Deputy Commissioner of Taxation v Huynh [2026] FedCFamC2G 605

1. Subject to order 3, pursuant to s 256(2) of the Federal Circuit and Family Court of Australia Act 2021 (Cth), the sequestration order made by Registrar Morgan on 9 April 2026 be suspended to the extent it would otherwise act as a factum for the operation of s 60(2) and s 60(3) of the Bankruptcy Act 1966 (Cth) in relation to the interest the respondent has in Administrative Review Tribunal proceeding no 2025/6911-2025/6920.
2. The respondent's application for a stay of the sequestration and other orders Registrar Morgan made on 9 April 2026 is otherwise dismissed.
3. Order 1 is to have effect up to and including 1 May 2026, or until such other time and date as the Court may order.
4. The parties have liberty to apply on such notice as the circumstances warrant.

Note: The form of the order is subject to the entry in the Court's records.

Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 24.04(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2025 (Cth)), or to record a variation to the order pursuant to r 24.04 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2025 (Cth).

1. In these reasons for judgment, I consider an application the respondent, Mr Huynh, made for the stay of a sequestration order a Registrar of the Court made on 9 April 2026 pending the determination of the hearing of an application for review of the Registrar's order.

1. The Registrar made the sequestration order against the estate of Mr Huynh on the petition of the Deputy Commissioner of Taxation (Commissioner). The act of bankruptcy on which the creditor's petition is based is Mr Huynh's failure to comply with the requirements of a bankruptcy notice that was served on him on 16 September 2025. The bankruptcy notice demanded Mr Huynh pay to the Commissioner $1,748,528.49, being the amount of a judgment that was entered against Mr Huyhn in the Supreme Court of New South Wales, together with interest.
2. In addition to the $1,748,528.49 demanded by the bankruptcy notice, the creditor's petition claims Mr Huynh is indebted to the Commissioner for $81,899,953.30, being the total of amounts the Commissioner claims are payable by Mr Huynh under the Taxation Administration Act 1953 (Cth).
3. On 8 April 2026 Mr Huynh filed a notice stating grounds of opposition to the making of a sequestration order in which he raises the following grounds of opposition:

1. The Respondent is not insolvent.

1. The Respondent has ongoing proceedings for review in the Administrative Review Tribunal, proceedings no. 2025/6911-20255/6920 in respect of the majority of the debt subject to the Creditor's Petition filed by the Applicant.
2. The Respondent is arranging to procure funds from the refinance of a property at 16 Gilliver Avenue, Vaucluse NSW 2030, which is owned by the Respondent's wife, in order to pay the Respondent's debts.
3. There are other sufficient causes to decline a sequestration order, including that if such as an order is made against the Respondent:
   1. he will be unable to pursue the proceedings referred to in [2] above; and
   2. his ability to seek compensation from his professional advisers advising him on matters that led to his liability to the Applicant will be compromised or disrupted.
4. The Respondent, in the alternative, seeks that the Creditor's Petition filed by the Applicant be adjourned until 21 days after the outcome of the review in the Administrative Review Tribunal, proceedings no. 2025/6911-20255/6920.

1. On 9 April 2026 Mr Huynh filed an application for review of the Registrar's orders. In that application Mr Huynh also applied for an order that the Registrar's orders be stayed pending the determination of Mr Huynh's application for review.
2. The application for a stay was brought to my attention as duty judge at 9.09 am on 10 April 2026. I listed the matter before me at 9.45 am on 10 April 2026 for directions, and, on that occasion, I again listed the matter for directions at 3 pm on 10 April 2026. At that directions hearing I listed the application for review for hearing on 1 May 2026, and I listed Mr Huynh's application for a stay for hearing at 2.15 pm on 14 April 2026.
3. I heard the application for a stay in the afternoon of 14 April 2026 at the conclusion of which I indicated I would reserve my judgment and list the matter for judgment at 9.30 am on 15 April 2026. At 9.30 am on 15 April 2026, I pronounced the following orders:
   1. Subject to order 3, pursuant to s 256(2) of the Federal Circuit and Family Court of Australia Act 2021 (Cth), the sequestration order made by Registrar Morgan on 9 April 2026 be suspended to the extent it would otherwise act as a factum for the operation of s 60(2) and s 60(3) of the Bankruptcy Act 1966 (Cth) in relation to the interest the respondent has in Administrative Review Tribunal proceeding no 2025/6911-2025/6920.
   2. The respondent's application for a stay of the sequestration and other orders Registrar Morgan made on 9 April 2026 is otherwise dismissed.
   3. Order 1 is to have effect up to and including 1 May 2026, or until such other time and date as the Court may order.
   4. The parties have liberty to apply on such notice as the circumstances warrant.
4. These are reasons on the basis of which I made the orders.

1. In his application Mr Huynh applies for an order staying the orders of the Registrar, not an order staying proceedings under the sequestration order. At the hearing on 14 April 2026, however, Mr Huynh submitted proposed minutes of orders which provided for a stay of proceedings on the sequestration order, and an order suspending the operation of s 60(2) and s 60(3) of the Bankruptcy Act 1966 (Cth) to the extent necessary to permit Mr Huynh to pursue and maintain his interests in the proceedings he initiated in the Administrative Review Tribunal, being proceeding no. 2025/6911-2025/6920 (ART proceedings).
2. It is apparent that Mr Huynh framed the orders he seeks by reference to my judgment in Ashwood v Ashwood.[1] In that case I distinguished between the powers available to this Court under s 256(2) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) to stay proceedings on a sequestration order made by a Registrar, and the power to suspend the operation of a sequestration order made by a Registrar. I also considered the principles that should govern the exercise of the power to stay or suspend a sequestration order made by a Registrar.
3. Mr Olthof, who appeared for the Commissioner, directed my attention to the judgment of Judge Zipser in Owners - Strata Plan 9332 v Sethi, and in particular to that part of the judgment that appears under the heading "Principles governing exercise of power to stay".[2] Judge Zipser was of the view that the principles that govern the exercise of the power to grant a stay of sequestration orders made by a Registrar are those that apply to applications for a stay of a sequestration order made by a judge in the exercise of the judicial power of the Commonwealth.
4. I consider the following matters are relevant to determining whether a sequestration order made by a Registrar should be stayed or suspended pending the determination of an application for review of such sequestration order.

(a) The prospects of the creditor satisfying the preconditions prescribed by s 52(1) of the Bankruptcy Act and the Federal Circuit and Family Court of Australia (Division 2) (Bankruptcy) Rules 2021 (Cth) for the making of a sequestration order, and the prospects of the debtor establishing that a sequestration order ought not be made, even if the preconditions for making such an order have been met.

(b) The prejudice the debtor may suffer if a stay or suspension is granted but on the hearing of the application for review the sequestration order is set aside.

(c) The prejudice the petitioning creditor and other creditors of the debtor may suffer if a stay is granted but on the hearing of the application for review the judge affirms the sequestration order.

1. Mr Huynh submitted that if the sequestration order is not stayed, he would not be able to pursue the ART proceedings; and he would be hampered in his ability to refinance his property and therefore raise money with which to pay debts he acknowledges he owes the Commissioner.
2. The Commissioner, on the other, accepts it may be appropriate to suspend the operation of the sequestration order to the extent it is a factum to the operation of s 60(2) and s 60(3) of the Bankruptcy Act. The Commissioner, however, submits that Mr Huynh has not adduced evidence to demonstrate the prejudice he says he will suffer; and in any event, the prejudice Mr Huynh says he will suffer arises from his having been made bankrupt, and from the financial circumstances he faces, as Mr Huynh sets out in his affidavit. The Commissioner further submits that if a stay were to be granted, it should be subject to the express reservation of the rights of the trustee in bankruptcy (Trustee) to protect the assets of Mr Huynh's estate.
3. The Trustee, through his lawyer, Mr Hutchinson, proposed short minutes of order which provided for a stay of proceedings on the sequestration order, but subject to conditions which were intended to reserve to the Trustee the exercise of the rights he would otherwise have as a trustee in bankruptcy.

1. Mr Huynh does not submit he has strong prospects that a judge of this Court will set aside the sequestration order on the hearing de novo of the creditor's petition. Mr Huynh's having strong prospects of success on the application for review, therefore, is not a factor that would weigh in favour of granting a stay.
2. I am not satisfied that not ordering a stay of proceedings on the sequestration order would adversely affect Mr Huynh's ability to raise money by refinancing his home. The hearing of the application for review of the Registrar's decision has been set down for hearing on 1 May 2026. There is nothing to suggest that Mr Huynh's being bankrupt up to that time will delay or halt work prospective financiers would need to undertake to determine whether they will refinance his home. The evidence suggests that Mr Huynh's financial affairs are not simple, which means that prospective financiers would in any event require significant time and resources to determine whether they should refinance Mr Huynh's home.
3. I am satisfied, however, that Mr Huynh will be prejudiced, although in a relatively minor way, if I do not stay the sequestration order to the extent it affects Mr Huynh's right to pursue the claims he makes in the ART proceedings. I was told from the bar table that the ART proceedings are listed for a first directions hearing on 20 April 2026. Mr Huynh should be permitted to have the capacity to make decisions in his own interests at the directions hearing on 20 April 2026.
4. In these circumstances, I am satisfied that the sequestration order should be suspended to the extent it is a factum to the application of s 60(2) and s 60(3) of the Bankruptcy Act in relation to the claims Mr Huynh makes in the ART proceedings, but I am not satisfied that the proceedings on the sequestration order should otherwise be stayed.

1. It was for these reasons that I pronounced the orders I did at 9.30 am on 15 April 2026.

I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis.

[1] Ashwood v Ashwood [2024] FedCFamC2G 88.

[2] Owners - Strata Plan 9332 v Sethi [2025] FedCFamC2G 897.