Health Care Complaints Commission v Qasim, in the matter of Qasim
[2025] FedCFamC2G 1176
•25 July 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Health Care Complaints Commission v Qasim, in the matter of Qasim [2025] FedCFamC2G 1176
File number(s): SYG 2289 of 2024 Judgment of: JUDGE DOUST Date of judgment: 25 July 2025 Catchwords: BANKRUPTCY – Application for review of sequestration order made by Registrar – whether preconditions for making sequestration order are satisfied – whether there is any reason why a sequestration order ought not be made – application for review dismissed and sequestration order affirmed Legislation: Acts Interpretation Act 1901 (Cth) s 28A
Bankruptcy Act 1966 (Cth) ss 40(1)(g), 40(3)(b), 41(3)(c), 41(3)(c)(i), 43(1), 43(b)(i), 43(b)(ii), 47, 52, 52(1)(a), 52(1)(b), 52(1)(c), 52(2)(b), 109, 109(1)(a), 156A
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 256
Bankruptcy Regulations 2021 (Cth) regs 102, 102(1), 102(1)(a)
Federal Circuit and Family Court of Australia (Division 2) (Bankruptcy) Rules 2021 (Cth) rr 4.04(1)(a), 4.04(1)(b), 4.04(2), 4.05, 4.06(2), 4.06(3), 4.06(4)
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) r 21.04(1)
Legal Profession Uniform Law Application Act 2014 (NSW) ss 70, 70(5), 71, 71(3), 78
Cases cited: Burrows v Macpherson and Kelley Lawyer (Sydney) NSW [2022] FedCFamC2G 1048
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87, [1983] HCA 25
Sarks v Cassegrain (2015) 321 ALR 28; [2015] FCAFC 38
Singh v Fobupu Pty Ltd, in the matter of Singh [2021] FCAFC 14
Division: Division 2 General Federal Law Number of paragraphs: 94 Date of hearing: 14 April 2025 Place: Sydney Counsel for the Applicant: Ms N Bailey Solicitor for the Applicant: Mr C Davies, Hall & Wilcox The Respondent: In person ORDERS
SYG 2289 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
IN THE MATTER OF SHAHEEN QASIM
BETWEEN: HEALTH CARE COMPLAINTS COMMISSION
Applicant
AND: SHAHEEN QASIM
Respondent
ORDER MADE BY: JUDGE DOUST DATE OF ORDER: 25 JULY 2025 THE COURT ORDERS THAT:
1.The respondent's application for review of the sequestration order made against the estate of the respondent by Judicial Registrar Birchall on 3 December 2024 is dismissed.
2.The orders made by Judicial Registrar Birchall on 3 December 2024 are affirmed.
3.The Health Care Complaints Commission's costs of the application be paid out of the estate of the respondent with the same priority as petitioning creditor costs in accordance with s 109(1)(a) Bankruptcy Act 1966 (Cth), such costs to be determined on a lump sum basis by a Registrar in the absence of agreement between the Health Care Complaints Commission and the trustee in bankruptcy of the respondent.
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 DOUST:
INTRODUCTION
By an application brought pursuant to s 256 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (FCFCOAAct), the respondent (the review applicant) seeks review of a sequestration order made in respect of her estate by a registrar of this Court. The order was made on 3 December 2024 following presentation by the applicant (the HCCC) of a creditor's petition dated 17 September 2024.
The respondent is a former medical practitioner and the applicant is a body constituted by statute with the function of dealing with complaints against health practitioners. Following proceedings brought by the HCCC in the New South Wales Civil and Administrative Tribunal (NCAT) which cancelled the respondent's registration as a health practitioner, and an appeal from that decision to the New South Wales Court of Appeal (Court of Appeal), the HCCC was the beneficiary of orders that the respondent pay its costs, both in NCAT, and in the Court of Appeal.
On 19 March 2021, the Local Court of New South Wales ordered that the respondent pay the HCCC the amount of $33,072.36 giving force to a Certificate of Determination of Costs issued by a costs assessor (the costs assessment) pursuant to the Legal Profession Uniform Law Application Act 2014 (NSW) (LPUL Application Act). Those costs were the costs of the HCCC in the Court of Appeal. The bankruptcy notice demanded payment of that amount and annexed a copy of the order. There is no dispute that the respondent failed to comply with the bankruptcy notice.
For reasons that follow, the application for review must be dismissed, and the orders made by the registrar affirmed.
DOCUMENTS RELIED UPON
At the hearing of the application on 14 April 2025, the following documents were received into evidence:
(1)A court book, which had been prepared by the applicant and filed with the Court on 13 April 2024. The court book was described on its front page as the “Updated Court Book”. The court book contained a number of relevant documents such as the creditor's petition dated 17 September 2024, the application for review dated 19 December 2024, the affidavits as to service of the bankruptcy notice and the creditor's petition, affidavits as to debt, and affidavits of the respondent which had both been before the registrar and filed by the parties on the present application. The court book was received with the agreement of the parties, subject to one exclusion, being (at Tab 20) the affidavit of Claude Davies, solicitor, sworn 11 April 2025, which had been prepared by the applicant in anticipation of the respondent raising certain issues at the hearing. The applicant did not seek to rely on that affidavit, and it was excluded from the tender;
(2)Affidavit of Claude Davies, solicitor, sworn 14 April 2025, averring as to his searches of the National Personal Insolvency Index as to the respondent, which searches showed no debt agreement in place. The affidavit was read by the applicant; and
(3)A two page document tendered by the respondent. The front page was a Notice of Orders issued by the Local Court of New South Wales in Case No 2020/00070141 advising of the making of orders by consent on 30 October 2023 and the vacation of a hearing date on 2 November 2023. The second page was a judgment/order issued by the Registrar of the Local Court of New South Wales on 3 February 2023 in Case Number 2021/00078150, such orders said to have been made and entered on 19 March 2021. The second page was the Local Court order that had been attached to the bankruptcy notice issued by the Official Receiver.
Neither party required any of the deponents of any of the affidavits to be cross-examined.
OPERATIVE STATUTORY PROVISIONS
As the application seeks review of a decision made by a registrar exercising delegated powers, a hearing de novo of the creditor's petition is required: r 21.04(1), Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (GFL Rules). The creditor must, in effect, prosecute its petition again.
The relevant statutory provisions which arise on the present review are as follows.
Section 40(1)(g) of the Bankruptcy Act 1966 (Cth) (the Act), which provides, inter alia as follows:
40 Acts of bankruptcy
(1) A debtor commits an act of bankruptcy in each of the following cases:
…
(g)if a creditor who has obtained against the debtor a final judgment or final order, being a judgment or order the execution of which has not been stayed, has served on the debtor in Australia or, by leave of the Court, elsewhere, a bankruptcy notice under this Act and the debtor does not:
(i)where the notice was served in Australia-within the time fixed for compliance with the notice; or
(ii)where the notice was served elsewhere-within the time specified by the order giving leave to effect the service;
comply with the requirements of the notice or satisfy the Court that he or she has a counter claim, set off or cross demand equal to or exceeding the amount of the judgment debt or sum payable under the final order, as the case may be, being a counter claim, set off or cross demand that he or she could not have set up in the action or proceeding in which the judgment or order was obtained;
…
Section 43(1) of the Act provides:
43 Jurisdiction to make sequestration orders
(1) Subject to this Act, where:
(a) a debtor has committed an act of bankruptcy; and
(b) at the time when the act of bankruptcy was committed, the debtor:
(i) was personally present or ordinarily resident in Australia;
(ii) had a dwelling - house or place of business in Australia;
(iii)was carrying on business in Australia, either personally or by means of an agent or manager; or
(iv)was a member of a firm or partnership carrying on business in Australia by means of a partner or partners or of an agent or manager;
the Court may, on a petition presented by a creditor, make a sequestration order against the estate of the debtor.
Section 52 of the Act provides:
52 Proceedings and order on creditor's petition
(1) At the hearing of a creditor's petition, the Court shall require proof of:
(a)the matters stated in the petition (for which purpose the Court may accept the affidavit verifying the petition as sufficient);
(b) service of the petition; and
(c)the fact that the debt or debts on which the petitioning creditor relies is or are still owing;
and, if it is satisfied with the proof of those matters, may make a sequestration order against the estate of the debtor.
(1A)If the Court makes a sequestration order, the creditor who obtained the order must give a copy of it to the Official Receiver before the end of the period of 2 days beginning on the day the order was made.
Penalty: 5 penalty units.
Note: See also section 277B (about infringement notices).
(1B) Subsection (1A) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code .
(2)If the Court is not satisfied with the proof of any of those matters, or is satisfied by the debtor:
(a) that he or she is able to pay his or her debts; or
(b)that for other sufficient cause a sequestration order ought not to be made;
it may dismiss the petition.
Regulation 102 of the Bankruptcy Regulations 2021 (Cth) (the Regulations) provides as follows:
102 Service of documents
(1)Unless the contrary intention appears, if a document is required or permitted by the Act or this instrument to be given or sent to, or served on, a person (other than the Inspector - General, the Official Receiver or the Official Trustee), the document may be:
(a)sent by a courier service to the person at the address of the person last known to the person serving the document; or
(b)left, in an envelope or similar packaging marked with the person's name and any relevant document exchange number, at a document exchange where the person maintains a document exchange facility; or
(c)given in a manner specified in section 28A of the Acts Interpretation Act 1901; or
(d)sent, in accordance with the information technology requirements in subsection (3) of this section:
(i)by a kind of electronic communication that transmits the document to a facility maintained by the person for receipt of electronically transmitted documents; or
(ii)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.
Note:The Electronic Transactions Act 1999 applies to a requirement or permission to give information under the Bankruptcy Act 1966 or this instrument, including electronic communications covered by this section.
However, paragraph (d) of this subsection permits information to be given by means of particular kinds of electronic communication, in accordance with the information technology requirements in subsection (3). This means the requirements in section 9 of the Electronic Transactions Act do not apply in relation to electronic communications covered by this section (see subsection 9(3) of the Electronic Transactions Act.
(2)For the purposes of paragraph (1)(a) or (b), in the absence of proof to the contrary, the document is taken to have been received by, or served on, the person when the document would, in the due course of business practice, be delivered to that address or document exchange.
Note: For paragraph (1)(c), see section 29 of the Acts Interpretation Act 1901.
(3)For the purposes of paragraph (1)(d), the information technology requirements are:
(a)at the time the document is sent, it is reasonable to expect that the document would be readily accessible so as to be useable for subsequent reference; and
(b)the document is sent in one of the following formats, or in a format that is similar to or readily convertible into one of the following formats:
(i) Word;
(ii) Excel;
(iii) HTML;
(iv) PDF;
(v) plain text;
(vi) JPEG.
Section 28A of the Acts Interpretation Act 1901 (Cth) (the AI Act) provides as follows:
28A Service of documents
(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.
INTERLOCUTORY ISSUES
When the matter was before the Court for directions on 14 February 2025, and again for hearing on 14 April 2025, the respondent asked the Court to issue a subpoena to counsel who had appeared for the HCCC in proceedings in NCAT and the Court of Appeal concerning the respondent’s registration as a medical practitioner. That application was declined on both occasions.
It was not appropriate for the Court to allow the applicant to seek to go behind the Court of Appeal judgment awarding costs against her by way of cross-examination of the HCCC’s counsel. Although the respondent made an allegation that there was fraud in the Court of Appeal proceedings, she did not identify with any clarity what relevant evidence HCCC’s counsel could have given. The respondent had been represented by senior and junior counsel in the Court of Appeal, so there was no reason to think she did not have the capacity to defend and advance her own interests in that Court.
The respondent’s evidence, namely her affidavit of 19 December 2024, addressed her complaints about the proceedings in NCAT and the Court of Appeal. She alleged, for example, that “HCCC has failed abysmally as a model litigant”, and set out a series of allegations of “Tricks” by the HCCC in its conduct of the proceedings against the respondent, such as failing to reply to the respondent’s affidavit evidence, failing to recognise that the persons who complained about the respondent were vexatious litigants, and the like. Those allegations were an attempt to relitigate the NCAT proceeding. The respondent also alleged that the Court of Appeal was misled by counsel for the HCCC embracing a concession by the respondent’s counsel about the impact upon her of the litigation in which she was involved. The respondent also alleged HCCC’s counsel failed to “acknowledge her own deficiencies in strata law and impress the ignorant bone lazy tribunal panel of 2014” and had encouraged all her witnesses to lie under oath. No particulars were provided of the latter conduct. The respondent’s allegations do not provide a basis for thinking that the judgment debt (for the costs in the Court of Appeal) was obtained irregularly.
ISSUES FOR DETERMINATION
The questions that arise for determination in the present matter are the following:
(1)Whether the applicant had a final judgment or final order against the respondent;
(2)Whether the respondent had a counter-claim, set-off, or cross-demand equal to or exceeding the amount of the final order in the bankruptcy notice that could not have been set up in the action or proceeding in which the order was obtained;
(3)Whether the bankruptcy notice was properly served upon the respondent in accordance with the requirements of the Act and Regulations;
(4)Whether the respondent had committed an act of bankruptcy by failure to comply with the requirements of a bankruptcy notice that had not been set aside;
(5)Whether the applicant had complied with the evidentiary requirements of the Act and the Federal Circuit and Family Court of Australia (Division 2) (Bankruptcy) Rules 2021 (Cth) (the Bankruptcy Rules) in respect of its petition; and
(6)Whether the Court should make a sequestration order in respect of the respondent's estate.
Those issues are addressed below following a recitation of the relevant history.
BACKGROUND
The respondent had been a medical practitioner whose registration as a health practitioner had been cancelled by a decision of the NCAT (sitting in its Occupational Division) on 2 May 2014.
The respondent brought an appeal from that decision to the New South Wales Court of Appeal, which, on 22 September 2015, dismissed the appeal and ordered the respondent to pay:
(a)the HCCC's costs of the appeal; and
(b)the HCCC's costs of the proceedings below assessed at $70,000, such order to take effect on 2 May 2014.
(Court of Appeal judgment)
On 7 October 2020, the Manager, Costs Assessment sent to the parties a certificate of determination of manager’s assessment costs in the sum of $1,881.00 pursuant to s 71 of the LPUL Application Act, and a certificate of determination of costs in the sum of $31,191.36 pursuant to ss 70 and 78 of the LPUL Application Act (the costs certificates).
On 19 March 2021, the Local Court of New South Wales gave a judgment (the Local Court judgment) as follows:
Shaheen Qasim, First Defendant
is to pay
Health Care Complaints Commission, First Plaintiff,
the sum of
Claim amount: $33,072.36
Interest claimed: $0.00
Filing fees: $0.00
Service fees: $0.00
Solicitors fees: $0.00
Other costs: $0.00
TOTAL: $33,072.36
Rania Ashkar, the acting executive Director Corporate Operations and Chief Financial Officer of the HCCC deposed that the costs certificates were the “underlying” certificates for the Local Court judgment. I take Ms Ashkar to mean that the costs certificates were filed with the Local Court pursuant to s 70 of the LPUL Application Act and were the basis for the Local Court judgment.
On 8 February 2024, the Official Receiver issued Bankruptcy Notice BN263328 (the bankruptcy notice). The bankruptcy notice identified the debt as $33,072.36, “as per the accompanying final judgment/s or final order/s” and attached a copy of the Local Court judgment. It was addressed to the respondent at the same Randwick address (the Randwick address) as that provided by the respondent in her affidavit dated 19 December 2024 in support of the application for review of the registrar's decision.
The Randwick address also appears as the respondent's address in the following documents attached to the respondent's affidavit dated 19 December 2024 in support of the application for review:
(1)a Complaint and Summons for an Apprehended Personal Violence Order sworn by the respondent on 5 September 2005;
(2)a Complaint and Summons for an Apprehended Personal Violence Order sworn by the respondent on 31 August 2005;
(3)an affidavit in Federal Court format (without a proceedings number) affirmed by the respondent and dated 14 August 2023; and
(4)an affidavit with "Federal Circuit Court & Family Court of Australia" on the front page (without a proceedings number) affirmed by the respondent and dated 12 August 2023.
In her 19 December 2024 affidavit, the respondent also attaches a deal of material narrating ongoing disputation between herself and residents of other units at the same street address as the Randwick address.
I am satisfied having regard to all of that evidence that the respondent is, and was at all relevant times, ordinarily resident at the Randwick address and also that she had a dwelling house in Australia, being the unit she occupied at the Randwick address. Accordingly, I am satisfied that the requirements of s 43(b)(i) and (ii) of the Act are met.
Joseph Khoury, a process server, averred, in an affidavit of service made on 5 March 2024 (the Khoury affidavit), that on 19 February 2024, he sought to effect personal service at the Randwick address. Mr Khoury averred that he heard someone moving inside the property, and made enquiries of neighbours that the respondent lived at the address, and that nobody opened the door to the unit. Mr Khoury did not aver that he knocked on the door, but I infer from his evidence that nobody opened the door that he did so. The question is otiose for reasons which will become apparent. Mr Khoury does not, in his affidavit, aver what it was that he sought to personally serve upon the respondent on 19 February 2024, but again, the question is otiose.
Mr Khoury averred that on 20 February 2024, he again attempted (and again did not succeed in effecting) personal service at the Randwick address. Mr Khoury claimed to have heard someone moving inside the property, and that he saw mail addressed to the respondent in the letterbox. Mr Khoury did not aver to having knocked on the door.
Mr Khoury further averred that on 26 February 2024, at 7:15am, he served the bankruptcy notice, an Australian Financial Security Authority (AFSA) Bankruptcy Warning notice, and a Certified Extract of the Local Court judgment which were all in an envelope addressed to the respondent, by affixing that envelope to the front door of the Randwick address.
In a supplementary affidavit sworn by Mr Khoury on 17 February 2025 (supplementary Khoury affidavit), he averred that before delivering the documents on 26 February 2024, he knocked on the front door of the Randwick address, and there was no answer. Mr Khoury averred that above the doorbell was a sign saying "PLEASE DO NOT PRESS THE BELL…LEAVE A CARD". He annexed to his supplementary affidavit a photograph of a doorway with a wooden framed door with dappled glass and a security grille, a photograph of the addressed envelope, and a photograph of the envelope apparently wedged into the frame of the security grille above the handle/lock.
Mr Khoury was not required for cross-examination by the respondent, nor did the respondent question service of the bankruptcy notice in her notice of grounds of opposition to the creditor's petition dated 29 October 2024. However, in her affidavit dated 2 November 2024, the respondent stated that she was not served with the bankruptcy notice as she was in lectures, and there was no one at home to accept service of documents. In the respondent's application for review, she states: "No bankruptcy occurred on 18 March 2024, as there were no documents left at the door…".
In the respondent's affidavit made in support of the application for review, at [c] the respondent avers:
No bankruptcy occurred on the 18 March 2024. No documents were found at the door of [the Randwick address] as alleged. Applicant to provide photographic evidence than a testimony.
In the event, Mr Khoury did in fact provide photographic evidence of having affixed the envelope to the respondent's front door in his supplementary affidavit made on 17 February 2025.
I am satisfied having regard to all of the above evidence, and noting the absence of any attempt to contradict his evidence, that Mr Khoury's evidence that he left the envelope containing the bankruptcy notice and other documents affixed to the respondent's front door on 26 February 2024 should be accepted.
The applicant filed the creditor's petition on 17 September 2024. The creditor's petition alleged, amongst other things, that the respondent failed to comply with the bankruptcy notice on or before 18 March 2024, or to satisfy the Court that she had a counter-claim, set-off, or cross-demand equal to or exceeding the amount of the judgment debt or sum payable under the final order, as the case may be, being a counter-claim, set-off, or cross-demand that she could not have set up in the action or proceeding in which the judgment or order was obtained.
The creditor's petition contained an affidavit of Ms Ashkar, affirmed on 17 September 2024 that:
(1)she has access to the books and records of the HCCC;
(2)the statements in the creditor's petition were, within her knowledge, true; and
(3)the respondent failed within 21 days after service of the bankruptcy notice to pay the debt or make an arrangement to the HCCC's satisfaction for payment of the debt.
(Ashkar September affidavit)
The respondent did not require Ms Ashkar for cross-examination. Nor did the respondent make any statement in the application for review, or in any of her affidavits, disputing Ms Ashkar's claim that the respondent had failed to pay the debt referred to in the bankruptcy notice.
The creditor's petition was accompanied by a Trustee Consent to Act Declaration made by Jonathon Colbran (trustee consent).
The creditor's petition was also accompanied by an affidavit of Lachlan Collins dated 17 September 2024, a paralegal in the employ of the applicant's lawyers, affirming that on 17 September 2024 he conducted a search of the record of the Federal Court of Australia and the Federal Circuit Court of Australia (sic) and found that the respondent had not made any application in respect of the bankruptcy notice (Collins affidavit). That affidavit complied with r 4.04(1)(a) of the Bankruptcy Rules and annexed a copy of the search Mr Collins had undertaken for any such application, in compliance with the requirement in r 4.04(2) of the Bankruptcy Rules.
The respondent did not require Mr Collins for cross-examination, nor did she provide any evidence of having made any application in respect of the bankruptcy notice. The respondent asserted in a "Genuine Steps Statement" filed with the Court on 12 March 2025, that she had requested the HCCC to agree to have the bankruptcy notice reviewed by the Administrative Review Tribunal, but that the HCCC had rejected that request.
In the absence of any evidence to the contrary of that given by Mr Collins, and in the absence of any cross-examination of him, I am satisfied that his evidence that the respondent had not made any application in respect of the bankruptcy notice should be accepted.
On 14 October 2024, Roderick Bruce Duncombe, licenced commercial agent, affirmed an affidavit that he had served the respondent with the creditor's petition, the Collins affidavit, the Khoury affidavit, and the trustee consent on 10 October 2024 outside the front of the Law Courts building at Queens Square in Sydney (Duncombe affidavit) by handing her those documents, and that when he asked the person served if she was Shaheen Qasim, the person answered "Yes".
The respondent did not require Mr Duncombe for cross-examination, nor did she provide any affidavit evidence contradicting the evidence in the Duncombe affidavit. During the course of the hearing on 14 April 2025, the respondent initially claimed that she had been served in the court, however, when pressed, she conceded that in fact she had been served outside the court building. I am satisfied that the respondent was served with the creditor's petition and accompanying documents as Mr Duncombe avers.
The respondent filed a Notice stating grounds of opposition to the Creditor's petition on 29 October 2024 (Notice of opposition). The grounds of opposition stated therein were as follows:
1.The debt alleged in the demand to be owing is genuinely disputed on substantial grounds.
2.The respondent has a genuine right of set-off against the creditor which exceeds the amount claimed in the demand.
3.Bankruptcy Notice 263328 was not served on the respondent by personal service or substituted service.
4.The Commission has, at least in effect if not by intention, sought to circumvent the application of section 41(3)(c)(i) in respect of the Tribunal Costs by re-registering the appeal Judgment as a new judgment in the Local Court and then purporting to rely the fresh date of entry in the Notice. The Commission's mis-use of the Local Court's process to bring about unauthenticated judgment to be used in the Notice brings the administration of justice in disrepute. It is also oppressive to the respondent in that the Notice to extract from her satisfaction of the Tribunal Costs through a bankruptcy process threatens her with sequestration.
The respondent affirmed an affidavit on 26 October 2024 (respondent 26 October affidavit), which alleged (in summary) that:
(1)She did not owe the debt as claimed in "BN 2289" (the respondent appeared by that reference to be confusing the bankruptcy notice number with the proceedings number);
(2)The amount is incorrect and misleading;
(3)The debt dates back to periods between 2010 and 2015. The respondent later asserted that amounts charged for 2012 to 2015 have a "statutory limit of > 6 years", and that the debt was statute barred;
(4)The debt was not owed by the Respondent, but by the Medical Council to the applicant (the Health Care Complaints Commission);
(5)The debt of $33,000 is part of the $70,000; and
(6)The applicant had sought to circumvent the application of section 41(3)(c)(i) [presumably a reference to the Act] in respect of the Tribunal costs by re-registering the appeal judgment as a new judgment in the Local Court.
The respondent also affirmed an affidavit on 2 November 2024 (respondent 2 November affidavit), which alleged (in summary) that:
(1)She was not served with the bankruptcy notice as she was in lectures and nobody was at home at the time of service;
(2)She does not owe the debt claimed in the creditor's petition;
(3)The debts claimed date back to periods between 2010 and 2015 and are statute barred;
(4)The debt was not owed by the respondent, but by the Medical Council to the HCCC;
(5)The appeal orders [presumably those made by the Court of Appeal in 2015)] are not a cost assessor's certificate;
(6)The HCCC has misapplied the law; and
(7)The applicant had sought to circumvent the application of section 41(3)(c)(i) [presumably a reference to the Act] in respect of the Tribunal costs by re-registering the appeal judgment as a new judgment in the Local Court.
In the event, the registrar made the sequestration order the subject of the present review on 3 December 2024.
In her application for review dated 19 December 2024 (review application), the respondent stated that she sought review of all of the orders made by the registrar and that her estate should not be sequestrated.
As best the review application may be understood, the respondent was asserting that:
(1)She did not owe the debt/s claimed and/or the debts were statute barred;
(2)No act of bankruptcy had occurred as she had not been served with the bankruptcy notice;
(3)The appeal orders (that is, the orders made by the Court of Appeal in 2015) are not a cost assessor's certificate, and the Local Court judgment was void;
(4)The registrar failed to have regard to Annexure A, which was emailed to the Court registry on 2 November 2024 (presumably this was a reference to Annexure A to the respondent's affidavit of 2 November 2024, which was a document headed Diploma of Community Services Timetable for Semester 1, Term 1, 2024); and
(5)The HCCC had misapplied the law since 2004. The respondent was the subject of a vexatious complaint by her neighbours, a doctor had lied under oath at the tribunal hearing in 2020, and the HCCC had failed to disclose certain information about patients.
The respondent's affidavit affirmed 19 December 2024 essentially repeated those claims, but elaborated somewhat on the claims concerning the Local Court judgment and the costs assessment. The affidavit asserted that "the Appeal Orders is not a cost assessor's certificate as a judgment or order" and that the Tribunal costs order was not a final order within the meaning of s 40(1)(g) of the Act and in any event should be set aside because it was more than 6 years old and was "stale for bankruptcy purposes".
The respondent also further averred that no bill of costs was served on her.
The application for review came on for directions on 14 February 2025, on which occasion the matter was listed for final hearing before this Court on 27 March 2025, and directions were made for the preparation of the matter for the hearing.
When the matter came on for hearing on 27 March 2025, the solicitor who had filed a Notice of Appearance on 24 March 2025 as the respondent's representative, did not appear. The solicitor wrote by email to my Chambers on Wednesday 26 March 2025 at 6:48pm advising that he had been "given instructions that I'm not required to attend the final hearing. I will not go into the detail details (sic) however will briefly say it's partly due to a cost agreement issue".
At the hearing on 27 March 2025, the respondent claimed that she had been expecting an appearance on her behalf by the solicitor.
Although it appeared from the solicitor's email that the respondent may have herself brought about the failure of her solicitor to appear on her behalf, in the circumstances I could not exclude the possibility that the respondent had been surprised by the failure of her representative to appear. Ordinarily, a solicitor in such circumstances is expected to appear at the hearing to seek the Court's leave to withdraw. Accordingly, the hearing was adjourned to 14 April 2025 to allow the respondent an opportunity to retain other representation.
The respondent ultimately appeared at the hearing on 14 April 2025 without representation.
At the hearing the HCCC read the following:
(1)Affidavit of Debt of Rania Ashkar affirmed 11 April 2025, which averred that the debt of $103,072.36 plus legal costs was still owing and remained outstanding (Ashkar April 2025 affidavit); and
(2)Affidavit of search of Claude Thomas Pollard Davies sworn on 14 April 2025 that he had searched the National Personal Insolvency Index (NPII) in respect of the respondent and there were no details of any debt agreement in place on the date the petition was presented and on the date the further search was undertaken, and there were no applications to seek to set aside the creditor's petition. The affidavit also annexed an extract from the NPII showing entries concerning the respondent (Davies search affidavit).
CONSIDERATION
Whether the applicant had a final judgment or final order against the respondent
I am satisfied that the applicant had a final judgment or final order against the respondent, within the meaning of s 40(1)(g) of the Act, being the Local Court judgment given on 19 March 2021 in the sum of $33,072.36.
Pursuant to s 70(5) and s 71(3) of the LPUL Application Act, upon filing in the appropriate court of a certificate of costs assessment, such certificate is taken to be a judgment of that court: Singh v Fobupu Pty Ltd, in the matter of Singh [2021] FCAFC 14 at [30]; Sarks v Cassegrain (2015) 321 ALR 28; [2015] FCAFC 38 (at [39] per Edmonds and Gleeson JJ, Pagone J agreeing), and is deemed by s 40(3)(b) of the Act to be final judgment obtained in the action.
That judgment was the subject of the bankruptcy notice issued on 8 February 2024.
Whilst the respondent alleged in the Notice stating grounds of opposition to Creditor’s petition that the debt alleged in the demand is genuinely disputed on substantial grounds, the respondent has not identified any basis to query the Local Court judgment given on 19 March 2021. The respondent asserted that the debt was not owed by her, but by the Medical Council to the applicant. That submission is rejected. The applicant is plainly named in the Local Court judgment as the first defendant and the party who is required to pay the first plaintiff (the Health Care Complaints Commission) the nominated amount.
The respondent alleged in her affidavit of 2 November 2024 that the debts claimed by the applicant related back to 2010, and were statute barred as they were more than 6 years old. That submission should not be accepted. The relevant limitation is that in s 41(3)(c) of the Act, which prohibits the issue of a bankruptcy notice if six years has elapsed since the judgment was given. The judgment in the present matter, being the Local Court judgment, was given on 19 March 2021. Six years had not elapsed since that judgment was given. Accordingly, there was no impediment to the issue of the bankruptcy notice.
Whilst the applicant maintains the respondent is indebted to it in the amount specified in the Court of Appeal judgment, being $70,000.00, the bankruptcy notice was not premised on that debt, which dates back to 22 September 2015.
Whether the respondent has a counter-claim, set-off, or cross-demand equal to or exceeding the amount of the judgment debt or sum payable under the final order that she could not have set up in the action or proceeding in which the judgment or order was obtained
Nothing in the evidence adduced by the respondent has identified any counter-claim, set-off, or cross-demand of any type.
Whilst it is apparent that the respondent is aggrieved by the outcome in the Court of Appeal, and is aggrieved by the orders that she pay the HCCC's costs, she has not articulated any cause of action she has against the HCCC which might sound in any monetary order in her favour.
Whether the applicant served the respondent with the bankruptcy notice in a manner that complied with the requirements of the Act and the Regulations
It is necessary, in order for the requirements of s 40(1)(g) to be satisfied, for the creditor to demonstrate that the respondent has been served with the bankruptcy notice.
As set out above, reg 102 of the Regulations (which is set out in full above) deals with the question of giving or sending a document to, or serving a document on, a person. It does not purport to deal exhaustively with the means by which a person may be served. Rather, reg 102(1) refers to two means by which service "may be" effected, namely through use of a courier service or a document exchange. A document exchange was not used in the present matter, however, delivery of the document by the process server may be regarded as the document having been sent by a “courier service” within the meaning of reg 102: see Burrows v Macpherson and Kelley Lawyer (Sydney) NSW [2022] FedCFamC2G 1048 at [51].
Reg 102 also contains a note referring to s 28A of the AI Act which provides that for the purposes of any Act that requires a document to be served on a person, the document may be served by leaving it at the address of the place of residence of the person last known to the person serving the document.
As set out above, I am satisfied that the Randwick address was the place of residence of the respondent at all relevant times, including 26 February 2024, which is the date upon which Mr Khoury avers that he left the bankruptcy notice and other documents in an envelope affixed to the front door of the Randwick address. Mr Khoury annexed to his supplementary affidavit photographs that purported to show the envelope containing the bankruptcy notice affixed to what he averred was the front door of the respondent’s residence. The respondent did not adduce any evidence that the location shown in the photographs was not in fact her front door, nor did she cross-examine Mr Khoury to suggest that his evidence was not correct. I am satisfied that Mr Khoury’s evidence should be accepted.
The respondent claimed that she had not received the bankruptcy notice. She was not cross-examined, however, the Act requires service of the bankruptcy notice, not proof of actual receipt by the debtor. Proof of non-receipt (as compared with proof of non-delivery) is not sufficient to displace a conclusion that service has been effected: Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87, [1983] HCA 25 at [22].
I am satisfied that the applicant served the respondent with the bankruptcy notice in a manner that complied with the requirements of reg 102(1)(a) of the Regulations and s 28A of the AI Act on 26 February 2024 when Mr Khoury affixed the envelope containing the bankruptcy notice to the respondent’s front door.
The respondent alleged that the registrar failed to have regard to Annexure A, which was emailed to the Court registry on 2 November 2024. This was presumably a reference to Annexure A to the respondent's affidavit of 2 November 2024, which was a document headed Diploma of Community Services Timetable for Semester 1, Term 1, 2024. The respondent submitted, in effect, that she was not served as she was attending lectures. Nothing in the timetable shows any course activity on 26 February 2024, nor does it show any activity at 7:15am, when Mr Khoury averred that he attended the respondent’s premises. In any event, the provision of the timetable is not proof as to the respondent’s whereabouts, and, for the reasons set out above, it was not necessary for Mr Khoury to give the bankruptcy notice to the respondent provided he delivered it to her address.
Whether the respondent failed to comply with the requirements of the bankruptcy notice within the time fixed for compliance with the notice
I am satisfied that the respondent has not complied with the requirements of the bankruptcy notice within the 21 day period nominated in the bankruptcy notice.
Ms Ashkar averred in her affidavit affirmed 17 September 2024 in support of the creditor’s petition that the respondent failed within 21 days after service of the bankruptcy notice to pay the debt or make a satisfactory arrangement for payment. She also affirmed in her affidavit made on 11 April 2025 that the respondent remained indebted to the applicant in the amount of $103,072.36 plus legal costs. That amount included the Local Court judgment given on 19 March 2021 in the sum of $33,072.36.
The respondent did not seek to cross-examine Ms Ashkar on either of those affidavits.
Accordingly, I am satisfied that the respondent committed an act of bankruptcy of the type described in s 40(1)(g) of the Act.
Whether the Court should make a sequestration order in respect of the respondent's estate
I am satisfied that the applicant has proved the matters in s 52 of the Act, as follows.
First, the creditor's petition was supported by an affidavit verifying it on behalf of the applicant, as required by s 47 of the Act, being the Ashkar September affidavit referred to above. Based on that evidence, which was not challenged in cross-examination, and for the reasons set out above, I am satisfied that the applicant has proved the matters stated in the petition, as required by s 52(1)(a) of the Act, namely:
(a)the existence of the debt owed by the respondent to the applicant, which remained owed at the time of the hearing;
(b)the fact the applicant does not have security over property of the respondent;
(c)the respondent having been present and ordinarily resident in Australia at the time of the act of bankruptcy (being 18 March 2024);
(d)the respondent having a dwelling house in Australia at the time of the act of bankruptcy; and
(e)the respondent having committed an act of bankruptcy by failing to comply with the bankruptcy notice within 21 days after service, namely by 18 March 2024.
I am satisfied, based on the Duncombe affidavit, that the applicant served the respondent with the creditor's petition, the Ashkar September affidavit, the Collins affidavit, and the first Khoury affidavit, as required by r 4.05 of the Bankruptcy Rules, on 10 October 2024, by Mr Duncombe handing those documents to the respondent. I am satisfied that the applicant has proved service of the petition as required by s 52(1)(b) of the Act.
I am satisfied, as required by s 52(1)(c) of the Act, that the applicant has proved that the debt on which it relies is still owing.
I am further satisfied that the creditor's petition was, as required by rr 4.04(1)(a) and (2) of the Bankruptcy Rules, accompanied by an affidavit as to a search of the records of this Court and the Federal Court of Australia showing no application was made in relation to the bankruptcy notice, and annexing that search, namely it was accompanied by the Collins affidavit, which was filed along with the creditor's petition.
I am satisfied that the creditor's petition was, as required by r 4.04(1)(b) of the Bankruptcy Rules, accompanied by an affidavit of service of the relevant bankruptcy notice, namely, it was accompanied by the first Khoury affidavit.
The applicant also filed the trustee consent along with the creditor's petition, in accordance with s 156A of the Act.
I am satisfied that the requirements of r 4.06(2) of the Bankruptcy Rules have been met by the applicant having filed the Duncombe affidavit, which both averred as to the fact of service of the documents above, and the means and time of such service, and annexed a copy of each of those documents, being the creditor's petition, the Ashkar September affidavit, the Collins affidavit and the first Khoury affidavit, as required by r 4.06(2) of the Bankruptcy Rules.
I am satisfied that the requirements of r 4.06(3) of the Bankruptcy Rules have been met by the applicant having filed the Davies search affidavit, which averred as to his search of the NPII in respect of the respondent and as to the absence of any debt agreement in place on either the date the petition was presented or the date the further search was undertaken, and that there were no applications to seek to set aside the creditor's petition. The affidavit also annexed an extract from the NPII.
I am satisfied that the requirements of r 4.06(4) of the Bankruptcy Rules have been met by the applicant having filed the Ashkar April 2025 affidavit, which averred as to the outstanding debt.
In those circumstances, the Court may make a sequestration order. However, the Court may decline to do so, and dismiss the petition if “for other sufficient cause a sequestration order ought not to be made”: s 52(2)(b) of the Act.
One of the arguments advanced by the respondent was that the applicant’s registration of the costs certificate in the Local Court was a misuse of the Local Court’s process and was designed to circumvent the six-year time limit in s 41(3)(c) of the Act. Section 41(3)(c) of the Act prohibits the issuing of a bankruptcy notice in respect of a judgment or order where a period of more than six years has elapsed since the judgment was given or the order was made. I am not persuaded that this argument is one which justifies dismissing the creditors petition.
Implicit in the respondent’s argument is the contention that s 41(3)(c) of the Act evinces an intention that the time for the issue of a bankruptcy notice should commence to run from when a costs order is first made. It is not clear why that would, or should, be the case. Until the issue and filing of a costs certificate, such order could not be the subject of a bankruptcy notice. It was only by the costs assessment process that the debt was quantified, and only by the filing of the certificate in the Local Court that the debt acquired the force of a final judgment.
Whilst nearly five years elapsed between the Court of Appeal judgment and the issue of the costs certificate, there is not an evidential basis in the present matter to form a conclusion that the time taken by the applicant to pursue the present petition involved any intent to circumvent the limit in s 41(3)(c) of the Act, nor should the delay be thought to warrant the exercise of the discretion to refuse the petition. The respondent’s continuing refusal to accept the judgment of the Court of Appeal, to pay the $70,000.00 in costs owing pursuant to the order made on 22 September 2015, to pay the costs which were quantified in the assessor’s certificate of 7 October 2020 and were the subject of the order of 19 March 2021, or to make any arrangement for payment of those sums notwithstanding the significant elapse of time since liability was first incurred, militate against an exercise of discretion against making the order sought.
As set out above, the respondent made a number of allegations about the HCCC’s conduct in the proceedings before the NCAT and the Court of Appeal in her affidavit of 19 December 2024. None identified any irregularity in the Local Court order made following the costs assessment, and only one allegation appeared to concern the Court of Appeal proceedings. That allegation was misconceived. The respondent’s complaints about the NCAT proceeding could have been raised in the Court of Appeal. There is no indication in the Court of Appeal judgment of 22 September 2015, which was in evidence in the proceeding, that any of the matters about which the respondent complains were ventilated in that appeal. There was nothing in the respondent’s allegations that might persuade the Court to question the order of the Local Court creating the debt on which the bankruptcy notice proceeded, to question the judgment of the Court of Appeal, or to exercise the Court’s discretion not to make the sequestration order sought.
CONCLUSION
I am satisfied the applicant has proved all of the matters it is required to prove under the Act before a sequestration order may be made; and I am satisfied that such an order should be made against the estate of the respondent and propose to so order.
I will also order that the respondent pay the applicant's costs of the application, and that those costs be paid out of the estate of the respondent in accordance with s 109 of the Act.
I certify that the preceding ninety-four (94) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Doust. Associate:
Dated: 25 July 2025
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