All Options Pty Ltd v Mathews (No 2)

In *All Options Pty Ltd v Mathews (No 2)*, Justice Kelly of the Federal Circuit Court of Australia considered an application by Mr Mathews to review a registrar's decision concerning a creditor's petition. Mr Mathews sought to have the court "look behind the judgment" under s 52(1)(c) of the *Bankruptcy Act 1966* (Cth) and argue that no debt was owing to the applicant, All Options Pty Ltd, upon which a sequestration order could be made.

The primary legal issue before the court was whether Mr Mathews had discharged the onus of proving that the debt relied upon by All Options was not still owing, thereby preventing the making of a sequestration order. This required the court to determine if the registrar's decision, which had been sought to be reviewed under s 104(2) of the *Federal Circuit Court of Australia Act 1999* (Cth), should be set aside. The review was to proceed as a hearing *de novo*, meaning the court would consider the creditor's petition afresh.

Justice Kelly reasoned that the review of a registrar's exercise of power under s 104(2) of the *Federal Circuit Court of Australia Act 1999* (Cth) necessitates a hearing *de novo* pursuant to r 20.03 of the *Federal Circuit Court Rules 2001* (Cth). In such a hearing, the onus rests on the petitioning creditor to prove the matters required by s 52(1) of the *Bankruptcy Act 1966* (Cth), namely the debt, service of the petition, and that the debt remains owing. The court found that All Options had obtained a final judgment against Mr Mathews, which had not been stayed, and that Mr Mathews had committed an act of bankruptcy by failing to comply with a bankruptcy notice. His Honour accepted the verifying affidavit as sufficient proof of the matters stated in the petition, including proof of service and that the debt was still owing.

Consequently, All Options Pty Ltd had established a *prima facie* entitlement to the making of a sequestration order against the estate of Mr Mathews.