensch Exhibit or taken other steps to ensure, as a matter of fairness, that both he and Mr Boensch had a copy of the material at the same time. 112 Coupled with that was the curtailment, by the primary judge, of the time afforded to Mr Boensch to make submissions in a way that can only be described as ad hoc. Mr Boensch had no clear understanding, at the outset, of the time available to him. In saying that, we do not mean to suggest that a judge is not permitted to delimit the time allocated to a party to present his or her case. To the contrary. But it is incumbent on the judge to do so in a way that is both fair and clear, having regard to the total time allocated for the hearing, the issues in the case and the assessment by the parties of the time they will need to present their respective cases. 113 Somerville Legal submits that the 50 minutes allocated to Mr Boensch to make his submissions allowed him a "substantial opportunity" to address the court, relying on Sullivan v Department of Transport (1978) 20 ALR 323; 1 ALD 383 (Sullivan) at 343. In Sullivan a Full Court of this Court (Smithers, Deane and Fisher JJ) considered whether the Administrative Appeals Tribunal (Tribunal) was in breach of its duty to act judicially because it had failed, of its own motion, to adjourn the proceeding or to alert the appellant of his right to apply for an adjournment. Relevantly, at 343, Deane J noted that a refusal to grant an adjournment may constitute a failure to give a party an adequate opportunity to present his or her case and that a failure by a tribunal, which is under a duty to act judicially, to adjourn a matter even where the relevant party has not expressly sought an adjournment may constitute a failure to allow that party the opportunity of properly presenting his or her case. In that context his Honour said that it was the duty of the Tribunal to ensure that a party is given a reasonable opportunity to present his or her case. 114 Somerville Legal's submission suggests that Mr Boensch was given more than a reasonable opportunity to present his case. Whether that is so is to be assessed having regard to the whole of the proceeding, which in this case was an application to sequester Mr Boensch's estate where Mr Boensch had gone to some effort to collate the material he said was relevant to a consideration of his grounds of opposition. Mr Boensch was entitled to an opportunity to properly present that material and was entitled to know at the outset the length of time he had to do so. In circumstances where the primary judge gave Mr Boensch shifting time limits, and in doing so conveyed a sense of impatience with the case being put by Mr Boensch, we do not think that he was given the reasonable opportunity to which he was entitled to address his grounds of opposition. 115 The third matter concerns the Boensch Exhibit itself. The material comprising the Boensch Exhibit came to the attention of the primary judge for the first time when it was tendered at the hearing. A copy of the Boensch Exhibit was before this Court. It comprises approximately 980 pages. The transcript discloses that the primary judge had the benefit of the Boensch Exhibit for a part of the time during which Mr Boensch made his submissions, that is for part of the 50 minutes allocated to Mr Boensch. Towards the latter part of the hearing, the primary judge handed the Boensch Exhibit back to Mr Boensch so that he would have it available for the purpose of addressing the court. 116 As the primary judge was bringing the hearing to a close, his Honour informed Mr Boensch that he had "read the material", by which we understand him to mean that he had read the Boensch Exhibit. In his reasons the primary judge referred in parts generally to "the material" and in one instance to a particular document: see Somerville (No 1) at [10], [11] and [13]. At [14] the primary judge said the following about the Boensch Exhibit: Mr Boensch identified that he had provided some exhibits in support of his affidavits to the Court but the Court had no such exhibits before it. Mr Boensch delivered up to the Court the exhibits that he contended he provided to the Court registry, and the Court accepted the same into evidence. 117 With respect, despite the statement recorded in the transcript that he had done so, given the length of the Boensch Exhibit and the time allowed for the hearing, it would have been impossible for his Honour to have "read" the Boensch Exhibit. After all, he had only a limited opportunity to familiarise himself with its contents. While he may have been generally aware of the nature of the material in it, he could not have considered it in any detail, let alone have read it. In contrast, the primary judge had available to him before the commencement of the hearing the Hemsworth Affidavit, which comprised 238 paragraphs and its exhibit of some 650 pages. 118 It is difficult to accept that the primary judge could have had any appreciation of the detail of the material in the Boensch Exhibit and how it may have impacted the grounds of opposition at the time he delivered his reasons and made orders. For example, it is apparent on a close examination of the Boensch Exhibit that there was a factual issue about when fees were payable to Mr Bevan and whether Mr Boensch was informed of the October Offer (see [34]-[43] above). 119 That is a matter of some significance. The effect of the October Offer was to defer the payment of that part of Mr Bevan's fees which exceeded his estimate until the time of judgment on the Separate Questions and, in the event the Separate Questions were answered adversely to Mr Boensch, to make payment of those fees contingent on the outcome of any appeal. There was an available inference, based on the evidence in the Boensch Exhibit, that Mr Boensch had not seen the October Offer at the time Somerville Legal responded to it by putting a counter offer, thus implicitly rejecting the October Offer; and that Mr Boensch first became aware of the October Offer in March 2016 upon speaking with Mr Bevan. Somerville Legal did not adduce or point to any evidence demonstrating that it provided a copy of the October Offer to Mr Boensch or that members of that firm discussed it with him or that there had been any discussion which led to its implicit rejection by the making of the counter offer to Mr Bevan. 120 The inference raised by the correspondence between Mr Boensch and Mr Bevan included in the Boensch Exhibit and unanswered by Somerville Legal was relevant to the question of whether there was "other sufficient cause as to why a sequestration order ought not to be made". For example, had Mr Boensch been aware of the October Offer he may have accepted it, some of the liability for the costs claimed would have been deferred and become a contingent liability and Somerville Legal could not have issued a bill of costs in the amount it did. 121 A litigant is entitled to expect that the evidence he or she presents will be read and considered by the court (in the sense discussed in Carrascalao v Minister for Immigration and Border Protection (2017) 252 FCR 352). Putting to one side the question of apprehended bias, a matter which was not expressly raised in the amended notice of appeal, to do otherwise would be to deny a litigant procedural fairness. If the primary judge had read the correspondence, he plainly did not consider it. 122 In order for the Court to grant relief, a denial of procedural fairness must work a practical injustice. It is therefore necessary for Mr Boensch to establish that he was denied the possibility of a successful outcome: see Flightdeck at [58]; MZAPC v Minister for Immigration and Border Protection [2021] HCA 17 at [59]-[60]. As Gageler and Gordon JJ observed in Minister for Immigration and Border Protection v WZARH (2015) 256 CLR 326 (WZARH) at [58] "[w]hat must be shown by a person seeking to establish a denial of procedural fairness will depend upon the precise defect alleged to have occurred in the decision-making process". Here the procedures adopted by the primary judge failed to afford Mr Boensch a reasonable opportunity to be heard or, put another way, the opportunity which in fairness ought to have been given to him: see WZARH at [60]. 123 In each of the instances we have identified above, Mr Boensch was denied that opportunity. He ought to have been informed that he had a right to cross-examine and a duty to do so if he intended to challenge the creditor's evidence. He ought to have been given the opportunity to address the court when both he and the primary judge had the Boensch Exhibit before them. He ought to have been informed at the outset of the time he had available to make submissions and thereafter permitted to proceed without the imposition of ad hoc time limits. And he ought to have had the benefit of the trial judge having read and considered the entire contents of the Boensch Exhibit. 124 It is clear that in being denied those opportunities Mr Boensch was denied the possibility of a successful outcome. Cross-‍examination of Mr Hemsworth would have given Mr Boensch the opportunity to test the evidence upon which Somerville Legal relied, particularly where he challenged its veracity, and to explore some of the issues which he said arose, for example whether he had been given a copy of the October Offer at the time it was made. A clear allocation to Mr Boensch at the outset of the hearing of adequate time to make submissions would have allowed him to present the key issues in an orderly fashion. Coupled with that, the availability of the Boensch Exhibit to Mr Boensch and the primary judge at the same time, while Mr Boensch was addressing the court, was critical to Mr Boensch's ability to explain his arguments. It was also vital to the court's capacity to follow those arguments and to appreciate how they may impact on the grounds of opposition and the extent to which they may have been made out, as illustrated by the matters raised at [118]-[120] above. For the same reason it was necessary for the court to properly review the material in the Boensch Exhibit. 125 It follows that ground 9 of the appeal is made out. In these circumstances it is unnecessary to consider the remaining grounds of appeal or Somerville Legal's notice of contention.

The nature of the relief 126 As Mr Boensch has succeeded in establishing ground 9 of his notice of appeal, the sequestration order made by the Circuit Court on 12 December 2019 should be set aside and the matter remitted to the Circuit Court. However, a question arises as to whether there would be any utility in remitting the matter to the Circuit Court for rehearing. That issue arises in the following context. 127 It will be recalled that here the creditor's petition was presented on 5 April 2019 and a sequestration order was made within 12 months of presentation of the petition, on 12 December 2019. No application to extend the life of the petition was made pursuant to s 52(5) of the Act as it was not necessary. 128 The parties were invited to provide submissions on the utility of a remittal order in these circumstances. In particular the issue that arises is whether the creditor's petition is stale in light of s 54(2) of the Act because more than 12 months has passed since its presentation or whether it is still valid because a sequestration order was made within 12 months of its presentation. 129 Somerville Legal referred to s 52(4) of the Act and submitted that the creditor's petition is dated 16 May 2019 (although on our inspection it appears to be dated 5 April 2019 and was presented on the same date), the sequestration order was made on 12 December 2019 and, on that basis, the creditor's petition has not lapsed. It contended that, if the Court were to decide to set aside the sequestration order, it is within the Court's discretion to extend the time of the creditor's petition to 16 May 2021. 130 Mr Boensch submitted that if the Court was to set aside the sequestration order, which is the requirement for sending it back to the Circuit Court to look behind the judgment(s), then the situation is as if the sequestration order was never made. He contended that, if the sequestration was, "as if never made", then the extension under s 52(4) of the Act that Somerville Legal seeks to rely on is not available. 131 In Bechara v Bates [2021] FCAFC 34 (Bechara v Bates) a sequestration order was made against the estate of Ms Bechara by a registrar of the Circuit Court on 5 July 2016 based on a creditor's petition which had been presented on 7 April 2016. Thereafter, Ms Bechara applied pursuant to s 104 of the Federal Circuit Court of Australia Act 1999 (Cth) (FCCA Act) for a review of the registrar's order. That application was dismissed. Through a complex set of proceedings the parties came before a Full Court of this Court, both by way of appeal from a decision of a single judge of this Court and by way of application pursuant to s 39B of the Judiciary Act 1903 (Cth) (Judiciary Act) to quash the decision of the Circuit Court. The Full Court (Allsop CJ, Markovic and Colvin JJ) concluded that Ms Bechara was entitled to the relief she sought pursuant to s 39B of the Judiciary Act. In that context the Full Court considered whether, given the passing of time, the creditor's petition was stale such that the proceeding could not be remitted to the Circuit Court. The determination of that issue turned on the effect of the order made by a registrar which was then the subject of a de novo hearing. After referring to the reasons of Emmett J in Totev v Sfar (2008) 167 FCR 193 (Totev), at [149]-[151] the Full Court said: 149 With respect, this is to give the notion of the de novo hearing too mechanical and rigid a form. It must take its place in its statutory context, which here includes s 103(2) of the Circuit Court Act. Section 103(2) means a sequestration order has been made and the debtor's status has changed. The hearing is de novo in the original jurisdiction and proceeds again, on the same petition. However, the hearing is undertaken in order to ensure the supervision of the exercise of delegated judicial power by the registrar. The mere bringing of the application for review does not invalidate, revoke or suspend the exercise of that delegated authority. It remains a valid exercise of delegated judicial power but subject to the review. The form of the review hearing is a de novo consideration, but while that review is pending the delegated authority by which the registrar made the order (in the present case the sequestration order) remains in existence and so too the order made in its exercise. 150 Therefore, if after concluding the de novo review the judge would otherwise make a sequestration order, that is, all the matters in s 52(1) are proved and no matter in s 52(2) arises to stand in the way of a conclusion that a sequestration order ought be made, the application for review will be dismissed and the exercise of delegated authority will remain operative. The Court may make this clear by affirming the order of the registrar. On the other hand, if the conclusion reached on the de novo review is that the petition should be dismissed (whether or not for reasons that were available or present before the registrar), that order will be made, and the sequestration order set aside or annulled: see Pattison. 151 Looking at the matter thus, and recognising the effect and status of the registrar's order ("for all purposes") there has been before the times set out in s 52(4)(a) and (b) of the Bankruptcy Act a sequestration order made. An application for review does not make the registrar's orders provisional or ineffective. 132 At [152] the Full Court concluded that even after two years from the presentation of the creditor's petition the hearing of the petition on a de novo review, re-enlivened for that purpose, could take place, a view which accorded with the reasoning of Bennett J in Totev, with which Cowdroy J agreed. 133 The facts of this case are different. Here the sequestration order was made on 12 December 2019 by a judge of the Circuit Court. Unlike in in Totev and Bechara v Bates, the sequestration order itself is to be set aside and, as a result, there will be no subsisting order. 134 In Deputy Commissioner of Taxation v Clyne (1984) 4 FCR 156 (Clyne), however, a similar situation presented itself. The High Court had set aside a sequestration order made by a judge of this Court as being beyond power and remitted the matter to the Court for rehearing. The proceeding then came before a Full Court on a stated case which raised for consideration the question whether, in light of the circumstances of that case and by force of s 52(4) of the Act, the creditor's petition had lapsed. The High Court had not addressed the question in its reasons. At 157-158 Toohey and Wilcox JJ said: Section 52(4) provides for the lapse of a petition unless "a sequestration order is made on the petition" within twelve months or time is extended. The petition was presented on 4 January 1983 and a sequestration order was made within twelve months of that date, namely on 7 October 1983. That sequestration order has now been set aside by the High Court as being beyond power but that does not mean that the order was a nullity. The Federal Court is a superior court of record: see s 5(2) of the Federal Court of Australia Act 1976 (Cth). An order of a superior court of record which is, for any reason, irregular is not a nullity, but merely voidable: see Cameron v Cole (1943) 68 CLR 571 at 590-591, 598, 599 and 604-605; Taylor v Taylor (1979) 143 CLR 1 at 7-8. This approach was implicitly adopted by the majority justices in the High Court in this case when they referred at 400 to decisions where a second sequestration order had erroneously been made on a petition founded on a debt provable in the existing bankruptcy. They went on: "It was held that the creditor had no legal right to the second sequestration order which should be rescinded. The proper course was, in our opinion, to annul rather than to rescind the order." Annulment would, of course, have been unnecessary if the second order, which was - for the same reasons as in the present case - beyond power, had been a nullity when made. One of the two events specified in s 52(4) as necessary to prevent lapse of the petition did occur. 135 The finding in Clyne that the creditor's petition had not lapsed was made because the sequestration order was not a nullity but merely voidable as an order of a superior court of record. But the Circuit Court is not a superior court of record: see Flint v Richard Busuttil & Co Pty Ltd (2013) 216 FCR 375 (Flint) at [20] and s 8(3) of the FCCA Act which provides that that court is "a court of record". Thus it is necessary to consider whether the principle in Clyne applies where the sequestration order is made by the Circuit Court. 136 In New South Wales v Kable (2013) 252 CLR 118 (Kable) at [55]-[56] Gageler J said: [55] A judicial order of any court, whether superior or inferior, is valid and effective if it is made within jurisdiction. Any judicial order, whether of a superior court or an inferior court and whether made within or without jurisdiction, is a judgment, decree, order or sentence from which an appeal may lie to the High Court under s 73 of the Constitution and, where such an appeal lies, a judicial order made without jurisdiction may be set aside by the High Court in determining the appeal. Any judicial order made in excess of jurisdiction by a federal court, whether the court be created as a superior court or an inferior court, may be set aside by a writ of certiorari issued under s 32 of the Judiciary Act 1903 (Cth) in the exercise of the original jurisdiction of the High Court conferred by s 75 or under s 76 of the Constitution. [56] There is, however, a critical distinction between a superior court and an inferior court concerning the authority belonging to a judicial order that is made without jurisdiction. A judicial order of an inferior court made without jurisdiction has no legal force as an order of that court. One consequence is that failure to obey the order cannot be a contempt of court. Another is that the order may be challenged collaterally in a subsequent proceeding in which reliance is sought to be placed on it. Where there is doubt about whether a judicial order of an inferior court is made within jurisdiction, the validity of the order "must always remain an outstanding question" unless and until that question is authoritatively determined by some other court in the exercise of judicial power within its own jurisdiction. In contrast: It is settled by the highest authority that the decision of a superior court, even if in excess of jurisdiction, is at the worst voidable, and is valid unless and until it is set aside. (Emphasis added, footnotes omitted.) 137 Here, the sequestration order is to be set aside because of the failure to afford procedural fairness to Mr Boensch. Thus whether the sequestration order is void or voidable depends on whether a failure by the Circuit Court to afford procedural fairness is a jurisdictional error. If it is not, the principles in Clyne will apply; the sequestration order is not a nullity, but merely voidable and, one of the events specified in s 52(4) having occurred, the creditor's petition has not lapsed. If it is a jurisdictional error, the sequestration order is void. 138 The starting point to consider that issue is Craig v The State of South Australia (1995) 184 CLR 163 where the High Court discussed the scope of certiorari and the nature of jurisdictional error. When discussing the former, it observed (at 175) that where the writ of certiorari runs it enables the quashing of an impugned order upon one or more established grounds including jurisdictional error, failure to observe some requirements or procedural fairness, fraud and error of law on the face of the record. As to the latter (at 176), the High Court drew a distinction between administrative decision makers and inferior courts. At 177-178 the High Court said the following about what constitutes jurisdictional error on the part of an inferior court: An inferior court falls into jurisdictional error if it mistakenly asserts or denies the existence of jurisdiction or if it misapprehends or disregards the nature or limits of its functions or powers in a case where it correctly recognises that jurisdiction does exist. Such jurisdictional error can infect either a positive act or a refusal or failure to act. Since certiorari goes only to quash a decision or order, an inferior court will fall into jurisdictional error for the purposes of the writ where it makes an order or decision (including an order or decision to the effect that it lacks, or refuses to exercise, jurisdiction) which is based upon a mistaken assumption or denial of jurisdiction or a misconception or disregard of the nature or limits of jurisdiction. Jurisdictional error is at its most obvious where the inferior court purports to act wholly or partly outside the general area of its jurisdiction in the sense of entertaining a matter or making a decision or order of a kind which wholly or partly lies outside the theoretical limits of its functions and powers. An inferior court would, for example, act wholly outside the general area of its jurisdiction in that sense if, having jurisdiction strictly limited to civil matters, it purported to hear and determine a criminal charge. Such a court would act partly outside the general area of its jurisdiction if, in a matter coming within the categories of civil cases which it had authority to hear and determine, it purported to make an order of a kind which it lacked power to make, such as an order for specific performance of a contract when its remedial powers were strictly limited to awarding damages for breach. Less obviously, an inferior court can, while acting wholly within the general area of its jurisdiction, fall into jurisdictional error by doing something which it lacks authority to do. If, for example, it is an essential condition of the existence of jurisdiction with respect to a particular matter that a certain event or requirement has in fact occurred or been satisfied, as distinct from the inferior court's own conclusion that it has, there will be jurisdictional error if the court or tribunal purports to act in circumstances where that event has not in fact occurred or that requirement has not in fact been satisfied even though the matter is the kind of matter which the court has jurisdiction to entertain. Similarly, jurisdictional error will occur where an inferior court disregards or takes account of some matter in circumstances where the statute or other instrument establishing it and conferring its jurisdiction requires that that particular matter be taken into account or ignored as a pre-condition of the existence of any authority to make an order or decision in the circumstances of the particular case. Again, an inferior court will exceed its authority and fall into jurisdictional error if it misconstrues that statute or other instrument and thereby misconceives the nature of the function which it is performing or the extent of its powers in the circumstances of the particular case. In the last-mentioned category of case, the line between jurisdictional error and mere error in the exercise of jurisdiction may be particularly difficult to discern. 139 Since Craig the question of whether a denial of procedural fairness by an inferior court, as opposed to an administrative decision maker, amounts to jurisdictional error has been the subject of much consideration. Different views have been expressed. For example in DMI16 v Federal Circuit Court of Australia (2018) 264 FCR 454 a Full Court of this Court (Collier, Logan and Perry JJ) said: 55 It is well established that a judge is required to conduct judicial proceedings in accordance with the rules of natural justice and procedural fairness. As, for example, Campbell JA explained in Adamson v Ede [2009] NSWCA 379 (Adamson) (with whose reasons Giles and Hodgson JJA agreed): 54 In Commissioner of Police v Tanos (1958) 98 CLR 383 at 396, Dixon CJ and Webb J (with whom Taylor J agreed) said of the rules of natural justice that "It is hardly necessary to add that its application to proceedings in the established courts is a matter of course." Similarly, in Yates Property Corporation Pty Ltd (in liq) v Darling Harbour Authority (1991) 24 NSWLR 156 at 186, Handley JA said: "Compliance with the requirements of natural justice is … an incident of the judicial process". 55 High Court discussion of Chapter III of the Constitution has emphasised the fundamental role of natural justice in exercising judicial power: Harris v Caladine (1991) 172 CLR 84 at 150 per Gaudron J; Re Nolan; Ex parte Young (1991) 172 CLR 460 at 496 per Gaudron J; Leeth v Commonwealth (1992) 174 CLR 455 at 470 per Mason CJ, Dawson and McHugh JJ, 502 per Gaudron J; Bass v Permanent Trustee Co Ltd [1999] HCA 9; (1999) 198 CLR 334 at 359 [56] per Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ; Forge v Australian Securities and Investments Commission [2006] HCA 44; (2006) 228 CLR 45 at 76 [63]-[64] per Gummow, Hayne and Crennan JJ; Kable v Director of Public Prosecutions for NSW (1996) 189 CLR 51 at 116 per McHugh J. 56 However, it does not necessarily follow that a breach of procedural fairness will (necessarily) constitute a jurisdictional error in the context of proceedings in a federal court. As Gaudron and Gummow JJ observed in Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 at [42], while a denial of procedural fairness by an administrative decision-maker will sound in jurisdictional error, "different considerations arise where the Commonwealth officer is a member of a federal court": semble SZVDC v Minister for Immigration and Border Protection (2018) 259 FCR 154 at [69] (the Court). 57 In support of his submission that a breach of procedural fairness by the Federal Circuit Court is a jurisdictional error, the appellant relied upon a comment by Robertson J (with whose reasons Logan and Kerr JJ agreed) in SZTES v Minister for Immigration and Border Protection [2015] FCAFC 158 that a denial of procedural fairness by the Federal Circuit Court "could constitute a jurisdictional error": at [51]. However, his Honour's comment was made in obiter only because the Court in SZTES ultimately found that the claim of procedural fairness failed on the facts: ibid at [73]. Equally, in this case it is unnecessary to decide the point of principle; nor would it be desirable to do so in circumstances where the Minister did not take issue with this first step of the appellant's argument. Rather, as we later explain, the appellant's argument fails for other reasons. 140 The parties' submissions do not expressly address the effect of s 52(4) of the Act in the context of setting aside the sequestration order based on a denial of procedural fairness and thus whether, in turn, a denial of procedural fairness by the primary judge, who is a judge of an inferior court, amounts to a jurisdictional error. In the circumstances, it is not necessary for us to determine the issue on this occasion. That is because, even if the breach of natural justice is a jurisdictional error rendering the sequestration order void, it may still have some effect for the purpose of s 52(4) of the Act. 141 In Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd (In Liq) (2019) 99 NSWLR 317, the New South Wales Court of Appeal (Leeming, Payne and White JJA, Sackville and Emmett AJJA) considered, among other things, the appropriate construction of s 16(2) of the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOPA) which allows a claimant with an outstanding payment claim to elect between recovering the amount in any court of competent jurisdiction or by making an adjudication application. The respondent, Ostwald, made an adjudication application in relation to its claim which the appellant, Seymour Whyte, alleged was lodged out of time. Among other matters, the Court of Appeal considered an argument by Seymour Whyte to the effect that, if the adjudication application (and subsequent adjudication determination) were void, Ostwald was precluded from seeking to enforce the debt pursuant to s 16(2)(a)(i) of the SOPA. Seymour Whyte contended that Ostwald was precluded from enforcing the debt pursuant to s 16(2)(a)(i) in a court either as a matter of statutory construction or as a matter of election at common law. 142 After dismissing the argument based on election at common law, Leeming JA (with whom Payne and White JJA agreed) considered and rejected the argument based on the construction of s 16(2)(a)(i) of the SOPA. In doing so at [28]-[30] his Honour outlined the applicable principles as follows: 28 Seymour Whyte relied on Gageler J's analysis in State of New South Wales v Kable (2013) 252 CLR 118; [2013] HCA 26 at [52]. Speaking of a purported but invalid law, and a thing done in the purported but invalid exercise of a power conferred by law, Gageler J said that both remained "at all times a thing in fact". He continued: "[52] … The thing is, as is sometimes said, a 'nullity' in the sense that it lacks the legal force it purports to have. But the thing is not a nullity in the sense that it has no existence at all or that it is incapable of having legal consequences. The factual existence of the thing might be the foundation of rights or duties that arise by force of another, valid, law." (Footnote omitted.) 29 The fact that a decision is beyond jurisdiction, and may be said to be a "nullity", is not determinative of its status for the purposes of further legal analysis. The law of contempt supplies an example. An inferior court's order beyond jurisdiction is a nullity, in the sense that the failure to obey it cannot be a contempt: United Telecasters Sydney Ltd v Hardy (1991) 23 NSWLR 323 at 335; Pelechowski v Registrar, Court of Appeal (NSW) (1999) 198 CLR 435; [1999] HCA 19 at [27]-[28], [55] and [71]. However, an order beyond jurisdiction may also be the subject of proceedings seeking judicial review in the Supreme Court's supervisory jurisdiction, or indeed an appeal (consider for example an appeal from the District Court upheld on the basis of a denial of procedural fairness). 30 But the question is one of construction … (Emphasis added.) 143 To like effect at [175] Sackville AJA (with whom Leeming, Payne and White JJA and Emmett AJA agreed) observed that "a decision affected by jurisdictional error - even a failure to comply with a 'mandatory' statutory precondition to the exercise of a power - is not necessarily devoid of legal consequences". After referring to Kable at [52] his Honour said (at [176]) that "legislation may attach consequences to an act or decision that is 'invalid' by reason of a jurisdictional error. The issue in the present case is therefore one of statutory construction": see too Director of Public Prosecutions v Edwards (2012) 44 VR 114 at [45] (per Warren CJ dissenting) and [177]-[182] (per Weinberg JA and Williams AJA). 144 Thus, assuming that the denial of procedural fairness by the primary judge amounts to a jurisdictional error such that Clyne does not apply and the sequestration order is void, the question to be determined is whether, as a matter of construction, s 52(4) of the Act preserves the legal consequences of that order. In particular: is s 52(4) to be construed such that a creditor's petition will not lapse where, before the statutory period expires, in fact (and without regard to the legality or validity of the relevant event) a sequestration order is made or the petition is dismissed or withdrawn? 145 In Clyne at 158 Toohey and Wilcox JJ said: Mr Clyne submits that the requirement of the subsection is for a valid sequestration order. He argues that, were it not so, the life of the petition would be extended indefinitely. This is the result of the view we take but it need not occasion concern; the court maintains control over the petition and may make such orders, including an order substituting a new creditor or dismissing the petition, as the circumstances require. The alternative position, which may accord to a debtor immunity in respect of a particular petition in relation to which an irregular order had been made, possibly with important consequences in respect of the commencement of the bankruptcy and the assets available for distribution to his creditors, is much more difficult to reconcile with the principles underlying the Act. 146 At 161 Jenkinson J relevantly observed, albeit in obiter, that: The natural meaning of the final clause of s 52(4) is that the occurrence of one or other of three actual events is specified within an ascertainable period of time. The subsection as a whole declares a legal consequence of the passage of a period of time without the occurrence of any of those three actual events in that period. There is in my opinion nothing in the legislative context to suggest that any of those three actual events are to be understood as of significance in s 52(4) only if the legal effect of the event continues undisturbed by subsequent order of a court. The three events are selected, it would seem, because the occurrence of any of them signifies a normal termination of a proceeding the duration of which it is intended by the legislature to control. There is in my opinion nothing in s 52(4), or elsewhere in the Act, to suggest that in s 52(4) or (5) an attempt has been made to exercise that control, after the proceeding has terminated upon the occurrence of one of those three events, in relation to the unusual supervenient events to which ss 37(1), 38 and 154(1) may give rise. Even if the sequestration order made by Beaumont J were characterised as void ab initio, as the judgment debtor submitted, that might not preclude a conclusion that a sequestration order had been made, for the purposes of s 52(4), before the expiration of the period of twelve months commencing on the date of presentation of the petition. 147 In Hamilton v Deputy Commissioner of Taxation of the Commonwealth of Australia [1990] FCA 202 a registrar made an order dismissing a creditor's petition. Justice Northrop found that the petition should not have been dismissed and went on to consider whether the petition had lapsed by reason of s 52(4) of the Act. After citing Clyne, his Honour observed at 16 that: In that case, a sequestration order had been made. Of necessity the same result must apply where the petition was dismissed even though the reasoning expressed could not apply. It is noted that the effect of this conclusion is that appeals from orders of sequestration or dismissal are freed from the constraints resulting from lapse by effluxion of time under sub-section 52(4). (Emphasis added.) 148 In Adams v Lambert (2006) 152 FCR 433 (Adams), the High Court had set aside an order of this Court dismissing a creditor's petition and remitted the proceeding back to this Court for further hearing. At [5] Gyles J identified that the first issue to be considered was whether the creditor's petition had lapsed by virtue of s 52(4) of the Act. In resolving that issue at [8]-[10] his Honour said: 8. The orders of the High Court and the passage of the judgment which relates to them contemplate that the matter will proceed to a hearing of the case, although there is no indication that the present issue was present to the minds of the Court. As pointed out in the passage from the judgment of Toohey and Wilcox JJ in Deputy Commissioner of Taxation v Clyne (above) somewhat anomalous results occur whichever view is taken where a petition comes on for hearing nearly two years from its date. In Rangott v Marshall (2004) 139 FCR 14 at [24] I said: It seems that the Act does not expressly address the imposition of an appellate regime upon the provisions in relation to sequestration and bankruptcy. That may be an accident of history. However, as I held in that case, there is an appellate regime which applies to sequestration orders, the critical provision of which is s 28 of the Federal Court of Australia Act 1976 (Cth). 9. I have no difficulty in agreeing with the submission of counsel for the applicant creditor that the decision of the Full Court in Re Young; Ex parte Smith (above) is not in point. It did not deal with the problem occasioned by the dismissal of a petition, when that dismissal is subsequently set aside on appeal. Nonetheless, the question remains as to the effect of the order of the High Court setting aside the dismissal. On one view, it is as if the dismissal had never occurred (cf Rangott v Marshall (above) at [29]). Thus, there is an argument that, as the dismissal never occurred, the proviso to s 52(4) was not met and the petition has lapsed. 10. In my opinion, the section should not be read in that fashion as it would, in many cases, frustrate the appeal provisions. As this case illustrates, it takes time to dispose of appeals. An order extending a petition which has been dismissed could hardly be made in the meantime. It is, no doubt, for this reason that that point was not taken up either by the Full Court of this Court or by the High Court, notwithstanding invitations to do so by counsel for the applicant creditor. That conclusion is consistent with the reasoning of the Full Court in Deputy Commissioner of Taxation v Clyne. In other words, in my opinion, 'dismissal' in s 52(4) means dismissal in fact, whether or not subsequently set aside (cf Yilmaz v Minister for Immigration and Multicultural Affairs (2000) 100 FCR 495). 149 The observations in these cases and in particular, by analogy, the approach in Adams lead us to conclude that, on a proper construction of s 52(4) of the Act, the creditor's petition will not lapse if in fact one of the three specified events occurs. That construction is supported by the ordinary meaning of the section as well as the fact that, as observed in Adams, appeals take time. It could not have been the intention of Parliament to frustrate the appeal process by its supervision of the bankruptcy process through, relevantly, the imposition of a time period for the resolution of a proceeding on a creditor's petition.

The Trustees' submissions 150 As set out above, the Trustees were given leave to intervene in the proceeding. They submitted that, in the event that Mr Boensch were to succeed on his appeal, the Court should exercise its discretion to make an order for the annulment of the bankrupt estate under s 153B of the Act "subject to the following terms": (1) Upon the [Trustees] filing with the Court, by no later than 60 days from the date of this order, an Affidavit certifying that the following events have taken place: (a) the petitioning creditor's debt in the amount of $213,263.71 plus interest calculated from 12 December 2019 has been paid or such other amount as proved pursuant to s84 of the Bankruptcy Act and paid; (b) the Respondent's costs of the creditor's petition in the amount of $33,315.72 or such sum to be taxed or agreed as between the Respondent and the [Trustees] has been paid ("priority costs"); (c) the Appellants other debts known to the [Trustees] as at the date of this order have been proved pursuant to s84 of the Bankruptcy Act and paid; and (d) the [Trustees] have been paid their reasonable remuneration and expenses incurred in their capacity as Trustee of the Appellants estate, including the costs of these proceedings on an indemnity basis as ordered in 3 below; the bankruptcy of the Appellant is annulled pursuant to s 153B(1) of the Bankruptcy Act 1966 (Cth). (2) The [Trustees] shall provide to the Appellant such reasonable assistance as they consider necessary to facilitate the events in order 1 being effected. (3) The Appellant pay the [Trustees'] costs of these proceedings on an indemnity basis. (4) The Appellant pay the Respondent's costs of these proceedings on an ordinary basis. (5) If the condition for annulment referred to in order 1 is not triggered, then the costs of the [Trustees] referred to in order 3 shall be treated as part of the costs and expenses of the administration of the Appellants estate and to be paid in priority pursuant to s109(1) of the Bankruptcy Act. (6) Liberty to apply on 3 days notice. 151 The Trustees estimated that the amount required to annul the bankruptcy as at 10 June 2020 was approximately $1.89 million made up of amounts owing to unsecured creditors and the Trustees' remuneration and costs. 152 The Trustees submitted that, notwithstanding the general power conferred on this Court by s 28 of the Federal Court of Australia Act 1976 (Cth) (Federal Court Act), where a trustee in bankruptcy has proceeded to administer a bankrupt estate the Court will require the bankrupt to apply for an annulment under s 153B of the Act rather than setting aside a sequestration order. The Trustees noted that a trustee's charges and expenses incurred in administering a bankrupt estate are granted a priority under s 109 of the Act and are generally recovered from the proceeds of a bankrupt's property. 153 The Trustees submitted that, if the Court is persuaded by Mr Boensch's submissions that the sequestration order ought not to have been made, then the more appropriate relief would be to order an annulment pursuant to s 153B of the Act rather than to set aside the sequestration order, particularly in circumstances where that order was made by a judge, not a registrar. If an annulment order is made the Trustees will be entitled to recover their remuneration and expenses incurred to date in administering the bankrupt estate pursuant to s 154(1)(b) of the Act. The Trustees contended that the decision to either set aside the sequestration order or annul the bankrupt estate pursuant to s 153B of the Act is critical to the likelihood of their entitlement to remuneration and expenses to date for their efforts as court-appointed trustees in administering Mr Boensch's bankrupt estate. 154 The Trustees submitted that, while there is some authority supporting the exercise of discretion in favour of the bankrupt and ordering that a sequestration order be set aside, the weight of authority lies with the decision of Flint where the Court found in favour of the trustee and made an order pursuant to s 153B of the Act annulling the bankruptcy. The Trustees submit that the facts in Kyriackou v Shield Mercantile Pty Ltd (No 2) [2004] FCA 1338 (Kyriackou), where the Court exercised its discretion in favour of the bankrupt and ordered that the sequestration order be set aside, are distinguishable from the facts in this matter. They say that Kyriackou concerned the validity of the bankruptcy notice whereas here Mr Boensch's application to set aside the bankruptcy notice was dismissed and the primary judge found that an act of bankruptcy occurred such that Somerville Legal was entitled to present a creditor's petition to the court. 155 The Trustees also submitted that the Court ought to follow the approach taken to the form of orders in Kessly v Beadle as Trustee of the Bankrupt Estate of Evangelina Francisca Kessly [2020] FCA 607 (Kessly) and Barnes v Lion Finance Pty Ltd [2015] FCA 951. They relied on Kessly at [47], where the principles applying to the exercise of the discretion under s 153B of the Act were summarised, including that in exercising the discretion the Court can look to the preparedness of the appellant to pay the costs thrown away by reason of the annulment application and the trustee's costs and expenses of the bankruptcy to the extent that they have not otherwise been recovered from the bankrupt's estate. 156 Neither Mr Boensch nor Somerville Legal made any submissions in response to those of the Trustees. 157 Section 153B(1) of the Act relevantly provides that if the Court is satisfied that a sequestration order ought not to have been made, it may make an order annulling the bankruptcy. Where a bankruptcy is annulled the following consequences arise under s 154 of Act in relation to a trustee's costs: (1) If the bankruptcy of a person (in this section called the former bankrupt) is annulled under this Division: … (b) the trustee may apply the property of the former bankrupt still vested in the trustee in payment of the costs, charges and expenses of the administration of the bankruptcy, including the remuneration and expenses of the trustee; and … (3) If the property of the former bankrupt referred to in paragraph (1)(b) is insufficient to meet the costs, charges and expenses referred to in that paragraph, the amount of the deficiency is a debt due by the former bankrupt to the trustee and is recoverable by the trustee by action against the former bankrupt in a court of competent jurisdiction. … 158 This is not an application by Mr Boensch to annul his bankruptcy. Thus, to the extent that the Trustees rely on authorities to be applied when considering whether to exercise the discretion in s 153B of the Act, they are somewhat inapt. However, the Trustees also point to the decisions in Kyriackou and Flint where, upon making orders for the setting aside of a sequestration order, consideration was given to the form of order to be made where it had been determined that the sequestration order should be set aside. 159 In Kyrackiou Weinberg J found that the bankruptcy was founded upon an invalid bankruptcy notice. The official trustee submitted that the Court should not set aside the sequestration order and dismiss the petition without also ordering that the bankruptcy be annulled pursuant to s 153B of the Act. Justice Weinberg first considered whether the official trustee was entitled to his costs of the proceeding. At [37] his Honour determined that the official trustee was not because he chose to be represented in the appeal to advance arguments relating to the costs that he had incurred in administering the estate and in relation to his remuneration but did not participate in the substance of the appeal. 160 His Honour then turned to consider whether the sequestration order should simply be set aside or the bankruptcy should be annulled. At [41]-[43] his Honour said: 41 It might be thought that the Act is deficient in failing to provide for the summary recovery by a trustee of the costs of administering an estate, and his or her reasonable remuneration, in circumstances where a sequestration order has had to be set aside. Perhaps the party responsible for those costs having been unnecessarily incurred, in this case the first respondent, ought to be summarily liable for them. There may be some cases, in which it will be appropriate to annul a bankruptcy under s 153B, thereby triggering the operation of s 154, rather than setting aside a sequestration order. Certainly, Emmett J took that approach in Austral. French J, in Symons, was prepared to contemplate a similar course, though not without reservations. In my opinion, this is not such a case. 42 It seems to me that a trustee who administers a bankrupt estate, in the knowledge that the bankrupt is challenging the validity of the sequestration order, must exercise caution when incurring expenses whilst the status of the bankruptcy remains uncertain. I can well understand why, in Austral, given the facts of that case, involving as it did a resolution of a dispute between a debtor and a creditor, Emmett J concluded that it was appropriate to order the annulment of the bankruptcy, rather than simply setting aside the sequestration order. There was something to be said for making the putative bankrupt's estate meet the costs needlessly thrown away, particularly given the fact that there had been a short administration. The argument for fixing the estate with the costs and expenses of the administration seems to me to be less cogent when the putative bankrupt should never have been the subject of a sequestration order in the first place. That is particularly so when the sequestration order is based upon a bankruptcy notice that has always been attacked as invalid. 43 In this case, a balance must be struck between the rights of the appellant, who should never have been made bankrupt in the first place, and the Official Trustee, who has simply done what the Act requires him to do. In my view, the particular circumstances of this case require that that balance tilt in favour of the appellant. It follows that the Official Trustee must bear his own costs and expenses of the administration unless he elects to institute proceedings to recover them: see generally Wenkart v Pantzer (2003) 132 FCR 204 at 207. That is a matter for the Official Trustee. It does not fall within the ambit of any costs order that can properly be made in relation to this appeal. (Emphasis added.) 161 In Flint the appellant, Ms Flint, sought to have a sequestration order made by a judge of this Court set aside. The trustee applied to be heard on the form of order and submitted that an order annulling the bankruptcy should be made under s 153B of the Act so as to protect his costs and remuneration in accordance with s 154 of the Act. The Full Court (Allsop CJ, Katzmann and Perry JJ) concluded that the exposure of the trustee to the consequences of setting aside the sequestration order in that case, leaving him with no statutory basis for any remuneration, would be a gross injustice. However, the Court was of the view that placing the totality of the burden for the trustee's costs and remuneration on Ms Flint would be unjust and that the petitioning creditor, Busuttil, should bear the burden of some of those costs. At [53]-[54] their Honours said: 53 On the one hand, Ms Flint is not without blame. Her completed statement of affairs lodged on 31 July 2013 reveals that she is solvent. Yet, she has steadfastly and without apparent justification refused to discharge the judgment debt that gave rise to the creditor's petition and she failed to prove solvency at the hearing. Furthermore, she did not appeal within the 21 day period provided by the Federal Court Rules and required an extension of time to bring the appeal. In the meantime the trustee was undertaking work in the administration of the bankrupt estate. 54 On the other hand, Busuttil should share some of the responsibility for the trustee's costs and remuneration. In its own interests it ought to have applied for an extension of the period for compliance with the creditor's petition before the statutory period lapsed. It could have recognised that there was doubt about the validity of the federal magistrate's order and the risks of moving on the petition in those circumstances (especially having regard to the impact on third parties). It could have issued a fresh bankruptcy notice. It could have conceded the point at the heart of the appeal. 162 Accordingly, the Full Court set aside the sequestration order and dismissed the petition but made consequential orders dealing with the trustee's costs and remuneration. In doing so the Full Court noted that, irrespective of the position under the Act, it was accepted that there was power to make such orders under s 28 of the Federal Court Act. Contrary to the Trustees' submissions, an order under s 153B of the Act was not made. The consequential orders required Ms Flint to pay 75% of the trustee's costs and remuneration and for Busuttil to pay the remaining 25%. 163 We do not propose to make orders in the form sought by the Trustees (see [150] above). 164 First, we would not make an order that Mr Boensch pay the Trustees' costs of this proceeding (see (3) of the proposed orders). As was the case in Kyrackiou the Trustees chose to intervene in the proceeding to advance their case in relation to the form of the orders. Notwithstanding their limited role, they were present for the entirety of the hearing. Insofar as they contended for the form of orders set out at [150] above, they relied entirely on their written submissions. In those circumstances Mr Boensch should not be liable for their costs of the proceeding, let alone on an indemnity basis. 165 Secondly, having considered the circumstances and where the balance lies, in our view this is not a case where it is appropriate to annul the bankruptcy pursuant to s 153B of the Act or to make consequential orders of the kind made in Flint. The circumstances of this case are analogous to those in Kyriackou. The sequestration order was infected by a denial of procedural fairness. The amount the Trustees contend that Mr Boensch should pay as part of their proposed orders is substantial. Apart from their remuneration, the Trustees also seek payment of Somerville Legal's costs of the proceeding before the primary judge, even though the relevant costs order is to be set aside, and amounts owing to all creditors of Mr Boensch's bankrupt estate. Given our findings, he should not have to bear that burden. It is not his fault the hearing miscarried. To the extent that the amount sought includes the Trustees' costs and remuneration, estimated at approximately $160,000 as at June 2020, the observations of Weinberg J in Kyrackiou at [42], as to the caution to be exercised by a trustee in bankruptcy in incurring expenses where the validity of the sequestration order is challenged and the status of the bankruptcy is uncertain, are relevant here. Mr Boensch commenced his appeal in December 2019, within the time required by the Court's rules. The Trustee was aware of that fact at least from March 2020 when it applied to intervene in the appeal (and in all likelihood from an earlier date). Despite that, they proceeded to incur significant costs in administering his bankrupt estate. 166 In the circumstances of this case, the Trustees should bear their own costs of the administration unless they elect to commence proceedings to recover them: see Kyriackou at [43].

Conclusion 167 The appeal should be allowed with costs, the orders made by the primary judge on 12 December 2019 should be set aside and the proceeding remitted to the Circuit Court, differently constituted, for rehearing. 168 We will make orders accordingly. I certify that the preceding one hundred and sixty-eight (168) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Katzmann, Markovic and Abraham.