Djunaedi v Collins
[2025] FedCFamC2G 135
•7 February 2025
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 332; (2009) 261 ALR 220
Ko v Minister for Immigration & Anor [2019] FCCA 2176
Kosovich v Mancini (1982) 31 SASR 272
Liberty Funding Pty Ltd v Phoenix Capital Ltd [2005] FCAFC 3; (2005) 218 ALR 283
Mineralogy Pty Ltd & Anor v The State of Western Australia [2020] QSC 344
Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v FAK19 [2021] FCAFC 153; (2021) 287 FCR 181
Ogbonna v CTI Logistics Limited [2021] FCA 1491
Ogbonna, in the matter of Ogbonna [2023] FCA 1334
Re Clarecastle Pty Ltd (in liq) [2011] NSWSC 553; (2011) 251 FLR 225
Savcor Pty Ltd v Cathodic Protection International APS [2005] VSCA 213; (2005) 12 VR 639
Sinnot v Chief of Defence Force [2020] FCA 643
Town & Country Sport Resorts (Holdings) Pty Ltd v Partnership Pacific Ltd (1988) 20 FCR 540; (1988) 97 ALR 315; (1988) ATPR 40-911
Unicomb v Blais [2024] NSWSC 903
Walter Rau Neusser Oel Und Fett AG v Cross Pacific Trading Ltd [2005] FCA 955
Division: Division 2 General Federal Law Number of paragraphs: 65 Date of last submission/s: 16 August 2024 Date of hearing: 16 August 2024 Place: Perth Counsel for the Applicants: Dr R Catterwell Solicitor for the Applicants: Websters Lawyers Counsel for the Respondent: Mr G Finlayson Solicitor for the Respondent: Diaspora Legal ORDERS
ADG 15 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: JULIE DJUNAEDI
First Applicant
DEDDY DJUNAEDI
Second Applicant
ANTONIO DEPASQUALE (and others named in the Schedule)
Third Applicant
AND: ROBERT WAYNE COLLINS
Respondent
ORDER MADE BY:
JUDGE LUCEV
DATE OF ORDER:
7 FEBRUARY 2025
THE COURT ORDERS THAT:
1.The orders for substituted service on the Respondent of Bankruptcy Notice No. BN 262835 of 2023 made by a Registrar of the Court on 16 January 2024 be set aside.
2.The matter be adjourned to a mention before the General Federal Law Case Management Judge in the Adelaide Registry on a date to be fixed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE LUCEV
INTRODUCTION
By an interim application lodged in the Adelaide Registry of this Court on 14 May 2024, but not accepted for filing until 27 May 2024, the Respondent, Robert Wayne Collins, applies to set aside a substituted service order made by a Registrar of the Court on 16 January 2024 in respect of a bankruptcy notice directed to the Respondent (“Set Aside Application”, “Substituted Service Order” and “Bankruptcy Notice” respectively). The Applicants, Ms Julie Djunaedi and five others, oppose the orders sought in the Set Aside Application.
SUBSTITUTED SERVICE ORDER
On 16 January 2024 a Registrar of the Court made the Substituted Service Order which was in the following terms:
1.Service of Bankruptcy Notice No. BN 262835 of 2023 issued on 19 December 2023 and addressed to Robert Wayne Collins (the Respondent) together with a sealed copy of this order may be effected by the following means occurring on or before 19 January 2024:
a.By sending by express post addressed to the Respondent at Mobilong Prison, Maurice Rd, Murray Bridge SA 5253; and
b.By scanning and sending by email to the Respondent’s solicitor Greg Finlayson at the following email address [email protected].
2.Service in accordance with this order shall be deemed good and sufficient service of the Bankruptcy Notice on the Respondent.
3.The Bankruptcy Notice shall be deemed to be served on the Respondent on 22 January 2024.
4.The Bankruptcy Notice be amended by deleting the following words in paragraph 1 on page 3 of the notice “after service on you of the Bankruptcy Notice” and substituting “after 22 January 2024”.
5.The Applicant lodge an appropriate application with the Official Receiver to make the amendments to the Bankruptcy Notice required by Order 4.
6.A copy of the amended Bankruptcy Notice issued by the Official Receiver pursuant to Order 5 and served pursuant to Order 1 be annexed to any affidavit proving that service.
7.Costs of this application be reserved for the purposes of any Creditor’s Petition based on this Bankruptcy Notice.
ORDERS SOUGHT IN THE SET ASIDE APPLCATION
The orders sought in the Set Aside Application are as follows:
1.This application be returnable before the Registrar who made the orders ex parte on 16 January 2024.
2. Set aside the orders of the Court dated 16 January 2024.
Pursuant to Rule 22.02:
3.The Applicants pay the costs of the Respondent to be agreed or taxed on an indemnity basis.
The summary of the basis for the orders sought as set out in the Set Aide Application is as follows:
Pursuant to Rule17.05 (2)(a) and on the grounds that the applicants did not fulfil their duty of disclosure on the ex part application in that they failed to disclose:
a)that Greg Finlayson had advised the applicants that he had no instructions to accept service of the bankruptcy notice;
b)that the material relied upon by the applicants at exhibit AGC-1 to the affidavit of Andrew Geoffrey Carpenter affirmed 9 January 2024 was the use of material obtained by virtue of provision under compulsion of the processes of the Federal Court of Australia in matter SAD157 of 2024 without leave of the Federal Court of Australia; and
c)the solicitor for the applicants had been requested to draw those matters to the attention of the Registrar on the ex parte application.
AFFIDAVITS
On the Set Aside Application there are five affidavits before the Court. They are the:
(a)affidavit of Andrew Geoffrey Carpenter filed on 9 January 2024 (“Carpenter January Affidavit”);
(b)affidavit of Robert Wayne Collins filed on 13 May 2024 (“Collins Affidavit”);
(c)affidavit of Gregory James Finlayson filed on 14 May 2024 (“Finlayson Affidavit”);
(d)affidavit of Andrew Geoffrey Carpenter filed on 12 August 2024 (“Carpenter 12 August Affidavit”); and
(e)affidavit of Andrew Geoffrey Carpenter filed on 13 August 2024 (“Carpenter 13 August Affidavit”).
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.
On 9 January 2024:
(a)at 9.46 am the Applicants’ solicitor emailed the Respondent’s solicitor to thank him for acknowledging service of the Bankruptcy Notice and asked if the Respondent’s solicitor is instructed to accept service of the Creditor’s Petition: Finlayson Affidavit at [23] and Annexure GJF-2 at p 12;
(b)at 9.59 am the Respondent’s solicitor replied to the email and stated that he did not acknowledge service of any bankruptcy petition, nor was he instructed to accept service. Further, he had no instructions to accept service of the creditors petition and to “please provide the file reference to it”: Finlayson Affidavit at [23] and Annexure GJF-2 at p 13;
(c)at 1.23 pm the Applicants’ solicitor replied, and stated that “whilst service has been effected, no doubt you will engage in your ridiculous tactics so we will lodge an application for substituted service”: Finlayson Affidavit at [23] and Annexure GJF-2 at p 14; and
(d)at 7.27 pm the Respondent’s solicitor replied and asked the Applicants’ solicitor to provide the “requested information” (a file reference for the Creditors’ Petition): Finlayson Affidavit at [23] and Annexure GJF-2 at p 15.
On 16 January 2024:
(a)at 6.46 am the Applicants’ solicitor emailed the Respondent’s solicitor and requested that he “please see attached”: Finlayson Affidavit at [25] and Annexure GJF-3 at p 16. The affidavit does not state what documents were attached to the email;
(b)at 10.40 am the Respondent’s solicitor emailed the Applicants’ solicitor and stated that his affidavit filed in this matter does not exhibit all correspondence in compliance with the duty of candour in ex parte applications, and it exhibits material in breach of the obligations in Hearne v Street [2008] HCA 36; (2008) 235 CLR 125; (2008) 82 ALJR 1259; (2008) 248 ALR 609 (“Hearne”) in contempt of the Federal Court of Australia. Further, the Respondent’s solicitor requested that the Applicants’ solicitor immediately inform the Registrar as such: Finlayson Affidavit at [26] and Annexure GJF-4 at p 17; and
(c)at 1.59 pm the South Australia District Registry emailed the Applicants’ solicitor with the terms of the orders made by the Registrar on 16 January 2024: Finlayson Affidavit at [26] and Annexure GJF-4 at pp 30-31.
On 17 January 2024, the Applicants’ solicitor caused correspondence to be sent to the Respondent serving a copy of the Bankruptcy Notice. This correspondence was also sent by email to the Respondent’s solicitor on the same day. As the Respondent’s solicitor did not reply, the Applicants’ solicitor instructed his rounds clerk to send the correspondence by express post only: Carpenter 12 August Affidavit at [2]-[5].
On 25 January 2024, the Applicants’ solicitor received the correspondence back with the envelope marked as “RTS”: Carpenter 12 August Affidavit at [6].
On 26 January 2024, the Respondent’s solicitor emailed the Applicants’ solicitor in regard to an alleged breach of the Hearne obligation in respect of the use of material filed in the Federal Court Proceedings and these proceedings: Finlayson Affidavit at [26] and Annexure GJF-4 at p 17. The Respondent’s solicitor also requested that the Applicants consent to a variation of the timetable such that his client is not required to file affidavit material or submissions until 31 January 2024, because:
My client is concerned that facing a timetable for the filing of further affidavit material in this matter in opposition to your clients’ creditors’ petition that further material subject to the Hearn obligation will be used for alternative purpose without leave of the Federal Court.
The creditors petition was filed on 29 February 2024: Carpenter 12 August Affidavit at [12].
On 4 March 2024, the Respondent’s solicitor emailed the Applicants’ solicitor about “the breach by your clients, you and Websters of the obligation in Hearne v Street [2008]”. As the breach was not disclosed to the Registrar and there had been no attempts to “justify, explain or purge that conduct”, the Respondent was giving consideration to an application for contempt or an application that the Registrar charge the Applicants with contempt: Finlayson Affidavit at [26] and Annexure GJF-4 at p 18. Further, the Respondent’s solicitor invited the Applicant’s solicitor to:
1.File an affidavit in the proceedings by way of explanation as to how the breach came to occur and what steps have been taken to purge the conduct to date and making apology for the breach.
2.Make application to set aside the order of [the] Registrar…dated 16 January 2024 in matter ADG15 of 2024.
On 13 April 2024, the Respondent received by post from solicitors for the Applicants a creditors petition in the matter ADG75 of 2024 and other documents which included a copy of orders of this Court made in this matter dated 16 January 2024. He had not previously seen the orders of this Court made in this matter dated 16 January 2024, the bankruptcy notice of 19 December 2023, the amended bankruptcy notice of 17 January 2024 or the affidavit of Andrew Carpenter affirmed on 9 January 2024: Collins Affidavit at [15]-[16].
On 23 April 2024:
(a)at 9.01 am, the Respondent’s solicitor emailed the Applicants’ solicitor and stated that he is “acting for him [the Respondent] in this Federal Circuit and Family Court of Australia matter only (not ADG75 of 2024)” and he has instructions from the Respondent to seek to set aside the orders of 16 January 2024 which were “obtained irregularly ex parte”. He requested that the Applicants consent to the setting aside of the order, and to advise him of the Applicants’ position by 5.00 pm Wednesday 24 April 2024. Further, the Respondent’s solicitor requested a copy of all communications with the Court in respect of the Applicants’ ex parte application for substituted service: Finlayson Affidavit at [26] and Annexure GJF-4 at p 19;
(b)at 9.26 am the Applicants’ solicitor replied to the email noting “you have continually denied that you are not acting for Collins yet you have now commenced acting for him”. In addition, he informed that orders for substituted service have been granted due to the Respondent avoiding service: Finlayson Affidavit at [26] and Annexure GJF-4 at p 21;
(c)at 9.52 am the Respondent’s solicitor emailed the Applicants’ solicitor asking if there is any reason why the emails between him and the Court dated 16 January 2024 with respect to the orders obtained ex parte that day and the Applicant’s solicitor’s affidavit of 9 January 2024 were not provided to the Respondent prior to 23 April 2024: Finlayson Affidavit at [26] and Annexure GJF-4 at p 22;
(d)at 10.00 am the Applicants’ solicitor replied that there were no orders to provide the documents to the Respondent. In addition, he informed that he wrote to the Respondent on 17 January 2024 serving the documents and the Respondent had marked the letter as RTS: Finlayson Affidavit at [26] and Annexure GJF at p 23; and
(e)at 10.21 am the Respondent’s solicitor emailed back listing the documents received on 17 January 2024, and stated that the letter did not enclose either the emails between the Applicants’ solicitor and the Court dated 16 January 2024 with respect to the orders obtained ex parte that day nor the Applicants’ solicitor’s affidavit of 9 January 2024: Finlayson Affidavit at [26] and Annexure GJF-4 at p 24.
On 26 April 2024:
(a)at 11.45 am the Respondent’s solicitor emailed the Registrar’s associate requesting reasons for the decision of 16 January 2024 (including any applicable reasoning as to the stipulation of express post): Finlayson Affidavit at [26] and Annexure GJF-4 at p 30;
(b)at 11.53 am the Applicants’ solicitor emailed the Registrar’s associate informing that he did not have prior notice of the Respondent’s solicitor contacting the Court nor did he give consent to do so. Further, he stated that the terms in the Registrar’s 16 January 2024 email are clear and do not require any explanation; and
(c)at 5.17 pm the Respondent’s solicitor emailed the Applicants’ solicitor in regard to the service of the amended bankruptcy notice. In the email, the Respondent’s solicitor noted that the Respondent did not mark the letter RTS, the amended bankruptcy notice was not served in accordance with the orders of 16 January 2023 in any event in that it was not sent by express post prior to 19 January 2024 or at all, and that the Applicants’ solicitor’s affidavit is misleading. The email states that unless it is acknowledged that the Bankruptcy Notice was not served in accordance with the orders, the Respondent will file an application to set aside the 16 January 2024 orders: Finlayson Affidavit at [26] and Annexure GJF-4 at p 25.
On 29 April 2024, the Registrar’s associate emailed the Respondent’s solicitor and the email contained the Registrar’s reasons for the Substituted Service Order made on 19 January 2024, stating that it was appropriate to make the orders on the basis that personal service of the Bankruptcy Notice on the Respondent was impractical and service of the Bankruptcy Notice in accordance with the order made would, in all reasonable probability, be effective in bringing the Bankruptcy Notice to the attention of the Respondent. Further, the email noted that the Registrar also determined that express post was a more suitable method of service as there is a record by Australia Post of delivery when documents are sent by express post: Finlayson Affidavit at [26] and Annexure GJF-4 at p 28-29.
On 1 May 2024, the Respondent’s solicitor emailed the Applicants’ solicitor in regard to the application for substituted service of the Bankruptcy Notice in this matter. In the email, the Applicant’s duties and obligations in an ex parte application are set out. In addition, the Respondent’s solicitor asserted that “your clients obtained the ex parte order for substituted service of the Bankruptcy Notice on Mr Collins irregularly and Mr Collins is entitled to have the order set aside ex debito justitiae”: Finlayson Affidavit at [26] and Annexure GJF-4 at pp 26-27. Attached to the email are proposed consent orders to set aside the Substituted Service Order.
On 8 May 2024, the Respondent’s solicitor sought to book a professional visit with the Respondent but was not successful: Finlayson Affidavit at [28].
On 9 May 2024:
(a)the Respondent’s solicitor was able to obtain a booking to speak with the Respondent in person at Mobiling on Monday 13 May 2024: Finlayson Affidavit at [29];
(b)the Applicants’ solicitor replied to the Respondent’s solicitor’s email (of 23 April 2024 at 9.01 am) to put him “on notice that, if he was to run any peculiar arguments”, the Applicants will seek costs against him in his personal capacity: Finlayson Affidavit at [26] and Annexure GJF-4 at p 34; and
(c)the Respondent’s solicitors sent a letter to the Applicants’ solicitors detailing the particulars of their client’s pre-action claim set out in correspondence from the Applicants’ solicitors dated 8 April 2024. The Respondent’s solicitor stated that ‘this letter is out client’s pre-action response pursuant to UCR 61.9”: Finlayson Affidavit at [26] and Annexure GJF-4 at pp 40-43.
On 13 May 2024:
(a)at 2.26 pm the Respondent’s solicitor emailed the Applicants’ solicitor “please find attached by way of service the affidavit of Robert Wayne Collins affirmed and filed today”: Finlayson Affidavit at [26] and Annexure GJF-4 at p 36;
(b)at 2.41 pm the Applicants’ solicitor replied by requesting that the Respondent’s solicitor make sure the Respondent avails himself for cross examination on the affidavit. In addition, the email stated that “you are and remain on notice regarding a costs order against you in your personal capacity”: Finlayson Affidavit at [26] and Annexure GJF-4 at p 36; and
(c)at 10.17 pm the Respondent’s solicitors replied asking for evidentiary basis for the Applicants’ solicitor’s “threats” of a personal costs order: Finlayson Affidavit at [26] and Annexure GJF-4 at p 37.
On 14 May 2024:
(a)the Applicants’ solicitor emailed the Respondent’s solicitor explaining the instances which give rise to an application for personal cost orders, including: multiple Legal Profession Conduct Commissioner complaints, furthering a position that is untenable, and being in conflict with Mr Collins in a separate claim: Finlayson Affidavit at [26] and Annexure GJF-4 at p 38; and
(b)the Respondent’s solicitor replied requesting that the Applicant’s solicitor identify the “multiple untenable position in this action that drew the ire of the Court”. He stated that in this action he has foreshadowed only an application to set aside the ex parte order for substituted service of 16 January 2024, and invited the Applicants’ solicitor to grapple with the contentions set out in it or he is instructed to file and serve the foreshadowed application on the same day (14 May 2024): Finlayson Affidavit at [26] and Annexure GJF-4 at p 39.
On 12 August 2024:
(a)the Applicants’ solicitor undertook a search of the Department of Corrections Portal. Upon typing in the prisoner number identifier (as was written on the returned envelope), the portal showed that this number was Mr Collins’ prison ID: Carpenter 12 August Affidavit at [8];
(b)the Applicants’ solicitor called Mobilong Prison to enquire about their mail delivery procedures. He identified himself as a solicitor who acted against the Respondent and asked if he could speak to someone regarding prisoner mail. He advised that he sent the Respondent mail on 17 January 2024 enclosing a bankruptcy notice, but it was returned to his officer on 25 January 2024 as it was marked return to sender. He enquired as to whether there was a log of mail that the prison keeps and whether he could be advised of the date on which his letter from 17 January 2024 was received. The female prison officer advised that there is a register of mail which showed that his mail was received by the prison and given to the Respondent. He was advised and verily believed to be true that the prison received his letter on 22 January 2024, the prison staff personally gave the letter to the Respondent on 22 January 2024 and due to refusal to accept, the letter was marked as return to sender and posted back to his office: Carpenter 13 August Affidavit at [4]-[10]; and
(c)the Respondent’s solicitor lodged an amended notice of grounds of opposition (without leave or consent) denying that the Respondent was served with the Bankruptcy Notice on 22 January 2024: Carpenter 13 August Affidavit at [2].
SUBMISSIONS
Respondent’s submissions
The Respondent’s submissions were as follows:
(a)the question for the Court is whether the Substituted Service Order was obtained irregularly or in default of the Applicants’ duty of candour. In the case of irregularity there is a right to discharge the order ex debito justititae whereas in the case of a lack of candour there is a prima facie entitlement: Mineralogy Pty Ltd & Anor v The State of Western Australia [2020] QSC 344 (“Mineralogy v WA”) at [89]-[92] per Martin J;
(b)the position in respect of the Harman Undertaking regarding affidavits filed but not read is further informed by Unicomb v Blais [2024] NSWSC 903 (“Unicomb”) which identifies compulsion as the jurisprudential basis of the obligation;
(c)Unicomb does not however assist the applicants as the Finlayson Federal Court Affidavit was filed under compulsion pursuant to r 2.06(c) of the Federal Court (Bankruptcy) Rules 2016 (Cth) (“Bankruptcy Rules”);
(d)the status of the obligation in respect of the Finlayson Federal Court Affidavit is not one which the Court ought address on the Set Aside Application. What is relevant is that the provenance of the affidavit material, and specifically the 13 October 2023 email, ought to have been drawn to the attention of the Registrar on the ex parte Substituted Service Application as it would have been a proper submission by the Respondent that the dicta in Hearne ought to have been followed;
(e)the Applicants ought to have informed the Registrar of:
(i)the provenance of the affidavit material;
(ii)the prior correspondence, and in particular that the Respondent’s solicitors were not instructed to accept service; and
(iii)the request that the Registrar be informed of the service and affidavit material issues; and
(f)insofar as there is any residual discretion to not set aside the Substituted Service Order, that discretion ought not be exercised in favour of the Applicants taking into account that they were on notice of the issues, but nevertheless chose not to inform the Registrar and then failed to engage on the issue in a proper manner.
Applicants’ submissions
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”).
CONSIDERATION
Did 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.
In Walter Rau Neusser Oel Und Fett AG v Cross Pacific Trading Ltd [2005] FCA 955 at [38] per Allsop J the Federal Court observed that:
In an ex parte hearing, it is the obligation of the party seeking orders, through its representatives, to take the place of the absent party to the extent of bringing forward all the material facts which that party would have brought forward in defence of the application: Thomas A Edison Ltd v Bullock (1912) 15 CLR 678 at 681-82 per Isaacs J. That does not mean stating matters obliquely, including documents in voluminous exhibits, and merely not mis-stating the position. It means squarely putting the other side’s case, if there is one, by coherently expressing the known facts in a way such that the Court can understand, in the urgent context in which the application is brought forward, what might be said against the making of the orders. It is not for the Court to search out, organise and bring together what can be said on the respondents’ behalf. That is the responsibility of the applicant, through its representatives.
Discharge of orders obtained ex parte may be the price or “pain” of a failure to make full and proper disclosure on an application heard ex parte, particularly where there is deliberate or intentional non-disclosure: Savcor Pty Ltd v Cathodic Protection International APS [2005] VSCA 213; (2005) 12 VR 639 at [29] and [31] per Gillard AJA (with whom Ormiston and Buchanan JJA at [1] and [5] respectively agreed).
On 9 January 2024 the Respondent’s now solicitors (who at that time did act for the Respondent in various other proceedings, and did act for the Respondent’s wife, Ms Mohor, in the Federal Court Proceedings: see [8(f)] above) advised the Applicants’ solicitors that they did not act for the Respondent, and, importantly, that they had no instructions to accept service of the Bankruptcy Notice directed to the Respondent.
On 16 January 2024:
(a)at 10.40 am the Respondent’s now solicitor emailed the Applicants’ solicitors advising that he continued to act for the Respondent’s wife and that the Carpenter January Affidavit did not exhibit all correspondence in compliance with the Applicants’ duty of disclosure on an ex parte application; and
(b)at 1.59 pm a Registrar of this Court issued the Substituted Service Order.
Nothing in the affidavits filed by the Applicants or the Respondent suggest or provide any basis for concluding that the Registrar was informed of the correspondence from the Respondent’s solicitors indicating that they did not then act for the Respondent in relation to the service of the Bankruptcy Notice. Likewise, what purport to be the Registrar’s reasons for deciding to make the Substituted Service Order, set out in seven lines in an email sent almost three and a half months after the making of the Substituted Service Order from a “Legal Case Manager” at the “Federal Court of Australia South Australia District Registry”, give no indication that the Registrar was informed by those who appeared for the Applicants of the correspondence from the Respondent’s solicitors indicating that they did not then act for the Respondent.
Given the proximity of the advice of 9 January 2024 that the Respondent’s now solicitors did not act for the Respondent in these proceedings and the email on the same day that the Substituted Service Order issued reminding the Applicants’ solicitors about their duty of disclosure it is difficult to draw any conclusion other than that the Applicants’ solicitors deliberately decided to ignore their duty of disclosure on an ex parte application. Had such disclosure been made it is entirely possible that insofar as the Registrar’s order for substituted service on the Respondent’s now solicitors is concerned, that that order might not have been made. Certainly, the opportunity to consider whether to not make that order was withdrawn from the Registrar by the Applicants’ solicitor’s failure to disclose the fact that they had been informed that the Respondent’s now solicitors did not then act for the Respondent, and of the relevant correspondence in relation thereto. It follows that, insofar as the Substituted Service Order ordered that service may be effected upon the Respondent’s now solicitor, that order ought to be set aside.
Was there a breach of the Harman Undertaking?
The Respondent submits that the Applicants are in breach of what is known as a Harman Undertaking, that is, that documents produced in litigation, to another party under a compulsion, by reason of a rule of court or court order, are protected from misuse. The name derives from the judgment of the House of Lords in Harman v Secretary of State for Home Department [1983] 1 AC 280; [1983] 1 All ER 532; [1983] 2 WLR 338 (“Harman”), and it is submitted that the protection is said to arise from the implied undertaking not to misuse documents, and that it is a misuse to use documents for an ulterior or collateral or alien purpose. The use of documents in litigation other than the litigation in which the documents were produced may be a misuse. Harman was applied by the High Court in Hearne, which is the leading Australian case on the matter.
In these proceedings the Respondent submits that information obtained by the Applicants as to the Respondent’s whereabouts, namely that he was in prison, was covered by what is known as a Harman Undertaking.
In Hearne the High Court observed that the primary person bound by the relevant obligation is the litigant who receives documents or information from the other side, but the “implied undertaking” also binds others to whom documents and information are given, including those who are engaged in day-to-day conduct of the litigation: at [3] per Gleeson CJ, [57] per Kirby J, and [109]-[110] per Hayne, Heydon and Crennan JJ. In Hearne at [96] per Hayne, Heydon and Crennan JJ the plurality observed, in a well-known passage, that (footnotes omitted and bold emphasis added):
Where one party to litigation is compelled, either by reason of a rule of court, or by reason of a specific order of the court, or otherwise, to disclose documents or information, the party obtaining the disclosure cannot, without the leave of the court, use it for any purpose other than that for which it was given unless it is received into evidence. The types of material disclosed to which this principle applies include … affidavits.
In Sinnot v Chief of Defence Force [2020] FCA 643 (“Sinnot”) at [29] per Logan J the Federal Court held that he was bound by Hearne and a judgment of the Full Court of the Federal Court in Liberty Funding Pty Ltd v Phoenix Capital Ltd [2005] FCAFC 3; (2005) 218 ALR 283 to hold that an affidavit was not to be used for other than the purposes of the proceedings in which it had been filed.
In Forty Two International Pty Limited v Barnes [2010] FCA 397 (“Forty Two International”) at [66]-[74] per Yates J the Federal Court usefully summarised the Harman Undertaking as follows (bold emphasis added):
66.It is not in dispute that a document produced pursuant to the compulsory processes of the court is entitled to special protection, such that it may not be used for any purposes other than those related to the litigation in the course and for the purposes of which the document is produced. This obligation is qualified to the extent that it must yield to inconsistent statutory provisions and to the requirements of curial processes in other litigation: Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10 at 32-33.
67.This principle is one of general application. Examples of the application of the principle include: where the document is produced on discovery … including where the document is made available in an arbitration as on discovery …; where the document is produced on subpoena …; where answers are provided to interrogatories …; and in respect of witness statements ….
68.The principle has been expressed in terms of an implied “undertaking” given to the court. However, as explained in Hearne v Street (2008) 235 CLR 125 in [105]-[108], this characterisation of the obligation is a conceptual artefact having its origins in the historical requirement that the use of documents generated by litigious processes depended on the giving of an express undertaking: Richardson v Hastings (1844) 7 Beav 354; Hopkinson v Lord Burghley (1867) LR2 Ch App 447. Since at least the decision in Alterskye v Scott [1948] 1 All ER 469, the principle has also been described in terms of an implied “obligation”. The plurality in Hearne characterised the principle as an obligation of substantive law ….
69.… the obligation is to be understood as applying to documents and information. In Crest at 854, Lord Oliver said:
“It has recently been held by Scott J. in Sybron Corporation v Barclays Bank Plc. [1985] Ch. 299 - and this must, in my judgment, clearly be right - that the implied undertaking applies not merely to the documents discovered themselves but also to information derived from those documents whether it be embodied in a copy or stored in the mind. But the implied undertaking is one which is given to the court ordering discovery and it is clear and is not disputed by the appellants that it can, in appropriate circumstances, be released or modified by the court.”
70.What lies at the root of the principle involved is the fact that information has been disclosed compulsorily by use of the court's process. ….
71.In my view, in the case of documents produced in answer to a subpoena, the protection of the obligation extends beyond the documents themselves to information derived from the fact of production, including the fact that the documents are or were in the possession of the person who produced them and the fact that, at least prima facie, the documents are of a description that answers the call of the subpoena.
72.The obligation restricts not only the disclosure of the documents or information, but also more general instances of use of the documents or information outside the purposes of the proceeding in and for which the documents or information were disclosed. ….
73.Plainly the obligation to the court can be released or modified by leave granted by that court. The scope of the leave may be general or limited, and leave may be granted on terms.
74.In Crest, Lord Oliver at 860 stated that a court will not release or modify this obligation except in special circumstances. In Liberty Funding Pty Ltd v Phoenix Capital Ltd (2005) 218 ALR 283; [2005] FCAFC 3, a Full Court of this court, following the approach in Springfield, which approved Holpitt Pty Ltd v Varimu Pty Ltd (1991) 29 FCR 576 and Sweetman v Australian Thoroughbred Finance Pty Ltd (unreported, Lockhart J, 23 July 1992), said in [31]:
“… It is unnecessary to examine the authorities in this area in any detail. The parties were not in disagreement as to the legal principles. The notion of ‘special circumstances’ does not require that some extraordinary factors must bear on the question before the discretion will be exercised. It is sufficient to say that, in all the circumstances, good reason must be shown why, contrary to the usual position, documents produced or information obtained in one piece of litigation should be used for the advantage of a party in another piece of litigation or for other non-litigious purposes. The discretion is a broad one and all the circumstances of the case must be examined. …”
In Barnes v Forty Two International Pty Limited [2010] FCAFC 87 an appeal against Forty Two International was dismissed, with the Full Court of the Federal Court not expressing any disapproval of the statement of principle concerning the Harman Undertaking in Forty Two International.
Once the material is adduced in evidence it enters the public domain, and the protection of the Harman Undertaking is lost, unless the court restrains further publication: Esso Australia Resources Ltd v Plowman [1995] HCA 19; (1995) 183 CLR 10; (1995) 69 ALJR 404; (1995) 128 ALR 391 (“Esso Australia Resources); CLR at 32-33 per Mason CJ. Further, the duty of confidentiality may give way to other duties, including the requirement to respond to a subpoena in other proceedings: Esso Australia Resources at [33] per Mason CJ; Re Clarecastle Pty Ltd (in liq) [2011] NSWSC 553; (2011) 251 FLR 225. The Court notes that in Esso Australia Resources the High Court observed that the Harman Undertaking must yield to the requirements of curial processes in other litigation: CLR at 32-33 per Mason CJ.
Documents in one set of proceedings which are subject to the Harman Undertaking remain subject to it even if they are discoverable in a second set of proceedings: and it is necessary for the beneficiaries of the Harman Undertaking to be given an opportunity to advance arguments restricting the right of inspection of the documents enjoyed by the party to whom discovery was made in the second set of proceedings: City of Swan v McGraw-Hill Companies Inc [2014] FCA 1271; (2014) 226 FCR 462.
Reference was made by the parties to Unicomb, a recent judgment of the New South Wales Supreme Court. In Unicomb the New South Wales Supreme Court made a declaration that affidavits made in earlier proceedings were not subject to the Harman Undertaking: Unicomb at [296] per McGrath J, but it did so because leave was granted to file affidavits by a certain date if the party concerned wished to do so, and the filing of the affidavits concerned was therefore not attended by any element of compulsion because it was a matter for the party concerned as to whether they did file an affidavit: Unicomb at [247]-[251] per McGrath J.
The question therefore arises as to whether the Finlayson Federal Court Affidavit filed in the Federal Court Proceedings was filed under an obligation of compulsion.
There is no dispute that the Finlayson Federal Court Affidavit was filed in relation to a notice stating grounds of opposition filed by Ms Mohor in the federal Court Proceedings (“Notice of Opposition”): Transcript, p 9 lines 15-17.
Rule 2.06 of the Bankruptcy Rules provides as follows (bold emphasis added):
A person who intends to oppose an application (including an interim application) or a petition must, at least 3 days before the date fixed for the hearing of the application or petition or, with the leave of the Court, at the hearing:
(a) File a notice of appearance in accordance with Form B4; and
(b)File a notice in accordance with Form B5 stating the grounds of opposition; and
(c) File an affidavit in support of the grounds of opposition; and
(d) Serve the notices and supporting affidavit on the applicant.
Rule 1.04(1) of the Bankruptcy Rules states that “unless the Court otherwise orders, these Rules apply to a proceeding in the Court to which the Bankruptcy Act applies”.
In Bates v Bechara (No 2) [2021] FCCA 1809 (“Bechara (No 2)”) the Applicant, Mr Bates, and the Respondent, Ms Bechara, had, since 2014, been engaged in protracted litigation. Mr Bates had obtained a final judgment for fees rendered by him, together with interest and costs. A Registrar of this Court (then styled as the Federal Circuit Court) made a sequestration order against Ms Bechara’s estate. Ms Bechara filed an application pursuant to s 104(2) of the Federal Circuit Court Act 1999 (Cth) (“FCC Act”) seeking review of the Registrar’s decision to make the sequestration order.
Relevantly, the Federal Circuit Court was asked to considered the scope and operation of the Bankruptcy Rules and in particular whether a debtor, having sought review of a Registrar’s decision pursuant to s 104(2) of the FCC Act, is nonetheless obliged to comply with the requirements of the Bankruptcy Rules in relation a notice stating grounds of opposition to the making of a sequestration order together with an affidavit in support of the grounds of opposition, and the consequences of any failure to comply with those requirements.
In Bechara (No 2) at [52]-[54] per Judge A Kelly the Court considered r 2.06 of the Bankruptcy Rules as follows (bold emphasis added):
[5]A debtor who intends to appear at the hearing of a petition is obliged to file and serve a notice of appearance, a notice stating his or her grounds of opposition to the making of a sequestration order together with an affidavit in support of the grounds of opposition. A person who, before the hearing, has not filed ground of opposition and/or an affidavit that supports each ground of opposition may not do so without leave. Where a person intending to oppose a petition but who has not filed grounds of opposition supported by affidavit, appears at the hearing of a petition, it is a matter of discretion whether he or she may be permitted to appear and be heard…
…
[53]Rule 2.06 is expressed in imperative and cumulative terms. The rule, as applied to a debtor who intends to oppose a petition, reflects principles of “enduring” importance “that before a person can be made bankrupt the court must be satisfied that the debt on which the petitioning creditor relies is due by the debtor and that if any genuine dispute exists as to the liability of the debtor to the petitioning creditor it ought to be investigated before he is made bankrupt”: Ahern v Deputy Commissioner of Taxation (Qld) (1987) 76 ALR 137, 148; Culleton (2017) 343 ALR 632, [36]-[38].
[54]…Both the text of r 2.06(c) and the context in which it appears (in rules concerned with procedures for the proper administration of bankruptcy laws), express requirements concerned to govern the steps that must be taken by, relevantly, a debtor who intends to appear, participate in a hearing and oppose a petition. Rule 2.06 forms part of the streamlined process to assist a congested court and assist it in the prompt determination of petitions in a context where orders may effect a fundamental change to “the status of the debtor to a bankrupt and affects the rights of creditors”: Jones v Thomson [2017] FCA 125, [66]; see also, Bechara v Bates [2021] FCAFC 34, [173].
The reasoning in Bechara (No 2) as set out above is in the Court’s view unimpeachable, save to note that r 2.06 of the Bankruptcy Rules is subject to an order imposing different conditions pursuant to r 1.04(1) of the Bankruptcy Rules: Ogbonna v CTI Logistics Limited [2021] FCA 1491 at [14] per Colvin J (albeit r 1.04(1) was not expressly mentioned there); Ogbonna, in the matter of Ogbonna [2023] FCA 1334 at [82]-[83] per Feutrill J, referring in particular at [82] to CTI Logistics v Ogbonna [2022] FedCFamC2G 781 at [68] per Judge Street.
The Court notes the interpretation of “must” as imperative and expressing necessity in the sense of an obligation or requirement is supported by considerable authority:
(a)in Kosovich v Mancini (1982) 31 SASR 272 (“Kosovich”) the South Australian Supreme Court was dealing with road transport legislation which provided that the mass of a vehicle “must be determined in accordance with the regulations”: Kosovich at 275 per Millhouse J. The South Australian Supreme Court observed: Kosovich at 275 and 276 per Millhouse J, as follows:
It seems to me that “must be determined” imposes an obligation which cannot be regarded as directory only. I have looked both in the dictionary and in Maxwell. The appropriate meaning of “must” in the Shorter Oxford English Dictionary is: “Expressing necessity: Am (is are) obliged or required to; have (has) to; it is necessary that (I, you, he, it, etc) should”. “In ordinary usage, ‘may’ is permissive and ‘must’ is imperative” (Maxwell on Interpretation of Statutes 12th ed. (1969) p.324),
…
If the wish of Parliament had been to make the subsection directory it could easily have done so by using the word “may” instead of the word “must”.
(b)in 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 (“Adams”) the Full Court of the Federal Court was dealing with fisheries management legislation, and in particular a provision which provided that certain objectives “must be pursued by the Minister and the Authority in the administration of the Act, … and by the Authority in the performance of its functions”. Each of the five objectives were conjoined by the use of the word “and”. The Full Court of the Federal Court held that the use of the word “must”, and the linking of each of the five objectives with the word “and”, meant that each objective must be pursued by the Minister and by the Authority: Adams at 332 per Sheppard J (with whom Tamberlin J at 334 and Lehane J at 336 agreed);
(c)in ChunWang v Minister for Immigration and Multicultural Affairs [1997] FCA 70; (1997) 71 FCR 386; (1997) 151 ALR 717; (1997) 45 ALD 104 at 391 per Merkel J in dealing with migration legislation which required that applications “must” be lodged within a certain time limit, the Federal Court, having cited Kosovich as authority for the proposition that “must” is a word of absolute obligation, went on to observe that:
…[s]uch an interpretation also accords with the principle that enactments requiring that a specified procedure be followed in courts are usually mandatory and not merely directory.
(d)in Broad Spectrum Training Pty Ltd & Ors v Bidding Buzz Limited & Ors [2010] 244 FLR 335; [2010] FMCA 932 at [40] per Lucev FM this Court (then the Federal Magistrates Court), having set out the passages from the authorities cited immediately above, observed that:
The above authorities strongly indicate that the use of the word “must” in the phrase “must advise” imposes an obligation on the Court to exercise the required function, namely, to advise the parties to use the dispute resolution process, being mediation in this case.
(e)in EVS17 v Minister for Immigration and Border Protection [2019] FCAFC 20; (2019) 268 FCR 299; (2019) 163 ALD 422 at [32] per Allsop CJ, Markovic and Steward JJ the Full Court of the Federal Court held that the use of the phrase “must give” imposed a mandatory obligation on an office-holder to provide to an administrative decision-maker material of a certain kind.
It follows that where a party seeks to oppose a bankruptcy process of a kind described in r 2.06 of the Bankruptcy Rules there is a mandatory obligation to file the affidavit referred to in sub-para (c) thereof, subject to the Court otherwise ordering under r 1.04(1) of the Bankruptcy Rules. Thus, Ms Mohor, who was opposing a bankruptcy process of a relevant kind in the Federal Court Proceedings, was compelled to file the Finlayson Federal Court Affidavit.
In the circumstances, the Court:
(a)ought to follow the reasoning in Bechara (No 2) set out above as part of the expected comity between first instance judges in the same court: Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v FAK19 [2021] FCAFC 153; (2021) 287 FCR 181 at [21]-[22] per Allsop CJ; Ko v Minister for Immigration & Anor [2019] FCCA 2176 at [15] per Judge Lucev; and
(b)the documents and information contained in the Finlayson Federal Court Affidavit were subject to the Harman Undertaking as it was an affidavit filed under compulsion in the Federal Court Proceedings.
The Applicants also argued that the alleged breach of the Harman Undertaking was not material because the disclosure of the Respondent’s whereabouts in the 13 October 2023 email was unnecessary for the purposes of the Federal Court Proceedings. The Court does not accept that argument for two reasons. The first is that based on the Federal Court judgment in Sinnot it is both the document and the information contained therein that are the subject of the Harman Undertaking: Sinnot at [29] per Logan J; see too Forty-Two International at [70] and [72] per Yates J, and thus the Harman Undertaking applies to the Finlayson Federal Court Affidavit in its entirety. The second is that the disclosure of the fact that the Respondent was in prison was a relevant matter to be disclosed to the Sheriff’s Office in circumstances where there were evidently difficulties with the issue of service of documents upon the Respondent in prison, and the Respondent’s now solicitors were acting for both the Respondent and Ms Mohor in the relevant proceedings in the Supreme Court of South Australia, those proceedings being the proceedings which gave rise to the judgment debt, and the problems with service adverted to in the 13 October 2023 email were problems in relation to both the Respondent and Ms Mohor in the proceedings in the Supreme Court of South Australia. It is entirely conceivable that issues in relation to service of documents may have arisen in the since discontinued Federal Court Proceedings and that the 13 October 2023 email formed part of the document chain in that regard, relating as it did to the proceedings in the Supreme Court of South Australia which give rise to the judgment debt in these proceedings. The 13 October 2023 email may therefore have been material, and is certainly not obviously immaterial, to the now discontinued Federal Court Proceedings.
There is no evidence that the Applicants applied, or considered applying, to the Federal Court for release from the Harman Undertaking, which is a course which might have been adopted by a diligent solicitor acting appropriately on behalf of the Applicants. Instead, the information concerning the Respondent’s whereabouts, which was subject to the Harman Undertaking was used, evidently deliberately, as part of the substituted service application by the Applicants (and more particularly the Applicants’ solicitors), entirely for their own benefit, and contrary to the Harman Undertaking.
There is also no evidence that the Applicants disclosed to the Registrar any possible breach of the Harman Undertaking prior to the making of the Substituted Service Orders, notwithstanding the timely email to the Applicants solicitors from the Respondents’ solicitors at 10.40 am on 16 January 2024, more than three hours before the Substituted Service Order was made by the Registrar, reminding the Applicants’ solicitors that the Carpenter January Affidavit “exhibits materials in breach of the obligation in Hearne v Street”.
On the evidence led and the submissions made in these proceedings, the Court is satisfied that 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. Without that breach there would have been no factual basis for making the order for substituted service on the Respondent by mail at the prison. Had such disclosure been made it is entirely possible that insofar as the Registrar’s order for substituted service on the Respondent’s by mail at the prison is concerned, that that order might not have been made. Certainly, the opportunity to consider whether to not to make that order was withdrawn from the Registrar by the Applicants’ solicitor’s failure to disclose the fact that they had been informed that the Respondent’s now solicitors, and then solicitors for Ms Mohor in the Federal Court Proceedings, considered there was a breach of the Harman Undertaking, and of the relevant correspondence in relation thereto. It follows that, insofar as the Substituted Service Order ordered that service may be effected upon the Respondent by mail at the prison in which he was incarcerated, that that order ought to be set aside.
The Court further observes that on the same facts that relate to the breach of the Harman Undertaking 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 discussed at [28]-[30] above.
SERVICE UNDER S 28A OF THE INTERPRETATION ACT
The Applicants argued that, irrespective of the other alleged issues arising in relation to service in this matter, that service had been effected on the Respondent by mail by reason of s 28A of the Interpretation Act.
Section 28A of the Interpretation Act provides as follows:
(1)For the purposes of any Act that requires or permits a document to be served on a person, whether the expression “serve”, “give” or “send” or any other expression is used, then the document may be served:
(a) on a natural person:
(i) by delivering it to the person personally; or
(ii)by leaving it at, or by sending it by pre‑paid post to, the address of the place of residence or business of the person last known to the person serving the document; or
(b)on a body corporate—by leaving it at, or sending it by pre‑paid post to, the head office, a registered office or a principal office of the body corporate.
Note: The Electronic Transactions Act 1999 deals with giving information in writing by means of an electronic communication.
(2) Nothing in subsection (1):
(a)affects the operation of any other law of the Commonwealth, or any law of a State or Territory, that authorises the service of a document otherwise than as provided in that subsection; or
(b)affects the power of a court to authorise service of a document otherwise than as provided in that subsection.
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.
I certify that the preceding sixty-five (65) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Lucev. Associate:
Dated: 7 February 2025
SCHEDULE OF PARTIES
ADG 15 of 2024 Applicants
Fourth Applicant:
SALLY DEPASQUALE
Fifth Applicant:
COLIN PRESTON
Sixth Applicant:
PHILIP CHARLTON
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