Kambouris v Paule, in the matter of Paule [2025] FCA 1590

Driver v Botanical Water Technologies [2025] NSWSC 566

Driver v Botanical Water Technologies Pty Ltd [2024] NSWSC 1409

Driver v Botanical Water Technologies Pty Ltd (No 2) [2024] NSWSC 1641

Minister for Community Services & Health v Chee Keong Thoo [1988] FCA 54; 78 ALR 307

Olney-Fraser v Deputy Commissioner of Taxation [2019] FCA 877

One Managed Investment Funds Ltd v Pitard [2021] FCA 738

Paule v Kambouris (Unreported, Federal Court of Australia, 5 May 2025)

Paule v Kambouris [2025] FCA 474

Paule v Kambouris [2025] FCA 539

Paule v Kambouris (No 3) [2025] FCA 648

1. The property of the first respondent be released from the control of the controlling trustee under section 208 of the Bankruptcy Act 1966 (Cth).
2. The creditors' petition proceedings, being NSD 1004 of 2025 and NSD 1005 of 2025, be listed in the Registrar's bankruptcy list at 11am on 27 January 2026.
3. The first respondent pay the applicants' costs of the proceedings NSD 2242 of 2025.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

1 INTRODUCTION

2 RELEVANT FACTUAL MATTERS

2.1 The evidence

2.2 Outline chronology of relevant events

2.3 Mr Paule's Statement of Affairs

2.4 Mr Paule's proposed personal insolvency agreement

3 THE SUBMISSIONS

4 CONSIDERATION

5 DISPOSITION

1. The applicants, Ambrosios Kambouris and DJD Trading Pty Ltd seek final orders releasing the property of the first respondent, Terry Paule, from the control of the second respondent, Nicholas Giasoumi, as the controlling trustee pursuant to Part X of the Bankruptcy Act 1966 (Cth).
2. The matter was listed for final hearing before me as duty judge because, by r 75-27 of the Insolvency Practice Rules (Bankruptcy) 2016 (Cth) (Bankruptcy Rules), the controlling trustee must call a meeting of creditors not more than 30 days after consent or approval of their appointment on 27 November 2025.
3. The present application arises against a background of intensive litigation between the parties. Proceedings were brought in the Supreme Court of New South Wales (NSWSC) in 2021 and determined adversely to Mr Paule, resulting in orders made on 20 December 2024 (December 2024 Orders) that he pay Mr Kambouris the sum of USD $8,518,852.64 and pay DJD Trading the sum of USD $7,469,896.98 (Supreme Court Proceedings); Driver v Botanical Water Technologies Pty Ltd (No 2) [2024] NSWSC 1641 at [24] (Ball J) (Driver (No 2)). The judgment in the Supreme Court Proceedings (that precedes the judgment the December 2024 Orders are based upon) finds that Mr Paule acted in breach of his fiduciary obligations owed to Mr Kambouris; Driver v Botanical Water Technologies Pty Ltd [2024] NSWSC 1409 at [110]-[125], [128], [180] (Ball J) (Driver (No 1)).
4. When Mr Paule did not pay the judgment debts, the applicants served bankruptcy notices on him on 6 March 2025. After some extensions of the period for compliance with those notices, Mr Paule failed to comply with the bankruptcy notices and the applicants filed Creditors' Petitions (creditors' petitions) (being NSD1004/2025 and NSD1005/2025, the creditors' petition proceedings) on 23 June 2025. Mr Paule obtained a number of adjournments of those petitions. Before they were heard, on 27 November 2025, Mr Giasoumi of Dye & Co Pty Ltd, was appointed as controlling trustee of the estate of Mr Paule pursuant to s 188(1) of the Bankruptcy Act, with the consequence that, by operation of the provisions of Part X of the Bankruptcy Act, the creditors' petitions are stayed; Bankruptcy Act s 189AAA. It is the appointment of Mr Giasoumi and the consequences of his appointment which give rise to the present application.
5. The applicants primarily rely on the terms of s 208 of the Bankruptcy Act, which provide that the Court may make an order releasing the debtor's property from control under Part X Div 2 of the Bankruptcy Act if:

(a) an interested person applies to the Court for such an order; and

(b) the Court is satisfied that special circumstances justify it making the Order.

1. In short, the applicants contend that the Court can be satisfied that special circumstances in s 208(b) arise and, in its discretion, make the orders sought which, in effect, will release Mr Paule's property from control of the controlling trustee and enable the creditors' petitions to proceed. In the alternative, the applicants contend Mr Paule's application to appoint Mr Giasoumi as his controlling trustee be set aside as an abuse of process on the basis that the purpose of seeking the appointment has been made to make it impossible for them to obtain a sequestration order in such a way that is foreign to the purpose of the bankruptcy laws, citing Clyne v Deputy Commissioner of Taxation [1984] HCA 44; 154 CLR 589 at 599-600 (Gibbs CJ, Murphy, Brennan and Dawson JJ). The applicants additionally contend that the authority signed by Mr Paule appointing the controlling trustee should be declared ineffective because of defects in his draft personal insolvency agreement.
2. In the event that orders releasing Mr Paule's property from control are made, the applicants seek sequestration orders, as filed and sought in NSD1004/2025 and NSD1005/2025.
3. The orders sought in the originating application, as amended are:

(1) A declaration that the authority signed by Mr Paule on 27 November 2025 appointing Nicholas Giasoumi pursuant to s 188 of the Bankruptcy Act 1966 (Cth) is not effective for the purposes of Part X of that Act;

(2) An order pursuant to s 208 of the Bankruptcy Act releasing the property of Mr Paule from the control of Mr Giasoumi under Part X of the Bankruptcy Act; and

(3) In the alternative, an order setting aside the appointment of Mr Giasoumi as controlling trustee under Part X as an abuse of process.

1. Mr Paule disputes the entitlement of the applicants to the orders sought.
2. The controlling trustee took a neutral approach to the application.
3. All parties were represented by counsel, who presented helpful submissions.
4. For the reasons set out below, I am satisfied that special circumstances exist to justify the making of orders pursuant to s 208 of the Bankruptcy Act. Having reached that conclusion, it is not necessary for me to consider the abuse of process ground or whether the alleged defects in the draft personal insolvency agreement vitiate the authority of the controlling trustee. I am do not consider that there is sufficient urgency to warrant consideration of the creditors' petitions in the duty list, but shall direct that they be listed registrar's bankruptcy list at 11am on Tuesday 27 January 2026.

1. The applicants read a lengthy affidavit sworn by William Wade, solicitor, of 2 December 2025 which annexed numerous documents forming the basis for the chronology set out below. They also read a shorter affidavit of Mr Wade sworn 8 December 2025.
2. Mr Paule relied on an affidavit affirmed by himself on 8 December 2025, in which he explains the circumstances of his coming to appoint the controlling trustee and apparent discrepancies between his statement of affairs and earlier sworn evidence about his financial position. He was cross-examined. Owing to time constraints necessary for the matter to be heard in the duty list, counsel for the applicants was limited to 30 minutes in which to cross-examine.
3. The controlling trustee relied upon an affidavit sworn by Mr Giasoumi that explains that he was appointed on 27 November 2025 when he was provided with a statement of affairs, an authority authorising him to take control of Mr Paule's property and to call a meeting of creditors under Part X of the Bankruptcy Act and a proposal for dealing with Mr Paule's affairs (in the form of a draft personal insolvency agreement). He refers to investigations that he has conducted since his appointment.

1. Set out below is a short chronology of relevant events. The primary documents upon which it is based were annexed to the 2 December 2025 affidavit of Mr Wade.
2. On 8 November 2024, final orders were made in the Supreme Court proceedings; Driver (No 1).
3. On 20 December 2024, further orders were made in the Supreme Court proceedings in relation to interest and costs; Driver (No 2).
4. On 6 March 2025, Dr Kambouris and DJD Trading served bankruptcy notices on Mr Paule.
5. On 19 March 2025, Mr Paule (and others) commenced an appeal in the New South Wales Court of Appeal (NSWCoA) from the Orders in the Supreme Court proceedings (the appeal).
6. On 21 March 2025, Mr Paule commenced proceedings in the Federal Court (NSD403/2025 and NSD404/2025) seeking an extension of time for compliance with the bankruptcy notices pending determination of the appeal. An extension was granted until 1 April 2025 and subsequently extended until 29 April 2025, when the application was listed for hearing.
7. On 17 April 2025, Mr Paule affirmed an affidavit in support of a further extension. In it he says:

(1) That in 2009, he purchased the property at 63 Albany Road, Toorak (the property) and it is registered in his name and unencumbered.

(2) Since that time, he has caused substantial renovations to be undertaken to the property.

(3) He undertakes, and has instructed his solicitors to undertake to the Court, that he will not deal with:

(a) the property; or

(b) any other property owned by him and for which he holds the beneficial interest, other than in the course of ordinary business;

during the course of these proceedings (the April 2025 undertaking).

1. On 5 May 2025, a Judicial Registrar of this court dismissed Mr Paule's applications to extend time for compliance with the bankruptcy notices; Paule v Kambouris (Unreported, Federal Court of Australia, 5 May 2025) at [77] (Paule v Kambouris (No 1)). In his reasons, the Registrar noted that Mr Paule relied on five valuations of the property, which the Registrar then assessed to be likely valued between AUD $21,000,000 and AUD $26,000,000; Paule v Kambouris (No 1) at [77]. This valuation was used in support of the contention that Mr Paule had the means to satisfy the judgment debts (at [58]) and that, whilst the extension was refused, the Registrar considered it a factor that weighted in favour of the extension when accompanied by the April 2025 undertaking (at [75]-[76]). On the same day, Needham J extended the time to comply with the bankruptcy notices pending determination of a review of the Judicial Registrar's orders on condition of Mr Paule restating his undertaking, which he did; Paule v Kambouris [2025] FCA 474 at [4], [8] (Paule v Kambouris (No 2)).
2. On 8 May 2025, Mr Paule affirmed a further affidavit in which he said that he has over 35 years of experience in business as a financial advisor and is the co-founder and Chairman of Findex (Aust) Pty Ltd which he says is the fifth largest accounting and business advisory professional services firm in Australia by revenue. He says in [10] that set out in Schedule 1 of this affidavit "are the details of my current assets that I hold legally. They amount to a total of approximately $29,915.000 AUD ... I confirm that I have no current liabilities in my name."
3. The schedule of assets identified in the affidavit lists:

(a) the property as valued (by one of the five valuations relied upon in Paule v Kambouris (No 1) at AUD $28,000,000;

(b) five luxury motor vehicles at a combined value of AUD $1,165,000; and

(c) furniture and household effects at a value of AUD $750,000.

1. On 15 May 2025, Mr Paule filed a notice of motion in the NSWSC seeking a stay of the December 2024 Orders made in the Supreme Court Proceedings, pending determination of the appeal (Stay Application).
2. On 26 May 2025, upon noting that Mr Paule repeated the April 2025 undertaking, Stellios J adjourned the applications to review the orders of the Judicial Registrar and the applications to set aside the bankruptcy notices until after the Stay Application in the NSWSC is determined; Paule v Kambouris [2025] FCA 539 at [95] (Stellios J) (Paule v Kambouris (No 3)). In so doing, his Honour referred to Mr Paule's schedule of assets at [46] and summarised the submission advanced on behalf of Mr Paule by his senior counsel that: Mr Paule is a man of some commercial substance, with a valuable unencumbered property; that there is no evidence that he has any current liabilities other than judgment debts; and that there was no basis to find that he is presently insolvent (Paule v Kambouris (No 3) at [51]).
3. On 30 May 2025, Williams J heard the Stay Application and made orders granting a stay of the December 2024 Orders in the Supreme Court proceedings until the first day of the hearing by the NSWCoA, conditional upon Mr Paule providing a written undertaking to the NSWSC and the present applicants in the terms of the April 2025 undertaking and also that Mr Paule provide to the present applicants "a charge in caveatable form" over the property by 5pm on 3 June 2025. The judgment records that her Honour was satisfied that Mr Paule owned the property unencumbered and that it has a value of between AUD $15,000,000 and AUD $28,000,000, that he owned vehicles with a combined estimated value of AUD $1,165,000 and furniture and household effects with an estimated value of AUD $750,000; Driver v Botanical Water Technologies [2025] NSWSC 566 at [19] (Williams J).
4. On 1 June 2025, Appian Lawyers lodged a caveat naming Anna Paule, Mr Paule's wife, as caveator over the property, on the ground that she holds an "implied, resulting or constructive trust" over the property.
5. On 19 June 2025, the applications to review the decision of the Registrar, declining extensions of time for compliance with the bankruptcy notices were dismissed; Paule v Kambouris (No 3) [2025] FCA 648 at [5] (Stellios J) (Paule v Kambouris (No 4)).
6. On 23 June 2025, the applicants commenced the present proceedings NSD1004/2025 and NSD1005/2025 and the creditors' petitions were served on Mr Paule on 11 July 2025.
7. On 25 July 2025, the appeal from the judgment and orders in the Supreme Court proceedings was dismissed; Botanical Water Technologies IP Ltd v Driver [2025] NSWCA 162 (per Payne JA at [104]; Ward P agreeing at [1], Adamson JA agreeing at [105]).
8. On 22 August 2025, Mr Paule filed an application for special leave to appeal to the High Court from the decision of the NSWCoA.
9. On 25 August 2025, Mr Paule filed notices of appearance in the creditors' petition proceedings and his solicitor filed an affidavit in support of an application for the adjournment of those proceedings, noting his instructions to re-state an undertaking that Mr Paule had offered to the Court (in order to stave off freezing orders that were sought against him earlier in July 2025) which was largely to the effect of the April 2025 undertaking (the August 2025 undertaking).
10. On 26 August 2025, a Registrar of this Court adjourned the creditors' petition proceedings to 21 October 2025, noting the August 2025 undertaking.
11. On 13 October 2025, Ms Paule commenced proceedings in the Supreme Court of Victoria (VSC) to restrain the Sheriff of the State of Victoria from executing a warrant (earlier issued by the applicants on 27 June 2025) for seizure and sale of the property. In support of that application, Ms Paule swore an affidavit which says, amongst other things:

(a) that in about January 2016 she and Mr Paule separated on a final basis;

(b) they continued to cohabitate in the property until about March 2023;

(c) they are negotiating a binding financial agreement to divide their assets;

(d) on 19 August 2009, Ms Paule became the sole registered proprietor of the property, having purchased it for AUD $7,600,000;

(e) in or around December 2021, Mr Paule proposed, and Ms Paule agreed, that in order to reduce land tax payable, she should transfer the property to his name but that she would remain the true owner of it even though it was in his name (i.e. even though he was the registered proprietor). The property was then transferred to his name. On 1 June 2025, she instructed a solicitor to lodge a caveat over the property.

1. On 5 November 2025, DJD Trading filed an interlocutory application in NSD1005/2025 seeking a freezing order against Mr Paule in respect of his assets in Australia up to a value of AUD $28,000,000.
2. On 6 November 2025, Needham J made freezing orders in NSD1005/2025, restraining Mr Paule from disposing of any of his assets in Australia up to an unencumbered value of AUD $28,000,000.
3. Also on 6 November 2025, the High Court dismissed Mr Paule's special leave application.
4. On 17 November 2025, Mr Paule filed notices of opposition in the creditors' petition proceedings. On the following day, a Registrar of the Court adjourned those proceedings until 2 December 2025.
5. On 27 November 2025, Mr Giasoumi is appointed as controlling trustee of the estate of Mr Paule under s 188 of the Bankruptcy Act.

1. On 27 November 2025, Mr Paule completed a statement of affairs to the controlling trustee that relevantly states:

(4) that he has no interest in any land or buildings in Australia or overseas;

(5) that he does not own or have an interest in any vehicles;

(6) that he does not own or have any entitlement to any shares, options, rights, convertible notes or other securities; and

(7) that he does not own or have any other assets of value (other than general household furniture).

1. The statement of affairs also provides a list of the following creditors:

1. In addition, in the statement of affairs Mr Paule responds to the following questions in the negative:

44A Have you been a unit holder in or beneficiary of a trust in the last 5 years; OR 44B Have you transferred any assets to a trust in the last 5 years?

1. The statement of affairs then instructs that one must "use this form to provide details if, in the last 5 years, you have been involved in more than one company". Mr Paule then identifies: TZP Pty Ltd which is a trustee company for STP Family Trust; AP Protein Holdings Pty Ltd; AP Protein Pty Ltd; Arkom Pty Ltd which is a trustee of S&T Paule Family Trust; Biocheese Pty Ltd; Findex Group Ltd; Longford Tower Pty Ltd which is a trustee of S&T Paule Unit Trust; Meliora Foods Pty Ltd; MyCo Holding (APP) Pty Ltd; My Co Holding Pty Ltd; Paule Nominees Pty Ltd which is a trustee company of Lifeplan Superannuation Fund; S&T Paule Management Pty Ltd which is a trustee company of S&T Paule Management Discretionary Trust; SproutX Pty Ltd and Torch T Pty Ltd.
2. Mr Paule signed a declaration to the effect that the particulars of the form were correct.

2.4 Mr Paule's proposed personal insolvency agreement

1. In his affidavit of 8 December 2025, Mr Paule refers to and annexes his proposed personal insolvency agreement. In it, he proposes pursuant to s 188 that his creditors deal with his affairs by requiring that he execute a Personal Insolvency Agreement (PIA) in accordance with Part X of the Bankruptcy Act, which will include the terms and conditions that are then listed.
2. Those terms include:

(1) That Mr Paule will pay, or cause to be paid to the Trustees of the PIA the sum of AUD $500,000, with:

(a) AUD $100,000 to be paid on trust to the firm of the controlling trustee prior to the execution of the controlling trustee authority pursuant to s 188 of the Bankruptcy Act (cl 1(a)) with the controlling trustee's and trustees of the PIA's remuneration to be taken from this amount (cl 7); and

(b) AUD $400,000 paid within seven days of creditors voting to accept the PIA (cl 1(b));

(2) Upon the trustees receiving these payments, the debtor will be released from all provable debts within the meaning of the Bankruptcy Act (cl 2);

(3) The trustees will distribute the funds in accordance with the order of payment of debts in Division 2 of Part VI of the Bankruptcy Act, except for Ms Paule who is an excluded creditor and will not participate in the distribution (cl 4);

(4) Other property within the meaning of ss 58 and 116 of the Bankruptcy Act which would be divisible among creditors if the debtor were made bankrupt will not be available to meet the claims of creditors (cl 6);

(5) Sections 120, 121 and 122 of the Bankruptcy Act will not apply to the PIA (cl 8);

(6) If the PIA is accepted by the creditors, Mr Giasoumi will agree to be the trustee (cl 9); and

(7) Mr Paule agrees to execute the PIA, and by doing so give effect to its terms and any relevant provisions of the Bankruptcy Act (cl 10).

1. The applicants' primary submission is that an order under s 208 of the Bankruptcy Act is warranted because, first Mr Paule has repeatedly asserted in this Court on affidavit that he holds the property unencumbered. On this basis, he has given undertakings to the Federal Court of Australia and to the NSWSC in the Supreme Court proceedings. Yet in his statement of affairs, he states that he does not own any real estate.
2. Secondly, Mr Paule has asserted in affidavits in this Court and in the Supreme Court proceedings that he owns motor vehicles with an estimated value of AUD $1,615,000 and furniture and other household effects worth about AUD $750,000, yet in his statement of affairs to the controlling trustee he says that he owns no vehicles or any other assets of value.
3. Thirdly, in his earlier affidavits Mr Paule said that he had no liabilities beyond the judgment debt in the Supreme Court proceedings, yet in his statement of affairs he says that he incurred debts in October 2025 and November 2025 of more than AUD $370,000,000 to various entities associated with him.
4. Fourthly, the controlling trustee was appointed immediately after those purported debts were incurred. The applicants submit that these transactions will have the result that, unless set aside, Mr Paule's personal associates will have the ability to pass a special resolution at the creditors meeting on the basis that they will control a majority in number of the creditors and at least 75% in value of the creditors pursuant to the special resolution required under Part X of the Bankruptcy Act ; r 75-132 of the Bankruptcy Rules. The applicants submit that the controlling trustee will not be in a position to carry out all necessary investigations and set aside any relevant transactions before the creditor's meeting, which must take place by 13 January 2026 at the latest.
5. Finally, the applicants submit that the fact that Mr Paule's draft PIA proposes a contribution of AUD $500,000 to participating creditors (which is to include any remuneration to the controlling trustee) suggests that any recovery by the applicants is likely to be so trivial or disproportionate that it is better dealt with by way of bankruptcy.
6. In light of these matters, the applicants submit that the court may make an order releasing Mr Paule's property from the control of the controlling trustee because special circumstances within s 208 of the Bankruptcy Act justify it doing so, citing Olney-Fraser v Deputy Commissioner of Taxation [2019] FCA 877 (Davies J).
7. In the alternative, the applicants submit that the appointment by Mr Paule of the controlling trustee should be set aside as an abuse of process.
8. The applicants further submit that the authority signed by Mr Paule on 27 November 2025 appointing the controlling trustee is not effective because the draft personal insolvency agreement provided by him to the controlling trustee did not meet the requirements of ss188(2C) and 188(2D) of the Bankruptcy Act.
9. Mr Paule submits that that there is an explanation for the alleged discrepancies in his affidavits, and relies on his affidavit of 8 December 2025 in support of that proposition, to which I refer in further detail below. He contends that the applicants will not suffer any prejudice if a creditors' meeting proceeds under Part X and refers to the scheme of Part X of the Bankruptcy Act which obliges the controlling trustee, himself an experienced insolvency practitioner, to conduct appropriate investigations before putting any PIA to the creditors. He contends that there is nothing out of the ordinary that can be said to substantiate a finding that "special circumstances" exist for the purposes of s 208 of the Bankruptcy Act and that in any event, the matters to which the applicants point strongly favour the retention of the controlling trustee, for the same reasons as those identified in Deputy Commissioner of Taxation v Johns [2005] FCA 1143; 144 FCR 112 at [110] (Edmonds J). Mr Paule otherwise disputes that there has been any abuse of process in the appointment of the controlling trustee and contends that the alleged defects with the draft PIA would not serve to vitiate its terms.
10. The controlling trustee, Mr Giasoumi, was represented at the hearing, but did not file written submissions. Counsel for the controlling trustee further submitted that matters raised in the process of cross-examining the first respondent ought not to affect their client where the controlling trustee has not had an opportunity to respond in evidence to those matters.

1. As noted above, s 208 of the Bankruptcy Act provides:

The Court may make an order releasing the debtor's property from control under this Division if:

(a) an interested person applies to the Court for such an order; and

(b) the Court is satisfied that special circumstances justify it making the order.

1. In Johns, Edmonds J referred to the statement by Burchett J in Minister for Community Services & Health v Chee Keong Thoo [1988] FCA 54; 78 ALR 307 at 324, albeit in a different statutory context, that "...the core of the idea of 'special circumstances' is that there is something unusual or different to take the matter out of the ordinary course". His Honour went on to say:
   1. The phrase 'special circumstances' is obviously designed to accommodate a great variety of circumstances which are 'out of the ordinary course' in the sense used by his Honour, however, they must be circumstances which justify an order releasing the debtor's property from control of the controlling trustee.
2. In Olney-Fraser, Davies J adopted the same meaning of "special circumstances", noting at [13] that the salient point made in both Thoo and Johns is that the term simply requires circumstances that are out of the ordinary that bear upon the question of whether the Court should exercise its power under s 208 of the Bankruptcy Act. The same meaning was ascribed to the term by O'Bryan J in One Managed Investment Funds Ltd v Pitard [2021] FCA 738 at [24].
3. The reasoning in these cases demonstrates that the meaning of "special circumstances" is to be understood in the light of the context in which it appears; Thoo at 324.
4. Amendments were made to Part X of the Bankruptcy Act by the Bankruptcy Legislation Amendment Act 2004 (Cth). The Explanatory Memorandum to the Bankruptcy Legislation Amendment Bill 2004 (Cth) notes in [15] that:

The amendments proposed in this Bill will enhance the integrity of the Part X process but will not affect the fundamental policy underpinning Part X of providing a simple and flexible process for debtors and creditors to come to an agreement without sequestration.

(Emphasis added)

1. The aim to provide a "flexible process" echoes the language used by Senator Gorton when he gave the second reading speech for the Bankruptcy Act, which first introduced Part X. There he observed that Part X is one of the procedures that may be followed where it is not desired by the creditors to have a debtor's affairs administered under the strict procedure of bankruptcy. He summarised the intention of Part X procedure as follows:

(a) that a debtor does not act without receiving independent and expert advice; before he can come to any arrangement with his creditors he must first have consulted a solicitor or a registered trustee;

(b) that the interests of all creditors are protected by having a solicitor or a registered trustee call the meeting of creditors, by ensuring that the creditors are given full information as to the debtor's affairs and by requiring the appointment of a trustee to administer the deed or composition; and

(c) that the deed or composition is competently administered by having the person administering it responsible [to the Court].

1. The objective of providing a simple and flexible process is reflected by the terms of Part X of the Bankruptcy Act. By s 188(1) a debtor "who desires that his or her affairs be dealt with under this Part without his or her estate being sequestrated" and who satisfies various qualifying requirements in (a) to (d), may sign an authority naming and authorising a registered trustee, a solicitor or the Official Trustee, to call a meeting of the debtor's creditors and to take control of the debtor's property. If the person authorised is a registered trustee (as is Mr Giasoumi), then by s 188(2C) the authority signed by the debtor is not effective unless the registered trustee is first given to the proposed trustee (a) a statement of the debtor's affairs and (b) a proposal for dealing with them under Part X, which by s 188(2E) must include a draft PIA. Once authority has been given for the appointment of a trustee, it is not revocable by the debtor; s 188(3). The registered trustee who consents to the exercise of powers given by an authority must, within two business days of consenting, give a copy of the authority and the debtor's statement of affairs to the Official Receiver; s 188(5).
2. By s 189AAA of the Bankruptcy Act, if an authority signed by a debtor under s 188 has become effective and a creditor's petition was presented against the debtor beforehand (which is the position in this case) then proceedings relating to that petition are stayed until the conclusion of the meeting of creditors or the adjournment of that meeting, whichever is the earlier. This is subject to the operation of s 206(1).
3. Section 188A sets out the requirements for a PIA.
4. Section 188B provides that a person who is a creditor of the debtor may inspect and obtain a copy of, or make extracts from the statement of affairs.
5. Section 189(1) provides that when authority given by a debtor under s 188 becomes effective, the property of the debtor becomes subject to control under Part X (Div 2) and by s 189(1A) remains under control until one of six alternative situations arise. Relevantly: (a) the creditors resolve at a meeting that the property cease to be subject to control; (b) the debtor and trustee execute a PIA following special resolution by the creditors (being a vote in favour by 75% of the creditors by number and debt - see Bankruptcy Rules r 75-132); (d) four months pass since the authority under s 188 was given; or (e) the Court under s 208 releases the property from control.
6. By s 189(2), a debtor whose property is subject to control: (a) shall not remove or dispose of their property except with the consent of the controlling trustee; (b) shall provide the controlling trustee with information about the debtor's examinable affairs as the controlling trustee requires; and (c) shall comply with any direction given by the controlling trustee with respect to his or her property of affairs. This is a penal provision in respect of which the penalty is noted to be imprisonment for 12 months.
7. Section 190 specifies the duties and powers of the controlling trustee. They include: (1) that the controlling trustee must call a meeting of the debtor's creditors; and (2) that the controlling trustee is empowered to: (a) take immediate control of the debtor's property and affairs; (b) make inquires and investigations as the trustee considers necessary and (c) carry on the business of the debtor, if the controlling trustee considers it to be in the interests of the creditors to do so. Additional duties are identified in s 190A.
8. Section 204(1) provides that the creditors may, at a meeting called pursuant to an authority under s 188, by special resolution:

(a) resolve that the property be no longer subject to control (where the debtor's property is subject to control under Part X Div 2);

(b) require the debtor to execute a PIA; or

(c) require the debtor to present a debtor's petition within 7 days from the day on which the resolution was passed.

1. Section 206(1) provides that where a meeting of creditors has passed a special resolution requiring the debtor to execute a PIA and a creditor's petition was presented against the debtor before the passing of the resolution or is presented against the debtor after the passing of the resolution, but before the agreement has been executed, then upon application by the debtor, a creditor or a person nominated as trustee under the proposed PIA, the Court may (if it considers it would be for the advantage of the creditors that the debtor's affairs be administered under the agreement) adjourn the hearing of the petition for such period as it considers necessary to allow the agreement to be executed and, if duly executed, dismiss the petition.
2. Section 208 provides for the termination of control by the Court in special circumstances.
3. I have noted earlier that by r 75-27 of the Bankruptcy Rules, the controlling trustee must call a meeting of creditors not more than 30 days after consent or approval of their appointment. The scheme of Part X calls for some urgency on the part of the controlling trustee. The stay of any creditor's petition provided under s 189AAA will only be effective on the terms set out sub-section (1), meaning that it remains in force until the conclusion of the meeting or until it is adjourned, unless the meeting resolves to approve a PIA. As O'Bryan J observed in One Managed Investment at [23]:
   1. As to the necessity of the order, the fact that an effective authority has been given under s 188 of the Act in respect of a debtor's estate does not prevent the Court from making a sequestration order under s 43. Section 189AAA of the Act provides that, where an effective authority has been given and a creditor's petition has been presented (before or after the authority became effective), proceedings relating to the petition are stayed (by force of the section) until the earlier of the adjournment or conclusion of the creditor's meeting (called in pursuance of the authority). Accordingly, once the creditor's meeting has been adjourned or concluded, the applicant on a creditor's petition may move on the petition and seek the sequestration of the debtor's estate. In the present case, the creditor's meeting was adjourned on 14 May 2021 and the statutory stay of the creditor's petition under s 189AAA expired at that time. The Act also addresses the "orderly conduct" of the sequestration of the debtor's estate in circumstances where an effective authority has been given under s 188. As noted above, s 189(1) provides that when an authority given by a debtor under s 188 becomes effective, the property of the debtor becomes subject to control under Division 2 of Part X. However, s 189(1A)(f) provides that the control continues until the debtor becomes a bankrupt. Accordingly, once a sequestration order is made, the property of the debtor ceases to be controlled under the provisions of Division 2 of Part X and becomes subject to the provisions of Division 4 of Part IV.
4. I now turn to the factual matters that the applicants contend amount to special circumstances.
5. At the centre of the applicants' submission lies the proposition that the present proceedings are ill-suited for the application of the Part X regime having regard to the complexity of the inquiries that the controlling trustee must make to satisfy himself as to Mr Paule's state of affairs and the conduct of Mr Paule in representing his state of affairs.
6. There is force in this submission.
7. First, Mr Paule has asserted in this Court on affidavit that he holds the property and various assets that are "unencumbered". The chronology set out in section 2.2 above indicates that the April 2025 undertaking was presented to the Court against the background of Mr Paule's statement that he was the owner of the property and that it was unencumbered. Submissions were advanced before the Judicial Registrar on his behalf that it was valued at over AUD $20,000,000 million. Justice Needham granted the extension sought on the basis of the April 2025 undertaking underpinned by the representation as to ownership; Paule v Kambouris (No 2) at [8]. In his 8 May 2025 affidavit, Mr Paule repeated his statement of ownership of the property (valued at AUD $28,000,000), luxury motor vehicles worth AUD $1,165,000 million and furniture and household effects worth $750,000. Senior counsel for Mr Paule advanced to the Court, I infer on the basis of Mr Paule's instructions, that he is a man of substance with no current liabilities beyond the judgment debt and that he was not then insolvent. Similar representations were made to the Supreme Court on 30 May 2025.
8. Yet in his statement of affairs, Mr Paule declared that he had no assets and that he had accumulated debts in the amount of AUD $371,519,139.07.
9. Mr Paule purports to provide an explanation for the discrepancy in his asset position in his affidavit of 8 December 2025, filed the day before the hearing. In it, he notes that Ms Paule lodged a caveat over the property on 1 June 2025 and filed proceedings in the VSC, seeking orders that he holds the property on trust on her behalf. His evidence is that he attempted to allow for this (and other) events when completing his statement of affairs.
10. In his oral evidence, Mr Paule gave unsatisfactory evidence as to the discrepancy between his evidence that he owned the property "unencumbered" and his statement of affairs. He said that the reason that he had listed the property his schedule of assets in April 2025 was because he held "legal" title in the property and not the beneficial ownership. However, he said that since 2021, by an agreement with his wife, he held the property on trust for her.
11. This evidence is arguably inconsistent with this affidavit given to the NSWSC on 10 June 2025, when he said that prior to becoming aware that the caveat had been lodged by Ms Paule, he was not aware that she was asserting a claim as a beneficiary of any such trust or the existence of any such trust nor was he aware that she was intending to lodge a caveat. It is certainly inconsistent with the submissions that he instructed his legal representatives to make to the Federal Court and the NSWSC to the effect that the property is a valuable asset that he owned, such that the various adjournments, extensions and stays that he sought should be granted.
12. I consider that Mr Paule's contention in cross-examination that the distinction between legal and beneficial ownership justified his statement in his affidavit evidence as to his "ownership" of the "unencumbered" value of the property to be deeply unsatisfactory. If it is a view that he held at the time he gave those affidavits, then he was not being frank with the courts from whom he was seeking discretionary orders.
13. In cross-examination, Mr Paule was asked about the fact that the statement of assets attributed a nil value to any vehicles whereas earlier in his statement of assets he had listed five vehicles worth AUD $1,165,000. He gave the following evidence:

I discussed this with the controlling trustee because this form is an online form. So my affairs are quite complex, and it was suggested to me that through investigation, through their job, they would sort through the mechanics, if you like, the intricacies of this. So the reason being that...Anna is laying claim to motor vehicles and the Albany Road address as part of her rights of having paid for them and also her family law rights. So I did discuss it with the controlling trustee and he said "I understand, fully aware, and I'll investigate as part of my job".

1. This explanation is difficult to accept. The proceedings commenced by Mrs Paule do not assert a claim to a trust over the motor vehicles. There is no basis on the evidence before me to suggest that Mr Paule does not own the vehicles. Mr Giasoumi did not have a chance to give evidence in response to the suggestion that Mr Paule was relieved of his obligations to complete the statement of assets accurately. However, Mr Paule is a sophisticated businessman who has acted as a financial advisor for many decades. He signed a declaration to the effect that his statement of affairs is accurate. It is apparent that, even accepting Mr Paule's explanation as to why he did not include the motor vehicles in the schedule, that the statement is less than complete.
2. The same observations apply to his representation in the statement of affairs concerning the furniture and other items in the property, which he had valued at AUD $750,000. It is not apparent why, if one would accept that Ms Paule held the beneficial ownership of the property, she would also hold beneficial ownership of those assets. No evidence suggests that she is asserting such a claim.
3. Secondly, in his earlier affidavits Mr Paule said that he had no liabilities beyond the judgment debt in the Supreme Court proceedings, yet in his statement of affairs he says that he incurred debts in October 2025 and November 2025 of more than AUD $371,000,000 to various entities.
4. In his affidavit of 2 December 2025, Mr Wade identifies each of the creditors identified in the schedule to Mr Paule's statement of affairs and reports investigations into them.
5. They indicate that Sooper Pty Ltd, has Vicky Pappas as its sole director and shareholder. Ms Pappas gave affidavits filed in the Supreme Court proceedings where she described herself as Chief Executive Officer of My Co Pty Ltd which is the "family office investment vehicle for Terry Paule and Spiro Paule". In his 8 December 2025 affidavit, Mr Paule gives evidence that a new and significant claim was asserted against him by the Administrators of Botanical Water Technologies Ltd (BWT UK) and that it has lodged a claim against him. He says that in late November 2025, before 27 November 2025, he was informed by Ms Pappas, the director of Sooper Pty Ltd, that the Administrators of BWT UK had assigned the claim to Sooper. No explanation is provided of the circumstances of the assignment. It is apparent that Ms Pappas is an associate, and most likely a close associate, of Mr Paule.
6. Biocheese Pty Ltd is said to be owed AUD $2,055,388.18 by Mr Paule for legal fees. Mr Paule is a director of Biocheese together with his brother, Spiro. Philo Holding Company Ltd UK, also said to be owed legal fees, is a company of which Mr Paule is the sole director. In his December 2025 affidavit, Mr Paule gives evidence that his legal expenses for the Supreme Court Proceedings and the cases that followed on appeal were paid by these companies by way of loan advances and that he needs to repay those advances.
7. It is apparent that Mr Paule has a close personal association with each of Sooper, Biocheese, Philo Holding Company and Ms Pappas. He is married to Ms Paule, although family law proceedings have been commenced.
8. Drawing the threads together, I accept that the factual and legal matters that underpin the affairs of Mr Paule are complex. He is subject to family court proceedings and has interests in numerous companies. In his oral evidence he said that he is the beneficiary of "a couple of dozen" discretionary trusts. He was able to name a few. In his statement of affairs, he lists 14 companies that he has been involved in in the last five years. Complexity alone would not be sufficient to warrant being a special circumstance within s 208. However, two additional matters compel me to the conclusion that the present case is one where that description is warranted.
9. First, Mr Paule is a sophisticated businessman who has demonstrated that he is prepared to and does engage in sophistry in order to suit his own ends in relation to his debt position. I have referred to several examples above. The processes in Part X are intended to provide a simple and flexible process for debtors and creditors to come to an agreement without sequestration. Yet any person addressing Mr Paule's affairs is likely to be obliged to conduct detailed investigations to satisfy themselves as to the true position, perhaps despite whatever it is that Mr Paule tells them is the case.
10. Secondly, by the scheme of Part X, creditors are intended to be given full information as to the debtor's affairs. As much is evident by the requirement that the statement of affairs be filed with the Official Receiver and made available to any creditor who asks for it; see Bankruptcy Act s 188B. I am by no means satisfied that the statement of affairs prepared by Mr Paule provides such full information, or that any additional information provided by Mr Paule may be regarded as self-evidently reliable. Each of his statements will have to be scrutinised with care and independently verified.
11. Thirdly, the effect of Mr Paule's recently described additional debts of AUD $371,519,139.07 being included in Mr Paule's statement of affairs indicates that the interests of the applicants will be swamped in a vote of creditors. The applicants have, in the course of the last month, moved from being the sole creditors to being two of 10 itemised creditors (the applicants assert that they now hold only 7% of Mr Paule's total stated indebtedness). Most of the eight other creditors, and the vast majority of the overall debt so asserted lies in the hands of people or companies closely affiliated with Mr Paule. I do not regard the timing or magnitude of the newly asserted debt to be adequately explained, with USD $93,000,000 million (about AUD $140,150,000) and over AUD $200,000,000 apparently arising in the days before the controlling trustee was appointed.
12. When these factors are considered in light of the time constraints imposed upon the controlling trustee, most notably the requirement that a meeting of creditors be convened by 13 January 2026, I consider that the circumstances of the present case are special or unusual. In this regard they certainly do not have the character of events that one might normally expect in an application of Part X of the Bankruptcy Act. They are quite different to the circumstances in Johns.
13. I do not here intend any criticism of Mr Giasoumi. Nor was it submitted that he should be exposed to criticism. Simply that the process that Mr Paule engaged pursuant to Part X is not able to proceed because of the special circumstances to which I have referred.
14. Having reached this conclusion, I do not consider it necessary to consider the alternative grounds advanced by the applicants. I note the following finding from Olney-Fraser at [12] citing Beaman v Bond [2014] FCWA 21; 328 FLR 256 at [102] (Crisford J) [102]:

Whilst the term special circumstances can and often does include an abuse of process there is nothing to suggest that an abuse of process is pivotal to a finding of special circumstances. Special circumstances are simply those which are 'out of the ordinary course'.

1. Whilst there may be some argument as to whether there was an abuse of process in this instance, it is not pivotal to the finding of special circumstances, which is enough to provide the relief sought by the applicants.

1. I will order that the property of Mr Paule be released from the control of the controlling trustee under Part X of the Bankruptcy Act. Otherwise, I do not consider there to be sufficient urgency for the creditors' petitions to be determined in the duty list and observe that the freezing orders made by Needham J on 6 November 2025 in NSD1005/2025 remain in place. I will direct that the proceedings be listed in the first Registrar's bankruptcy list in 2026, which will be at 11am on 27 January 2026. Mr Paule must pay the applicants' costs of the proceedings.

I certify that the preceding one hundred and one (101) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Burley.