Djunaedi v Mohor

Djunaedi v Collins [2025] FedCFamC2G 135

Djunaedi v Mohor [2025] FedCFamC2G 216

Dowling v Colonial Mutual Life Assurance Society Limited [1915] 20 CLR 509

Forty Two International Pty Ltd v Barnes [2010] FCA 397

Glew v Harrowell; in the matter of Glew [2003] FCA 373

Hearne v Street [2008] HCA 36

Liberty Funding Pty Ltd v Phoenix Capital Ltd [2005] FCAFC 3

Mbuzi v Favell (No 2) [2012] FCA 311

Ramsay health Care Australia Pty Ltd v Compton (2017)_ [2017] HCA 28; 261 CLR 132

Re Gye & Perkes v McInture [1992] FCA 235

Re Svir; Ex Parte Commissioner of Taxation [1998] FCA 503; (1998) 83 FCR 314

Robson as Former Trustee of the Estate f Samsakopoulos v Body Corporate for Sanderling at Kings Beach CTS 2942 [2021] FCAFC 143

Springfield Nominees Pty Ltd v Bridgeland Securities Ltd [1992] FCA 720

Wren v Mahoney [1972] HCA 5; (1972) 126 CLR 212

Collins & Anor v Djunaedi & Ors [2016] SACCFC 48

Collins & Anor v Djunaedi & Ors (No 2) [2016] SACCFC 63

Djunaedi & Ors v Collins & Anor [2015] SADG 120

Djunaedi & Ors v Collins & Anor (No 2) [2022] SADG 132

Harman v Secretary of State for the Home Department [1983] 1 AC 280

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

ANTONIO DEPASQUALE (and others named in the Schedule)

Upon the undertaking of the applicant petitioner that they will abandon any security in the real property of the first respondent:

1. The estate of Robert Wayne Collins be sequestrated under the Bankruptcy Act 1966 (Cth).
2. The estate of Veronika Mohor be sequestrated under the Bankruptcy Act 1966 (Cth).
3. The Applicant Creditors' costs (including reserved costs) be taxed and paid from the estate of the Respondent Debtor(s) in accordance with the bankruptcy Act 1966 (Cth).

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 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).

1. These reasons for judgment relate to a creditor's petition issued pursuant to the provisions of the Bankruptcy Act 1966 (Cth).[1] There are six petitioning creditors - Julie Djunaedi, Deddy Djunaedi, Antonio DePasquale, Sally DePasquale, Colin Preston and Philip Charlton.[2]The respondents to the petition are Veronika Mohor and Robert Wayne Collins.[3]
2. The relevant petition was filed on 27 February 2024 and relates to bankruptcy notices, which was issued by the official receiver on 19 December and 10 October 2023, requiring Mr Collins and Ms Mohor respectively to pay the sum of $31,000.00 to the petitioners within 21 days after the service of the bankruptcy notice upon Ms Mohor and within 21 days after 22 January 2024, in the case of Mr Collins.
3. This debt derives from a judgment entered in the petitioner's favour by Judge Dart of the Supreme Court of South Australia on 3 May 2023. The Petitioning Creditors and Mr Collins and Ms Mohor have a long and convoluted history of litigation with each other, which commenced in at least 2015 and which has taken place in the District Court and Supreme Court of South Australia; the Federal Court; and most recently in this court.
4. Controversies have arisen regarding the circumstances surrounding the service of the relevant bankruptcy notice on Mr Collins, who has been incarcerated at relevant times. In addition, earlier bankruptcy proceedings, in the Federal Court, against Ms Mohor alone, were discontinued, which subsequently led to an award of costs being made against the current petitioners.
5. This along with other orders for costs made, in other related proceedings between the parties, has been summitted on Ms Mohor and Mr Collins' behalf to amount to an arguable set off or counterclaim in respect of the sums sought pursuant to the judgment debt relied upon as the relevant act of bankruptcy. In the jargon, it would authorise this court to go behind Judge Dart's order.
6. As noted above, the relevant petition in these proceedings was filed on 27 February 2024. Legislative provision applicable to such matters [section 52(4) of the Act] provides that bankruptcy petitions lapse after the expiration of a period of 12 months after being presented to the court, unless extended for a further period of 12 months pursuant to the provisions of section 52(5).
7. Judge Lucev, of this court, made such an order extending the relevant petition on 7 February 2024. Counsel for each of the respondents is critical of this order. In all of these circumstances, it is submitted on behalf of the respondents that there is evidence to support their contention that the court should exercise its discretion not to make a sequestration order against each of them.
8. In what follows, I have attempted to chart what I have found to be a veritable sargasso sea of court files, judgments and documents. In terms, which I consider only mildly hyperbolic, it seems to me to be a case of Dicken's Jarndyce & Jarndyce colliding with Kafka's The Trial.
9. Division 2 of the Federal Circuit and Family Court of Australia is set on the lowest tier of the Federal Judicial hierarchy and has been conferred with a broad jurisdiction in general federal law matters, which have frequently been described as having a less complex nature.
10. Section 4 of the Act which creates the court directs that it should deliver justice effectively and efficiently. In so doing, it is charged to focus on ensuring that disputes are resolved at a cost that is proportionate to the importance and complexity such matters. In this particular matter, I fear sight has been lost of these laudable objectives. From my perspective, it is difficult to glean what will be achieved, in practical terms, if and when, the issues enjoined in the case, are ever resolved.

1. In July of 2015, the Petitioning Creditors detailed above, along with five others, commenced proceedings in the District Court of South Australia against Mr Collins and Ms Mohor alleging that they had paid them the sum of $385,750.00 to be invested in a bank in Papua New Guinea and in real estate in New York.
2. In brief terms, the petitioners alleged that Mr Collins and Ms Mohor had made fraudulent representations, breached warranties made in respect of the various transactions and further breached provisions of the Australian Consumer Law and had, in effect, misappropriated this sum of money.
3. It would appear to be the case that, at an early stage of the proceedings, a freezing order was made, by the court preventing Mr Collins and Ms Mohor from dealing with their assets, pending the outcome of the substantive proceedings.
4. In May of 2015, the Petitioning Creditors took out an application for summary judgment against Mr Collins and Ms Mohor in the District Court, which was listed before Judge Tilmouth. The relevant application came before Judge Tilmouth on 14 August 2015.[4]
5. In his judgment relating to the deferral of the summary judgment application on the basis that Mr Collins and Ms Mohor were seeking legal advice and had a right to silence in the light of pending criminal proceedings against them, Judge Tilmouth summarised the background to the matter in the following terms:

In affidavit material before the court based primarily on banking records of accounts operated by the defendants, the payments of numerous sums advanced by the plaintiffs to the defendants, totalling $386,750, are traced into accounts operated and controlled by them. These funds were not applied to the intended purpose and in some cases are demonstrated to have been applied to the repayment of a mortgage, a loan, the purchase of a Mercedes vehicle, and landscaping. That is to say these funds were applied to the personal benefit of the defendants, often in substantial sums. The defendants originally claimed to have transferred all these funds overseas, which is demonstrably not the case.

There is also evidence before the court that the Mercedes was traded in for a newer model on 14 April 2015, with a trade-in value of $47,000, and requiring a loan of $35,996.15. Another Judge of this court made a Freezing Order on 29 January 2015, by which the defendants were bound not to 'dispose of, deal with, or diminish the value of any of your assets in Australia'. Mr Collins asserts that the contract with respect to the motor vehicle was made 12 months before the first car was bought and the defendants were obliged 'to follow on with it' and that the car had in fact gone up in value.[1] Nevertheless this conduct is a prima facie breach of the order.

The defendants now face six charges of deception and one count of money laundering, for which they were bailed in the Christies Beach Magistrates Court on 4 July 2015, for hearing on 11 August this year. These charges relate to the very transactions to which these civil proceedings relate. It would appear at this early stage that if the defendants are committed for trial to the District Court, that is not likely to be heard until later this year, or even early 2016.

Although now unrepresented in the civil proceedings, the defendants are represented with respect to the criminal charges. They have not complied with orders to file a defence in these civil proceedings. They claim not to have done so on legal advice pending the outcome of the stay application, which was lodged on 15 July 2015. Nor have they complied with a notice to admit facts, for similar reasons.[5]

1. In these circumstances, Judge Tilmouth elected to adjourn the proceedings to a date to be fixed but after 11 August 2015, when it was anticipated the overall situation might be clearer, particularly how the criminal proceedings had been advanced.
2. There appears to be no controversy that the matter returned before Judge Tilmouth, in December of 2015, when the application for summary judgment to be entered on behalf of Ms Djunaedi and the other plaintiffs was heard.
3. Judge Tilmouth entered summary judgment in their favour in a total amount of $423,656.25, which was distributed between each of the individual parties according, I presume, to the amount each had invested in the fraudulent scheme. His Honour characterised the defence mounted by Mr Collins and Ms Mohor as being patently no more than a colourable smoke screen...supported by bogus documents.
4. Interest at the rate of 8% was applied to each judgment. In addition, Judge Tilmouth made the following order as to costs:

The Plaintiffs have the costs of the subject action, application and order to be agreed or taxed on a party/party basis.

1. This judgment was subject to an appeal, instigated by Mr Collins and Ms Mohor to the Full Court of the Supreme Court of South Australia. The appeal was actually dismissed on 4 February 2016 but the published judgment was delivered on 11 May 2016.[6] Kourakis CJ (with whom Stanley & Parker JJ agreed) said as follows:

[T]he proposed defence, on its face, is an audacious attempt to perpetrate on the Court the same fraud perpetrated on the plaintiffs.

It is inherently probable that the plaintiffs advanced the funds on the faith of the pleaded PNG Bank and New York Real Estate representations. It is fanciful to suggest that the plaintiffs paid over hundreds of thousands of dollars for the defendant's personal use hoping and believing that the defendants would secure an equivalent amount by borrowing overseas to invest in the way they had promised. If the defendants had that degree of borrowing capacity, there is no reason why they would not have borrowed money for their personal needs and used the plaintiff's money for the agreed investments.

It is patent on the face of the loan agreement that it is fraudulent as are the bizarre emails from the CIA and the Shiekh. It is ridiculous to claim that nearly half a million dollars might be borrowed from a Saudi Arabian prince and paid to New York lawyers to form a trading corporation without leaving any money trail. Overall, the evidence discloses the modus operandi of the fraudster.[7]

1. On 4 March 2016 Ms Mohor became bankrupt on her own petition. Around about the same time, Mr Collins also became bankrupt, apparently also on his own petition. Different trustees were appointed because of possible conflicts of interest between the two. Both Mr Collins and Ms Mohor have been discharged from their respective bankruptcy due to the operation of the Act.
2. Criminal proceedings were brought against Mr Collins only with a trial being held in the District Court. On 29 November 2019, he was sentenced to six years imprisonment with a non-parole period of four years. He was apparently released on home detention on 29 July 2021. This home detention orders seems to have been revoked and replaced by actual custodial incarceration.
3. On 23 February 2016, notwithstanding the fact of the order for costs made by Judge Tilmouth, Ms Djunaedi and some of the other plaintiffs in the original District Court proceedings, brought an interlocutory application against Mr Collins and Ms Mohor seeking costs on an indemnity basis against them.
4. The basis of the application, set out in an affidavit of their solicitor Mr Carpenter, was the costs incurred by them were in excess of $190,000.00, which sum had been increased by the egregious conduct of Mr Collins and Ms Mohor.
5. This application was ultimately determined by Judge Slattery in the District Court on 4 March 2016. The rationale for Judge Slattery dealing with the matter rather than Judge Tilmouth appears to be that one of the parties had indicated an intention to bring an application for apprehended bias and it was thought appropriate to transfer the case to the docket of another judge.
6. Ms Mohor has provided a transcript of what occurred.[8] She and Mr Collins were represented by a barrister, Dr Churches. As will be detailed further, this order has been the subject of other subsequent proceedings.
7. It is apparent that costs were ordered on an indemnity basis, by Judge Slattery, against Mr Collins and Ms Mohor, who now takes exemption that Justice Slattery was not informed of the earlier party/party costs order of Justice Tilmouth. What is clear is that the extent of the indemnity was never assessed through taxation.
8. In his judgement Judge Slattery detailed the various fraudulent representations which had been made by Mr Collins, on which Ms Djunaedi and the others had relied to invest their funds. He considered that Mr Collins' conduct both before and during the litigation justified an order for indemnity costs. He found as follows:

I make the order not merely because the defendants' case lacked merit or because the defendant has deliberately violated the plaintiffs' rights. I am satisfied that the plaintiffs as the applicants for costs have shown that the defendants knew, or alternatively, should have known of the relevant deficiencies of their cases. I am not satisfied that any partial order for indemnity costs should be made. I am satisfied that the defendants knew or ought to have known of the hopelessness of their position from the outset. The Court will set its face against such conduct by a party to litigation. That is why the Court has the discretion under the rules and at common law to make an order for indemnity costs. In my opinion the position of the defendants is and has at all material times been hopeless. I therefore order that in the event that the costs of the action between the plaintiffs and the defendant Collins are to be taxed then the plaintiffs are entitled to recover their costs on an indemnity basis under the Rules of the Court.[9]

The taxation envisaged by Judge Slattery never eventuated.

1. On 23 May 2016, the Full Court ordered that Mr Collins and Ms Mohor pay the costs of their unsuccessful appeal, holding that their respective bankruptcies did not represent an impediment in this regard.[10] It appears to be the case that, once again, no process was engaged to quantify the costs at this time. In this context, Mr Belperio, counsel for the petitioners, submits that given the bankruptcy Mr Collins and Ms Mohor, it was considered that such a course would be fruitless.
2. What were the implications of Ms Mohor's bankruptcy vis-à-vis the disposition of property owned by her at the time of the relevant sequestration, is not clear to me but remains controversial. Ms Mohor deposes as follows:

As part of my bankruptcy the equity in my home was purchased from my trustee in bankruptcy and used to pay the applicants.[11]

1. In his written submissions, Mr Belperio asserts that the following occurred:

The Respondent Ms Mohor's property survived bankruptcy after a company in which she was the director, namely Doug and Co Pty Ltd, purchased her bankrupt share of the property.[12]

1. It is the petitioners' position that they only became aware of the existence of this property and by implication that it remained in at least the beneficial ownership of Ms Mohor and had survived her bankruptcy in September of 2021. What is the position of Ms Mohor in respect of the property and what are the implications in respect of it vis-à-vis her first bankruptcy and its status in any subsequent bankruptcy is an issue which has not been agitated before me.
2. However, issues surrounding this property, seem to have been the catalyst for the instigation of a series of further proceedings between the parties, which have ultimately led to the current petition before the court, which is opposed on a variety of grounds by Mr Collins and Ms Mohor.
3. Firstly, on 17 September 2021, Mr Collins and Ms Mohor brought an interlocutory application in the District Court seeking to have the freezing order made against them on 23 February 2015, which prevented them dealing with their assets, discharged.
4. In response, Ms Djunaedi and others of the applicants in the original proceedings brought a cross-application seeking to re-agitate their application for indemnity costs by applying for a formal taxation. The amount sought was in excess of $250,000.00.
5. From my perspective (and indeed from that of the parties themselves) so many years after the original proceedings had been instituted, the various salient events and what had actually been ordered, was mired in confusion.
6. The matter came before Judge Burnett in November of 2022, who summarised what had occurred.[13] From this summary, it is apparent to me that what His Honour was called upon to adjudicate was a tangled skein of discontinued applications and competing applications for costs.
7. Doing the best I can, the relevant chronology is as follows:
   • 30 September 2021, Ms Djunaedi files a detailed claim for costs;
   • 30 September 2021, Mr Collins and Ms Mohor advise they wish to withdraw their application to dismiss the freezing order;
   • Ms Djunaedi's solicitor erroneously claim that Judge Tilmouth did not make an order for cost and their other claim for indemnity costs did not proceed because of Mr Collin and Ms Mohor's bankruptcy, which also incorrect;
   • Mr Collins and Ms Mohor apply to have the order of Judge Slattery set aside;
   • 13 December 2021, Ms Djunaedi withdraws the application for indemnity costs;
   • 17 December 2021, Ms Djunaedi apparently consented to the setting aside of the freezing order;
   • During this period, Mr Collins and Ms Mohor were at times represented and at other times not.
8. In this context, Mr Collins and Ms Mohor sought indemnity costs in relation to the discontinued application for indemnity costs and in respect of the withdrawal of opposition to the freezing order. Judge Burnett found no application had been made to vary Judge Tilmouth's standard order for party/party costs and Judge Slattery's order had rendered the current application for indemnity costs otiose. He said as follows:

In my opinion, the application for indemnity costs was misconceived in that it proceeded on the factual basis that there had been no previous order for costs. As that factual basis was incorrect, the applicants could never have succeeded on their application. The application was not tenable. It does not matter for these purposes that the applicants were honestly mistaken in their belief and failed to recall the earlier costs orders that were made.

1. However, he also noted that Ms Djunaedi's solicitor had advised that they were discontinuing the application for costs and no costs should be awarded to Mr Collins and Ms Mohor after the date of this indication; whilst Ms Djunaedi should have their costs for this period. In addition, Judge Burnett noted that the relevant freezing order could have had no further application on the bankruptcy of Mr Collins and Ms Mohor as their property vested in the trustee appointed to administer their respective estates.
2. In all these circumstances, a gyre of cost orders was made by Judge Burnett - some in favour of Mr Collins and Ms Mohor; some in favour of Ms Djunaedi and her fellow plaintiffs. He made the following orders:

(1) The respondents are entitled to costs incurred in the period between 4 November 2021 and 12 November 2021 on an indemnity basis in relation to resisting the application by the applicants for indemnity costs.

(2) The respondents are entitled to their costs incurred in the period between 4 November 2021 and 17 December 2021 on the standard costs basis in relation to their application for the discharge of the freezing orders.

(3) The applicants are entitled to set off the whole of the amount of their liability under orders 1 and 2 above against the liability that the respondents have to them under the following orders:

(a) Orders made on 8 February 2022 in these proceedings.

(b) Orders made by the Full Court on 23 May 2016 in the appeal from the summary judgment.

1. As will be detailed in due course, it is the position of Mr Collins and Ms Mohor that, at least in part, this order represents a set off which can be utilised by them to resist the current creditor's petition.
2. On 12 January 2022, the petitioning creditors filed an application in the Supreme Court for an order for costs relating the unsuccessful appeal lodged by Mr Collins and Ms Mohor. The order for costs was made after their respective bankruptcies. A bill in taxable form was provided which sought costs in an amount in excess of $80,000.00. Mr Collins and Ms Mohor's response was that the costs should be nil.
3. At first instance, the application was determined on an undefended basis with summary judgment being entered. Thereafter, on application, Judge Dart set aside this judgment on the basis that some irregularities had arisen in respect to its entry but nevertheless proceeded to hear the matter, indicating that a broad-brush approach was warranted given the matter had already occupied more time than it warrants.
4. In this context, Judge Dart alluded to the fact that two of the original plaintiffs in the 2015 application had dropped out of the case. His Honour said as follows:

On 12 January 2022 a claim for costs was lodged by some of the respondents. The evidence before the Court is that two of the respondents do not wish to be involved. They were advised of the hearing date for the argument but declined to attend. It is not surprising. These proceedings commenced about eight years ago. The respondents were all people who had been defrauded by the appellants. The legal system has produced no return. It is hardly surprising that people become disillusioned and drop out of the process.

1. In these circumstances, he made an order for costs in a lumpsum in an amount of $31,000.00 on 23 February 2023. It is this judgment debt which forms the basis of the relevant bankruptcy notices and the resulting creditor's petition.
2. However, later on 3 May 2023, Judge Dart also determined that the creditors were entitled to the costs of the taxation on a party/party basis but with a 20 per cent uplift to reflect the court's disapproval of the manner in which Mr Collins and Ms Mohor had approached the matter, which was characterised by a lack of cooperation.
3. At this stage, Judge Dart also placed a charge on a property registered in Ms Mohor's name located at 3 Tasman Court, Hackham pursuant to the provisions of the Enforcement of Judgments Act 1991 SA. This charge has been registered on the relevant certificate of title. I presume this property is Ms Mohor's home.
4. Mr Collins and Ms Mohor elected to appeal the various orders for costs made against them, which included half of the costs of the summary judgment, with their appeal being determined by the Full Court on 14 September 2023. The Full Court noted that the proceedings had a long and difficult history. I respectfully concur. However, from my perspective, matters have become more rather than less convoluted since September 2023.
5. The Full Court found the grounds of appeal to lack merit and rejected the submission that Mr Collins and Ms Mohor had been subjected to injustice. Leave to appeal was refused. The Full Court said as follows:

The applicants say that if the orders are left to stand they will suffer financial prejudice (and potentially lose their home). The weight to be attached to this claim must be assessed in a context where, on any view, the applicants are liable to pay a significant sum of costs to the respondents. To the extent that this litigation, and in particular the taxation process, has placed them under financial strain, it is apparent from the judge's reasons, and the history of the proceedings more generally, that the applicants are largely the authors of their own misfortune.[14]

1. The respondents to the appeal apparently sought costs on an indemnity basis. The Full Court considered that they were entitled to an awards of costs but considered that it would be a waste of time for efforts to be made to quantify such costs in the circumstances. It observed as follows:

In our view, there was little merit in the applicants' submissions, both in support of their contention that they were entitled to appeal as of right, and as to why, in the alternative, they should be granted leave to appeal. However, rather than dwell on whether it is appropriate to order that they pay the respondents' costs of the application on a standard or indemnity basis, we consider it more appropriate to simply fix a sum. This is appropriate in circumstances where this Court is in a position to estimate the likely costs reasonably incurred by the respondents, and where there is a risk of further wasted time and expense if the costs are not fixed.[15]

1. The Full Court granted the costs in the sum of $2,000.00. The rationale of this determination being that to do otherwise would merely lead to yet more fruitless and expensive litigation, which would achieve very little. As will be expanded upon in due course, I fear that the current proceedings have the same potential.

1. On the afternoon of 3 November 2023 (a Friday) a creditor's petition was lodged on behalf of Ms Djunaedi and four of the others against Ms Mohor alone, which was formally filed on 6 November (the following Monday).[16] This was based on the judgment debt made in their favour by Judge Dart and a resulting bankruptcy notice issued on 10 October 2023.
2. The bankruptcy notice was apparently served personally, in controversial circumstances, on Ms Mohor, at her home in Hackham, on 13 October 2023. The petition was served on Ms Mohor, again by leaving it at the door of her home, after she declined to accept it, on 9 November 2023.
3. The petition was opposed. Mr Finlayson, the respondents' current solicitor was instructed to act for Ms Mohor. He was also instructed in respect of other proceedings relating to a warrant for possession, directed to the sheriff, in respect of the Hackham property, which had apparently been issued as a consequence of the charging order made by Judge Dart.
4. The grounds of opposition to the petition were as follows:

The application is vexatious, and therefore an abuse of process, in circumstances where:

The Applicants assert that the debt is fully secured;

The Applicants have issued a warrant of sale in respect of real property being the residence of the Respondent and the respondent has co-operated with the Sheriff and the warrant of sale remains part-executed.

1. Mr Finlayson filed an affidavit in support of the ground of opposition on 7 December 2023, to which he attached correspondence emanating from his office to the sheriff's office, which assumes some significance in later proceedings.
2. In this letter, Mr Finlayson advised the relevant official at the sheriff's office that he was acting for both Mr Collins and Ms Mohor and requested that he (Mr Finlayson) be provided with all correspondence in respect of the warrant. Further, he wrote as follows:

You may or may not be aware that Mr Collins is in custody at Cadell serving a sentence of imprisonment.

1. I have not been advised of what is the status of this warrant for possession. Given Ms Mohor continues to occupy the Tasman Court property it does not seem to be unreasonable to assume that the property has not been realised. Why this is so has not been disclosed to me.
2. The first mention of the petition (against Ms Mohor) occurred on 12 December 2023, when the court's registrar made procedural orders regarding the filing of affidavits and listed the hearing of the petition on 29 February 2024. On 21 February 2024, Ms Djunaedi and the other petitioners discontinued the petition.
3. Mr Belperio their counsel has indicated that the reason for this discontinuance was that it was conceded that the petition in question had been filed one day premature given when the bankruptcy notice had been filed. Whether this was so or not is now irrelevant given the fact of the discontinuance.

1. The discontinuance precipitated an application for cost on behalf of Ms Mohor instituted by Mr Finlayson. The amount sought was $26,000.00 plus GST. The creditors proposed $1,500.00 given the fact that the case had required only one mention up to that stage.
2. On 6 February 2024, the registrar referred to the matter to a judge of the Federal Court and it was listed before Collier J on 21 February, who granted leave to file the notice of discontinuance and reserved costs. Her Honour subsequently made orders directed that the issue of costs be determined on the papers.
3. Justice Collier published the relevant judgment on 16 September 2024. She was not impressed with the submissions provided characterising Mr Finlayson's claim for costs as a tally of his charges and disbursements referable to his charge out rate, based on information in his timesheets without any supporting invoices; whilst those of the creditors did not logically engage with them.
4. In these circumstances Collier J concluded as follows:

The range of costs before the Court is $1,500 to $26,000 plus GST, reflecting the relatively early stage of the litigation in respect of which costs should be assessed. I am not persuaded that costs in this relatively uncomplicated matter, in this range, warrant an order for taxation - rather, I consider a lump sum costs order to be appropriate. However, it is not feasible for me to make such an order at this stage on the material before the Court. I consider it would be inefficient for me to require the parties at this point to file further submissions and material to supplement the material they have already provided. Rather, in the interests of efficiency as contemplated by s 37M of the Federal Court Act, I consider that the appropriate course of action is to refer the costs dispute between the parties to a Registrar under s 54A of the Federal Court Act and div 28.6 of the Federal Court Rules, as contemplated by [4.9] of the Costs Practice Note.[17]

1. After this referral, a hearing proceeded before a registrar of the court who reported back to Collier J who subsequently made an order for costs in Ms Mohor's favour in an amount of $11,760.00, which has not been satisfied. Because there had never been an actual hearing in the Federal Court of the bankruptcy petition, Mr Finlayson's affidavit, referred to above, was never formally read in court.

1. The petitioning creditors commenced the second bankruptcy proceedings on 27 February 2024 against Ms Mohor and Mr Collins. The former was described as being of 3 Tasman Court, Hackham; whilst the latter was described as being of Mobilong Prison, Maurice Road, Murray Bridge. The first court date specified for the hearing of the petition was endorsed upon the relevant cover sheet as being 9.30 am on 9 April 2024.[18]
2. As will be detailed in greater detail, in due course, pursuant to the applicable legislation, in order to found a sequestration order - the formal action through which the property of a person declared to be bankrupt vests in his or her court appointed trustee - it is necessary for the petitioning creditor to establish that the person who is the subject of the relevant petition has committed an act of bankruptcy.
3. Most commonly, such an act of bankruptcy is established by the failure of a person to comply with a formal notice of demand, issued by the Official Receiver, that a sum specified in the notice, deriving from an unsatisfied judgment debt, has not been paid within a designated period.
4. On the basis of the judgment of Judge Dart, referred to above and made on 3 May 2023, a further bankruptcy notice was issued against Ms Mohor on 10 October 2023 and one in similar terms, issued in respect of Mr Collins on 19 December 2023. The period for satisfaction of each of these notices was 21 days after service of the relevant notice.
5. On 27 February 2024, a process server, Mr Millar, retained by the petitioning creditors' solicitor deposed that he had personally served the bankruptcy notice, upon Ms Mohor, at her home, in Hackham, on 13 October 2023. No such affidavit of service was provided in respect of Mr Collins.
6. However, as will be detailed in greater detail in due course, that is not to say that a process server had not been directed to attend at the location which Mr Collins then occupied and the relevant bankruptcy notice left with him in a manner in which he could have perused if he had chosen to do so. Rather, as with all his dealings with the applicants in this case (and their legal representative) he elected to approach the notice with obfuscation and obstruction.
7. In these circumstances, Mr Carpenter, Ms Djunaedi's solicitor, commenced proceedings, in the Federal Circuit Court, on 9 January 2024, prior to the actual filing of the petition, seeking an order for substituted service of the bankruptcy notice on Mr Collins.[19] It was necessary to establish non-compliance with a bankruptcy notice as a pre-condition for the filing of a creditor's petition.
8. Section 309(2) of the Act provides the court with a broad discretion regarding the mechanism by which any notice required to be provided to any person is to be achieved. It provides as follows:

Where a notice or other document is required by this Act to be served or given to a person, the Court may, in a particular case, order that it be given or served in a manner specified by the Court, whether or not any other manner of giving or serving the notice or other document is prescribed.

1. Regulation 102 of the Bankruptcy Regulations 2021, which is headed Service of Documents reads as follows:

(1) Unless the contrary intention appears, if a document is required or permitted by the Act or this instrument to be given or sent to, or served on, a person (other than the Inspector‑General, the Official Receiver or the Official Trustee), the document may be:

(a) sent by a courier service to the person at the address of the person last known to the person serving the document; or

(b) left, in an envelope or similar packaging marked with the person's name and any relevant document exchange number, at a document exchange where the person maintains a document exchange facility; or

(c) given in a manner specified in section 28A of the Acts Interpretation Act 1901; or

(d) sent, in accordance with the information technology requirements in subsection (3) of this section:

(i) by a kind of electronic communication that transmits the document to a facility maintained by the person for receipt of electronically transmitted documents; or

(ii) by a kind of electronic communication such that, in the ordinary course of events, the document could be reasonably expected to be received by the person.

1. Section 28A(1) of the Acts Interpretation Act 1901 provides a definition of the concept of service in the following terms:

(1) For the purposes of any Act that requires or permits a document to be served on a person, whether the expression "serve", "give" or "send" or any other expression is used, then the document may be served:

(a)on a natural person:

by delivering it to the person personally; or

by leaving it at, or by sending it by prepaid post to, the address of the place of residence or business of the person last known to the person serving the document; or

1. The relevant rules of court Federal Circuit and Family Court of Australia (Division 2) (Bankruptcy) Rules 2021 [Rule 3.01][20] provide that applications for substituted service can be made by the filing of an affidavit setting out the grounds on which such an application is made.
2. The order sought was that service be affected by:
   • Mailing it to Mobilong Prison;
   • Mailing it to his last known address - the Hackham property, where Ms Mohor lived;
   • Emailing it to Mr Finlayson.

As matters subsequently transpired, it would be more correct to indicate that what was sought was more in the nature of a prospective order deeming service to have been affected if certain things occurred.

1. In support of this application, in his affidavit filed on 15 January 2024, Mr Carpenter relied on:
   • The letter referred to above annexed to Mr Finlayson's affidavit filed (but not read) in the Federal Court petition against Ms Mohor;
   • Proof of mailing and emailing of the notice to Mr Collins and Mr Finlayson respectively;
   • That a process server had attended on Mr Collins at the Mobilong Prison on 22 December 2023 to personally serve the notice on him but he (Mr Collins) had declined to accept it.
2. In particular, in his affidavit, Mr Carpenter deposed as follows:
   • On 13 October 2023, Mr Finlayson had written to the Sheriff's office stating that Mr Collins was in custody at Cadell serving a sentence of imprisonment. The provenance of this letter was the annexure to Mr Finlayson's affidavit filed in the discontinued Federal Court proceedings against Ms Mohor;
   • On 19 December 2023, he had contacted staff at the Cadell Training Centre, by telephone, in order to inquire how he could serve the bankruptcy notice on Mr Collins. In this context, he was advised that Mr Collins had been transferred to Mobilong;
   • On 19 December 2023, he had forwarded the bankruptcy notice to Mr Collins by mail to the GPO Box of the Department of Corrections and by email to Mr Finlayson's office;
   • On 21 December 2023, Mr Finlayson had replied to the correspondence addressed to him in the following terms:

On my instructions, no service has been effected (sic) on my client and the representation in your email below is false and potentially dishonest.

• On 22 December 2023 a process server retained by him had attended at Mobilong Prison in order to serve the bankruptcy notice on Mr Collins. He had met with Mr Collins who had declined to accept service and the relevant correspondence had been left by the process server with a prison officer, who advise that it would be placed with Mr Collin's personal belongings.
• On 27 December 2023, Mr Finlayson had written to him in the following terms:

I have had no response to my email below of 20 December 2023.

I presume that is because you had no answer to the allegation that your representation to me, a fellow practitioner, was false and dishonest in that you were fully aware that no service had been effected (sic) on my client.

That is further apparent as you have only subsequently engaged one Jason Miller, who on Friday 22 December 2023 attended at Mobilong Prison on the false pretence that he was a lawyer seeking to meet with Mr Collins when in fact he was not a lawyer at all but rather a person engaged by you to attempt service on Mr Collins.

This incident is a further example of the dishonesty and disgraceful conduct by which this matter is being progressed by you. I request a full explanation and look forward to receiving any affidavit of service which you propound in respect of this matter.

Please advise if there is any reason why your false representation to me ought not be the subject of professional complaint.

1. It is the letter of 13 October 2023 passing between Mr Finlayson's office and the Sheriff's office which is central to these proceedings and in which the information that Mr Collins was in custody was contained. The relevant letter is an annexure to Mr Finlayson's affidavit filed in the Federal Court bankruptcy proceedings against Ms Mohor on 7 December 2023.
2. The exact extract from Mr Carpenter's affidavit reads as follows:

On 13 October 2023 the Respondent's solicitor emailed the Sheriff's office on (sic) stating that the Respondent is in Cadell serving a sentence of imprisonment. Annexed hereto and marked as AGC 1 is a true email form the Respondent's solicitor to the Sheriff.

1. It is Mr Collins' position that this email was subject to an implied undertaking to which Mr Carpenter was subject that it could be used only in the Federal Court proceedings in which it had been filed unless the Federal Court itself released him from such an undertaking, which it had not. Further, it was incumbent on Mr Carpenter to inform the Registrar of the source of the document, which he did not do.
2. As will be indicated later, it is now Mr Carpenter's position that he had another source of information in respect of Mr Collins' incarceration, which was not subject to such an undertaking. However, it is only recently that this information has been provided.
3. On the basis of the material delineated above, Registrar Colbran (sitting in chambers), on 16 January 2024, was prepared to make an order, by way of substituted service, deeming that the bankruptcy notice would have been served on Mr Collins on 22 January 2024, if it were to be posted to him by express mail, at what was his then last known address - Mobilong Prison, Maurice Road, Murray Bridge and emailed to Mr Finlayson's office on or before 19 January 2024.
4. The formal order of Registrar Colbran was in the following terms:

(1) Service of Bankruptcy Notice No. BN 262835 of 2023 issued on 19 December 2023 and addressed to Robert Wayne Collins (the Respondent) together with a sealed copy of this order may be effected by the following means occurring on or before 19 January 2024:

(a) By sending by express post addressed to the Respondent at Mobilong Prison, Maurice Rd, Murray Bridge SA 5253; and

(b) By scanning and sending by email to the Respondent's solicitor Greg Finlayson at the following email address greg.finlayson@diaspora.legal.

(2) Service in accordance with this order shall be deemed good and sufficient service of the Bankruptcy Notice on the Respondent.

(3) The Bankruptcy Notice shall be deemed to be served on the Respondent on 22 January 2024.

(4) The Bankruptcy Notice be amended by deleting the following words in paragraph 1 on page 3 of the notice "after service on you of the Bankruptcy Notice" and substituting "after 22 January 2024".

(5) The Applicant lodge an appropriate application with the Official Receiver to make the amendments to the Bankruptcy Notice required by Order 4.

(6) A copy of the amended Bankruptcy Notice issued by the Official Receiver pursuant to Order 5 and served pursuant to Order 1 be annexed to any affidavit proving that service.

Costs of this application be reserved for the purposes of any Creditor's Petition based on this Bankruptcy Notice.

1. On 27 February 2024, Mr Carpenter filed an affidavit in which he deposed that he had forwarded an amended bankruptcy notice dated 17 January 2024; the order for substituted service; and the relevant judgment debt issued by Judge Dart; by mail to Mobilong Prison and to Mr Finlayson's office. However, the relevant letter to Mr Collins had been returned marked RTS.
2. In these circumstances, it is implicit from Mr Carpenter's affidavit that he considered that he had complied with the orders for substituted/deemed service, made by Registrar Colbran, in respect of the bankruptcy notice and necessarily one of the essential precursors for the filing of a sequestration order had been satisfied in respect of Mr Collins. The same is evident in respect of the personal service of the bankruptcy notice on Ms Mohor.
3. Controversies have subsequently arisen between the parties' respective solicitors (as before Mr Carpenter and Mr Finlayson) as to whether Mr Collins had been served with the relevant bankruptcy notice, particularly whether the information contained in the letter of 13 October 2023 was subject to an implied undertaken regarding its use.
4. Mr Finlayson has challenged the mechanism through which Mr Carpenter became aware that Mr Collins was incarcerated at Mobilong and, in collateral proceedings to these, has succeeded in setting aside the order for substituted service of the relevant bankruptcy notice only.
5. This was the context in which the relevant creditors' petition, which is currently before me, came to be filed on 27 February 2024.[21] The date for its first hearing before the court was endorsed on the cover sheet provided by the court of 9 April 2024 at 9.30 am.
6. As will be detailed in more detail, in due course, Ms Junaedi and those advising her relied on the order for substituted service of the bankruptcy notice on Mr Collins and an affidavit of service of the bankruptcy notice personally on Ms Mohor on 13 October 2013 to found the petition.[22]
7. Mr Millar the process servicer retained by Mr Carpenter reported to him (Mr Carpenter) as follows:

On 22 December 2023 at 11:10am I attended Mobilong Prison in person to serve the Second Respondent with a Bankruptcy Notice.

I met with the Second Respondent in person and told the Second Respondent that I was serving him with Court documents. The Second Respondent refused to accept the documents and walked out of the room. Service could not be effected (sic) due to his refusal.

1. As will be detailed in due course, this does not accord with Mr Collin's recollection of what occurred on that day at the prison. It is however consistent with what Mr Finlayson recorded in his email to Mr Carpenter. In this context, Mr Carpenter deposed, in his affidavit of 15 January 2024 as follows:

I have been advised by Jason Millar, process server from Tech 8, and verily believe to be true, that on 22 December 2023 at 11:10am he attended Mobilong Prison in person to serve the Respondent with a Bankruptcy Notice. He met with the Respondent in person and told the Respondent that he was serving him with Court documents. The Respondent refused to accept the documents and walked out of the room. Mr Millar gave the sealed self-addressed envelope with a prison officer who advised that he will leave the document in the Respondent's personal belongings

1. In my view, in the light of the statutory and regulatory regime outlined above, if what Mr Millar and Mr Carpenter deposes is correct, it indicates that Mr Collins was served with the original bankruptcy notice on 22 December prior to the making of the order of Registrar Colbran, when it was left with the prison officer, at Mr Collin's last known address. An affidavit to this effect was filed by Mr Millar to confirm his actions in this regard on 7 March 2024.
2. In CLGC Pty Ltd v Zhang[23] Judge Mansourides adopted a wide interpretation of the expression address in the context of service of a bankruptcy notice on a prisoner. He held that it constituted a place at which a person may be reached. Clearly, in my view, Mr Millar reached Mr Collins on 22 December 2022. Mr Collins did not wish to be so reached, which, to a certain extent was his prerogative.
3. However, by leaving the documents in question with a prison officer, Mr Millar enabled Mr Collins to access them, if he so desired. Certainly, it seems to be the case that he elected to contact Mr Finlayson about them, as Mr Finlayson's email to Mr Carpenter clearly confirms. This seems to me to fall within the purview of service envisaged by section 28A of the Acts Interpretation Act.
4. Necessarily, those acting for the creditor petitioners wasted no time in commencing the sequestration proceedings and seem to have been unconcerned at Mr Finlayson's assertions that the process leading to the purported service of his client was flawed.
5. What is clear to me is that whether he was inclined to read the correspondence provided to him or not and regardless of the logistical difficulties which confronted him, Mr Collins had the means to inform himself of the contents of the bankruptcy notice addressed to him.
6. After the issue of the petition, it was necessary, pursuant to the applicable rules [Part 4], for the petition to be served on each of the parties no less than five days prior to the date fixed for its hearing, along with the following documents:
   • The petition;
   • An affidavit verifying that the debt remains outstanding;
   • Significantly, in cases relating to a bankruptcy notice that no proceedings are on foot to set aside the notice or to extend time for compliance;
   • A consent to act as trustee if a sequestration order is made.
7. In the case of each respondent, the sole act of bankruptcy relied upon, to found the sequestration orders sought, was that within the six months proceeding the filing of the petition:

The first respondent debtor (Ms Mohor) failed to comply on or before 3 November 2023 with the requirements of a bankruptcy notice served on her on 13 October 2023 or to satisfy the Court that she had a counter-claim, set-off or cross demand equal to or more than the sum claimed in the bankruptcy notice, being a counter-claim, set-off or cross demand that she could not have set up in the action in which the judgment referred to in the bankruptcy notice was obtained.

The second respondent debtor (Mr Collins) failed to comply on or before 12 February 2024 with the requirements of a bankruptcy notice served on him on 22 January 2024 or to satisfy the Court that he had a counter-claim, set-off or cross demand equal to or more than the sum claimed in the bankruptcy notice, being a counter-claim, set-off or cross demand that he could not have set up in the action in which the judgment referred to in the bankruptcy notice was obtained.

1. As a precursor to the first mention of the petition filed on 29 February 2024, which as earlier noted was listed for 9 April 2024, on 29 February 2024, Mr Carpenter filed an affidavit to confirm that he had complied with the orders of Registrar Colbran for the substituted service of the bankruptcy notice on Mr Collins and Ms Mohor had been personally served with her notice by Mr Millar.
2. On 29 February 2024, Mr Carpenter made a further application in a case seeking an order to enable the substituted service of the petition on Mr Collins by mail at Mobilong Prison and by emailing Mr Finlayson. He deposed that he had contacted Mobilong Prison, which had confirmed Mr Collins was still incarcerated there. He further deposed that it was implicit from his discussions with Mr Finlayson that Mr Collins must be aware of the pending bankruptcy proceedings against him.
3. In anticipation of the first return date of the petition, on 4 March 2024, Mr Carpenter filed an affidavit containing confirmation that Mr Ambrose was prepared to act as trustee of both respondents in the event a sequestration order was made.
4. On 6 March 2023, Mr Carpenter amended his application for substituted service to include Ms Mohor seeking orders that she could be served by mail directed to her home in Hackham. In support of his application in respect of both Ms Mohor and Mr Collins, Mr Carpenter filed a further affidavit also on 6 March, in which he deposed to the following effect:
   • A process server had attended at the Hackham address on three occasions to attempt service unsuccessfully. Intelligence provided by the process server indicated that Ms Mohor was present in the property but refused to come to the door or answer her phone when it was called;
   • As recently as 16 January 2024, Mr Finlayson had indicated to him that he continued to act for Ms Mohor.
5. The application for substituted service was initially listed before Registrar Parkyn on 6 March 2024. He was apparently concerned at the adequacy of the evidence provided to him regarding the attempts to serve Ms Mohor. I suspect that there was no direct evidence in this regard. The case was therefore adjourned until 13 March 2024.
6. In these circumstances, an affidavit was filed on 7 March 2024 by Mr Millar, the process server retained by Mr Carpenter, who confirmed his difficulties in engaging with Ms Mohor and his view that she was avoiding service. He also confirmed that he had attempted to serve Mr Collins with the bankruptcy notice at Mobilong Prison on 22 December 2023 and he had refused to accept service.[24]
7. The application for substituted service of the creditor's petition came before Registrar Colbran on 13 March 2024. I have a transcript of what was said. Mr Carpenter appeared but Mr Finlayson nor anyone associated with the respondents did not. Registrar Colbran indicated as follows:

All right. I have - I know that on the last occasion, Registrar Parkyn made orders that further material was filed. I am partially satisfied that the concerns raised by Registrar Parkin have been met, and that is in relation to Veronika Mohor. I'm not yet satisfied about the second respondent because the material that is before the court is in relation to a bankruptcy notice only. It's not in relation to - there have been no efforts to serve the creditors' petition.

I'm also not satisfied that there's sufficient material to enable service on Mr Finlayson. However, I am satisfied that in regard to the first respondent, Veronika Mohor - that if the documents are sent by express post to the address at 3 Tasman Terrace in Hackham, that that will, in all reasonable likelihood, bring the petition to Ms Mohor's attention, and I'm also satisfied that it's not reasonably practical to serve Ms Mohor. So what I had proposed to do was to leave the petition listed on 9April.

1. In these circumstances, she dispensed with the requirement of personal service of the petition on Ms Mohor and directed that service could be achieved by mailing the relevant documents to her Hackham address. No orders were made in respect of issues to do with service of the petition on Mr Collins.
2. On 2 April 2024, Mr Carpenter filed an affidavit in which he deposed that he had sent correspondence, by registered post, to Ms Mohor, to her address in Hackham, but she had declined to accept the relevant envelope addressed to her.
3. On 9 April 2024, Registrar Parkyn made the following series of notations and orders:

THE COURT NOTES THAT:

1. Correspondence was received by the Court from the Second Respondent, Mr Collins, dated 19 March 2024 (Correspondence). The Correspondence:

   1. Indicated he was aware of a "bankruptcy hearing early April";
   2. Stated that he did not have funds to engage a solicitor;
   3. provided an address for the Second Respondent of Locked Bag 200, Murray Bridge 5253;
   4. indicated he was housed at Mobilong Prison;
   5. stated that "I think I can attend via video conferencing but cannot arrange this here a Mobilong" [sic];
   6. stated that "I object to this hearing".

2. The Second Respondent does not appear to have been formally served with the Petition and other material filed by the Applicants in this proceeding.

3. The First Respondent filed a notice of appearance on 8 April 2024 that included an address for service at the office of Diaspora Legal with the email address Australia@diaspora.legal.

THE COURT ORDERS THAT:

Petition as it relates to the First Respondent

1. The Applicants are to serve a copy of all material filed in this proceeding to date on the First Respondent's solicitor Mr Finlayson by no later than 12 April 2024.

2. If the First Respondent intends to oppose the orders sought on the Petition, she is to file and serve any notice of opposition and supporting affidavits upon which she wishes to rely by 13 May 2024**.**

Service of the Petition and other material upon the Second Respondent and arrangements for his participation in hearings

1. Personal service of the Petition and supporting affidavits upon the Second Respondent be dispensed with.

2. A sealed copy of the Petition, a copy of this order, a copy of each affidavit verifying the Petition, a copy of any affidavit of service of the bankruptcy notice and a copy of any consent of a registered trustee (Documents), be served by on or before 12 April 2024 sending them by express post addressed to the Second Respondent at Mobilong Prison, Locked Bag 200, Murray Bridge South Australia 5253.

3. Upon condition that the Documents are sent by express post in accordance with paragraph 4 above, the Documents will be deemed to have been served upon the Second Respondent on 16 April 2024.

4. The Second Respondent is to file and serve any notice of opposition and supporting affidavits upon which he wishes to rely to oppose the orders sought in the Petition by 17 May 2024. The Second Respondent has liberty to apply to vary this order.

5. The Registry is to contact the responsible officer at Mobilong Prison and make arrangements for the Second Respondent to attend the adjourned hearing of the Petition by video link.

Other matters

1. The Petition be adjourned to 21 May 2024 at 9:30 am, with the Second Respondent to appear by video link.
2. The costs of today are reserved.
3. Any affidavit material to be relied upon at any future directions hearing is to be filed and served three clear business days prior to the hearing.

1. I have been provided with a transcript of what was said before the registrar on this date, which provides the context of these orders. It is implicit in the order that Mr Finlayson, who practices under the name of Diaspora Legal was formally acting for Ms Mohor. Mr Collins was not apparently present at the hearing.
2. What the transcript reveals can, I think, be summarised as follows:
   • Counsel for Ms Djunaedi (Mr Belperio) conceded Mr Collins had not been served with the petition and a process server was being sent to the prison to remedy this;
   • Mr Belperio asserted that there could be no issue regarding service on Ms Mohor given the contents of the affidavit of service filed by Mr Finlayson;
   • The registrar considered the correspondence passing between the parties' solicitors to be immature and not of a standard worthy of legal practitioners;
   • The registrar indicated as follows:

The court received correspondence from Mr Collins on 19 March that indicates exactly what you said - that he's housed in Mobilong Prison; that he was aware of a bankruptcy hearing in early April; that he thought he could attend by video conferencing, but he can't arrange that; and that he objects to this hearing. Now, rather than your client sending process servers to the prison, what I intend to do this morning was to make an order in relation to how the petition was to be served on the second respondent. And I think that can be affected by post and express post.

• Mr Finlayson alluded to the discontinued proceedings in the Federal Court and submitted that the potential for a cost order to be made against the petitioners might be influential in respect of whether his client's had some form of set off or counterclaim against them. In this context, he indicated that the case was to be mentioned before Collier J in two days' time;
• In addition, Mr Finlayson submitted the fact of the discontinued petition could raise issues of res judicata/abuse of process on the basis that the same bankruptcy proceedings had been recommenced in the FCFCOA after having been discontinued in the Federal Court.

1. In the light of how these highly conflicted and somewhat vitriolic proceedings have been conducted between Mr Carpenter and Mr Finlayson, over many years and in different guises, Registrar Parkyn made an offhand but acute observation to which Mr Finlayson perhaps unguardedly replied. Registrar Parkyn said: You're not exactly new to the facts and circumstances surrounding these parties and their interaction, Mr Finlayson? To which he replied: No. That's correct.
2. As will be detailed in due course, one of the factual issues arising in the case deals with assertions as to when Mr Finlayson is acting/not acting for Mr Collins and when he is acting for Ms Mohor alone and acting for both of them together. The unkind might think that these considerations are dictated by tactical considerations.
3. The difficulty which now arises is that the petition in question must now be considered in circumstances in which an application had been made, subsequent to its issue, to impugn the service of the bankruptcy notice on which the resulting petition is based.
4. Given the fact that the application to set aside the order for substituted service had not as yet then been made, the registrar clearly did not know of that prospective application and Mr Finlayson did not allude to it as a possibility.
5. In effect, the registrar made an order for substituted service of the petition against Mr Collins, whilst the application to challenge the service of the relevant bankruptcy notice in question remained prospective in nature, in circumstances in which it is implicit that Mr Collins had acknowledged that he was in custody at Mobilong Prison and had received some documents relating to bankruptcy proceedings involving him.
6. The order for substituted service and what followed from it precipitated a notice of appearance [in suit ADG 15 - the application for substituted service of the bankruptcy notice] from Mr Finlayson, on behalf of Mr Collins, which was filed on 22 April 2024. This notice did indeed indicate that Mr Collins was then of Mobilong Prison, presumably as a prisoner.
7. The notice of appearance is not qualified other than it has the court file number relating to the earlier file regarding substituted service of the bankruptcy notice and not the later file number relating to the petition.
8. What was the nature of the professional relationship between the two, in and about December of 2023 is not clear to me. It appears to be the case that subsequently Mr Finlayson was assiduous in his differentiation between appearing in respect of bankruptcy notice proceedings and those relating to the petition.
9. In addition, on 8 April, Mr Finlayson filed a notice of appearance, in the same form as he had done for Mr Collins on behalf of Ms Mohor, other than it carried the suit number ADG 75.
10. It would appear to be the case that neither Mr Carpenter nor the registrar was aware of the prospect of a challenge being made to the substituted service of the bankruptcy notice on which the petition against Mr Collins was based.
11. In this context, on 22 April 2024, Mr Carpenter filed an affidavit in which he deposed that he had provided the documents filed in the proceedings up to this stage, including the bankruptcy notice and the resulting petition to Mr Collins, by mail, at the Mobilong Prison and Mr Finlayson's office by email in accordance with Registrar Parkyn's directions.
12. Accordingly, from Mr Carpenter and the petitioning creditors perspective all had been done in order to comply with the requirements of Part 4 of the Bankruptcy Rules and the petition_._
13. In this context, on 16 May 2024, Mr Finlayson, acting on behalf of Ms Mohor alone, filed a notice in opposition to the petition, along with an affidavit in support. As best I can understand the grounds, they can be summarised as follows:
    • The debt on which the petition was based was not owed as not all the parties entitled to rely on the judgment debt were petitioners in the bankruptcy proceedings;
    • The petitioners held security over a piece of real property, pursuant to the order of Judge Dart, which was likely to be of greater value than the monies due under the order;
    • The court should exercise its discretion to dismiss the petition on the basis it was the same cause of action brought in the Federal Court;
    • The petitioners were subject to an order for costs in the District Court in favour of the respondent;
    • Ms Mohor had insignificant assets and was in receipt of the aged pension.
14. The matter returned to court on 21 May 2024, again before Registrar Parkyn. Mr Finlayson indicated that he appeared on behalf of Ms Mohor but contrary to his address for service filed on 22 April 2024, indicated that he did not act for Mr Collins. Arrangements had apparently been made for Mr Collins to attend by electronic means, from the prison, but these had not been fruitful.
15. On this day, the registry of the court received correspondence, ostensibly emanating from Mr Collins at Mobilong Prison, which included a notice of objection to the petition in the same terms as filed on behalf of Ms Mohor and an affidavit from Mr Collins himself.
16. In this affidavit, Mr Collins alluded to the fact that an application was lodged to set aside the ex parte orders for substituted service of the amended bankruptcy notice had been lodged on his behalf. He went on to depose that the registrar had declined to accept the application in question.
17. On 21 May 2024, Registrar Parkyn made firstly the follow notations:

The solicitor for the First Respondent, Mr Finlayson, provided the Court by email on 20 May 2024 a notice of opposition and affidavit of the Second Respondent upon which the Second Respondent wishes to rely in this proceeding.

Mr Finlayson has confirmed in correspondence with the Court, and again this morning, that he does not act for the Second Respondent in this proceeding.

The Second Respondent confirmed during the hearing this morning that he wishes to rely upon the notice of opposition and affidavit referred to in note one above.

The affidavit of Mr Andrew Carpenter lodged on 18 April 2024 at 10:15am be removed from the file.

The time for the First Respondent to file and serve any notice of opposition and affidavits in support upon which she wishes to rely is extended to 17 May 2024.

The time for the Second Respondent to file and serve any notice of opposition and affidavits in support upon which he wishes to rely is extended to 21 May 2024.

The Applicants are to file and serve any written submissions upon which they wish to rely in support of the orders sought in the Petition by 4 June 2024.

The First Respondent is to file and serve any written submissions upon which she wishes to rely by 18 June 2024.

The Second Respondent is to file and serve any written submissions upon which he wishes to rely by 25 June 2024.

The Applicants are to file and serve any written submissions upon which they wish to rely in respect of the grounds of opposition to the Petition by 9 July 2024.

The hearing of the Petition be referred to a Judge of the Federal Circuit and Family Court of Australia, to be heard at a date and time to be advised.

There be liberty to apply.

1. Accordingly, it is apparent that the petitions, against each of the respondents, was progressed to a final hearing, which was scheduled for a date to be allocated. It is not clear whether this was done in the light of the application to set aside the ex parte orders relating to the service of the bankruptcy notice on Mr Collins. I suspect not.
2. I have not been provided with a transcript of what was said, in court, on 21 May. It seems implicit that Registrar Parkyn did not have copies of the documents provided by either Mr Collins or those which had been rejected for filing earlier.
3. I reach this conclusion in the light of the notation recording that Mr Finlayson did not act for Mr Collins. However, to my mind there appears to me to be some level of tension arising from the fact that he (Mr Finlayson) had prepared the rejected proceedings in respect of the bankruptcy notice but did not act in regard to the substantive matter.
4. What does become apparent from the document itself is that Mr Finlayson, on behalf of Mr Collins, lodged his application to challenge the order for substituted service of the bankruptcy notice, with the court's registry on 14 May but it was not formally accepted for filing until 27 May 2024. The reason for this hiatus is canvassed in an affidavit filed by Mr Collins on 22 May.
5. On 16 May, a court officer wrote to Mr Finlayson in the following terms:

The orders made in AD15/2024 were ex parte orders, and therefore by their nature were made in the absence of one party. If you wish to amend, dispute or otherwise discharge the orders made by the Registrar on 16 January 2024, then an application/notice of opposition should be filed in ADG75/2024 Djunaedi & Ors v Veronika Mohar & Anor.

The applicants in this matter seek to sequestrate the estate of Mr Collins on the basis of a bankruptcy notice served pursuant to the 16 January 2024 orders. Otherwise, if you wish to review the Registrar's decision then an appropriate application should be filed in ADG15/2024 (together with an application for an extension of time).

1. It would appear to me that the correspondence is incomplete. Mr Finlayson apparently requested written reasons for this decision foreshadowing a judicial review of the decision. The Registrar responded as follows:

I have rejected for filing the interlocutory application and affidavit elodged in ADGl5/2024 on 14 May 2024 pursuant to rule 2.06(a) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021. I am not required to provide reasons for this decision: see item (f) in Schedule 2 of the Administrative Decisions (Judicial Review) Act 1977.

1. In this context, I suspect at the insistence of Mr Finlayson, the matter was formally listed before Registrar Colbran in chambers, on which occasion, after noting the existence of the file relating to the creditor's petition and the fact that it had been referred to a judge for hearing, made the following direction:

Pursuant to section 256(3) of the Federal Circuit and Family Court of Australia Act 2021,[25] the interlocutory application and affidavit in support filed on 14 May 2024 by the Respondent be referred to a Judge of the Federal Circuit and Family Court of Australia, to be heard at a date and time to be advised.

1. As noted above, pursuant to the provisions of section 309(2) of the Bankruptcy Act the court has wide powers to make orders for the substituted service of notice required to be served under its provisions, including bankruptcy notices.
2. Pursuant to section 254 of the FCFCOA Act the court may delegate its powers to its registrars and pursuant to section 256 make rules in respect of the review of decisions made pursuant to such delegations.
3. Rule 2.02 of the rules authorises the delegation of a number of powers under the Act to its registrars including those arising under subsection 309(2). Given the nature of delegated power, it is subject to a right of judicial review. Sub-rule (3) of Rule 2.02 provides a prescribed form for the exercise of such a review and a time limit of 21 days after the day on which the power was exercised for the making any such application which is subject to any direction by the court or a Judge to the contrary.
4. The power exercised by Registrar Colbran was exercised by her on 16 January 2024. No formal application appears to have been made for a review of the decision or for an extension of time in which it can be filed.
5. The petition and the interlocutory application were listed for directions before me on 18 July 2024. At this stage, Mr Finlayson apparently appeared for both Ms Mohor and Mr Collins and filed submissions in opposition to the petition, one of which was that it was not appropriate to deal with the application for bankruptcy, whilst the issue of proper service of the bankruptcy notice addressed to Mr Collins remained unresolved.
6. In this context, it was submitted that the level of irregularity surrounding this matter was sufficient cause to justify the dismissal of the petition as a whole. In these circumstances, I made an order fixing both issues for hearing before Judge Lucev on 16 August 2024. The formal order was as follows:

The hearing of the Creditor's Petition and associated issues be listed for hearing on 16 August 2024 at 2.00pm before Judge Lucev sitting in Adelaide to be run concurrently with matter number ADG15/2024.

The proceedings before Judge Lucev (the application to set aside the order for substituted service of the bankruptcy notice on Mr Collins).

1. The central issue, in any bankruptcy proceedings, is whether the person who is the subject of the relevant petition is or is not solvent in the sense of being able to pay their debts. In this context, the service of a bankruptcy notice and any subsequent non-compliance with its terms is a central precursor to any successful application for sequestration brought pursuant to the provisions of section 40(1)(g) of the Act.
2. In essential terms, proof of insolvency, pursuant to the provision of section 52, is established to the court by the failure to comply with a formal bankruptcy demand, thus establishing the prerequisite act of bankruptcy.
3. In these circumstances, issues regarding the service of the notice in question frequently assume central importance in subsequent sequestration proceedings. In this context, relevant authorities[26]speak of the rigour which has to be associated with the service of bankruptcy notices, because of the effect which they have of invoking the prospect of sequestration in any recipient, if the relevant notice is not satisfied.
4. In colloquial terms, the receipt of a bankruptcy notice starts the clock ticking of bankruptcy proceedings and, as a consequence, the exact point of time at which this process begins must be established with clarity. This is because of the penal consequences of bankruptcy, the most significant of which is the vesting of property in a trustee appointed by the court.
5. In Mbuzi Collier J found that a bankruptcy notice had not been properly served on the alleged debtor and, as a consequence of this failure, a subsequent bankruptcy petition served upon him was poisoned at its source, which resulted in the discharge of the sequestration order which had been made in reliance of it.[27]
6. In this case, it is not asserted that Mr Collins did not receive the relevant bankruptcy notice, rather the challenge is that the means by which Mr Carpenter became aware of his (Mr Collin's) incarceration, leading to the service of the notice upon him, and what is characterised it as Mr Carpenter's lack of candour, characterised by omission, in what he deposed to the court when he applied for the relevant order for substituted service, have surrounded the service of the notice in question with such an atmosphere of such impropriety that the court cannot allow the notice to stand or the relevant petition to proceed.
7. On 27 May 2024, after the filing of the petition in question and after issues to do with its service had been before the court and resolved by it, Mr Finlayson filed an application seeking to set aside the order for substituted service of the bankruptcy notice only, on the following bases that:
   • firstly, Mr Finlayson did not have instructions to accept service;
   • secondly, knowledge of the fact that Mr Collins was incarcerated at Mobilong Prison had come to Mr Carpenter through the means of a document which was subject to an implied undertaking that it would not be utilised in connection with other proceedings; and
   • thirdly, considerations relating to the administration of justice obliged Mr Carpenter to disclose how he came to know that Mr Collins was in Mobilong to the registrar in his application for substituted service.
8. This submission rests primarily on what lawyers, in shorthand terms refer to as being a breach of a Harman undertaking following the English case of Harman v Secretary of State for the Home Department.[28] It is equally applicable in Australia. In Hearne v Street, the High Court described the principle underlying the undertaking as follow:

Where one party to litigation is compelled, either by reason of a rule of court, or by reason of a specific order of the court, or otherwise, to disclose documents or information, the party obtaining the disclosure cannot, without the leave of the court, use it for any purpose other than that for which it was given unless it is received into evidence.[29]

1. The rationale for the rule is to strike a balance between competing interests, which can be summarised in the following general terms - the entitlement to privacy in litigation, on the one hand, and, on the other, the right of the public to have access to issue of general knowledge which fall within the public domain.
2. The court in Harman said as follows:

...on the one hand, the protection of a litigant's private right to keep [their] documents to [themselves] not withstanding [their] duty of disclose them to the other side in the litigation, and, on the other, the protection of the right, which the law recognises, subject to certain exceptions, as the right of everyone, to speak freely, and to impart information and ideas, upon matters of public knowledge.[30]

1. The type of material covered by this implied undertaking includes both affidavits and documents produced on subpoena and extends to any copies of such documents. It is a rule relating to the administration of justice in the sense that courts should control the documents which they compel be produced to them or which are produced as a consequence of their processes. Essentially whatever the court that is instrumental in the solicitation of such documents should control their subsequent dissemination.
2. In Forty Two International Pty Ltd v Barnes[31] Yates J said as follows:

The obligation restricts not only the disclosure of the documents or information, but also more general instances of use of the documents or information outside the purposes of the proceeding in and for which the documents or information were disclosed. ....

1. Accordingly, the objection to service of the notice relates more to concerns about the administration of justice and probity in a general sense rather than to consideration relating to Mr Collin's solvency and issue to do with bankruptcy per se, particularly his capacity to respond to the mechanism represented by the notice in question.
2. It is open to a person who is subject to such an implied undertaking to apply to the court for which the relevant document was prepared or obtained to be released from it. In this case, that court would be the Federal Court. In order to secure such a release, it is ordinarily necessary for the person concerned to demonstrate some degree of special or extenuating circumstances justifying such release.
3. In Liberty Funding Pty Ltd v Phoenix Capital Ltd ("Liberty Funding"),[32] the Full Court of the Federal Court said as follows:

In order to be released from the implied undertaking it has been said that a party in the position of the appellants must show "special circumstances". It is unnecessary to examine the authorities in this area in any detail. The parties were not in disagreement as to the legal principles. The notion of "special circumstances" does not require that some extraordinary factors must bear on the question before the discretion will be exercised. It is sufficient to say that, in all the circumstances, good reason must be shown why, contrary to the usual position, documents produced or information obtained in one piece of litigation should be used for the advantage of a party in another piece of litigation or for other non-litigious purposes. The discretion is a broad one and all the circumstances of the case must be examined.[33]

1. In Springfield Nominees Pty Ltd v Bridgelands Securities Ltd,[34] Wilcox J indicated that special circumstances may arise where there are special features or a special feature of the case which afford good reason for modifying or releasing the undertaking, being circumstances which are of sufficient gravity to override the private and public interests in protection of the confidentiality of a person's private documents, which are required by law to be produced to a court.
2. The central evidentiary issue in the proceedings before Judge Lucev were what arose from the discontinued proceedings in the Federal Court against Ms Mohor alone and the fact that Mr Carpenter had referenced correspondence provided to him by Mr Finlayson said to be germane to Mr Collins alone, which Mr Carpenter had subsequently utilised in support of his application for substituted service of the bankruptcy notice. The relevant documents read in the proceedings before Judge Lucev were as follows:
   • Mr Carpenter's affidavit of 9 January 2024;
   • Mr Collin's affidavit of 13 May 2024;
   • Mr Finlayson's affidavit of 14 May 2024;
   • Two further affidavits of Mr Carpenter filed on 12 & 13 August 2024.
3. The hearing before Judge Lucev took place, as scheduled on 16 August 2024. His Honour elected to deal only with the application pertaining to substituted service of the bankruptcy notice. Judgment was delivered on 7 February 2025.[35]
4. At this stage, it became apparent to Judge Lucev that he was not in a position to deal with the actual petition, particularly as it pertained to Ms Mohor and of his own volition he extended the petition to 26 February 2026 pursuant to the provisions of section 52(5) of the Act.
5. As will be detailed in greater detail, in due course, how this came about is also a source of controversy for the respondents and a further ground as to why the court should exercise its discretion not to make a sequestration order in respect of either of the relevant petitions in this matter.
6. It would appear to me that I can inferentially conclude that Mr Carpenter, by dint of his previous involvement with Mr Finlayson had an expectation that every conceivable point would be taken in respect of the service of the bankruptcy notice on Mr Collins.
7. In my view, this is the only conceivable explanation for Mr Carpenter making the application for substituted service on 9 January 2024, notwithstanding the fact that Mr Millar had, ostensibly at least, done all that was necessary to provide the bankruptcy notice to Mr Collins, at the Mobilong Prison, on 22 December 2023.
8. It is clear however from Mr Carpenter's affidavit filed in support of the application for substituted service that Mr Collins apparent resistance to physically accept the bankruptcy notice formed part of the evidence supporting Mr Carpenter's application to the registrar that Mr Collins should be serviced by having the relevant notice provided to him, at the prison, by mail.
9. As previously indicated, after the relevant petitions had been filed and Ms Mohor had been personally served with the petition applicable to her and Mr Finlayson had appeared on her behalf before the registrar, the application to set aside the order of Registrar Colbran made on 16 January 2024 was made on behalf of Mr Collins by Mr Finlayson.
10. The application was not made as an application to review the delegated decision of a registrar but was based on rule 17.05(2)(a) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules. This rule authorises the court to vary or set aside a judgment or order before it has been entered, if the relevant order was made in the absence of a party.
11. Pursuant to the provisions of rule 17.02, a judgment or order takes effect on the day it is given or made. In this case, it seems apparent to me that that the relevant order of Registrar Colbran was entered on 16 January 2024.
12. Mr Collins filed an affidavit in support of his application, in which he deposed to the following effect:
    • He had been a sentenced prisoner at Mobilong Prison since prior to November 2023;
    • The location of prisoners within the correctional services system was controlled and correctional service staff were not permitted to disclose the location of prisoners;
    • As of December of 2023, he had not personally made it publicly known that he had been returned to prison following a period of home detention;
    • On 22 December 2023 he had been informed by prison officers that a lawyer had arranged to see him but when he had agreed to meet the person it became apparent that it was a person who wished to serve him with documents, which he refused to accept;
    • On 27 December 2023, he was advised - presumably by a correctional officer - that he had a legal letter, which he refused to sign for and which remains uncollected by him;
    • On 13 April 2024 he received correspondence from Mr Carpenter, which enclosed the petition against him; both the original and amended bankruptcy notice; and the order for substituted service;
    • After receiving these documents, he contacted Mr Finlayson, whom he had not previously authorised to accept service of any documents on his behalf.
13. On 14 May 2024, Mr Finlayson filed a further affidavit in support of the application, which was formally accepted, by the registry, some days later, on 27 May. I am unaware of what was the reason for the delay. The deponent of the affidavit was Mr Finlayson himself.
14. The contents of his affidavit can be summarised as follows:
    • He had been acting for both Mr Collins and Ms Mohor in the Supreme Court proceedings before Judge Dart and had attended court in reference to those proceedings on 22 November 2023;
    • On this occasion (22 November 2023), Mr Carpenter had asked him where Mr Collins was living and whether he was in prison. He declined to answer. This had led to an oral application being made to Judge Dart for this information to be disclosed, which had been refused by Judge Dart;
    • He had filed an affidavit, on 7 December 2023, which he had deposed, on behalf of Ms Mohor in the Federal Court bankruptcy proceedings. As previously indicated one of the grounds of opposition was based on the fact that the property at Tasman Court, Hackham was subject to a warrant of execution issued on behalf of Ms Djunaedi and the other petitioners and therefore the petition could be considered vexatious;
    • One of the annexures to this affidavit contained the information that Mr Collins was in custody at Cadell serving a sentence of imprisonment. As previously indicated this was an email from Mr Finlayson's office to the Sheriff's office, which did not include Mr Carpenter and was dated 13 October 2023_;_
    • Given that Ms Djuaedi and the other petitioners had discontinued the bankruptcy petition on 21 February 2024, this affidavit had never been formally read in the proceedings before Collier J;
    • He provided copies of correspondence passing between him and Mr Carpenter between 9 January 2024 and May of 2024.
15. At this stage, Mr Carpenter elected not to respond to this affidavit in a formal manner, particularly what was the basis for him allegedly asking Mr Finalyson whether Mr Collins was in prison as of 22 November 2023, which was prior to the filing of the controversial affidavit in Ms Mohor's bankruptcy proceedings on 7 December 2023. It must be the case that Mr Carpenter did not have access to the affidavit of Mr Finlayson filed in the Mohor bankruptcy proceedings until it was filed in the Federal Court.
16. In these circumstances, it does not seem to me to be an unreasonable inference that Mr Carpenter had some inkling of the fact that Mr Collins had been re-incarcerated and was seeking confirmation of this fact, when he posed the question to Mr Finlayson on 22 November 2023, prior to him having access to the controversial letter to the Sheriff.
17. However, in a formal sense, Mr Carpenter did not depose as to having any collateral source of knowledge that this was the case, at this stage of proceedings. This is no-longer the case and has significance as to how the court should approach the issue of service of the bankruptcy notice in different circumstances to those facing Judge Lucev.
18. It is difficult to follow the correspondence provided, which is mutually vituperative in its tone. Regrettably, it is my impression that the authors concerned have had little regard for the court's overarching purpose in its conduct of the civil litigation coming before it and their respective role in applying that principle.
19. Section 190 of the FCFCOA Act provides a directive to the court, in the application of its practice and procedure, to facilitate the just resolution of disputes according to law, as quickly, inexpensively and efficiently as possible. This reflects the objects of the Act as contained in section 5 and is referred to as the Court's overarching purpose.
20. Rule 1.04 delineates the obligation of parties to assist the court to achieve its objectives delineated in the overarching purpose. Parties are required to avoid undue delay, expense and technicality. In essence, there should be a satisfactory level of proportionality between the resources allocated to a particular case and the gravamen of the issue to be determined.
21. In the present matter, it seems incontrovertible that Mr Carpenter and Mr Finlayson have a long history of engagement with one another, in various forums, involving their respective clients. These proceedings have been protracted and convoluted and, in my impression, characterised by obfuscation and intransigence.
22. There is scant evidence of any focus on limiting issues in dispute or any impetus to engage in proactive discussions to avoid misapprehension or misunderstanding. Rather the emphasis has been on, in metaphorical terms, shooting first and asking questions later. Every conceivable point has been taken and no quarter given.
23. No doubt Mr Finlayson did not have to answer Mr Carpenter's acknowledged query put to him on 22 November 2023 as to whether Mr Collins was in prison. In addition, Mr Carpenter could have told Mr Finlayson why he had asked this particular question. Indeed, these are issues which could have been ventilated before Judge Lucev and perhaps court time more efficiently allocated. Again, in colloquial terms, there has been no attempt made to cut to the chase.
24. In this context, I note the inherent seriousness of bankruptcy proceedings and the moment for any individual who is subject to them - a theme to which I will return in due course. I also accept that parties to litigation are entitled, in the vernacular, to play hard ball and are under no obligation to make any concessions to the other party concerned.
25. In the current matter, in my view, this is most obviously characterised by Mr Collins resolute refusal to accept physically the documents which I accept Mr Millar proffered to him and which were mailed to him at the prison.
26. I accept that he is not required to make any accommodation in this regard. However, in my view, issues of this kind have, at least, the potential to be relevant when a party wishes the court to exercise a discretion in his or her favour. Again, these are matters to which I will return in due course.
27. The first portion of the correspondence predates the application for substituted service and articulates controversies surrounding Mr Millar's visit to Mr Collins at Mobilong Prison on 22 December 2023.
28. On 9 January 2024, Mr Carpenter wrote to Mr Finlayson asserting that Mr Collins had been served with the bankruptcy notice but with the following qualification:

Whilst service has been effected, (sic) no doubt you will engage in your normal ridiculous tactics so we lodge an application for substituted service. Had you refrained from these asinine tactics, the matter would have resolved a long time ago.

In these circumstances, it is important to note that Mr Carpenter had despatched Mr Millar to Mobilong Prison in late December of 2023, which was after he had the potential to access the annexure to Mr Finlayson's affidavit but prior to the application for substituted service.

1. In response Mr Finlayson refuted any suggestion that he had agreed to accept service of any bankruptcy notice addressed to Mr Collins and asserting that Mr Millar had gained access to Mr Collins, on 22 December, under false pretences by representing that he was a lawyer rather than a process server.
2. On 16 January 2024, Mr Finlayson sent further correspondence in which he asserted that Mr Carpenter had not been completely candid in his application for substituted service of the bankruptcy notice and that he was in breach of his implied undertaking to the court not to utilise documents produced in one set of proceedings in another and requesting that he (Mr Carpenter) inform Registrar Colbran to this effect.
3. Mr Carpenter's two affidavits deal with his understanding of how the order made by Registrar Colbran on 16 January 2024 had been administratively approached by correctional services staff at Mobilong Prison. This evidence can be summarised as follows:
   • He had received back his letter sent to Mr Collins on 17 January 2024 marked RTS on 25 January 2024 marked 26460 and Legal Mail Admission;
   • His understanding was that this number was Mr Collins prison identification number a fact which was confirmed when he entered it in the relevant Correction Services website and it was disclosed that Mr Collins was located at Mobilong;
   • He had telephoned the prison and been advised that his letter had been received on 22 January and a staff member had personally given it to Mr Collins who had declined to accept it and directed the staff member to return it to its sender.
4. Essentially, Mr Carpenter did not engage with the issue as to how he had come to know that Mr Collins was in prison. However, the tenor of his evidence is that Mr Finlayson had to have been, for all intents and purposes, representing Mr Collins since 2019 and it was apparent that all reasonable steps had been made to bring the bankruptcy notice to Mr Collins' attention throughout December 2023 and January 2024, which had led to the subsequent filing of the relevant petitions and it was only in May of 2024 that issues germane to its service had been raised.
5. This was the context in which Mr Collins' application to discharge the orders of Registrar Colbran arose on 16 August 2024. As previously indicated above, the focus of this hearing was the apparent controversy between the parties as to the provenance of the information which had led to the application for substituted service on Mr Collins on the basis that he was incarcerated at Mobilong and whether that information was subject to an implied obligation that it not be disseminated without either consent or, at the very least, disclosure at to its source to Registrar Colbran.
6. Judge Lucev obtained a transcript of the proceedings which indicates they took about an hour. It was agreed that no cross-examination of the various deponents of the affidavits filed in reference to the application would be required. In this context, the following exchange occurred between Judge Lucev and Mr Finlayson:

Judge Lucev: So I don't have any difficulty with the bankruptcy notice set aside application being heard first. Whether we then get to the creditor's petition might be another issue. So in that regard, I take it- and I've taken it from short submission you've file, I think, Mr Finlayson - that in relation to service issues to the extent they're now in dispute, that it's only the events on and from about 9 January 2024 that are in issue. There's no reliance placed by anyone on the events prior to Christmas, if I can put it that way - - -

Mr Finlayson: No. That's correct.

1. This seems to indicate that no issue was raised in these proceedings in respect of the purported service of the bankruptcy notice by Mr Millar, when he attended at the prison on 22 December 2023. In this context, the tenor of Mr Carpenter's correspondence (as quoted above) was that he was of the view that service upon Mr Collins had been affected but it was only out of a concern that this service would be challenged that Mr Carpenter considered that it would be necessary to bring an application for substituted service.
2. In addition, it appears to be the case that no challenge was made to the service of the relevant bankruptcy notice on Ms Mohor and both parties conceded that if the issue of service of the bankruptcy notice, on Mr Collins, was resolved, there was no impediment to the joint petition, issued on 29 February 2024, against both of them, proceedings.
3. Judge Lucev took the view that those advising Ms Djunaedi and her fellow litigants should have applied to the Federal Court to be released from the implied undertaking that material prepared in connection with the discontinued bankruptcy proceedings against Ms Mohor would not be utilised in other proceedings. He also considered that the alleged failure of Mr Carpenter to disclose that the correspondence attached to Mr Finlayson's affidavit was the source of this information was a further breach of the implied undertaking.
4. In summary, Judge Lucev found as follows:
   • the Applicants deliberately decided to ignore their duty of disclosure on an ex parte application in relation to the issue of service and whether the Respondents' now solicitors had instructions to accept service;
   • there has been a deliberate breach of the Harman Undertaking by the Applicants in relation to the information concerning the Respondent's whereabouts, namely, that he was in prison; and
   • the Applicants failure to bring the allegation of the breach of the Harman Undertaking to the Registrar's attention prior to the making of the Substituted Service Orders was a further breach of the duty of disclosure.
   • In these circumstances he elected to set aside the order for substituted service made by Registrar Colbran.
5. The gravamen of Judge Lucev's judgment is that Mr Carpenter improperly utilised information relating to Mr Collins in his application to the Registrar. Although, it is open to correctional services to suppress the identity and location of a person who is incarcerated on security grounds, in general terms, I do not accept that any privilege, including legal professional privilege, can attach to whether a person is the subject of a term of imprisonment.
6. Indeed, other than in extraordinary circumstances, criminal courts exercise their sentencing functions in open court and it a matter of public record whether a person has received a sentence of imprisonment and the nature of the offending which led to it. Public policy considerations, relating to both specific and general deterrence dictate that this be the case.
7. In the current matter, it is incontrovertible that Mr Collins was in Cadell Prison from at least mid-November of 2024 onwards - the date on which Mr Carpenter inquired of Mr Finlayson whether Mr Collins was in prison and which query Mr Finlayson declined to answer.
8. It is also incontrovertible that, on two separate occasions, on 22 December 2023 and on 22 January 2024 respectively, Mr Collins was given the opportunity to access the bankruptcy notices issued to him but declined to avail himself of the opportunity to physically inspect those documents.
9. The act of service is a matter of physical fact. An identifiable object is transported (or transmitted) to a discernible locus, at a stipulated time. It either occurs within the parameters envisaged by 28A(1) of the Acts Interpretation Act or it does not. In order to occur, service requires knowledge of the relevant locus at which the act of service can be completed.
10. In this sense, Mr Collins was provided the opportunity to access the bankruptcy notices at the Cadell Prison on these two occasions. As such I am satisfied that Mr Collins was served on these two separate occasions, in the sense that he could have accessed the documents in question, if he chose to do so.
11. On the basis of this analysis, the orders of Judge Lucev raises the following issues. Does the fact that the knowledge or information, which led to the physical act of service came from an impugned source render the act of service nugatory and if so, how can the prohibition be dissolved. Is the fact of a person being in custody as a result of the application of the criminal justice system capable of being subject to a Harman undertaking or is a matter which is capable of being of public knowledge.
12. As I have determined, the fact that Mr Collins was in prison cannot be regarded as a piece of privileged information. As a member of the public, in general terms, Mr Carpenter was entitled to know if Mr Collins had been sentenced (or indeed remanded). Nor was this fact, of itself, an issue germane to the proceedings concerning Ms Mohor in the Federal Court proceedings.
13. However, acting on the assumption that it is to be so regarded, how was Mr Carpenter to utilise the information when it came into his hands via the affidavit of Mr Finlayson. Was he obliged to disregard it, particularly given the fact that if he was incarcerated, the issue of where Mr Collins was located, in the period of December/January of 2023/24, was a matter within the public domain.
14. In addition, it cannot be said that Mr Carpenter came into the possession of this information through surreptitious or underhand means. Mr Collins was not entitled to anonymity within the prison system (other than presumably on security grounds). In addition, unless prohibited by the relevant court to do so, members of the media were entitled to report on such a state of affairs.
15. In these circumstances, in my view, there is a distinction between the use of the relevant document and the otherwise unprotected information which it contained. The information was not prepared in conjunction with the Federal Court proceedings. It was extraneous to them.
16. In these circumstances, having learnt of this information, in the context of the physical requirements of service, was Mr Carpenter required, in some way to unknow what he had come to know about where Mr Collins was located before he could proceed with the act of service required of him by his clients in the furtherance of their instructions to him. Was he required to consider the provenance of this information to be regarded as contaminated, even if it was subsequently confirmed to be correct by another source. How could the Federal Court, even if it had been approached declined to authorise the use of the information in question.
17. Mr Carpenter provided the information as to the whereabouts of Mr Collins, to the Registrar, so she could be appraised of the utility of the orders which he sought, namely that sending the bankruptcy notice to the prison would result in Mr Collins having the opportunity to access the bankruptcy notice addressed to him. This was its only relevance to the issue of service.
18. It seems to me to be a somewhat abstruse outcome that Mr Carpenter, having come into possession of the prerequisite degree of fact as to where he could complete service upon Mr Collins that he could not utilise that fact to complete the physical act of service.
19. In particular, was he to regard it as prohibited, until presumably the Federal Court gave its imprimatur, from checking his intelligence from another source to proceed with service. I do not consider that this can be so. If there is no such prohibition how can any Harmon undertaking apply to the information contained in the relevant email annexed to Mr Finlayson's affidavit?
20. In any event, even if my analysis is flawed, that is not an end to the matter. On 17 March 2025, after the delivery of Judge Lucev's judgment on 7 February 2025, Mr Carpenter filed a further affidavit, in which he deposed as follows:

On 2 November 2023 I emailed the Applicants a copy of an Advertiser Article entitled "Robert Wayne Collins remanded in custody after allegedly stealing almost $1 million''.

This was the first time I became aware that Mr Collins was remanded in custody.

1. Mr Finlayson objects to this evidence on the basis that it is hearsay. Given that Mr Collins himself has deposed that he was in prison at the time and the evidence clearly establishes that this was so, the purpose of the affidavit is not to establish the truth or otherwise of whether Mr Collins was incarcerated at the time or whether Mr Carpenter had direct knowledge of this state of affairs.
2. Rather, the effect of this affidavit is to establish that Mr Carpenter had access to a collateral source of information regarding Mr Collins' incarceration that arose both prior to and independently of the annexure to Mr Finlayson's affidavit. In my view, this assertion, on his part, is consistent with the evidence of Mr Finlayson himself, who acknowledges that Mr Carpenter inquired of him on 22 November 2023 whether Mr Collins was in prison. It seems improbable in the extreme that this was an idle question on Mr Carpenter's part.
3. Thus, it seems to me to be more probable than not that Mr Carpenter had a collateral source of information, independent of the relevant email, to confirm the fact that Mr Collins was in custody and could be served via inquires to be made of Correctional Services. In these circumstances, I do not consider whatever use Mr Carpenter can be said to have put the relevant email, such as providing a source of confirmation of the newspaper article, it can be characterised as amounting to any breach of the implied undertaking which may be said to attach to it.
4. In these circumstances, I do not consider that the decision of Judge Lucev can have any import on the service of the first bankruptcy notice on Mr Collins, when it was left with a prison officer at Cadell Prison on 22 December 2023 by Mr Millar, after Mr Collins declined to accept it.
5. It cannot be said that the mechanism by which Mr Carpenter came to despatch Mr Millar to that location for the purpose of service is deleteriously affected, in any way, by the email which had become accessible to him on or after 7 December 2023. Thus, I find that Mr Collins was served with a bankruptcy notice prior to the making of the controversial order for substituted service by Registrar Colbran.
6. Finally, it seems to be to be necessary for the court to consider what are the consequences of any irregularity surrounding the service of the bankruptcy notices on Mr Collins. In this context, it seems to me that section 306(1) of the Act has application. It reads as follows:

Proceedings under this Act are not invalidated by a formal defect or an irregularity, unless the court before which the objection on that ground is made is of opinion that substantial injustice has been caused by the defect or irregularity and that the injustice cannot be remedied by that court.

1. The issue of a bankruptcy notice is a proceeding under the Act. In this particular matter there this not challenge to the issue of either of the bankruptcy notices or the nature of its contents, particularly whether it fails to meet the essential requirements of such notices under the Act. Mr Collins cannot assert that he was misled by the contents of the relevant notices given that he resolutely refused to read them.
2. This was his prerogative but it seems to me to be to be somewhat illogical for him to rely on arguments relating to defects in service when his own action essentially made service, in the context of bankruptcy proceedings, irrelevant. It would seem axiomatic that he was both unable and unwilling to comply with the terms of the relevant notices because he declined to engage with the process which they had put in train. In these circumstances, it would seem to me to amount to a significant injustice to the petitioners if the petition cannot proceed against both Mr Collins and Ms Mohor on the basis of the order of Judge Lucev, given the idiosyncratic nature of the matter.
3. For obvious reasons, it was highly undesirable that there was such a significant hiatus between the hearing of the application regarding the orders for substituted service and the delivery of judgment. This unfortunate state of affairs was exacerbated by the fact that Mr Finlayson did not bring the relevant application until a significant period of time had elapsed from the impugned order of Registrar Colbran, during which period the petitioners acted on the assumption that the relevant bankruptcy notices issued against both Mr Collins and Ms Mohor had been served and had not been satisfied and thus they were entitled to move the court pursuant to the provisions of sections 40 and 43 of the Act.
4. As indicated above, applications to review decisions made pursuant to the delegation of judicial powers are subject to time limits, which were not enjoined in the current matter. However, time limits apply to the efficacy of bankruptcy petitions. As a consequence of section 52(4) of the Act, a petition lapses after the expiration of 12 months.
5. In the current matter, the relevant petition against both Mr Collins and Ms Mohor was lodged on 29 February 2024. The petition was held in abeyance for a period of around six months whilst the substituted service issue was determined, which itself had been brought, it seems to me, at a late stage.
6. In general terms, it is desirable that issues relating to a person's solvency be determined as expeditiously as possible. This is designed to protect members of the community who may engage commercially with an insolvent person but also in the interests of the insolvent person themselves, so they may know what is their status and, in due course, be free from both the stain and practical implications of bankruptcy.
7. In this case, the applicants in the case were at obvious risk of having their petition lapse as a consequence of the late challenge to the service of the bankruptcy notice on Mr Collins and the delays surrounding the delivery of judgment. In my view, it is axiomatic that neither of these circumstances can be attributed to any act or omission relating to the applicants or their solicitor.
8. From my reading of the transcript of the proceedings of 16 August 2024, it does not appear apparent that there was any discussion of the risk of the petition expiring because of anticipated delays in respect of the delivery of judgment.
9. In this context, Mr Finlayson appears to be critical that Mr Carpenter did not raise the issue of the petition lapsing, particularly as it pertained to Ms Mohor, at an earlier stage, which would have enabled him more notice of it. In this context, it would appear to me that Judge Lucev raised the issue of his own volition.
10. Pursuant to the provisions of section 52(5) of the Act the court is granted a discretion to extend the operation to a petition for a further period of twelve months if satisfied that it is just and equitable to do so. This section reads as follows:

The Court may, at any time before the expiration of the period of 12 months commencing on the date of presentation of a creditor's petition, if it considers it just and equitable to do so, upon such terms and conditions as it thinks fit, order that the period at the expiration of which the petition will lapse be such period, being a period exceeding 12 months and not exceeding 24 months, commencing on the date of presentation of the petition as is specified in the order.

1. In these circumstances, on 7 February 2025 Judge Lucev extended the relevant petition to 26 February 2026. Mr Finlayson requested that he provided reasons for so doing, which were provided on 18 February 2025.[36]
2. In the written reasons, Judge Lucev determined that relevant authority indicated that such extensions were not unusual and were justifiable in circumstances where inadvertence, delay or listing schedule in a court might result in a petition expiring. As a consequence, he found that it was just and equitable for the petition to be extended because it was in the interest of justice that the issuance of the petition not be thwarted.
3. The relevant decision was made, prior to the request for reasons, was made in open court, on 7 February 2025 and a transcript of what was said has been prepared. The salient portions of this are as follows:

HIS HONOUR: All right. Well, the normal order in these circumstances would be that pursuant to section 52, subsection (5) of the Bankruptcy Act, the period at the expiration of which the creditors petition will lapse, or the creditors petition filed on 27 February 2024 will lapse, be extended to 26 February 2026 - that is, there's a 12- month extension in accordance with subsection (5) of section 52.

MR FINLAYSON: Well, we would like to be heard on that, and we would like to put on some material that it's not in the interests of justice that that occur.

HIS HONOUR: Well, Mr Finlayson, you're going to have some difficulty, because essentially this matter, the six months before it was allocated to me - it has taken me some time to arrive at the judgment in respect of the other matter. I hadn't quite appreciated how discrete they were. And it's de rigueur, I think, for matters such as this - I've done it numerous times over the last 18 years, as have other judges of the court- to extend the time at which the - or the period at which the expiration of the creditors petition lapses. I don't know what you would put in opposition to that other than effectively what you're going to put on the hearing of the creditors - - -

MR FINLAYSON: I would like perhaps an opportunity to reflect on the reasons.

1. Mr Finlayson now submits that his clients were denied procedural fairness because they were not able to put more detailed submissions in respect of the extension of time to His Honour and it is not an issue which is able to be reviewed.
2. Essentially, Mr Finlayson asserts that he and his clients were denied the opportunity, which he implicitly requested to reflect upon any issues thrown up by what he would characterise as the court's unilateral decision to extend the petition. He also asserts that the onus was on the applicants to make application to the court to extend the relevant petition.
3. Mr Finlayson has not elaborated as to the nature of the further material which he has been denied the opportunity of presenting to the court on his clients' behalf other than he initially submitted that, in the light of the ruling in respect of the order for substituted service, the petition against Mr Collins was doomed to failure. Necessarily, I do not agree with this submission, given my analysis of the situation.
4. Mr Finlayson asserts a lack of procedural fairness. I have no authority to quash the decision of Judge Lucev to extend time. I am neither acting as an appeal judge nor as the reviewer of an administrative decision maker, concerned to ensure the probity of a decision. In any event, it is difficult to see that there was any species of legal unreasonable pervading the relevant determination, particularly given that, other than the obvious benefits arising from the petitions lapsing, the respondents have not provided any specific prejudice arising to them.
5. It is not necessary for the petitioner concerned to move the court to engage the provisions of section 52(5) and I am satisfied that Judge Lucev had the power to do so of his own volition, particularly given that the case was held in abeyance pending the delivery of judgment. I also agree with his characterisation of the process as not unusual particularly in circumstance in which delay has arisen as a consequence of delays arising from the court's processes rather than a direct omission of the petitioners. However, it is they who will quite obviously who will most obviously be prejudiced by the automatic lapse of the relevant petition, which I do not consider would have been a just and equitable outcome.
6. In the current matter, Judge Lucev found that it was just and equitable for the petition to be extended because it was in the interest of justice that the issuance of the petition not be thwarted. Essentially, the petitioners were entitled to have their petition dealt heard given the circumstances surrounding the delay in it being listed.
7. I agree with this sentiment. More significantly, in my view, the extension of the petition cannot subsequently enliven the court's discretion to dismiss it, pursuant to the provisions of section 52(2). That seems to me to be a non sequitur.
8. Accordingly, the extension of time having been granted, in my view, the petition against each respondent remains current. In these circumstances, I propose now to turn to the disposal of the petition as it pertains to both Mr Collins and Ms Mohor.

1. The court's jurisdiction to make a sequestration order is founded in section 43(1) of the Bankruptcy Act. It depends upon the petitioning creditor establishing the commission of an act of bankruptcy by the debtor concerned.
2. In addition, the section provides a number of other conditions which must be satisfied which include residence in Australia, at the time of the commission of the act of bankruptcy. It is also clear that the authority to make a sequestration order is discretionary in nature.
3. Section 40 provides an exhaustive list of circumstances which constitute an act of bankruptcy. Of particular relevance, in the current matter, is section 40(1)(g) which provides as follows:

(g) if a creditor who has obtained against the debtor a final judgment or final order, being a judgment or order the execution of which has not been stayed, has served on the debtor in Australia or, by leave of the Court, elsewhere, a bankruptcy notice under this Act and the debtor does not:

(i) where the notice was served in Australia--within the time specified in the notice; or

(ii) where the notice was served elsewhere--within the time fixed for the purpose by the order giving leave to effect the service;

comply with the requirements of the notice or satisfy the Court that he or she has a counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt or sum payable under the final order, as the case may be, being a counter-claim, set-off or cross demand that he or she could not have set up in the action or proceeding in which the judgment or order was obtained;[37]

1. The power granted to the Official Receiver, to issue bankruptcy notices, arises pursuant to section 41(1)(a) of the Act, which reads as follows:

(1) An Official Receiver may issue a bankruptcy notice on the application of a creditor who has obtained against a debtor:

(i) is of the kind described in paragraph 40(1)(g); and

(ii) is for an amount of at least the statutory minimum'

At relevant times, the statutory minimum was $10,000.00.

1. Section 52(1) of the Act provides the process which the court is required to follow at the hearing of a creditor's petition and the evidentiary matters which must be satisfied before a sequestration order is made. The section is in the following terms:

(1) At the hearing of a creditor's petition, the Court shall require proof of:

(a) the matters stated in the petition (for which purpose the Court may accept the affidavit verifying the petition as sufficient);

(b) service of the petition; and

(c) the fact that the debt or debts on which the petitioning creditor relies is or are still owing;

and, if it is satisfied with the proof of those matters, may make a sequestration order against the estate of the debtor.

1. The judgment debt relied upon by the petitioners is that resulting from the judgment of Judge Dart awarding them costs in the sum of $31,000.00, which resulted in the relevant bankruptcy notices being issued against both Mr Collins and Ms Mohor. Mr Carpenter filed an affidavit on 16 August 2024 indicating that the debt remained outstanding to his clients.
2. There seems no controversy that the judgment debt has not been satisfied given the ground of opposition to the sequestration order, which rest, to some degree, on the assertion of a counterclaims and set offs arising in the respondents' favour as a consequence of the various orders for costs made in their favour by the Federal Court and the District Court and potentially in respect of the decision of Judge Lucev, in which costs were reserved.
3. For the reasons outlined above, I am satisfied that both the relevant bankruptcy notices and the resulting creditors' petitions have been served on each of the respondents. On 4 March 2024, Colin Louis Ambrose indicated his consent to act as trustee if sequestration orders were made.
4. It is clear from the use of the word may in section 52(1) that the court's authority to make a sequestration order is discretionary. It is also subject to the considerations contained in section 52(2), which reads as follows:

If the Court is not satisfied with the proof of any of those matters, or is satisfied by the debtor:

(a) that he or she is able to pay his or her debts; or

(b) that for other sufficient cause a sequestration order ought not to be made;

1. However, the onus is on the debtor concerned to establish that any other sufficient cause exists justifying that a sequestration order should not be made, if it is established that an act of bankruptcy has occurred. As was said in Deputy Commissioner of Taxation v Bayeh[38] the onus to establish other sufficient cause rests as a matter of form and substance upon the debtor.
2. In this case, it is the joint position of each respondent that the general circumstances of this matter, which include the multiplicity of proceedings between the parties and the length of time which they have been on foot; the award of costs made in their favour; the dismissal of the petition against Ms Mohor in the Federal Court; and Mr Collins obvious impecuniousness and lack of capacity to engage with the process; provide ample reason for the court to go behind the judgment debt on which the bankruptcy notices are based and exercise its discretion not to make a sequestration order.
3. The act of bankruptcy relied upon the applicants is the failure of Mr Collins and Ms Mohor to comply with the terms of the bankruptcy notices, which I have found were served upon each of them. In broad terms, it is the shared position of each respondent that there exists other sufficient cause to exercise the discretion, conferred upon the court by section 52(1) of the Act that it should decline to make the sequestration order sought by the petitioning creditors.
4. In more specific terms, it is asserted that:
   • The debt is not truly owed to any of the petitioning creditors specifically as the judgment debt was granted in favour of each of the original plaintiffs in the proceedings, some of whom have dropped out and this debt has not been apportioned between the current petitioners. This submission is said to be based on the decision of the High Court in Coulls v Bagot's Executor & Trustee Co Ltd.[39]
   • The applicants hold security over Ms Mohor's property pursuant to the orders of Judge Dart, which is likely to be greater than any unsecured amount owed to them.
   • The petition, so far as it applies to Ms Mohor is subject to the application of the principle of res judicata in the sense that the applicants had the opportunity to proceed against her in the Federal Court on the grounds but withdrew their petition, which was dismissed.
   • In the form of the costs order made in their favour by Collier J the respondents have a viable setoff or counterclaim, which they can enforce in the Federal Court, which will be rendered otiose by any sequestration order.
   • Mr Collins has no assets and is serving a term of imprisonment.
5. Ancillary to these grounds, in the respective notices of opposition filed by Mr Collins and Ms Mohor, issues were raised relating to the extension of the petition and the service of the relevant bankruptcy notices on Mr Collins, in the light of the order of Judge Lucev. I have dealt with those matters and do not consider that they either alone or in conjunction with the other grounds for opposition provide justification for the court exercising its discretion to go behind the judgment.
6. I concede the sequestration proceedings are concerned primarily with issues of solvency. Essentially, the capacity of individuals to meet their debts, as and when they fall due. In this sense, the interest of others who are extraneous to the actual sequestration proceedings themselves, may be germane. It is not in the public interest that an insolvent person be propped up by the court and be able to incur other debts which they are unable to satisfy. [40]
7. I also appreciate that matters of bankruptcy are primarily concerned with determining whether a person is or is not insolvent and are not a matters of mere debt collection given the sense of potential personal ignominy and failure which may attach to a person who is declared bankrupt.[41] A sequestration order is not one to be made lightly.
8. Accordingly, bankruptcy proceedings should not be utilised to achieve an ulterior purpose or one which is not related to personal insolvency. As has been noted, in a number of cases, bankruptcy is an idiosyncratic form of civil litigation because it has the effect of changing the legal status of the person who is rendered bankrupt. It is not to be applied by rote in the absence of any consideration of the human condition.
9. It remains that case that the making of a sequestration order involves the exercise of a discretion. This means that the making of such an order can never be considered to be automatic in the sense that it will inevitably follow that an unsatisfied judgment debt will result in a sequestration order.
10. In the case of Culleton v Balwyn Nominees Pty Ltd, the Full Court emphasised the fundamental significance of change in status which is wrought upon a person rendered bankrupt and the fact that such a change in status was very often replete with connotations of moral and public failure.[42] The Full Court said as follows:

Whilst it is legitimate for a creditor to proceed in bankruptcy for the purpose of recovering a debt that does not mean that bankruptcy should be viewed in its essential character as part of the process of execution of judgment debts. It is the changing of the status of an insolvent person.[43]

1. As such, it reminded first instance courts, such as this one, not to forget the human reality of bankruptcy and the potential emotional significance it held for the individuals affected by it. I hope I am well aware that the act of sequestration is not merely an administrative action.
2. However, the Full Court, in Culleton[44] was also careful to differentiate between bankruptcy proceedings which could be regarded as malicious in nature but nonetheless permissible and those that could only be considered an abuse of the court's processes and so liable to be dismissed.
3. In so doing it applied the principles enumerated by Isaacs J in Dowling v Colonial Mutual Life Assurance Society Limited,[45] which differentiated between the malicious use of a process and the abuse of such process. In the case, Isaacs J said as follows:

If the object sought to be effected by the process is within the lawful scope of the process, it is a use of the process within the meaning of the law, though it may be malicious, or even fraudulent, and in the circumstances the

1. This passage was approved by the High Court in Williams v Spautz, which categorised the statement as being an attempt to achieve a formulation which keeps the concept of abuse of process within reasonable bounds.
2. Considerations of this kind are implicit in the submissions applicable to Mr Collins - that he has no assets and is incarcerated and therefore the proceedings can have no practical consequences other than to add to the public stigma to which he is subject and therefore are tantamount to some form of abuse of process.
3. From Ms Mohor's perspective, the controversy which gives rise to the petition against her first arose in 2015 and led to her first self-declared bankruptcy in 2016. It seems to be the case that her most significant asset - the Tasman Court, Hackham property - survived that bankruptcy.
4. In all these circumstances, it is the flavour of her position that it is arguable that the applicants have some form of ulterior but occult agenda in respect of this fresh round of proceedings, which does not turn on issues germane to her solvency of itself.
5. In this context, she points to the earlier ill-fated bankruptcy proceedings against her in the Federal Court and the tangled skein of litigation in the state courts, some of which have gone the applicants' way but not all. In these circumstances, it hard to demur with Judge Dart's comment that these matters have taken too much time and occupied to much of each court's resources for little tangible result.
6. The other side of the coin is that the ultimate source of all these actions is the fraud and dishonesty of the respondents, which resulted in each of the applicants losing a significant sum of money. This fraud is recognised in the judgment of Judge Tilmouth and the Cout of Appeal.
7. In addition, as Doyle and Bleby JJ indicated in their judgment of September 2023, if Mr Collins and Ms Mohor do suffer financial prejudice, at the hands of Ms Djunaedi and the other applicants, such prejudice must be assessed in the context of them being largely the authors of their own misfortune.
8. Thereafter, in my assessment each of the subsequent episodes of litigation between the parties has been characterised by obfuscation and denial from Mr Collins and Ms Mohor. In this context, in my view, I must not lose sight of the fact that each of them seeks an exercise of the court's discretion, in their favour, to dismiss the joint petition against them.
9. In this context, in my view, I must be careful not to second guess the motivation of the applicants for commencing a further round of bankruptcy proceedings but rather focus on the application of section 40 and 52 of the Act and determine whether an act of bankruptcy has occurred and what should follow from it.
10. In my view, the fact that Mr Collins is incarcerated - although for how long has not been disclosed to me - and asserts that he is impecunious and so impliedly a sequestration order will achieve nothing in practical terms is not relevant to any determination as to whether he is solvent.
11. For the reasons detailed above, I accept that each of the respondents has been served firstly with a bankruptcy notice, which in each case remains unsatisfied. This has led to the subsequent instigation of a creditors' petition, which has also been served according to the court's direction.
12. The petitioners are judgment creditors of Mr Collins and Ms Mohor as a consequence of the order made by Judge Dart in the sum of $31,000.00. It is the submission of the respondents that the circumstances surrounding the making of this order justify the court going behind the judgment debt in question and to engage its discretion to dismiss the petition in question.
13. The order in question was subject to appeal by Mr Collins and Ms Mohor in the Full Court of the Supreme Court of South Australia. At this stage, the Full Court rejected the submission that there was some impediment to a costs order being made because of the missing respondents.
14. In this context, it was noted that Coulls v Bagot's Executors & Trustee Co Ltd was a case dealing with contractual principles - each party to a contract had to apply to enforce entitlements under it. That is not the case here.
15. All of the applicants in the current proceedings had costs orders made in their favour, non-participation of others in the proceedings before Judge Dart was found to be of no moment. As before Judge Dart and the Full Court the submission of Mr Finlayson is misconceived. This is a case concerned with non-compliance with a bankruptcy notice not a contract.
16. Mr Finlayson submits that a further ground to dismiss the current petition against Ms Mohor arises because the applicants' earlier petition was dismissed by Collier J and thus offends the principle of res judicata.
17. I do not consider that the fact that an earlier petition, in respect of the same judgment debt, was dismissed creates any issue estoppel in respect of any subsequent petition, based on the same debt. This is particularly so given that the earlier proceedings did not establish the existence or otherwise of the requisite debt for the purpose of making any sequestration order, as they were withdrawn before there was any determination in this regard.[46] There was no hearing on the merits.
18. In Re Gye & Perkes v McIntyre Beaumont J considered that the dismissal of a creditor's petition in bankruptcy does not, in any final or conclusive sense, create an estoppel on the issue of whether the petitioner's claim is a good debt.[47] His Honour went on to say as follows:

In the bankruptcy court, the question for determination, depending on a finding of insolvency, actually inferred or assumed, is whether the court, in its discretion, will make a sequestration order. If the bankruptcy court declines to exercise that discretion, it does not follow that the court has finally determined that no debt actually exists. That is a different question."[48]

1. In my view, the earlier proceedings did not determine the issue of whether firstly the debt in question was owed by Ms Mohor and secondly whether she was insolvent. In fact the earlier proceeding determined nothing. No issues were engaged between the parties. This cannot be a ground for dismissal of the petition against her.
2. Ms Mohor also contends that the various applicants are to be regarded as secured creditors as a consequence of Judge Dart's order. I accept that if their petition is granted, the applicant are willing to surrender their security in the Tasman Crescent property. I have not been informed of any logistical consequences of such surrender.
3. Finally, Mr Finlayson contends that, in the form of the various costs orders made in their favour, Mr Collins and Ms Mohor have a counter-claim, set off or cross demand that is equal or greater than the relevant judgment debt on which the relevant act of bankruptcy is posited.
4. In my view, the court's authority and the discretion, which rest upon it, to go behind a judgment debt is limited. Mr Collins and Ms Mohor are required to provide a sufficient reason why this court, exercising its bankruptcy jurisdiction, should not regard the judgment debts as being valid.[49] It is essential to provide a substantial reason for so doing.
5. This is not a case in which it is alleged that the judgment obtained by Ms Djunaedi and her fellow applicants was one which one tainted by their fraud or collusion. It was granted after a protracted process of inquiry and subject to further scrutiny on appeal. Circumstances in which the court will inquire into the validity of a judgment debt are not closed; but it is clear that the court will not inquire as a matter of course into that question.[50]
6. In broad terms, a debtor must satisfy the court that the counter-claim, set-off, or cross demand is made in good faith, and there is sufficient substance to the counter-claim, set-off or cross demand asserted to make it one which the debtor should, in justice, be permitted to have heard and determined in the usual way, rather than be forced to comply with the bankruptcy notice by payment or to commit an act of bankruptcy.
7. Clearly, it is not possible for any bankruptcy court to undertake a preliminary hearing of any such counterclaim in proceedings before it. What is required is a preliminary assessment directed towards such issues as to whether the debtor in question has a fair chance of success or are fairly entitled to litigate.
8. It involves a weighing up of issues relation the legal and factual merits of the claim relied upon by the debtor directed towards the question is it in the interests of justice to allow bankruptcy proceedings to go ahead or should a petitioning creditor be required to await the determination of any such claim.[51]
9. Lindgren J in Glew v Harrowell; in the matter of Glew[52] said as follows:

Perhaps little more can usefully be said than that a debtor must satisfy the Court that there is sufficient substance to the counter-claim, set-off or cross demand asserted to make it one which the debtor should, in justice, be permitted to have heard and determined in the usual way, rather than be forced to comply with the bankruptcy notice by payment or to commit an act of bankruptcy.

1. In the current matter, neither of the respondents has done anything to advance or enforce the orders made in their respective favour. I note that, pursuant to the operation of section 58(1) of the Act, if a sequestration order is made, all property (including choses in action) of the bankrupt vests in the trustee appointed by the court. A judgment debt and the right to enforce it falls within the purview of this provision.
2. Accordingly, it is open to any such trustee to consider whether it is feasible to take steps to recover such a judgment debt. Pursuant to section 60(2) an action commenced by a person who becomes a bankrupt is, upon becoming a bankrupt, stayed until the trustee in bankruptcy makes an election, in writing, to proceed with or discontinue the action. The rationale being that the trustee will make an economic decision as to whether the continuation of any such action will advance the interests of any creditors of the estate being administered.
3. In all these circumstances, I do not consider that the existence of the various costs orders made in the respondents' favour and any such contingent order arising from the order of Judge Lucev provide sufficient other cause, as envisaged by section 52(2) of the Act.
4. On the basis of the proof that the judgment debt arising from the order of Judge Dart remains outstanding, notice of which has been provided to each of the respondents, I find that they are not able to pay their debts and a sequestration order, against each of their estates should be made.
5. The costs of these proceedings should be paid out of the estate of each of the respondents. I note the consent of Mr Ambrose to act as trustee.
6. For all these reasons the orders of the court will be as set out at the commencement of these reasons for judgment.

I certify that the preceding two hundred and ninety-four (294) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Brown.

Associate:

Dated: 11 August 2025

SCHEDULE OF PARTIES

[1] Hereinafter referred to as "the Act".

[2] It is convenient to refer to them collectively as "the Petitioning Creditors" or "petitioners".

[3] It is convenient to refer to them as "the respondents".

[4] See Djunaedi & Ors v Collins & Anor [2015] SADG 120.

[5] See Djunaedi & Ors v Collins & Anor [2015] SADG 120 at [3]-[6].

[6] Collins & Anor v Djunaedi & Ors [2016] SACCFC 48.

[8] See Exhibit VM 8 to Ms Mohor's affidavit filed 17 May 2024.

[9] See Djunaedi v Collins DCCIV-15-91.

[10] See Collins & Anor v Djunaedi & Ors (No 2) [2016] SACCFC 63.

[11] See Ms Mohor's affidavit filed 17 May 2024 at [22].

[12] See Applicant's submissions at [16].

[13] Djunaedi & Ors v Collins & Anor (No 2) [2022] SADG 132 at [13] - [26].

[14] See Collins v Djunaedi [2023] SASCA 97.

[15] See Collins v Djunaedi (No 2) [2024] SASCA 2 at [5].

[16] The suit number is SAD 157 of 2023.

[17] See Djunaedi v Mohor; in the matter of Mohor [2024] FCA 1073 at [26].

[18] The relevant suit number is ADG75 of 2024.

[19] The suit number is ADG 15 of 2024. It has an earlier file number to the petition, reflecting the fact that substituted service proceedings pre-dated the issue of the relevant petition. Although the two proceedings are obviously inter-related different legal provisions apply to bankruptcy notices, particularly in terms of procedures to set them aside or extend the period provided for compliance, and creditor's petitions.

[20] Hereinafter referred to as the Bankruptcy Rules.

[21] The relevant suit number is ADG75 of 2024.

[22] See Affidavit of Jason Millar filed 29 February 2024 filed in proceedings ADG75/2024.

[23] CLGC Pty Ltd v Zhang [2022] FedCFamC2G 152.

[24] See affidavit of Jason Kyle Millar filed 7 March 2024 in ADG75/2024 at [9] - [10].

[25] Hereinafter referred to as the FCFCOA Act.

[26] See Mbuzi v Favell (No 2) [2012] FCA 311 at [24] - [40].

[28] See Harman v Secretary of State for the Home Department [1983] 1 AC 280.

[29] See Hearne v Street [2008] HCA 36 at [96].

[31] Forty Two International Pty Ltd v Barnes [2010] FCA 397 at [72] .

[32] See Liberty Funding Pty Ltd v Phoenix Capital Ltd [2005] FCAFC 3.

[33] See Liberty Funding Pty Ltd v Phoenix Capital Ltd [2005] FCAFC 3 at [31].

[34] See Springfield Nominees Pty Ltd v Bridgelands Securities Ltd [1992] FCA 720.

[35] Djunaedi v Collins [2025] FedCFamC2G 135.

[36] Djunaedi v Mohor [2025] FedCFamC2G 216.

[37] See Bankruptcy Act 1966 (Cth) s 40(1)(g).

[38] Deputy Commissioner of Taxation v Bayeh [1999] FCA 1223; (1999) 100 FCR 144 at [12].

[39] Coulls v Bagot's Executor & Trustee Co Ltd [1967] HCA 3.

[40] See Re Svir; Ex parte Commissioner of Taxation [1998] FCA 503; (1998) 83 FCR 314 at 317.

[41] Robson as former trustee of the estate of Samsakopoulos v Body Corporate for Sanderling at Kings Beach CTS 2942 [2021] FCAFC 143 at [7].

[42] See Culleton v Balwyn Nominees Pty Ltd [2017] FCAFC 8 at [40].

[44] See Culleton v Balwyn Nominees Pty Ltd [2017] FCAFC 8.

[45] See Dowling v Colonial Mutual Life Assurance Society Limited [1915] 20 CLR 509 at [521]-[522].

[46] See Re Gye & Perkes v McIntyre [1992] FCA 235 per Beaumont J.

[49] See Wren v Mahoney [1972] HCA 5; (1972) 126 CLR 212.

[50] See Ramsay Health Care Australia Pty Ltd v Compton [2017] HCA 28; (2017) 261 CLR 132 at [48].

[51] See Guss v Johnstone (2000) 171 ALR 598 at 606.

[52] Glew v Harrowell; in the matter of Glew [2003] FCA 373 at [12].