Reynolds v Higgins, in the matter of Higgins [2025] FCA 1575

Was the bankruptcy notice served on the debtor?

1. Section 43(1)(a) provides that the Court may, on a petition presented by a creditor, make a sequestration order against the estate of the debtor where, amongst other things, the debtor has committed an act of bankruptcy. Section 40(1)(g) provides, relevantly, that a debtor commits an act of bankruptcy if a creditor who has obtained against the debtor a final judgment that has not been stayed, has served on the debtor in Australia a bankruptcy notice and the debtor has not, within the time fixed for compliance, complied with the notice.
2. Regulation 102(1) provides that, unless the contrary intention appears, if a document is required or permitted by the Act to be served on a person the document may be: given in a manner specified in s 28A of the Acts Interpretation Act 1901 (Cth): reg 102(1)(c); or sent, in accordance with certain information technology requirements, 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: reg 102(1)(d)(ii). Section 28A(1)(a)(ii) of the Interpretation Act provides, relevantly, that for the purposes of any Act that requires or permits a document to be served on a person the document may be served on a natural person by leaving it at the address of the place of residence or business of the person last known to the person serving the document.
3. The petitioner submits that service on a solicitor authorised to accept service at the solicitor's place of business constitutes service of the bankruptcy notice on the debtor in accordance with reg 102(1)(c) and s 28A(1)(a)(ii) of the Interpretation Act as 'the address of the place of residence or business of [the debtor] last known to the [petitioner]'. Alternatively, the petitioner submits that it should be inferred from delivering the bankruptcy notice to the solicitor and certain other facts that the debtor's solicitor sent the bankruptcy notice to the debtor, likely by email, and consequently the document was served on the debtor in accordance with reg 102(1)(d).
4. The affidavit evidence demonstrates that on 27 August 2025 an order was made in the Supreme Court of Western Australia to the effect that judgment be entered in favour of the petitioner against the debtor for damages in the sum of $315,000.00 together with interest in the sum of $21,109.25. On 11 September 2025 the Official Receiver issued a bankruptcy notice under s 41(2) and reg 9 for a debt in the sum of $341,950.34 which is the amount of the judgment debt plus interest calculated in accordance with s 8(1)(a) of the Civil Judgments Enforcements Act 2004 (WA) up to the date the bankruptcy notice was issued. The bankruptcy notice identified the debtor's address as 'care of' an address in the central business district of Melbourne. By an email dated 15 September 2025 Ms Galati, a solicitor who had acted for the debtor in the proceedings resulting in the judgment debt, said that she was instructed to accept service of the bankruptcy notice.
5. On 17 September 2025 a process server handed the bankruptcy notice and a copy of the sealed order of the Supreme Court to Ms Galati at an address in a suburb of Perth. The petitioner's solicitors had sent an email to Ms Galati the previous day enquiring as to whether Ms Galati would be available to accept service at that address. In an affidavit of Mr Filing affirmed 10 October 2025 he deposes that the relevant address at which the bankruptcy notice was served was Ms Galati's address. I infer that the relevant address at which Ms Galati was served is the address from which she conducts her legal practice.
6. In the absence of any evidence to the contrary, I find that the debtor authorised Ms Galati to accept service of the bankruptcy notice at Ms Galati's place of business. I also find that the bankruptcy notice and a copy of the sealed order of the Supreme Court were handed to Ms Galati at Ms Galati's place of business on 17 September 2025. That is, the bankruptcy notice was left at Ms Galati's place of business.
7. Until 16 December 1996, when the Bankruptcy Regulations 1996 (Cth) came into force, the Act (s 41(4)) and Bankruptcy Rules 1968 (Cth) (r 15) provided that service of a bankruptcy notice was to be effected on the debtor by delivering it to the debtor personally. Within that legislative framework service on a solicitor with instructions to accept service was not service as prescribed and was not effective: Re Hanlin; Ex parte South Properties Development Pty Ltd (1995) 9 FCR 357 (Pincus J). Amendments in 1996 repealed s 41(4) and the 1968 Bankruptcy Rules and brought into force the 1996 Regulations. Regulation 16.01 of the 1996 Regulations was in similar terms to reg 102 of the 2021 Regulations. A bankruptcy notice was able to be served in accordance with any of the methods described in reg 16.01 of the 1996 Regulations: Skalkos v T & S Recoveries Pty Ltd [2004] FCAFC 321; 141 FCR 107 at [31] (Sundberg, Finkelstein and Hely JJ). Personal service was not required under the methods of service described in reg 16.01 and, consequently, from December 1996, personal service of a bankruptcy notice was no longer a requirement of service in accordance with s 40(1)(g). There is no material distinction between reg 16.01 of the 1996 Regulations and reg 102 of the 2021 Regulations. Therefore, service of a bankruptcy notice may be effected by any of the methods described in reg 102 for the purposes of s 40(1)(g).
8. Regulation 16.01(1)(c) of the 1996 Regulations provided that where a document was required or permitted by the Act to be served on a person the document was able to be served by leaving it 'in an envelope or similar packaging marked with the person's name, at the last known address of the person'. For the purposes of that regulation, a residential or business address of a person could be a person's 'last known address'. Taking into account that the purpose of reg 16.01(1)(c) was that the document should be brought to the attention of the person served, even if an address was not a person's residence or a business address a person personally occupied, the person may nonetheless have 'such a degree of connection with the premises that they may properly be described as [the person's] last-known address': Skalkos at [32]-[35], [37]. Further, 'the reference to "last-known address of the person" [was] to that address which [had] been made known by the [debtor] as at the time closest to the date in question': Drake v Stanton [1999] FCA 1635 at [5], [8] (Tamberlin J). There was also authority for the proposition that, where a solicitor had instructions to accept service of a bankruptcy notice, leaving a bankruptcy notice with an employee of a solicitor at the address of the solicitor constituted service at the last known address of the debtor for the purposes of reg 16.01(1)(c) of the 1996 Regulations: Troy and Company (A Firm) v Cameron [2002] FMCA 42 at [48] (citing, amongst other authorities, Drake v Stanton); Macquarie Leasing Pty Ltd v Phrakhoungheaung [2009] FMCA 167 at [13]- [19].
9. Orthodox principles of statutory interpretation apply to s 40(1)(g), reg 102(1)(c) and s 28A of the Interpretation Act. The starting point for the ascertainment of the meaning of a statutory provision is the text of the statute while, at the same time, having regard to its context and purpose. Context in its widest sense is to be considered at the first stage of interpretation as a guide to understanding the natural and ordinary meaning of the text in context. Where that leads to constructional choice, the meaning that best achieves the purpose of the Act is to be preferred: e.g., SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; 262 CLR 362 at [14] (Kiefel CJ, Nettle and Gordon JJ), [37]-[39] (Gageler J); s 15AA of the Interpretation Act. The Interpretation Act applies to the Regulations as if each provision was a section of an Act and is to be read and construed subject to the Act: ss 8(1), 8(5), 10(1)(a), 13 of the Legislation Act 2003 (Cth).
10. The text to which meaning is to be ascribed having regard to context and purpose is the expression 'given in a manner specified in section 28A of the Acts Interpretation Act 1901' where used in reg 102(1)(c). The text of reg 102(1)(c), incorporating the manner specified in s 28(1)(a)(ii) of the Interpretation Act, provides, relevantly, that if a document is required or permitted by the Act to be served on a person, the document may be 'given [by leaving it at the address of the place of residence or business of the person last known to the person serving the document]'. Context and purpose may be used to identify the meaning of the expression 'address of the place of residence or business' at what might be characterised as the level of generality the legislature intended by that expression.
11. Section 40(1)(g) operates where a creditor 'has served on a debtor' a notice of bankruptcy. Thus, that provision requires or permits service of a document on a person and, therefore, even in the absence of reg 102(1)(c), s 28A of the Interpretation Act would apply to service of a bankruptcy notice under s 40(1)(g). The 2021 Regulations are made under s 315, which provides for making regulations, including regulations that provide for the means of service of documents, under the Act. The evident purpose of 'service' under s 40(1)(g) is to bring the bankruptcy notice to the attention of the debtor. The purpose of reg 102 is to facilitate 'service' as the means by which a document, including a bankruptcy notice, is brought to the attention of the debtor. Section 28A has the same purpose with respect to service of a document for the purposes of any Act.
12. The provisions of reg 102, as a whole, also provide additional relevant context. Regulation 102(1)(a) provides for service by sending a document by courier service to the person 'at the address of the person last known to the person serving the document'. Regulation 102(1)(b) provides for service by leaving a document at a document exchange where the person maintains a facility. Regulation 102(1)(d) provides for service by electronic communication to a facility maintained by the person for receipt of electronically transmitted documents or by a kind of electronic communication where, in the ordinary course of events, the document could be reasonably expected to be received by the person. A common feature of all non-personal methods of service described in reg 102(1) is that the document be sent to or left at a place or facility or sent or transmitted by a means such that, in the ordinary course of events, the document could be reasonably expected to be received by the person to whom it is sent or transmitted. That common feature informs the intended level of generality of the meaning of 'place of residence or business'.
13. Taking into account the context and purpose of s 40(1)(g) and reg 102(1)(c), where a debtor has made known to a creditor an address at which service of a bankruptcy notice may be effected, it could be reasonably expected that a document left at that address would, in the ordinary course of events, be received by the debtor. Such an address could meet the description of 'the address of the place of residence or business of the person last known to the [creditor]'. It would not necessarily matter that the debtor was not living, residing, occupying or personally carrying on business at that address. Consistently with the authorities to which reference has been made, in context, the meaning of the expression 'the address of the place of residence or business of the [debtor] last known to the [creditor]' extends to a last known address that is sufficiently well connected to the affairs of the debtor such that, in the ordinary course of events, it could be reasonably expected that a document left at, or sent by pre-paid post, to that address will be received by the debtor. However, in any given case, whether there is a sufficient degree of connection between the debtor's affairs and the address must be established through evidence.
14. On the basis of the following facts, taken collectively, I am satisfied that the address of Ms Galati was the address of the debtor last known to the petitioner and was an address sufficiently well connected to the affairs of the debtor to meet the description, at least, of the address of the place of business of the debtor.

(1) I infer from the following facts that the petitioner was not aware of an address of the debtor's actual place of residence, work or business. I also infer that the debtor was unwilling to disclose an address of that nature to the petitioner or otherwise make herself available for service to be effected on her personally at any location. However, the debtor was willing to co-operate so as to have the bankruptcy notice served on her at an address of an agent by which she would receive the notice in the ordinary course of events.

(a) On 9 September 2025, after non-payment of the judgment debt, the petitioner's solicitors sent an email to Ms Galati enquiring whether she had instructions to accept service of a bankruptcy notice. Ms Galati responded indicating that she did not have those instructions.

(b) On 10 September 2025 the petitioner's solicitors asked Ms Galati to confirm whether: she could obtain instructions to accept service of a bankruptcy notice; she could obtain instructions to provide the debtor's residential address to the petitioner's solicitors; or the debtor would make herself available at a date and time to be agreed (for example at the offices of Arnold Bloch Leibler or her workplace) to accept service. Ms Galati responded that she would have instructions the following week as to whether service was to be effected on Arnold Bloch Leibler or Ms Galati.

(c) On 15 September 2025 the petitioner's solicitors requested a response regarding a method of serving the bankruptcy notice on the debtor failing which an application for substituted service would be made.

(d) On 15 September 2025 Ms Galati sent an email to the petitioner's solicitors indicating that she had instructions to accept service.

(2) Ms Galati acted for the debtor in the proceedings that resulted in the judgment debt the subject of the bankruptcy notice.

(3) The debtor authorised Ms Galati to accept service of the bankruptcy notice on the debtor's behalf.

(4) A process server delivered the bankruptcy notice to Ms Galati personally at the address of Ms Galati's legal practice.

(5) The debtor has actual knowledge of the bankruptcy notice and the creditor's petition. While the evidence of the debtor's actual knowledge does not of itself demonstrate that there has been service of the bankruptcy notice and creditor's petition in accordance with the Act, Regulations and Rules, the debtor has, through Ms Galati, indicated to the petitioner's solicitors that she considers the application for sequestration orders to be 'a matter for the Court'. That is, the debtor has evidently made a deliberate decision not to actively participate in the proceeding and, consequently, there is no evidence from the debtor regarding any address of her place of residence or business other than the address of Ms Galati's legal practice. Moreover, not only was the bankruptcy notice left at an address at which it could be reasonably expected would result in the bankruptcy notice coming to the debtor's attention, it was, in fact, such an address.

1. It follows that the petitioner served the bankruptcy notice on the debtor in the manner described in reg 102(1)(c) by leaving the notice with Ms Galati at the address of Ms Galati's legal practice. That conclusion renders it unnecessary to consider the petitioner's alternative argument, but for completeness, I will briefly explain the reasons why I do not accept there has been service in accordance with reg 102(1)(d).
2. In an email from Ms Galati to the petitioner's solicitors dated 18 November 2025 she said that the bankruptcy notice was sent to Arnold Bloch Liebler on 17 September 2025 for on-forwarding to the debtor. Ms Galati also said that she had independently confirmed with the debtor that the debtor had received a copy of the bankruptcy notice. Although these statements of Ms Galati are previous representations that are generally not admissible under s 59 of the Evidence Act 1995 (Cth), as the debtor has not appeared there was no objection to the admissibility of these statements, the previous representations are in evidence and may be given such probative weight as the Court considers appropriate: see, e.g., Jones v Sutherland Shire Council [1979] 2 NSWLR 206 at 214, 219-220 (Samuels JA); McLennan v Taylor [1966] 2 NSWR 685; (1966) 85 WN (Pt 1) (NSW) 525 at 528-529, 537-538, 540. In any event, subject to complying with the notice and objection requirements in s 67 and s 68 the previous representations would be admissible under the exception to the hearsay rule in s 64(2)(b) of the Evidence Act in that, having regard to the uncontroversial nature of the statements, to call Ms Galati would cause undue expense or delay or would not be reasonably practicable.
3. From the facts stated in Ms Galati's email of 18 November 2025 I find that Ms Galati sent the bankruptcy notice to Arnold Bloch Liebler. The email does not explain the manner in which Ms Galati 'confirmed' with the debtor that the debtor had received a copy of the notice of bankruptcy. It may or may not be a fact of which Ms Galati has direct knowledge. To the extent that it reflects something which the debtor said to Ms Galati the email is hearsay upon hearsay. In short, Ms Galati's email is insufficient evidence from which to infer or draw any firm conclusions about the extent to which the debtor has received a copy of the notice of bankruptcy or, if she has received it, the manner in which it was sent to her.
4. Regulation 102(1)(d) provides that a document may be sent 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. Further, s 40(1)(g) requires the petitioner to have served the bankruptcy notice on the debtor. The evidence does not establish that the bankruptcy notice was sent, by any person, to the debtor by any kind of electronic communication. Additionally, while there is no reason that service could not be effected by an agent, neither Ms Galati nor Arnold Bloch Leibler could be described as the petitioner's agent for the purposes of service of the bankruptcy notice. Therefore, the petitioner has not proved that she (through her agent) sent the bankruptcy notice by any kind of electronic communication to the debtor.

Was there effective service of the creditor's petition?

1. The Bankruptcy Rules apply to a proceeding in the Court to which the Act applies. However, the Federal Court Rules 2011 (Cth) also apply to the extent that they are relevant and not inconsistent with the Bankruptcy Rules: r 1.04(2) of the Bankruptcy Rules.
2. Rule 4.05 of the Bankruptcy Rules provides that unless the Court has otherwise ordered, at least five days before the date fixed for the hearing of a creditor's petition, the applicant creditor must serve on the respondent debtor the creditor's petition, the affidavit(s) verifying the petition, affidavit(s) required by r 4.04 addressing any applications in relation to the bankruptcy notice filed in the Federal Circuit and Family Court of Australia (Division 2) and a copy of any consent to act as trustee of the debtor's estate.
3. Rule 4.05 provides for the applicant creditor to 'serve on the respondent debtor'. That language is to be contrasted with r 8.06 of the Rules which provides that the applicant is to 'serve [the originating application] personally on each respondent named in the originating application'. It is unclear whether the difference in the language of these rules is deliberate. But, it would be unusual if an originating process of the Court, such as a creditor's petition, were not required to be served personally on the respondent debtor. Consistently with that general position, Meagher J expressed the view that personal service is required under r 4.05: Corporation of the City of Adelaide v Cosenza [2024] FCA 852 at [26].
4. In this case, it is unnecessary to resolve the apparent inconsistency between the Bankruptcy Rules and the Rules because r 10.28(1) provides that if a respondent in a proceeding has agreed that an originating application may be served on the respondent or another person for the respondent, in a way or at a place mentioned in the agreement, the application may be served in accordance with the agreement. Additionally, r 10.22 of the Rules provides that a lawyer may accept service of an originating application for a respondent if the lawyer has authority to accept service and the lawyer endorses a note on a copy of the document that the lawyer accepts service of the document for the respondent. These rules that provide exceptions to personal service (or other modes of service) and are not inconsistent with r 4.05 of the Bankruptcy Rules.
5. The affidavit evidence demonstrates that the debtor, through Ms Galati, agreed that service of the creditor's petition could be effected by personal service of the creditor's petition and accompanying documents on Ms Galati at the address of her legal practice. Service was effected in accordance with that agreement. Further, Ms Galati had authority to accept and accepted service of the creditor's petition and accompanying documents in accordance with that authority.
6. Rule 2.04 of the Bankruptcy Rules provides that a person who intends appearing at the hearing of an application or petition must file a notice of appearance. Rule 2.06 provides that a person who intends to oppose a petition must also file an appearance. The debtor has not filed an appearance in accordance with either of those rules. Ms Galati in an email to the petitioner's solicitors indicated that she did not have instructions to attend the hearing of the petition on 11 November 2025, but she was 'instructed to inform [the petitioner's solicitor] that [the debtor's] attitude to the proposed orders is that the application is a matter for the Court. [The debtor] will abide by the Court's decision.' There is also evidence that Ms Galati was informed of the hearing on 8 December 2025, but there was no appearance by Ms Galati or the debtor at that hearing. Clearly, the creditor's petition and accompanying documents have come to the attention of the debtor and she has made a deliberate decision not to participate in the proceeding.
7. The creditor's petition, affidavit verifying the petition, affidavit relating to the petition required by r 4.04 of the Bankruptcy Rules and copy of the consent to act as trustee of the debtor's estate were served on the debtor in accordance with an agreement and r 10.28(1) of the Rules. Although there is no evidence that Ms Galati endorsed a note on the documents as r 10.22 requires, in the absence of evidence to the contrary, the affidavit evidence demonstrates that Ms Galati had authority to accept service on behalf of the debtor and the lack of endorsement is a mere irregularity. To the extent there is no evidence of the endorsements, I would dispense with that requirement under r 1.34 of the Rules in the circumstances of this case. Accordingly, there has been effective service of the creditor's petition and accompanying documents in accordance with the Bankruptcy Rules and Rules.
8. For completeness, even if I am wrong and there has not been service in accordance with r 10.28 or r 10.22 (dispensing with the requirement for endorsement) of the Rules, non-personal service on the debtor in the circumstances of this case should be treated as a mere irregularity that can be cured by s 306 or by r 1.32 and r 1.34 of the Rules: see, e.g., Re Florance; Ex parte Turimetta Properties Pty Ltd [1979] FCA 58; (1979) 36 FLR 256 at 264 (Lockhart J). It is in the interests of justice that any non-compliance with r 4.05 be dispensed with in the circumstances of this case given that the creditor's petition and accompanying documents have plainly come to the attention of the debtor.

1. There are two further matters relating to the orders on the application that require explanation.

1. The affidavit verifying the creditor's petition was affirmed by Mr Filing, a solicitor of the petitioner. He deposes that the statements made in paragraphs 1, 2 and 3 are within his own knowledge and are true. He also deposes that the debtor failed within 21 days of service of the bankruptcy notice, to pay the debt or make arrangements to the petitioner's satisfaction for payment of the debt. That affidavit was in accordance with r 4.02 of the Bankruptcy Rules and was served on the debtor in the manner described earlier in these reasons.
2. The petitioner later filed an affidavit sworn by her on 10 November 2025 in accordance with r 4.06(4) of the Bankruptcy Rules in which she deposes that the judgment debt and interest referred to in the bankruptcy notice remains owing. Mr Filing also affirmed an affidavit on 5 December 2025 (a day before the hearing of the petition) in which he deposes that the petitioner informed him and he believes that the judgment debt and interest remain owing.
3. Section 47(1) provides that a creditor's petition must be verified by an affidavit of a person who knows the relevant facts. A solicitor may make that affidavit if the person has knowledge of the relevant facts even if that knowledge is acquired in the course of acting for the creditor, including knowledge acquired from the creditor, provided that knowledge amounts to more than mere instructions and may be on information and belief: ACW v Du Bray (No 2) [2020] FCA 994 at [110]- [120] (Wigney J); Council of the Law Society (ACT) v Ezekiel-Hart [2024] FCA 1341 at [37] (Perry J). The affidavit of Mr Filing verifying the creditor's petition and his affidavit verifying that the judgment debt and interest remain owing fall within the description of a person with knowledge of the relevant facts. In any event, to the extent the statements in Mr Filing's affidavits comprise previous representations, as there was no appearance by the debtor, his evidence was admitted without objection and the Court may give it such weight as is considered appropriate.
4. Mr Filing's affidavit of 5 December 2025 also deposes to searches of the National Personal Insolvency Index in accordance with r 4.06(3) of the Bankruptcy Rules. Rule 4.06(2) provides that the petitioner must file an affidavit that states that the documents required to be served under r 4.05 have been served, when and how they were served and has attached to it a copy of the documents that were served and proof of service in relation to the documents. An affidavit of Mr Filing affirmed 6 November 2025 and an affidavit of Mr Coates sworn the same day comply with r 4.06(2). These affidavits prove that there was service on the debtor and Ms Galati in the manner described earlier in these reasons.
5. There is no evidence that the petitioner's affidavit of 10 November 2025, Mr Filing's affidavit of 5 December 2025, or any other affidavit the petitioner filed after 10 October 2025 was served on the debtor or Ms Galati. However, in the absence of the debtor filing an appearance, there is no express requirement to serve affidavits filed under r 4.06 or any other affidavit (other than those referred to in r 4.05) on the debtor under the Bankruptcy Rules. Non-service of those affidavits on the debtor is not an impediment to making the orders requested on the creditor's petition.

1. The petitioner has sought an order that the debtor pay the petitioner's costs fixed in the sum of $6,330.00 and has filed a statement of costs and disbursements in accordance with paragraph 6 of the Court's Guide for Practitioners and Parties in Bankruptcy Matters Listed before a Judicial Registrar. The claimed costs accord with item 14.1 of Schedule 3 of the Rules and the Court filing fee for the creditor's petition. The other fee for the Australian Financial Services Australia Bankruptcy Notice and National Personal Insolvency Index search total $500.00 and appear reasonable. In general, in accordance with the principles explained in paragraph 4 of the Costs Practice Note (GPN-Costs), a lump sum costs order is appropriate.
2. Here, it is appropriate to fix the petitioner's costs in a lump sum and, in accordance with usual practice, the petitioner's costs should be paid out of the estate of the bankrupt. As the debtor has not appeared, there will be an order permitting the trustee in bankruptcy to apply to vary or set aside the costs order.

1. As the petitioner has proven the matters required by s 52(1), she is prima facie entitled to a sequestration order. There is no reason that such an order should not be made. For the reasons already given, there should be an order fixing costs and making them payable out of the estate of the debtor.

I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Feutrill.