Djunaedi v Collins

Case [2025] FedCFamC2G 135

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Djunaedi v Collins [2025] FedCFamC2G 135

File number(s): ADG 15 of 2024
Judgment of: JUDGE LUCEV
Date of judgment: 7 February 2025
Catchwords:

PRACTICE AND PROCEDURE – Application in a proceeding to set aside Registrar’s orders for substituted service of a bankruptcy notice on alleged debtor – where substituted service order obtained ex parte – whether solicitors for the Applicants complied with disclosure obligations on an ex parte application

PRACTICE AND PROCEDURE – Application in a proceeding to set aside Registrar’s orders for substituted service of a bankruptcy notice on alleged debtor – where respondent’s location disclosed in affidavit filed in bankruptcy proceedings in the Federal Court to which the respondent was not a party – whether address for service obtained and used by applicants’ solicitor in breach of Harman undertaking – whether disclosed information filed pursuant to an obligation of compulsion

BANKRUPTCY – Creditors petition application – application in a proceeding to set aside Registrar’s orders for substituted service of a bankruptcy notice on alleged debtor

WORDS AND PHRASES – “must”  
Legislation:

Acts Interpretation Act 1901 (Cth) s 28A

Federal Court (Bankruptcy) Rules 2016 (Cth) rr 1.04, 2.06

Federal Circuit Court Act 1999 (Cth) s 104
Cases cited:

Aristocrat Technologies Australia Pty Ltd v Allam [2016] HCA 3; (2016) 90 ALJR 370; (2016) 327 ALR 595; (2016) 149 ALD 232

Australian Fisheries Management Authority v PW Adams Pty Ltd  (1995) 61 FCR 314; (1995) 22 AAR 261; (1995) 134 ALR 51; (1995) 39 ALD 481

Barnes v Forty Two International Pty Limited [2010] FCAFC 87

Bates v Bechara (No 2) [2021] FCCA 1809

Broad Spectrum Training Pty Ltd & Ors v Bidding Buzz Limited & Ors [2010] 244 FLR 335; [2010] FMCA 932

ChunWang v Minister for Immigration and Multicultural Affairs [1997] FCA 70; (1997) 71 FCR 386; (1997) 151 ALR 717; (1997) 45 ALD 104

City of Swan v McGraw-Hill Companies Inc [2014] FCA 1271; (2014) 226 FCR 462

CLGC Pty Ltd v Zhang [2022] FedCFanC2G 152

CTI Logistics v Ogbonna [2022] FedCFamC2G 781

Esso Australia Resources Ltd v Plowman [1995] HCA 19; (1995) 183 CLR 10; (1995) 69 ALJR 404; (1995) 128 ALR 391

EVS17 v Minister for Immigration and Border Protection [2019] FCAFC 20; (2019) 268 FCR 299; (2019) 163 ALD 422

Forty Two International Pty Limited v Barnes [2010] FCA 397

Harman v Secretary of State for Home Department [1983] 1 AC 280; [1983] 1 All ER 532; [1983] 2 WLR 338

Hearne v Street [2008] HCA 36; (2008) 235 CLR 125; (2008) 82 ALJR 1259; (2008) 248 ALR 609

In the matter of Kala CapitalPty Ltd (in liq) [2012] NSWSC 1073

International Finance Trust Co Ltd v New South Wales Crime Commission [2009] HCA 49; (2009) 240 CLR 319; (2009) A Crim R 480: (2009) 84 ALJR 31; (2009) 74 ATR…

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AGLC
Djunaedi v Collins [2025] FedCFamC2G 135
Case
[2025] FedCFamC2G 135
Decision Date

CaseChat Overview and Summary

In the case of Djunaedi v Collins, the applicants sought to set aside orders made by a Registrar for substituted service of a bankruptcy notice on the alleged debtor, Mr Collins. The dispute arose from an ex parte application, and the central legal issues were whether the applicants' solicitors had complied with their disclosure obligations, whether there had been a breach of the Harman Undertaking, and whether the substituted service orders should be set aside.

The court held that the applicants' solicitors had deliberately ignored their duty of disclosure on the ex parte application regarding the issue of service and whether Mr Collins' solicitors had instructions to accept service. The court found that there had been a deliberate breach of the Harman Undertaking concerning the information about Mr Collins' whereabouts, specifically that he was in prison. The applicants' failure to bring the alleged breach of the Harman Undertaking to the Registrar's attention prior to the making of the Substituted Service Orders was deemed a further breach of the duty of disclosure. Consequently, the court ordered the substituted service orders to be set aside.

The court's reasoning hinged on the obligation of full disclosure by the applicants in ex parte proceedings, including making proper inquiries about all relevant facts prior to any ex parte hearing. The court emphasised that failure to make such disclosure ordinarily warrants the discharge of any order made ex parte, as it is crucial for the administration of justice that the court has full information before making such orders. The deliberate breaches of disclosure obligations and the Harman Undertaking led to the conclusion that the substituted service orders should be set aside.

Orders

Orders of the court

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Background

Background to the litigation

The parties agreed that, for present purposes, cross-examination on the above affidavits was not necessary.FACTUAL BACKGROUND The factual background is set out below. The parties agreed that the factual history of this matter prior to 9 January 2024 is not relevant to the Set Aside Application, but the Court notes that some background is required in relation to matters concerning other proceedings prior to that date. What is relevant, and seemingly not in dispute in relation to that background is that:(a)there were proceedings in the Federal Court of Australia, South Australia Registry (numbered SAD 157/2023) (“Federal Court Proceedings”) involving the Applicants as applicants in the Federal Court Proceedings and Ms Veronika Mohor (“Ms Mohor”), the Respondent’s wife, as respondent, in which a creditors petition (“Federal Court Creditors Petition”) was sought to issue against Ms Mohor: Finlayson Affidavit at [9]-[10] and Annexure GF-1 at pp 8-10;(b)in the Federal Court Proceedings the applicants were represented by the same solicitors as in these proceedings, and the Respondent’s solicitors in these proceedings represented Ms Mohor: Finlayson Affidavit at [11];(c)in the Federal Court Proceedings Ms Mohor’s solicitors filed an affidavit dated 7 December 2023 from Mr Finlayson (the solicitor with the conduct of the Federal Court Proceedings for Ms Mohor) (“Finlayson Federal Court Affidavit”) in opposition to the Federal Court Creditors Petition which was served on the applicants’ solicitors: Finlayson Affidavit at [10] and [12];(d)the Finlayson Federal Court Affidavit was never read in open court: Finlayson Affidavit at [13];(e)the Federal Court Creditors Petition was discontinued prior to its hearing and determination: Finlayson Affidavit at [13];(f)the Finlayson Federal Court Affidavit contained a 13 October 2023 email from Mr Finlayson to the South Australian Sheriff’s Office in relation to separate proceedings in the South Australian Supreme Court in which the Respondent’s solicitors acted for both Ms Mohor and the Respondent, those proceedings seemingly involved a Warrant of Sale in relation to certain property and a response to enforcement action against Ms Mohor and the Respondent in respect of a judgment of the Supreme Court of South Australia for $31,000 and issues in relation to costs in those proceedings: Finlayson Affidavit at [6] and [10] and Annexure GF-1 at p 11;(g)the 13 October 2023 email from the Respondent’s solicitors requested that the Sheriff direct all future correspondence to the address for service on the file, rather than being addressed directly to Ms Mohor and the Respondent, and adverted to the fact that the Respondent was in custody at a named correctional institution: Finlayson Affidavit at [6] and [10] and Annexure GF-1 at p 11; and (h)the judgment of the Supreme Court of South Australia for $31,000 is the judgment debt relied upon in the Bankruptcy Notice: Carpenter January Affidavit at [5] and Annexure AGC-2.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

The Applicants cited CLGC in support of their argument. In CLGC at [22] per Judge Manousaridis the Court accepted that service could be effected upon a prisoner by pre-paid post addressed to the inmate at the prison in which the prisoner was incarcerated. Accepting for present purposes that CLGC is correctly decided the Applicants cannot overcome the difficulty that arises from the breach of the Harman Undertaking in respect of the Finlayson Federal Court Affidavit filed in the Federal Court Proceedings. The breach of the Harman Undertaking poisons at the source the attempt to serve the Respondent at the place the subject of the breach.CONCLUSION AND ORDERS The Court has concluded or is satisfied that:(a)the Applicants deliberately decided to ignore their duty of disclosure on an ex parte application in relation to the issue of service and whether the Respondents’ now solicitors had instructions to accept service;(b)there has been a deliberate breach of the Harman Undertaking by the Applicants in relation to the information concerning the Respondent’s whereabouts, namely, that he was in prison; and(c)the Applicants failure to bring the allegation of the breach of the Harman Undertaking to the Registrar’s attention prior to the making of the Substituted Service Orders was a further breach of the duty of disclosure. In the circumstances there will be an order setting aside the Substituted Service Order.

Ratio Decidendi

Legal Principle Established

The Applicants’ submissions (taken from the transcript of the hearing on 16 August 2024 (“Transcript”) at pp 7-11 as no written outline of submissions was filed by the Applicants) were as follows:(a)for the Harman Undertaking to be enlivened the relevant affidavit material had to be filed under a compulsion, in this case under the Bankruptcy Rules;(b)there was no reason, in context, for the 13 October 2013 email, which contained the detail of the prison in which the Respondent was incarcerated, to be tendered, and hence the Harman Undertaking did not apply;(c)this is a case very similar to that in which affidavits are filed in accordance with timetabling orders, and the debtor, here Ms Mohor in the Federal Court Proceedings, had an option as to whether the Finlayson Federal Court Affidavit was filed;(d)“it would be odd to say that” r 2.06 of the Bankruptcy Rules “gives rise to some sort of compulsion” as to the filing of an affidavit in relation to a notice of opposition to a bankruptcy notice;(e)the 13 October 2023 email was not material: Mineralogy v WA at [91] per Martin J; and(f)even if the Substituted Service Order is set aside, service of the Bankruptcy Notice was effected by reason of s 28A of the Acts Interpretation Act 1901 (Cth) (“Interpretation Act”), citing CLGC Pty Ltd v Zhang [2022] FedCFanC2G 152 (“CLGC”).CONSIDERATIONDid the Respondent’s solicitors have instructions to accept service of the Bankruptcy Notice? The duties of an Applicant in ex parte proceeedings can be summarised as follows:(a)the first and primary obligation on a party making an ex parte application is an obligation of full disclosure of all relevant facts to the Court (which also entails making proper enquires about those facts prior to any ex parte hearing): International Finance Trust Co Ltd v New South Wales Crime Commission [2009] HCA 49; (2009) 240 CLR 319; (2009) A Crim R 480: (2009) 84 ALJR 31; (2009) 74 ATR 332; (2009) 261 ALR 220 at [130]-[133] per Hayne, Crennan and Kiefel JJ; Town & Country Sport Resorts (Holdings) Pty Ltd v Partnership Pacific Ltd (1988) 20 FCR 540; (1988) 97 ALR 315; (1988) ATPR 40-911, FCR at 543 per Davies, Gummow and Lee JJ; Mineralogy v WA at [77], [96] and [99] per Martin J;(b)the identification of any crucial points for and against the ex parte application, including reference to any likely defences, or material including that which might cause the court to refuse the ex-parte application: In the matter of Kala CapitalPty Ltd (in liq) [2012] NSWSC 1073 at [31] per Black J; Mineralogy v WA at [82] per Martin J; and(c)advice as to relevant legal authorities, including those contrary to the interests or arguments of the party seeking orders ex parte: Mineralogy v WA at [82] per Martin J. In Aristocrat Technologies Australia Pty Ltd v Allam [2016] HCA 3; (2016) 90 ALJR 370; (2016) 327 ALR 595; (2016) 149 ALD 232 it was observed at [15] per Gageler J (footnotes omitted) that:It is an elementary principle of our ordinarily adversarial system of justice that full and fair disclosure must be made by any person who seeks an order from a court ex parte, with the result that failure to make such disclosure is ordinarily sufficient to warrant discharge of such order as might be made. The principle is not confined to particular types of interlocutory orders. Its rationale lies in the importance to the administration of justice of the courts and the public being able to have confidence that an order will not be made in the absence of a person whose rights are immediately to be affected by that order unless the court making the order has first been informed by the applicant of all facts known to the applicant which that absent person could be expected to have sought to place before the court had the application for the order been contested.