Ogbonna v CTI Logistics Ltd [2025] FCA 1125 | Case summary

LIMITATION OF ACTIONS - limitation period for remedies for enforcement of judgment debts - application of s 13(1) of the Limitation Act 2005 (WA) to judgment debt - application of State remedies for enforcement of judgment debt under s 213 the Federal Circuit and Family Court of Australia Act 2021 (Cth) and r 25.11 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) - application and interpretation of s 12 and s 13(1) of Civil Judgments Enforcement Act 2004 (WA)

Ogbonna v CTI Logistics Ltd [2025] FCA 1125 | Case summary | Zoe

[57]

The respondents obtained a sequestration order against the appellant under s 43 of the Bankruptcy Act 1966 (Cth) in the Federal Circuit and Family Court of Australia (Division 2). As a vexatious proceedings order has been made against the appellant, he had to apply for leave to commence an appeal from that order. I granted the appellant leave to file a notice of appeal restricted to one ground of appeal. The appellant was evidently dissatisfied with that limited leave and continued to agitate for the inclusion of an additional ground of appeal and vast amounts of irrelevant material in the appeal book. After expending significant effort to expand the issues and materials in the appeal, the appellant then failed to comply with various pre-hearing orders. Then, the appellant was absent when the appeal was called on for hearing. The respondents did not seek an order dismissing the appeal, but requested that the appeal be heard in the appellant's absence. I acceded to that request on certain conditions. Opportunity was afforded to the appellant to make written and, if requested, oral submissions after the hearing and the hearing was adjourned to a date to be fixed. Notwithstanding those conditions, the appellant made no submissions to the Court and, in effect, disengaged with his appeal. Yet, in spite of the appellant's absence, attempts at unnecessary expansion of the issues, and, ultimate disinterest, the appeal must succeed.
The principal issue raised in the appeal is whether the judgment debt upon which the bankruptcy notice and act of bankruptcy was founded was 'owing', 'due' and 'payable immediately or at a certain time' for the purposes of s 44(1) of the Bankruptcy Act at the time of presentation of the respondents' petition and the hearing of that petition. The issue arises because at those times an action on the judgment debt was statute-barred under s 13(1) of the Limitation Act 2005 (WA) and, under the applicable procedure for enforcement of the judgment debt under s 13(1)(a) of the Civil Judgments Enforcement Act 2004 (WA), as applied by the relevant provisions of the Federal Circuit and Family Court of Australia Act 2021 (Cth) and Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth), leave was required before an application for an enforcement order could be made to the Federal Circuit and Family Court of Australia (Division 2). The respondents had not sought or been granted leave to apply for an enforcement order. Thus, at the time of presentation of the creditors' petition the respondents had no then present right to apply for an enforcement order to extract payment for the judgment debt. For the reasons that follow, although the judgment debt was a 'provable debt', it was payable contingently. It was not a debt that was 'payable immediately or at a certain future time' and, therefore, the respondents were not entitled to present their creditors' petition and obtain a sequestration order under s 43 of the Bankruptcy Act.

[58]

The background to the appeal and interlocutory applications that were heard with the appeal require a degree of explanation.
On 28 August 2015 a judge of the then Federal Circuit Court made a final order dismissing the appellant's unlawful discrimination claim in those proceedings against the respondents and ordering him to pay costs of $22,762.00: Ogbonna v CTI Logistics Ltd (No 2) [2015] FCCA 2318. On 11 March 2016 an application to extend the time within which the appellant had to appeal from that order was dismissed: Ogbonna v CTI Logistics Ltd [2016] FCA 239. On 20 July 2016 an application for special leave to appeal to the High Court was dismissed.
On 20 July 2016 the appellant commenced defamation proceedings against, amongst others, CTI Logistics in the District Court of Western Australia. On 20 January 2018 those defamation proceedings were dismissed for want of prosecution. On 28 February 2018 the appellant commenced a second suit for defamation against the same parties in the District Court.
On 10 May 2019 CTI Logistics requested payment of the judgment debt. It was not paid and on 6 June 2019 a bankruptcy notice was issued. At that time, the judgment debt, including interest, was in the sum of $29,050.63. The appellant applied to this Court to set aside the bankruptcy notice. Thereafter, by successive orders of this Court the time within which the appellant had to comply with that bankruptcy notice was extended. Those extensions were made pending the final resolution of the second defamation proceedings which were alleged, by the appellant, to comprise a counterclaim that exceeded the amount of the judgment debt. The appellant also commenced proceedings in this Court in which he sought orders setting aside the bankruptcy notice.
On 13 August 2019 the second defamation proceedings were summarily dismissed by a registrar of the District Court. On 16 August 2019 the appellant instituted an appeal from the registrar's orders to a judge of the District Court. On 20 November 2019 that appeal was dismissed. On 5 December 2019 the appellant instituted an appeal to the Supreme Court of Western Australia. On 12 February 2021 that appeal was dismissed. On 12 March 2021 the appellant applied for special leave to appeal to the High Court. On 24 June 2021 that application was refused. On 29 November 2021 this Court dismissed the appellant's application to set aside the bankruptcy notice: Ogbonna v CTI Logistics Limited [2021] FCA 1491.
In the meantime, after special leave to appeal was refused, on 8 October 2021, the appellant filed an originating process and statement of claim in this Court against CTI Logistics and others in which he alleged there were conspiracies and perversions of the course of justice in respect of the determination of the defamation proceedings. On 7 February 2022 those proceedings were summarily dismissed: Ogbonna v CTI Logistics Limited (No 2) [2022] FCA 75.
On 23 May 2022 the vexatious proceedings order was made against the appellant: Ogbonna v CTI Logistics Limited (No 6) [2022] FCA 615. After CTI Logistics (No 2) and before CTI Logistics (No 6), the appellant made a number of applications, all of which were dismissed: Ogbonna v CTI Logistics Limited (No 3) [2022] FCA 267, Ogbonna v CTI Logistics Limited (No 4) [2022] FCA 358 and Ogbonna v CTI Logistics Ltd (No 5) [2022] FCA 612.
On 20 September 2022 the primary judge made a sequestration order on presentation of a creditors' petition of CTI Logistics Limited, Mark Vanderlist and Tim Barton (the respondents in the appeal). Their petition was grounded on the unpaid judgment debt and an act of bankruptcy for non-compliance with the bankruptcy notice of 6 June 2019.
On 10 October 2022 the appellant filed an originating process in the Court under s 37AR(2) of the Federal Court of Australia Act 1976 (Cth) for leave to commence an appeal from the sequestration order. I heard that application on notice to the respondents on 12 September 2023. On 2 November 2023 I granted the appellant leave to file a notice of appeal containing one specific ground of appeal and otherwise dismissed the application: Ogbonna, in the matter of Ogbonna [2023] FCA 1334.
At the time of granting the appellant leave to file a notice of appeal, he had already made applications in the proceeding without leave. As observed in Ogbonna (No 1) the appellant had been involved in 46 proceedings in this Court, the Circuit Court and Western Australian courts of which 21 involved CTI Logistics and one or more of its officers, employees or legal representatives. Also, the appellant was subject to a vexatious proceeding order. In these circumstances, on 2 November 2023, I also made an order that no further interlocutory applications or affidavits were to be filed in the appeal proceeding without leave of the Court.
On 15 November 2023 the appellant filed a notice of appeal. On 7 December 2023 orders were made granting the appellant leave to amend the ground of appeal and for the preparation of appeal books. The appeal was later listed for hearing on 28 March 2024.
On 22 March 2024 the appellant lodged an interlocutory application (without leave) for leave to amend the notice of appeal, minute of amended notice of appeal and an affidavit in support. The appellant also lodged an interlocutory application (without leave) for punishment for alleged contempt and other documents. By this time, no appeal books or submissions had been filed in the appeal.
When the appeal was called on for hearing on 28 March 2024, none of the parties were in a position to proceed with the hearing of the appeal. Orders were made to vacate the hearing and relist it on a date to be fixed and case management orders were made for preparation of an appeal book that involved the Registrar settling the index and the respondents preparing the appeal book. I also made orders granting the appellant leave to file the interlocutory application to amend the notice of appeal, and refusing the appellant leave to file an interlocutory application for punishment for alleged contempt of court.
On 19 June 2024 the Registrar made orders settling the appeal book index and for the appellant to prepare a supplementary appeal book containing certain documents. That order excited a number of applications on the part of the appellant for leave to file interlocutory applications. These were all refused except one: Ogbonna v CTI Logistics Ltd (No 3) [2024] FCA 872; Ogbonna v CTI Logistics Ltd (No 4) [2024] FCA 1035; Ogbonna v CTI Logistics Ltd (No 5) [2024] FCA 1101; and Ogbonna v CTI Logistics Ltd (No 6) [2024] FCA 1134. In Ogbonna (No 5) orders were made granting the appellant leave to apply for review of the Registrar's orders of 19 June 2024 and requiring the appellant to file and serve certain documents to facilitate that review.
The appeal was relisted on 26 September 2024. As mentioned, when the appeal was called on for hearing the appellant was absent. Also called on for hearing were the applications for leave to amend the notice of appeal and for review of the Registrar's orders. I indicated to the respondents that I was minded, if an application were made, to dismiss the interlocutory applications and the appeal under r 36.75(1)(a)(i) of the Federal Court Rules 2011 (Cth). Nonetheless, the respondents requested that the appeal proceed in the appellant's absence under r 36.75(a)(iii). I acceded to that request and made orders at the conclusion of the hearing to facilitate the appellant's further participation in the appeal and re-listing of the appeal for further oral argument if requested or necessary. The orders made were as follows:

[81]

Although the appellant filed no written submission in support of the appeal, the issue raised in ground 1 was the subject of written and oral submissions on his application for leave to commence the appeal. These submissions were addressed in Ogbonna (No 1).
The applicant contends, in substance, that because an action on the judgment debt cannot be commenced more than six years after the cause of action accrued under s 13(1) of the Limitation Act (WA), at the time of presentation of the petition, there was no debt 'owing' or 'payable immediately or at a certain future time' for the purposes of s 44(1) of the Bankruptcy Act. Further, the judgment debt was not otherwise 'payable' because it was not enforceable at the time the petition was presented. It was not enforceable because the relevant rules of the Circuit Court adopted and applied s 13(1) of the Enforcements Act and that provision provided that an enforcement order could not be made six years after the order creating the judgment debt became effective without leave of the court. Here, the respondents had not obtained leave to apply for an enforcement order at the time they presented their creditors' petition.
The respondents submit, in substance, that s 13(1) of the Limitation Act (WA) is not relevant to enforcement of judgments of the Circuit Court. Further, at all material times, the respondents were entitled to enforce the judgment debt by operation of the legislation and rules governing enforcement of judgments and orders of the Circuit Court. The respondents contend that the judgment debt was both 'owing' and 'payable' at the time of presentation of the petition because, although leave was required, the judgment debt remained enforceable subject to the grant of leave. The respondents contend that the requirement to obtain leave after six years is analogous to a stay of enforcement. Relying on Re Pollack; Ex parte Deputy Commissioner of Taxation [1991] FCA 651; 32 FCR 40, the respondents submit that a judgment debt remains 'payable' for the purposes of s 44(1) where enforcement is effectively stayed.

[90]

Section 9 of the Bankruptcy Act provides that the Act does not affect a law of a State relating to matters not dealt with expressly or by necessary implication in the Act. Section 13(1) of the Limitation Act (WA) provides that: 'An action on any cause of action cannot be commenced if 6 years have elapsed since the cause of action accrued.' The term 'action' is defined in s 3(1) of the Limitation Act (WA) to include, relevantly, 'any civil proceeding in a court, whether the claim that is the subject of the proceeding or relief sought is under a written law, at common law, in equity or otherwise'.
As will be explained later, a judgment creditor has a cause of action in debt for a judgment debt. Therefore, a judgment creditor may bring an action in debt for a judgment debt within six years from the date the order creating the judgment debt became effective. After six years, the cause of action in debt is statute-barred by operation of s 13(1) of the Limitation Act (WA).
At the date of the order creating the judgment debt (28 August 2015) enforcement of the judgment debt was regulated by s 78 of the Federal Circuit Court of Australia Act 1999 (Cth) and Pt 29 of the Federal Circuit Court Rules 2001 (Cth). After the Federal Circuit and Family Court of Australia Act 2021 (Cth) came into force (1 September 2021) enforcement of the judgement debt was regulated by s 213 of that Act and Pt 25 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth). The effect of s 8(2) of the Federal Circuit and Family Court Act was that the Federal Circuit Court of Australia continued in existence and became the Federal Circuit and Family Court of Australia (Division2). Section 18 of Sch 5 of the Federal Circuit and Family Court of Australia (Consequential Amendments and Transitional Provisions) Act 2021 (Cth) provides that the amendments do not affect the validity of anything done before the amendments were made. Therefore, the Federal Circuit Court order creating the judgment debt continued after 1 September 2021, in effect, as an order of the Federal Circuit and Family Court of Australia (Div 2). (In these reasons I refer to the court whether named Federal Circuit Court of Australia or Federal Circuit and Family Court of Australia (Div 2) at the applicable time as the 'Circuit Court'.)
Section 213 of the Circuit Court Act 2021 provides:

[99]

(1) An 'action' on a 'cause of action' for the purposes of s 13(1) of the Limitation Act (WA) includes an action in debt for recovery of a judgment debt: at [8] (citing s 17(1) of the Limitation Act (NSW)). See, also, WT Lamb & Sons v Rider [1948] 2 KB 331 at 335-339; Dennehy v Reasonable Endeavours Pty Ltd [2003] FCAFC 158; 130 FCR 494 at [8]- [10] (Finkelstein J, Madgwick and Dowsett JJ agreeing).

(2) In general, where a creditor obtains judgment for a pre-existing debt (or liability), that debt is merged in the judgment. However, for bankruptcy purposes, the pre-existing debt continues to be available as the basis for a bankruptcy petition. The judgment creditor may rely on either the original debt or the judgment debt, subject to any applicable limitation periods: at [9] (citing Re King & Beesley [1894] UKLawRpKQB 169; [1895] 1 QB 189 at 191-192; Re Seckold; Ex parte Sargood Gardiner Ltd (1933) 5 ABC 195 at 197-199).

(3) A debt that is statute-barred is not provable in bankruptcy and cannot ground the presentation of a petition of the creditor for the purposes of s 44(1) of the Bankruptcy Act. Also, a statute-barred debt is unenforceable against a trustee in bankruptcy. The date for determination of whether a debt is statute-barred is the date of presentation of the petition: at [19]-[25] (citing Motor Terms Co Pty Ltd v Liberty Insurance Ltd [1967] HCA 9; 116 CLR 177 at 180; Tanning Research Laboratories Inc v O'Brien [1990] HCA 8; 169 CLR 332).

(4) Section 13(1) of the Limitation Act (WA) does not bar execution upon a judgment, at least, where execution is effectively an extension of the original proceedings in the court in which the judgment was obtained: at [11], [15]-[16] (citing WT Lamb & Sons v Rider at 337-338; Lowsley v Forbes [1998] UKHL 34; [1999] 1 AC 329); see, also, Dennehy at [2], [18].

(5) To the extent that a creditor is able to execute on a judgment at the date of presentation of a petition, that creditor remains a creditor able to prove in the bankruptcy and able to petition for a sequestration order for the purposes of s 43 and s 44 of the Bankruptcy Act: at [33]-[37], [58].

[100]

In O'Mara Constructions there was no examination of the judgment creditor's right to execute. Relevantly, the Court said:
1. We have referred to the "extent" to which a judgment creditor may be able to enforce his or her judgment. In argument, there was no examination of the extent of the appellant's right to execute. The parties appear to have proceeded on the basis that the appellant was at liberty to execute on the judgment without any relevant limitation. We will dispose of the case on that basis...
2. ...
3. ... The rights of any creditor are of value only to the extent that they facilitate recovery of the debt. Execution is a substantial aspect of a judgment creditor's rights. Orderly administration of a bankrupt estate would be severely impeded if such right were not terminated by a sequestration order. A judgment creditor who is able to execute on his or her judgment may accurately be described as a "creditor" in the sense in which that term is used in ss 43 and 44.
4. Section 44 also requires that the creditor's debt be payable, either immediately or at a certain future time. It may be argued that a creditor whose debt is not enforceable other than by way of execution on a judgment is not a creditor whose debt is so payable. However we consider that to be little more than a sematic quibble. In a practical sense, there is no way in which a judgment debt is payable other than by the voluntary act of the debtor or by some form of execution. A creditor who enforces his or her rights pursuant to a judgment by execution is, in effect, extracting payment. Given the clear intention to include such judgment creditors in the class of persons who are subject to the constraints of the Bankruptcy Act, and our conclusion that they are creditors, we have little difficulty in concluding that debts owing to them are also payable in the relevant sense. ...
A cause of action in debt is a claim founded on detention of a liquidated sum of money that is presently 'due and payable' by the debtor to the creditor. A debt can be 'owing' in the sense that the debtor 'owes' the creditor a sum of money, but that debt is not presently 'due' or 'payable' in the sense that the creditor is not entitled to payment of the debt and, therefore, the debtor is not detaining a sum of money that is owed to the creditor. There is no cause of action in debt if the sum of money is not 'due' or 'payable'.
In the context of loans, a debt may be repayable 'on demand' and be presently due and payable or a demand or some other event may be a condition precedent to the debt becoming due and payable: Central City Pty Ltd v Montevento Holdings Pty Ltd [2011] WASCA 5 at [36]- [37] (Murphy JA, Buss JA agreeing). That is, the debt may be 'owing' but not yet 'due' or 'payable'. The debt becomes 'due' or 'payable' when a demand for repayment is made or some other event takes place: see, e.g., Re Elgar Heights Pty Ltd (No 1) [1985] VicRp 67; [1985] VR 657 at 663-666, 668-669 (Ormiston J); Southern Cross Interiors Pty Ltd v Deputy Commissioner of Taxation [2001] NSWSC 621; 53 NSWLR 213 at [26]- [29] (Palmer J); Marriott Industries Pty Ltd v Mercantile Credits Limited; Maesbury Plumbers Pty Ltd (intervener) (1991) 160 LSJS 288 at 293 (King CJ); Main Camp Tea Tree Oil Ltd v Australian Rural Group Ltd [2002] NSWSC 219; 20 ACLC 726 at [17] (Barrett J). These general principles apply to other kinds of debts. So, for example, a judgment debt may be converted from a debt immediately due and payable to a debt due and payable by instalments by an order of a court: Re Agrillo; Ex parte Bankrupt [1977] FCA 16; at 487-489 (Riley J); ; at 173 (Riley J). In the case of instalments, the total debt is 'owing', but each instalment becomes 'due and payable' on the date for payment of the instalment.
The concepts of debts that are 'owing', 'due' and 'payable' are reflected in the structure and terms of s 44(1) of the Bankruptcy Act. Section 44(1)(a) provides that a debt must be 'owing'. Section 44(1)(b)(i) provides that debt must be 'due'. Section 44(1)(b)(ii) provides that the debt must be 'payable'. Section 44(1)(b)(ii) also introduces the concept that the debt may be payable 'immediately or at a certain future time'. A debt that is repayable on a date in the future or repayable by instalments is not payable 'immediately' but is payable 'at a certain future time'. For the purposes of s 44(1) 'debt' includes a liability: s 5.
The concept of a debt 'payable immediately or at a certain future time' may be distinguished from debts that are provable in a bankruptcy. Section 82(1) describes a provable debt in the following terms:

[106]

While the Full Court in O'Mara Constructions said it would be a 'semantic quibble' to consider that a judgment creditor whose debt is not enforceable other than by way of execution was not a debt 'payable', those comments were made in the context in which the judgment debt was otherwise 'presently' or 'immediately' enforceable. Part of the Full Court's reasons for that conclusion was that, upon presentation of a petition, ss 118-119A of the Bankruptcy Act prevent further execution upon a judgment debt and compel disgorgement of moneys derived from any execution in the previous six months. Therefore, a judgment creditor who otherwise has a right to extract payment by execution at the time of presentation of a creditor's petition falls within the class of creditors constrained from pursuing remedies against the bankrupt. A creditor in that class, in substance, has a present right to 'payment' and, therefore, must be included in the class of creditors whose debt is 'payable' for the purposes of s 44(1)(b)(ii): O'Mara Constructions at [30]-[33], [37].
The logic and reasoning of the Court in O'Mara Construction applies whether the right to execution is regarded as a 'present' right or a 'certain future' right. A right to execution may be regarded as a certain future right to payment in the sense that, subject only to engaging the applicable enforcement process, the right will crystallise into a right of execution in the future by which payment can be extracted. However, that logic and reasoning does not apply to a creditor with a mere contingent right to execution. That is, a right that may or may not crystallise into a right to extract payment in the future. Although a provable debt, there would be no present or certain future right to execution. A creditor with a contingent debt has no right to present a petition against a contingent debtor under s 44(1)(b)(ii). It follows that the principal question upon which the outcome of this appeal turns is whether the judgment debt was 'payable presently or at a certain future time' or was payable contingently in circumstances in which the cause of action on the judgment debt was statute-barred and leave to enforce the judgment debt was required but had not been obtained.
As already mentioned, the respondents contend, in substance, that the judgment debt was 'payable' until it was no longer capable of enforcement after 12 years. The respondents submit that the mechanism that requires leave after six years is analogous to a stay of execution and, where execution is stayed, the judgment debt remains payable: Re Pollack at 51 (Pincus J), 56-57 (Gummow J).
In Re Pollack the Commissioner of Taxation obtained judgment against the debtor in the District Court of New South Wales. The debtor applied to the registrar of that court for an order that the judgment debt be paid by instalments. Under the applicable court rules the application for payment by instalments operated as a stay of execution of the judgment debt. The debtor claimed that as a result of the stay the debt was not 'payable immediately or at a certain future time' for the purposes of s 44(1)(b)(ii) of the Bankruptcy Act. No question of expiry of the limitation period on an action on the judgment debt or for enforcement of the judgment debt arose on the facts of that case. Pincus J and Gummow J in separate reasons held that the stay did not, of itself, deprive the judgment debt of its character as an obligation payable immediately and, therefore, did not affect the creditor's right to petition for and obtain a sequestration order based on the judgment debt.
Justice Gummow reasoned (at 56-57):

[107]

In Pt 31A [of the District Court Rules 1973 (NSW)], distinctions are drawn between giving judgment in an action, enforcement of the judgment, stays of enforcement of the judgment, and the character of the judgment debt both as an obligation payable forthwith and as an obligation payable by instalments. Enforcement is concerned with the means of compulsion, whether of the debtor or of third parties such as those to whom orders for a garnishee are directed, whereby the creditor receives satisfaction in whole or part of the outstanding obligation represented by the judgment debt. The debt may be payable by the debtor although the means of enforcement are denied to the creditor. An order for payment by instalments would not, of itself, necessarily operate as a stay of enforcement of the judgment in respect of which the order was made. Rule 2(9) was needed expressly to so provide. When, pursuant to r 2(8), there is an application which operates as "a stay of enforcement" (as in the present case) the judgment debt in question, in my view, still remains payable forthwith as specified in r 1(2).

In Re Padagas; Ex parte Carrier Air Conditioning Pty Ltd [1977] FCA 12; (1977) 30 FLR 170 at 172, Riley J dealt with a case where an instalment order had been made by the Registrar under s 88(4) of the District Court Act, as it then stood. By reason of s 88(8), the order, whilst it remained in force, operated as a stay of enforcement of the judgment: cf the present Pt 31A, r 2(9). Nevertheless, his Honour held that the debt was payable. It was payable only "at a certain future time", but this was sufficient for s 44(1) of the Bankruptcy Act. The existence of the stay would have been fatal to validity of a bankruptcy notice. But it was no obstacle to the presentation of a petition.

In my view, in the present case the existence of a stay of enforcement pursuant to r 2(8) does not, of itself, and without more, deprive the judgment debt of its character as an obligation that is payable immediately, as indicated in r 1(2).

[117]

These observations apply equally to the operation of s 12 and s 13(1) of the Enforcements Act. While it may be the case that the judgment debt has not been extinguished and the effect of s 12 is to bar the 'remedy', if the right to apply for an enforcement order is barred the judgment debtor is in the same position as a creditor whose debt is statute-barred. The position with respect to s 13(1) is more nuanced in that there is a bar to the 'remedy', but there is also a right to apply for leave to have the bar lifted. While that may render the judgment debt contingently payable, it would not meet the description of right to apply for enforcement that is immediate or certain at a future time. The remedy is barred unless leave is granted.
In my view, the respondents did not have a right to execute on the judgment debt at the time of presentation of the creditors' petition. The payment obligation under the judgment debt was not relevantly in subsistence because, at that time, the respondents had a contingent not immediate or certain future means of extracting payment from the appellant and, otherwise, the cause of action on the judgment debt was barred under s 13(1) of the Limitation Act (WA).
In Re Pollack the reference of Pincus J to the ability of the judgment creditor to plead the judgment debt as a common law set off was made in a context in which the limitation period for an action on the judgment debt had not expired. Where a debt is statute-barred it cannot be pleaded as either common law or equitable set-off and, in that sense, it is not 'payable': McDonnell & East Ltd v McGregor [1936] HCA 28; 56 CLR 50 at 55-61 (Dixon J, McTiernan J agreeing); J & S Holdings Pty Ltd v NRMA Insurance Ltd [1982] FCA 78; (1982) 61 FLR 108 at 126-127 (Blackburn, Deane and Ellicott JJ). It is also of significance that the view of Gummow J in Re Pollack was qualified in that he said that a stay of enforcement did not of itself 'without more' deprive the judgment debt of its character as an obligation payable immediately. Here, there is 'more' in that an action on the judgment debt was statute-barred and the judgment debt was not enforceable by execution 'presently or at a certain future time'.

[118]

For the foregoing reasons the respondents were not creditors entitled to present the petition against the appellant under s 44 of the Bankruptcy Act. Therefore, the requirements of s 43 of the Act were not satisfied and the primary judge lacked authority to make a sequestration order.
No submission was made that if the appeal were successful the matter should be remitted to the Circuit Court for rehearing. For instance, no submissions was made to the effect that it was within the power of the Circuit Court to grant leave to enforce the judgment debt nunc pro tunc at the time of hearing the creditors' petition and that, if it had done so, the judgment debt would have been regarded as enforceable at that time of presentation of the creditors' petition and the judgment debt was thereby payable at that time. The respondents' case in the appeal was that the judgment debt was payable at the time of presentation of the creditors' petition and, therefore, the primary judge had not made the error asserted.
Further, no submissions were made regarding what other consequences should flow from allowing the appeal. As the sequestration order was made in September 2022 there has, no doubt, been significant work performed by the appellant's trustee in bankruptcy. The trustee in bankruptcy may have an interest in what orders should be made as a consequence of allowing the appeal including the trustee's remuneration and expenses of administration of the appellant's estate. In this respect, there appears to be a potential choice between setting aside the sequestration order or ordering annulment of the bankruptcy under s 153B of the Bankruptcy Act. The Court has not had the benefit of any submission on these matters and the appropriate form of orders is not self-evident.
It follows that the appeal should be allowed, but I will reserve the question of what orders should be made in consequence of allowing the appeal and hear the parties and the trustee in bankruptcy on the appropriate form of those orders. I will also reserve the question of costs because the appellant has succeeded on a ground not argued below and the application for leave to file the notice of appeal was only successful in part.

Ogbonna v CTI Logistics Ltd

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