Strata Plan No 31771 v Nagy [2026] FedCFamC2G 107

1. On 18 December 2025 the applicant - being the Owners-Strata Plan No 31771 - lodged an application for review of orders made by a Registrar of this Court on 4 December 2025. For reasons unknown, the application was not accepted for filing until 19 January 2026. On this date I made orders listing the application for hearing via Webex on 30 January 2026 and procedural orders for the filing of evidence and submissions by the applicant and the respondent, Ms Ramona Nagy.
2. On 22 January 2026, the applicant through its legal representative, filed what was described as an amended affidavit of service (bankruptcy notice) of Stephen Ecob and an affidavit of solicitor Megan Boot, who deposed to the reasons for the application for review. On 23 January 2026 the applicant filed an affidavit of Mr Ecob that deposed to steps taken to serve on Ms Nagy the application for review, orders of the Court made on 19 January 2026 and the amended affidavit of service of bankruptcy notice. On 28 January 2026, the applicant filed an outline of submissions.
3. The applicant's legal representative informed the Court that in addition to these documents the applicant sought to rely on the following documents that were filed when the matter was before the Registrar:
   • Creditor's petition filed on 28 October 2025;
   • Affidavit verifying paragraphs 1,2 and 3 of the creditor's petition filed on 28 October 2025;
   • Affidavit verifying paragraph 4 of the creditor's petition filed on 28 October 2025;
   • Consent of Brett Harrison to act as Trustee, filed on 28 October 2025;
   • Affidavit of service of bankruptcy notice filed on 28 October 2025;
   • Affidavit of service of creditor's petition filed on 2 December 2025;
   • Short form bill of costs

1. On 4 December 2025, Registrar Wilson made orders that the petition be dismissed and there be no order as to the costs. The Registrar did so in circumstances where there was an appearance on behalf of the applicant but no appearance from or on behalf of Ms Nagy. A notation to the orders reads that the affidavit of service of the bankruptcy notice filed by the applicant on 28 October 2025 does not attach a copy of the bankruptcy notice, and therefore the court cannot be satisfied that an act of bankruptcy has occurred.
2. There are no reasons which explain why such orders were made and no transcript of the hearing has been made available to the Court. However, I surmise, from the affidavit of Ms Boot that the orders were made as a consequence of the following events
3. On 28 October 2025, the applicant filed a creditors petition in this Court which named Ms Nagy as the respondent and identified a debt outstanding to the applicant of $15,681.19 comprising unpaid strata levies, legal costs and interest. The creditor's petition recorded that the respondent had committed an act of bankruptcy when she had failed to comply by 24 October 2025 with the requirements of a bankruptcy notice that had been served upon her on 3 October 2025. The bankruptcy notice, which is now annexed to the amended affidavit of service of Mr Ecob, was issued by the Official Receiver on 1 October 2025, and identified a debt amount of $10,263.66. The notice stated that the recipient (Ms Nagy) was required to pay the amount of the debt (or make arrangements for its settlement) withing 21 days after service of the notice.
4. At the time that the creditor's petition was filed, the judgment debt remained outstanding in full. However, on 29 October 2025 and on 3 November 2025, Ms Nagy made payments to the applicant in the total amount of $10,000 which the applicant acknowledges brought the amount outstanding below the prescribed statutory minimum threshold of $10,000.[1]
5. When the matter came before the Registrar on 4 December 2025 the applicant sought orders dismissing the creditor's petition and its legal costs. However, because the affidavit of service of the bankruptcy notice filed on 28 October 2025 did not attach a copy of the bankruptcy notice, the Registrar was not satisfied that there was an act of bankruptcy and in an exercise of discretion decided not to make a costs order in favour of the applicant.
6. The applicant challenges the propriety of this decision and submits that other options were available to cure the defects in the affidavit of service.[2]
7. However, in circumstances where the matter comes to me in the Court's review jurisdiction pursuant to r 3.05 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2025 (Cth), the proper approach is to conduct a hearing de novo and to consider, based on the material that is now before the Court, whether the Court's costs power is engaged and whether I should exercise my discretion to award costs in favour of the applicant.
8. The applicant in its written submissions referred to this Court's broad discretion to award costs under s 32 of the Bankruptcy Act 1966 (Cth) and noted, as is the case, that such discretion much be exercised judicially.
9. The applicant acknowledged that the general rule in bankruptcy proceedings before the Court is that costs should follow the event. However, the applicant submitted that there was precedent for this Court making an award of costs to a creditor who had ultimately abandoned an application for a sequestration order where the debtor had paid the amount outstanding prior to the determination of the claim by the Court: see Ziman v McKellar [2018] FCCA 3401.
10. The applicant submitted that where it had been put to the expense of proving that a debt was owed and an act of bankruptcy had in fact occurred, the Court should be satisfied that it was an appropriate exercise of its costs power to make an order that the respondent debtor pay the applicant's costs.
11. The applicant sought costs and disbursements in the amount of $6,150, relying on Schedule 3 to the Federal Court Rules 2011 (Cth) and the items set out in clauses 14.2 and 18.1 to that schedule.
12. In circumstances where I am satisfied, based on the amended affidavit of service of bankruptcy notice, that the respondent, Ms Nagy, did commit an act of bankruptcy, and where it is clear that the applicant was put to the trouble and expense of recovering costs owed to it by having to resort to a bankruptcy application, it is appropriate that I make an order in favour of the applicant for costs. While not decisive, I note that there is evidence before the Court that would suggest the respondent is no stranger to this type of application and has made payments shortly after the service of a bankruptcy notice, to avert the consequences of bankruptcy, on a previous occasion.
13. I am satisfied that Ms Nagy was served with the documents that would have alerted her to the fact that for a second time, the applicant sought to recover its costs. Furthermore, I note that the procedural orders made on 19 January 2026 made allowance for the respondent to file any affidavit she wished to rely on and written submissions. The respondent did not file any material and has not engaged in any way in this proceeding.
14. In these circumstances, the Court will order that the creditor's petition filed on 28 October 2025 be dismissed and the respondent pay the applicant's costs fixed in the amount of $6,150, which amount properly reflects items identified in Schedule 3 and is proportionate to the work undertaken by the applicant to seek recovery of moneys owing to it.

I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Symons.

[1] Bankruptcy Regulations 2021 (Cth) reg 10A; Bankruptcy Act 1966 (Cth) s 5(1).

[2] Bankruptcy Act 1966 (Cth) s 306; Federal Circuit and Family Court of Australia (Division 2) (Bankruptcy) Rules 2021 (Cth) r. 4.04.