Naumovic v District Council of Coober Pedy - [2023] FedCFamC2G 125

Federal Circuit and Family Court of Australia
(DIVISION 2)
Naumovic v District Council of Coober Pedy [2023] FedCFamC2G 125

File number(s): ADG 33 of 2022

Judgment of: JUDGE LUCEV

Date of judgment: 22 February 2023

Catchwords:
BANKRUPTCY – Application to review Registrar’s decision not to set aside bankruptcy notice – whether interim costs order of Supreme Court of South Australia on interlocutory proceeding a final order in bankruptcy – whether counterclaim, set off or cross demand available – whether Administrator is the Council – whether counterclaims , set off or cross demand mutual – whether issuance of bankruptcy notice abuse of process – whether debt collection – whether intention to continue bankruptcy proceedings to sequestrate debtor – whether issuance of bankruptcy notice in relation to taxation of costs proceedings oppressive – whether costs might be reduced in taxation proceedings – whether lawyer’s conduct scandalous – whether issuance of bankruptcy notice oppressive because intended to prevent applicant from participating in Council elections – whether failure to adjourn taxation of costs proceedings oppressive - whether grounds to go behind judgment

LOCAL GOVERNMENT – where Administrator appointed to exercise powers, functions and duties on behalf of the Council – whether Administrator is the Council

WORDS AND PHRASES - “on behalf of”

Legislation:
Bankruptcy Act 1966 (Cth) ss 3, 27, 29, 30, 40, 41, 52, 58, 60

Federal Circuit and Family Court of Australia Act 2021 (Cth) s 256

Judiciary Act 1903 (Cth) s 39B

Bankruptcy Regulations 2021 (Cth) reg 8

Federal Circuit and Family Court (Division 2) (General Federal Law) Rules 2021 (Cth) r 21.03

Federal Circuit and Family Court of Australia (Division 2) (Bankruptcy) Rules 2021 (Cth) r 3.02

Acts Interpretation Act 1915 (SA) s 34

Bankruptcy Act 1898 (NSW)

Legislation Interpretation Act 2021 (SA) s 11

Local Government (Elections) Act 1999 (SA) ss 8, 35

Local Government Act 1999 (SA) ss 4, 10, 35, 36, 39, 51, 52, 272, 273, Sch 1

Supreme Court Act 1935 (SA) s 40

Enforcement of Judgments Act 1991 (SA)

Uniform Civil Rules 2020 (SA) Ch 17, rr 183.1, 186.1, 194.1, 195.8, 195.13, 201.1, 201.5, 201.2, Sch 7

Cases cited:
AON Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175; (2009) 83 ALJR 951; (2009) 258 ALR 14

Attorney-General (NSW) v Chidgey [2008] NSWCCA 65; (2008) 182 A Crim R 536

Australian Securities and Investments Commission v Forge [2003] FCAFC 274; (2003) 133 FCR 487; (2003) 1 ABC(NS) 429

Bechara v Bates [2021] FCAFC 34; (2021) 286 FCR 166; (2021) 388 ALR 414; (2021) 18 ABC(NS) 1

Bhagat v Global Custodians Ltd [2002] FCA 223

Brunninghausen v Glavanics [1998] FCA 230

C2C Investments Pty ltd, in the matter of C2C Investments Pty Ltd v Leigh (No 3) [2012] FCA 680

Cassimatis v Australian Securities and Investments Commission [2016] FCA 131; (2016) 334 ALR 350

Cavoli v Etl [2007] FCA 1191; (2007) 5 ABC(NS) 363

Clyne Deputy Commissioner of Taxation (NSW) (No 3) (1982) 13 ATR 466; (1982) 82 ATC 4484

Clyne v Deputy Commissioner of Taxation (NSW) (No 3) (1982) 13 ATR 686; (1982) 69 FLR 1; (1982) 45 ALR 323; (1982) 82 ATC 4690

Dimitrov v Bendigo and Adelaide Bank Limited & Ors [2020] FCCA 3149

District Council of Coober Pedy v George Naumovic(No 2) [2020] SASC 159

District Council of Coober Pedy v Naumovic [2020] SASC 79

Elliott v Water Wheel Holdings Ltd [2004] FMCA 37; (2004) 178 FLR 459

Gelonesi v G Abignano (Investment) Pty Limited [2020] FCA 898

Glew v Harrowell, in the matter of Glew [2003] FCA 373; (2003) 198 ALR 331

Henderson, in the matter of Henderson v McCafferty [2000] FCA 1511

In re A Debtor [1958] 1 Ch 81; [1957] 2 All ER 551; [1957] 3 WLR 184

Jensen v Queensland Law Society Incorporated [2004] FCA 1630

Killoran v Duncan [1999] FCA 1574

Kimber v The Owners Strata Plan No 48216 (No 2) [2018] FCA 406

La Pegna & Anor v Deputy Commissioner of Taxation [2006] FMCA 1643; (2006) 204 FLR 364

Lavan Legal v Kenyon [2017] FCCA 2529; (2017) 326 FLR 20

Luck v Chief Executive Officer of Centrelink [2015] FCAFC 75

Luck v University of Southern Queensland [2015] FCA 286

Mariconte v Nobarani [2020] FCA 1485

Massih v Esber [2008] FCA 1452; (2008) 250 ALR 648

Maxwell v Moorabool Developments Pty Ltd [2004] FMCA 92

McPhee v Glentham Pty Ltd [2006] FMCA 1508

Myers v Myers [1969] WAR 19

NAKX v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCA 1559

Naumovic v District Council of Coober Pedy (unreported, Federal Circuit and Family Court of Australia (Division 2), 31 August 2022, Parkyn R)

Nobarani v Mariconte [2021] FCAFC 96; (2021) 18 ABC(NS) 128

O’Shanassy v Wingecarribee Shire Council, in the matter of O’Shanassy [2018] FCA 1381

Olivieri v Stafford (1989) 24 FCR 413; (1989) 91 ALR 91

Patane v Asteron Life Ltd (formerly Royal & Sun Alliance Financial Services Ltd) (ACN 001 698 228) [2004] FCA 232; (2004) 2 ABC(NS) 85

Pattison v Hadjimouratis [2006] FCAFC 153; (2006) 155 FCR 226; (2006) 236 ALR 1; (2006) 4 ABC(NS) 367

R v Portus; Ex parte Federated Clerks Union of Australia [1949] HCA 53; (1949) 79 CLR 428; (1949) 23 ALJ 621

R v Toohey and Others; Ex parte Attorney-General for the Northern Territory [1980] HCA 2; (1980) 145 CLR 374; (1980) 54 ALJR 145; (1980) 28 ALR 27

Rafidi v Commonwealth Bank of Australia [2020] FCAFC 26; (2020) 17 ABC(NS) 386

Ramsay Health Care Australia Pty Ltd v Compton [2017] HCA 28; (2017) 261 CLR 132; (2017) 91 ALJR 803; (2017) 345 ALR 534; (2017) 15 ABC(NS) 222; (2017) 122 ACSR 115

Re Athans; Ex parte Athans (1991) 29 FCR 302

Re Brown (1923) 40 WN (NSW) 73

Re Briggs; Ex Parte Briggs v Deputy Commission of Taxation (WA) [1986] FCA 512; (1986) 12 FCR 310

Re Ling; Ex parte Commonwealth of Australia (1995) 58 FCR 129; (1995) 130 ALR 596

Re Wedd; Ex parte Parker [1962] WAR 42; (1962) 19 ABC 36; [1962] ALR 60

Rose v Merition Apartments Pty Ltd [2011] FMCA 721

Sanders v Snell (No 2) (2000) 174 ALR 53

Seller v Deputy Commissioner of Taxation [2011] FCA 865; (2011) 84 ATR 501; (2011) 282 ALR 80; (2011) 9 ABC(NS) 195

Sims v Jooste & Ors (No 4) [2016] FCCA 2641

Singh v Fobupu Pty Ltd, in the matter of Singh [2021] FCAFC 14; (2021) 17 ABC(NS) 592

Slack v Bottoms English Solicitors [2002] FCA 1445

Stec v Orfanos [1999] FCA 457

Swarbrick v Burge & Ors [2009] FMCA 985; (2009) 236 FLR 311

Totev v Sfar [2008] FCAFC 35; (2008) 167 FCR 193; (2008) 247 ALR 180; (2008) 5 ABC(NS) 691

University of Southern Queensland v Luck [2017] FCCA 639; (2017) 318 FLR 147

Warner v Frost [1999] FCA 830

Watts v Adelaide Bank Limited [2009] FCA 420

Williamson v Bendigo and Adelaide Bank Ltd [2021] FCCA 296

Xu v Wan Ze Property Development (Aust) Pty Ltd (in Liq) [2014] FCA 461; (2014) 315 ALR 523

Zangmo v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2021] FCCA 1744

Division: Division 2 General Federal Law

Number of paragraphs: 141

Date of last submission/s: 24 November 2022

Date of hearing: 24 November 2022

Place: Adelaide (delivered by video-link from Perth)

Applicant: In person

Counsel for the Respondent: Mr J Napier

Solicitor for the Respondent: Norman Waterhouse
ORDERS

ADG 33 of 2022

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

IN THE MATTER OF GEORGE NAUMOVIC V DISTRICT COUNCIL OF COOBER PEDY

BETWEEN:
GEORGE NAUMOVIC

Applicant

AND:
DISTRICT COUNCIL OF COOBER PEDY

Respondent

order made by:

JUDGE LUCEV

DATE OF ORDER:

22 FEBRUARY 2023

THE COURT ORDERS THAT:
1.The applicant’s application filed 16 September 2022 for review of a Registrar’s decision dated 31 August 2022 dismissing the originating application filed 22 February 2022 seeking to set aside the Bankruptcy Notice BN 255075 issued on 13 January 2022 be dismissed, and the Registrar’s orders of 31 August 2022 be confirmed.
2.The time for the applicant to comply with the terms of Bankruptcy Notice Number BN 255075 issued on 13 January 2022 be extended to 4.00pm 8 March 2023.

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
Application

This is an application filed by Mr George Naumovic (“Mr Naumovic”) on 16 September 2022 under s 256(1) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (“FCFCA Act”) seeking review of a decision of a Registrar of this Court (“Review Application”), and for other ancillary orders. The Review Application concerns a Registrar’s Reasons for Decision in Naumovic v District Council of Coober Pedy (unreported, Federal Circuit and Family Court of Australia (Division 2), 31 August 2022, Parkyn R) (“Naumovic – Registrar’s Decision”) and consequent orders to the following effect:
(a)extending the time for Mr Naumovic to comply with the terms of a Bankruptcy Notice BN 255075 issued on 13 January 2022 (“Bankruptcy Notice”); and
(b)otherwise dismissing the originating application filed on 22 February 2022 seeking to set aside the Bankruptcy Notice (“Set Aside Application”).
The Review Application is opposed by the respondent, the District Council of Coober Pedy (“Council”).
Bankruptcy Notice
The Bankruptcy Notice was issued by the Official Receiver on 13 January 2022 and served by email upon Mr Naumovic on 3 February 2022 and claims a total debt owing of $43,831.85 (“Judgment Debt”), comprised of an amount of $42,845.81 arising from a costs order of the Supreme Court of South Australia (“SCSA”) dated 26 August 2021 in case number SCCIV-19-189 (District Council of Coober Pedy v George Naumovic (No 2) [2020] SASC 159) (“Further Costs Order”) in which the Council was the first applicant and Mr Naumovic the first respondent, and a further amount of $986.04 by way of interest.
Set Aside Application
In the Set Aside Application:
(a)the “Details of Claim”, which include the final orders sought by Mr Naumovic, are as follows:
On the grounds stated in the accompanying affidavit, the Applicant claims and seeks the following orders:
1.That the Bankruptcy Notice Number BN 255075 issued on 13 January 2022 which was served on me on the 3 February 2022 be set aside as it is not valid as it is not a Final Judgment or Final Order as detailed in the accompanying Affidavit and pursuant to the requirements set out in Division 1 Part 8 (1) (3) (4) of the Bankruptcy Regulations 2021 and section 40(1)(g) of the Bankruptcy Act 1966 and is in contravention of section 41(1)(a) of the Bankruptcy Act 1966.
2.That the Bankruptcy Notice Number BN 255075 issued on 13 January 2022 which was served on me on the 3 February 2022 be set aside as there may be proceedings to set aside the underlying judgment when permitted pursuant to Rule 196.1 (1) of the Uniform Civil Rules 2020 (SA) upon the completion of the taxation process as detailed in the accompanying Affidavit and pursuant to sections 41(6A)(a) and 41(6C) of the Bankruptcy Act and Rule 3.02(4) of the Bankruptcy Rules 2021.
3.That the Bankruptcy Notice Number BN 255075 issued on the 13 January 2022 which was served on me on the 3 February 2022 be set aside on the grounds of a counterclaim, set-off or cross demand as detailed in the accompanying Affidavit and pursuant to section 40(1)(g) and 41(7) of the Bankruptcy Act and Rule 3.02(3) of the Bankruptcy Rules 2021.
4.That the Bankruptcy Notice Number BN 255075 issued on the 13 January 2022 which was served on me on the 3 February 2022 be set aside on ‘other grounds’ as detailed in the accompanying Affidavit and pursuant to section 41(6A)(b) of the Bankruptcy Act and Rule 3.02 of the Bankruptcy Rules 2021.
5.Pursuant to section 29(1) and section 30(1)(a)(b) of the Bankruptcy Act 1966 that the Court give leave to the Applicant to unseal the Interlocutory Application [FDN 89] and accompanying Affidavit [FDN 90] of George Naumovic that is referred to in the Creditor’s Bankruptcy notice attached Order [FDN 94].
6.That the Applicant be awarded costs for any disbursements and out of pocket expenses incurred in this Application
(b)the “Claim for Interim Relief” seeks interim orders as follows:
1.That time for compliance with Bankruptcy Notice Number BN 255075 issued on 13 January 2022 which was served on me on 3 February 2022 be extended up to when the matter can be listed and heard by the Court pursuant to section 30(1) and section 33(1) of the Bankruptcy Act 1966 (Cth) and pursuant to Rule 3.03 of the Bankruptcy Rules 2021.
2.That time for compliance with Bankruptcy Notice Number BN 255075 issued on 13 January 2022 which was served on me on the 3 February 2022 be extended on the basis that there may be proceedings to set aside the underlying judgment when permitted pursuant to Rule 196.1 (1) of the Uniform Civil Rules 2020 (SA) upon the completion of the taxation process as detailed in the accompanying Affidavit and pursuant to sections 33(1), 41(6A)(a) and 41(6C) of the Bankruptcy Act and pursuant to Rules 3.02(4) and 3.03 of the Bankruptcy Rules 2021.
3.That time for compliance with the Bankruptcy Notice BN 255075 issued on the 13 January 2022 which was served on me on the 3 February 2022 be extended on the ground of a counter-claim, set-off or cross demand as detailed in the accompanying Affidavit and pursuant to sections 33(1), 40(1)(g) and 41(7) of the Bankruptcy Act and pursuant to Rules 3.02(3) and 3.03 of the Bankruptcy Rules 2021.
4.That time for compliance with the Bankruptcy Notice BN 255075 issued on the 13 January 2022 which was served on me on the 3 February 2022 be extended on ‘other grounds’ as detailed in the accompanying Affidavit and pursuant to sections 33(1), 41(6A)(b) of the Bankruptcy Act and pursuant to Rules 3.02 and 3.03 of the Bankruptcy Rules 2021
Notice of Grounds of Opposition
The Council filed a Notice of Grounds of Opposition on 6 May 2022 (“Notice of Opposition”) opposing the final relief sought by Mr Naumovic, and further stating that:
1.The judgment relied upon by the respondent in support of the application for the bankruptcy notice is a ‘final judgment or final order’ within the meaning of section 40(1)(g) of the Bankruptcy Act 1966 (Cth) (Act) and regulation 8(1) of the Bankruptcy Regulations 2021 (Cth).
2.The mere possibility that “there may be proceedings to set aside the underlying judgment” on some future date, is an insufficient basis for the Court to grant relief pursuant to section 41(6A) of the Act.
3.The applicant does not have a counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt, being a counter-claim, set-off or cross demand that he could not have set up in the proceeding in which the judgment or order was obtained (section 40(1)(g) of the Act).
4.The applicant has not filed any evidence, or alternatively any adequate evidence, to support an application for relief that the bankruptcy notice should be set aside on ‘other grounds’.
5.The Federal Circuit and Family Court of Australia lacks jurisdiction to give the applicant leave to “unseal” the affidavit of George Naumovic [FDN 90] referred to by the respondent.
6. The applicant should pay the respondent’s costs of this application.
The Review Application
In the Review Application Mr Naumovic seeks the following orders:
1.That pursuant to sections 35A(5), (6) of the Federal Court of Australia Act 1976, the Applicant seeks a review of the Registrar’s decision in this matter.
2.That the Court set a date to outline the conduct of how these proceedings are to proceed, including by way of rehearing all the evidence and submissions including additional evidence and submissions in relation to the Registrar’s decision in this matter.
3.That the Bankruptcy Notice Number BN 255075 issued on 13 January 2022 which was served on the Applicant on the 3 February 2022 be set aside as there are proceedings to set aside the underlying judgment pursuant to sections 41(6A)(a) and 41(6C) of the Bankruptcy Act and Rule 3.02(4) of the Bankruptcy Rules 2021.
4.That the Bankruptcy Notice Number BN 255075 issued on the 13 January 2022 which was served on the Applicant on the 3 February 2022 be set aside on the grounds of a counterclaim, set-off or cross demand pursuant to section 40(1)(g) and 41(7) of the Bankruptcy Act and Rule 3.02(3) of the Bankruptcy Rules 2021.
5.That the Bankruptcy Notice Number BN 255075 issued on the 13 January 2022 which was served on the Applicant on the 3 February 2022 be set aside on ‘other grounds’ pursuant to section 41(6A)(b) of the Bankruptcy Act and Rule 3.02 of the Bankruptcy Rules 2021.
6.That pursuant to section 29(1) and section 30(1)(a)(b) of the Bankruptcy Act 1966, the Court issue a subpoena to the Supreme Court of South Australia for the production of:
(a) the transcript of the Taxation Proceedings before Judge Bochner.
(b)the Interlocutory Application [FDN 89] and accompanying Affidavit [FDN 90] of George Naumovic that is referred to in the Creditor’s Bankruptcy notice attached Order [FDN 94].
7.Pursuant to section 29(1) and section 30(1)(a)(b) of the Bankruptcy Act 1966 that the Court issue a subpoena to the Respondent:
(a)for Timothy Robert Sandford Jackson the Administrator of the District Council of Goober Pedy (the Respondent) to attend and [give] evidence to the Court during these proceedings.
(b)to produce to the Court as referred to in the Thomas William Burke Affidavit sworn on the 22 June 2022, Annexure “TWB-1” (pages 9-12), the 23 documents that are listed on those injunctive orders.
8. That there be liberty to apply.
9. That the Applicant be awarded costs for any disbursements and out of pocket expenses incurred in this Application.
The Council, in written submissions, sought the following orders on the Review Application:
1.Mr Naumovic’s application seeking a subpoena be issued against the Supreme Court of South Australia for the production of documents, Mr Timothy Jackson to attend as a witness and produce 23 documents the subject of an injunction issued out of the Supreme Court of South Australia be dismissed.
2.Mr Naumovic’s application for review of Judicial Registrar Parkyn’s order of 31 August 2022 dismissing his application to set aside Bankruptcy Notice 255075 be dismissed, and the Judicial Registrar’s orders of that date be confirmed.
3.Council’s costs of Mr Naumovic’s application for review of Judicial Registrar Parkyn’s order of 31 August 2022 be paid by Mr Naumovic, to be taxed or agreed.
Background prior to review application
In Naumovic – Registrar’s Decision the litigation history of the matter prior to that decision is usefully set out at [5]-[17] per Parkyn R as follows:
Background
5. The Bankruptcy Notice the subject of this application relies upon a judgment of the Supreme Court of South Australia made in proceedings SCCIV-19-189 District Council of Coober Pedy & Anor v George Naumovic and Anor dated 26 August 2021 (Costs Judgment). The Costs Judgment requires the Applicant to pay the Respondent $42,845.81. The nature of the proceedings that lead to the Costs Judgment is addressed in more detail below.
6. Following the delivery of the Costs Judgment, on 27 October 2021, the Applicant filed an interlocutory application in the Supreme Court seeking various orders, including an order that the Costs Judgment be stayed. This interlocutory application was dismissed by Judge Bochner of the Supreme Court on 3 November 2021.
7. The Bankruptcy Notice was issued by the Official Receiver on 13 January 2022. It was served by email upon the Applicant on 3 February 2022. The Applicant filed the originating application and supporting affidavit in this proceeding on 22 February 2022.
8. At the first hearing of this application on 27 April 2022, orders were made to program the matter to a hearing on 25 July 2022. Orders were also made, which were not opposed by the Respondent, to extend the time for the Applicant to comply with the terms of the Bankruptcy Notice until 4:30 pm on 29 July 2022.
The evidence
9. The affidavits filed by the parties sets out the history of the proceedings in the Supreme Court that ultimately lead to the Costs Judgment being made. I will not repeat all of that history, but it is apparent that the parties have been involved in litigation with each other for a number of years. The Applicant was elected as a Councillor of the Respondent, but his appointment as a Councillor was suspended by operation of a proclamation made by the Governor pursuant to section 273(5) of the Local Government Act 1999 (SA) on 24 January 2019. This proclamation resulted in an administrator, a Mr Jackson, being appointed to the Respondent.
10. Following the proclamation referred to above, the Applicant obtained numerous documents of the Respondent. Following the Applicant’s refusal to return these documents, the Respondent instituted proceedings on 15 February 2019 in the Supreme Court seeking injunctive relief against the Applicant that required the return of the documents to which I have referred. These are the proceedings in which the Costs Judgment was made.
11. Judge Dart of the Supreme Court made final orders on 5 July 2019 in favour of the Respondent on its application for injunctive relief. The terms of those orders included orders that were to the effect that:
a. There be a final injunction restraining the Applicant from accessing, using, copying, disseminating or otherwise dealing with, in any way, the Restricted Information. The terms of the order did not preclude the Applicant from applying for the Restricted Information through lawful means;
b. The Applicant was to deliver up to the Respondent all copies of the Restricted Information and he was to delete all copies of the Restricted Information he held; and
c. The Applicant was precluded from releasing his affidavits sworn on 14 March 2019, 1 April 2019 and 26 May 2019 to any person, but did not restrict him from disclosing a copy of a list of documents attached to the orders made by Judge Dart on 5 July 2019.
12. After the making of Judge Dart’s orders on 5 July 2019, the Respondent commenced contempt proceedings against the Applicant in the Supreme Court of South Australia in relation to the use of documents the subject of Judge Dart’s orders. This application was made on 28 October 2019.
13. In the midst of the ongoing contempt proceedings brought against the Applicant, Judge Dart made orders on 24 January 2020 that the Applicant pay the Respondents costs of the proceedings relating to the injunctive relief sought by the Respondent.
14. On 13 May 2020, his Honour Justice Stanley found the Applicant guilty in relation to two of the ten grounds of contempt he was charged with. On 25 August 2020, Justice Stanley ordered that the Applicant pay 20% of the Respondent’s costs of the contempt proceedings on an indemnity basis. His Honour also ordered that the Applicant recover 80% of any disbursements and out of pocket expenses he incurred in relation to the trial of the contempt charges from the Respondent. On the same day, the Respondent filed a claim for costs in respect of the injunction proceedings seeking a total amount of $85,691.62. The vast majority of the costs claimed by the Respondent were opposed by the Applicant at that point in the proceeding.
15. The Respondent filed an interlocutory application in the Supreme Court on 25 November 2020 seeking an order fixing a specified component of its costs at $42,845.81. This application was made pursuant to rule 195.8(3)(c) of the Uniform Civil Procedure Rules 2020 (SA) (UCPR) which provides for a taxing officer to make interim orders. I note at this point that the UCPR also provide at rule 195.10(1)(c) that a taxation officer may after conducting a hearing make a provisional order fixing the amount of costs, or a specified component of costs, to which the claimant is entitled.
16.The Applicant filed his own interlocutory application regarding costs in the Supreme Court on 25 January 2021. In this application the Applicant sought an order (among others) that the 25 November 2020 application filed by the Respondent be dismissed. These two interlocutory applications were then adjourned for various reasons until they were ultimately heard and determined by Judge Bochner on 26 August 2021, at which time her Honour made the Costs Judgment.
17. As already referred to above, the Applicant sought a stay of the Costs Judgment, which was refused on 3 November 2021.
Affidavit Evidence

The affidavits relied upon by Mr Naumovic and the Council in these proceedings are set out below.
Mr Naumovic
In support of his application, Mr Naumovic relied upon affidavits sworn on the following dates:
(a)21 February 2022 (“First Naumovic Affidavit”);
(b)6 June 2022 (“Second Naumovic Affidavit”);
(c)14 July 2022 (“Third Naumovic Affidavit”); and
(d)21 November 2022 (“Fourth Naumovic Affidavit”).
The following were struck out of the Fourth Naumovic Affidavit:
(a)paragraph [8] and Annexure GN-3;
(b)paragraph [13]; and
(c)part of Annexure GN-6, being an affidavit and a proposed statement of claim at pages 82-112 (inclusive).
Mr Naumovic’s four affidavits are an interlaced mix of alleged fact and submissions. Rather than separate fact from submission, at this point it suffices to observe that what is submission will be treated as such, and that, in summary, Mr Naumovic’s affidavits assert that:
(a)the Bankruptcy Notice is based on an “alleged” debt claimed by the Council and is the subject of a costs claim for a matter heard in the SCSA “currently undergoing a taxation process … and nowhere near being finalised”: First Naumovic Affidavit at [5];
(b)Mr Naumovic was elected as a Councillor at the Council in November 2018, but in January 2019 the Council was placed into administration after an investigation found that maladministration had occurred prior to Mr Naumovic being elected: First Naumovic Affidavit at [14];
(c)on 24 January 2019 a Mr Timothy Robert Sandford Jackson (“Mr Jackson”) was appointed by the Governor of South Australia as the Administrator of the Council: First Naumovic Affidavit at [15];
(d)the Bankruptcy Notice did not comply with the requirements of s 41(1)(a) and (3)(a) of the Bankruptcy Act 1966 (Cth) (“Bankruptcy Act”) and reg 8(1), (3) and (4) of the Bankruptcy Regulations 2021 (Cth) (“Bankruptcy Regulations”): First Naumovic Affidavit at [13.2], as:
(i)the Official Receiver was misled by the Council in its application for the Bankruptcy Notice as the alleged debt claimed is based on an interim order that is currently undergoing taxation: First Naumovic Affidavit at [8.1];
(ii)the taxation process was last heard on 3 November 2021 where the matter was then adjourned to 13 December 2021 and adjourned further to not before 14 March 2022, however, the Bankruptcy Notice was issued on 13 January 2022 and served on Mr Naumovic on 3 February 2022: First Naumovic Affidavit at [8.2];
(iii)the Bankruptcy Notice was not submitted by the Council in its entirety and fraudulently omitted the record of outcome in the Further Costs Order made by Judge Bochner which made it clear that the Further Costs Order was a “non-finalising order”: First Naumovic Affidavit at [8.3] and Annexure GN-3; and
(iv)in order to finalise a matter, under Sch 7 item 9 of the Uniform Civil Rules 2020 (SA) (“UCR”), Forms 127 and 131 are required but were not obtained by the Council: First Naumovic Affidavit at [8.4];
(e)the Bankruptcy Notice should be set aside pursuant to s 41(6A)(a) and (6C) of the Bankruptcy Act as:
(i)the Bankruptcy Notice is defective and the debt amount does not exist: First Naumovic Affidavit at [9.1];
(ii)the taxation process is ongoing and only upon completion is Mr Naumovic lawfully able to appeal any order: First Naumovic Affidavit at [9.2]; Fourth Naumovic Affidavit at [27];
(iii)the following counterclaims are presently on foot by Mr Naumovic against Mr Jackson:
(A)for $100,000 in the Magistrates Court of South Australia (“MCSA”) in Adelaide against Mr Justin Freytag (“Mr Freytag”) and the Council for defamation and misfeasance in public office (“MCSA Adelaide Claim”): First Naumovic Affidavit at [10.2(a)] and Annexure GN-5a; Second Naumovic Affidavit at [3] and Annexure GN-2; and
(B)for $12,000 for a minor civil claim against Mr Jackson (“MCSA Minor Civil Claim”): First Naumovic Affidavit at [10.2(b)] and Annexure GN-5b,
(iv)a set off claim in relation to costs awarded in contempt proceedings brought by the Council against Mr Naumovic in the SCSA and in which the SCSA awarded Mr Naumovic 80% of his disbursements and out of pocket expenses against the Council (“Contempt Costs Order”): First Naumovic Affidavit at [10.3] and Annexure GN-5d;
(f)other grounds to set aside the Bankruptcy Notice exist as:
(i)the Bankruptcy Notice should not be considered to be a “final judgment” within the meaning of the Bankruptcy Act and is therefore invalid: First Naumovic Affidavit at [11.1] and Annexure GN-3; Second Naumovic Affidavit at [4.5] and Annexure GN-4; and
(ii)the Bankruptcy Notice is an abuse of process as it is being used to subvert the taxation process in the SCSA that is current and not finalised and is intended to be oppressive: First Naumovic Affidavit at [11.2]-[11.8]; Second Naumovic Affidavit at [4.4];
(g)the creditor named in this matter is the Council, however, Mr Jackson was appointed by the Governor of South Australia on 24 January 2019 to be the Administrator of the affairs of the Council: Second Naumovic Affidavit at [2] and as such, Mr Jackson is responsible for the authorisation of the events surrounding the SCSA proceedings against Mr Naumovic and the issuance of the Bankruptcy Notice in Mr Jackson’s capacity as the Administrator of the Council: Second Naumovic Affidavit at [2];
(h)the Bankruptcy Notice should be set aside as the Council is using the Bankruptcy Act for an improper purpose in order to recover an alleged debt amount and the present proceedings are based on an amount of $42,845.81 which is an amount based solely on the opinion of a solicitor for the Council, Mr Vasilos Marinos (“Mr Marinos”), that the SCSA would determine that Mr Naumovic was liable for at least that amount in relation to the Council’s claim for costs: Second Naumovic Affidavit at [4.1]-[4.2];
(i)the Council took none of the steps available to it under Ch 17 of the UCR to enforce the Further Costs Order: Second Naumovic Affidavit at [4.3];
(j)the Council is using the Bankruptcy Notice as a means to usurp the taxation procedure in the SCSA, and as such Mr Naumovic is being denied the right to have the costs claimed assessed accurately: Second Naumovic Affidavit at [4.4];
(k)the views and opinions of Mr Marinos, who is a solicitor for the Council, must be questioned as to its accuracy because one of Mr Marinos’ affidavits used in contempt proceedings against Mr Naumovic’s former wife was later withdrawn, and therefore the debt upon which the Bankruptcy Notice is based must also be considered unreliable and should not be considered to be a final judgment or final order: Second Naumovic Affidavit at [4.5];
(l)Mr Naumovic further sought that this Court give leave to unseal particular documents, that were originally sealed in the SCSA, as the circumstances giving rise to their sealing were an abuse of process: First Naumovic Affidavit at [12.1]-[12.4]. Mr Naumovic relies on ss 27(1), 29(1) and 30(1) of the Bankruptcy Act and s 39B(1A) of the Judiciary Act 1903 (Cth), relating to the jurisdiction of this Court and other courts, and requested that this Court:
(i)give leave to “open” Mr Naumovic’s interlocutory application and accompanying affidavit in the SCSA: Second Naumovic Affidavit at [5.1]; and
(ii)issue a subpoena to the Council for the production of the 23 documents that were the subject of the SCSA proceedings that this Bankruptcy Notice has been issued in relation to: Second Naumovic Affidavit at [5.2] and Annexure GN-5;
(m)this Court has the required jurisdiction to unseal his sealed affidavit (“Sealed Affidavit”) in the SCSA as in the Orders sealing the affidavit, Order 2 states among other things, that it is “not to be opened without leave of a Judge”, and the Orders as they are written do not stipulate what court the Judge must preside over, and that as this matter falls under the Bankruptcy Act, this Court does have the jurisdiction to unseal the Sealed Affidavit: Third Naumovic Affidavit at [21];
(n)in Brunninghausen v Glavanics [1998] FCA 230 (“Brunninghausen”) per Emmett J the Federal Court said:
If it is apparent that the purpose of a bankruptcy notice is to put pressure on a debtor to pay a debt, rather than to invoke the Court’s jurisdiction in relation to insolvency, the issue of a bankruptcy notice is an abuse of process.
(o)as the Bankruptcy Notice was issued for the purpose of debt recovery, this is an abuse of process and all of Mr Naumovic’s costs associated and incidental to these proceedings should be reimbursed by the Council and any costs claimed by the Council should be dismissed: Third Naumovic Affidavit at [5];
(p)the Council’s conduct in obtaining the Bankruptcy Notice is vexatious and malicious as it knew that there was a valid counterclaim for more than the alleged debt amount: Third Naumovic Affidavit at [5];
(q)in relation to the amount claimed by the Council, being $42,845.81, part of this amount is unnecessary billable hours which were negligently incurred by the Council: Third Naumovic Affidavit at [13];
(r)Mr Naumovic was unaware of the events occurring at the hearing in the SCSA on 25 August 2021 when Judge Bochner granted the “interim costs order” (the Further Costs Order) amounting to $42,845.81 as he was not present due to health reasons, and Mr Naumovic seeks this Court to use its powers to “go behind” the judgment and unseal the Sealed Affidavit: Third Naumovic Affidavit at [18];
(s)the timing of the issuing of the Bankruptcy Notice and the decision by the Council not to seek enforcement of the alleged debt in the SCSA gives weight to Mr Naumovic’s position that the Council is using the Bankruptcy Notice for improper and collateral purposes which as a result will make Mr Naumovic ineligible to run for the upcoming Council elections and preclude him from sitting on any committees: Third Naumovic Affidavit at [26];
(t)there is a whistle-blower element involved in the proceedings, however, he is unable to divulge the details in their entirety: Fourth Naumovic Affidavit at [3], and referred to District Council of Coober Pedy v Naumovic [2020] SASC 79 at [36] and [55] per Stanley J (“Naumovic – Contempt”); and
(u)further outlined the claim currently proceeding in the MCSA, noting that this is between Mr Naumovic and Mr Jackson as the Administrator of the Council: Fourth Naumovic Affidavit at [14]-[15], and that on 12 October 2022 Magistrate Oates made orders that, among other things, allowed Mr Naumovic to “exhibit” his proposed Amended Statement of Claim: Fourth Naumovic Affidavit at [18].
The Council
The Council relied upon the following affidavits from two of its solicitors:
(a)affidavit of Thomas William Burke (“Mr Burke”) sworn on 22 June 2022 (“Burke Affidavit”); and
(b)affidavits of Mr Marinos sworn on 14 November 2022 (“First Marinos Affidavit”) and 17 November 2022 (“Second Marinos Affidavit”).
The Council’s affidavit evidence can be summarised as follows:
(a)from the Burke Affidavit:
(i)the following matters are uncontentious:
(A)on 24 January 2019 the Governor of South Australia made the Local Government (Defaulting Council) Proclamation 2019 (“Proclamation”) pursuant to s 273(5) of the Local Government Act 1999 (SA) (“LG Act”) which, first, suspended all elected members of the Council from their respective offices until the Council ceased to be a defaulting council, and, second, appointed Mr Jackson as Administrator to administer the affairs of the Council: Burke Affidavit at [5]; and
(B)prior to the Proclamation, Mr Naumovic was elected as a Councillor, however, due to the Proclamation, Mr Naumovic’s appointment was suspended: Burke Affidavit at [6];
(ii)upon instructions from Mr Jackson, in or about early February 2019, the Council undertook a back-up of its information technology systems, and there was a glitch via its service provider, resulting in the suspended elected Council members who still had access to their mailboxes, and other users of the Council’s mail system, having the capacity to view, access and copy the Council’s restricted information, and Mr Naumovic consequently obtaining numerous restricted documents (“Restricted Documents”) despite not having authority to access them: Burke Affidavit at [7.1]-[7.2];
(iii)despite requests by the Council for Mr Naumovic to return the Restricted Documents, Mr Naumovic refused to do so, and on 15 February 2019 the Council filed proceedings for an injunction against Mr Naumovic in the SCSA seeking the return of the Restricted Documents: Burke Affidavit at [7.3]-[7.4] (“Injunction Proceedings”);
(iv)on 19 February 2019 interim injunctive orders were made in the Injunction Proceedings by Judge Dart in the SCSA, preventing Mr Naumovic from using the Restricted Documents, and on 5 July 2019, the SCSA (Judge Dart) granted final injunctive relief against Mr Naumovic and ordered that the Restricted Documents be returned to the Council (“Injunction Proceedings Final Orders”): Burke Affidavit at [8] and Annexure TWB-1;
(v)on 24 January 2020 the SCSA (Judge Dart) delivered Reasons for Judgment in relation to the Council’s claim for the costs of the Injunction Proceedings and ordered that Mr Naumovic pay the Council’s costs on a party/party basis: Burke Affidavit at [9];
(vi)on 25 January 2020 the Council filed its claim for the costs of the Injunction Proceedings in the SCSA for a total amount of $85,691.62 as a result of Mr Naumovic not accepting the Council’s offer to compromise its costs claim: Burke Affidavit at [10] and Annexure TWB-3;
(vii)on 24 September 2020 Mr Naumovic filed his response to Council’s claim for the costs of the Injunction Proceedings, opposing that claim in its entirety, save for some minor costs: Burke Affidavit at [11] and Annexure TWB-4;
(viii)on 25 November 2020 the Council filed an application seeking an interim order for half of its costs in the amount of $42,845.81 (“Interim Costs Application”): Burke Affidavit at [12] and Annexure TWB-5;
(ix)on 25 January 2021 Mr Naumovic filed an interlocutory application seeking orders for the Interim Costs Application to be dismissed: Burke Affidavit at [13], and Annexure [TWB-6];
(x)on 13 May 2021 orders were made listing the Interim Costs Application for hearing on 25 August 2021: Burke Affidavit at [16], and Annexure TWB-9;
(xi)on 25 June 2021 Mr Naumovic filed an amended response to the claim for costs sought by the Council, opposing all of the costs claimed by the Council: Burke Affidavit at [17] and Annexure TWB-10;
(xii)on 23 August 2021 Mr Naumovic sent an email to Judge Bochner’s chambers requesting an adjournment of the hearing of the Interim Costs Application: Burke Affidavit at [18] and Annexure TWB 11. Solicitors for the Council sent further correspondence to Judge Bochner’s chambers opposing the request for an adjournment, but consenting to any request from Mr Naumovic to appear by telephone: Burke Affidavit at [19] and Annexure TWB 12;
(xiii)on 24 and 25 August 2021 Judge Bochner’s clerk communicated with Mr Naumovic by email on three occasions and noted that Mr Naumovic’s request for an adjournment was opposed and that Mr Naumovic was required to attend the hearing before the SCSA on 25 August 2021 and could do so by telephone: Burke Affidavit at [20] and Annexure TWB-13;
(xiv)at the hearing of the Interim Costs Application on 25 August 2021 the SCSA (Judge Bochner):
(A)was satisfied that Mr Naumovic had not provided an adequate explanation for his non-attendance at the hearing, declined to grant Mr Naumovic’s request for an adjournment, and proceeded to conduct the hearing in Mr Naumovic’s absence;
(B)noted that Mr Naumovic’s application by email for an adjournment of the hearing was dismissed; and
(C)noted that the amount sought in the Interim Costs Application ($42,845.81) was only approximately $10,000 more than the disbursements which had been incurred. For this reason and given that Mr Naumovic had not conceded that the Council was entitled to any costs at all, the SCSA was prepared to make an interim costs order (the Further Costs Order) in favour of the Council for the amount of $42,845.81: Burke Affidavit at [24.1]-[24.3];
(xv)on 25 August 2021 the SCSA (Judge Bochner) granted the Interim Costs Application in the amount of $42,845.81: Burke Affidavit at [22], First Naumovic Affidavit at Annexure GN-1;
(xvi)on 27 October 2021 Mr Naumovic filed an interlocutory application seeking orders to stay the Further Costs Order (“Costs Stay Application”): Burke Affidavit at [24] and Annexure TWB-14;
(xvii)on 3 November 2021 the SCSA (Judge Bochner) dismissed the Costs Stay Application: Burke Affidavit at [25], First Naumovic Affidavit, Annexure GN-2a;
(xviii)on 28 October 2019 as a result of Mr Naumovic using the Restricted Documents in a pleading filed in the MCSA (in Adelaide), in relation to proceedings that Mr Naumovic had issued against another party, the Council filed a summons for contempt in the SCSA against Mr Naumovic (“Contempt Proceedings”): Burke Affidavit at [29];
(xix)on 13 May 2020 the SCSA (Stanley J) delivered Reasons for Judgment in Naumovic – Contempt, finding that Mr Naumovic was guilty of contempt in relation to two of the ten grounds of contempt claimed: Burke Affidavit at [30];
(xx)on 25 August 2020 the SCSA made the Contempt Costs Order, ordering that the Council should recover from Mr Naumovic 20% of its costs on an indemnity basis, to be agreed or taxed, as it was only partially successful. Mr Naumovic was self-represented apart from the hearing on penalty and was entitled to recover from the Council 80% of any disbursements and out of pocket expenses of the hearing: Burke Affidavit at [32.1]-[32.2]; First Naumovic Affidavit, Annexure [GN-5d];
(xxi)neither party has to date taken any steps under the UCR to seek orders or enforcement in relation to their costs under the Contempt Costs Orders: Burke Affidavit at [33];
(xxii)during the Injunction Proceedings, the Council made multiple successful applications to seal affidavits filed by Mr Naumovic as a result of the scandalous material within various affidavits filed by Mr Naumovic, regarding legal practitioners and law firms (“Sealed Affidavits”). These orders extend to the Restricted Documents, which Mr Naumovic now seeks to draw to the attention of this Court: Burke Affidavit at [36];
(xxiii)the Council’s solicitors object to the admissibility of the Sealed Affidavits and to the information alleged within them: Burke Affidavit at [37];
(xxiv)Mr Naumovic has filed multiple proceedings in the MCSA against members of Council, and Mr Jackson, for defamation: Burke Affidavit at [38];
(xxv)Mr Burke has been informed by Mr Jackson that the Council’s decision to issue the Bankruptcy Notice is directed to debt recovery and the purpose of the Bankruptcy Notice is not to prevent Mr Naumovic from running as a candidate in Council elections scheduled for November 2022: Burke Affidavit at [39]; and
(xxvi)on 13 January 2022 the Council issued the Bankruptcy Notice and then served it on Mr Naumovic by email on 3 February 2022: Burke Affidavit at [40], First Naumovic Affidavit at Annexure GN-1.
(b)from the Marinos Affidavits:
(i)on 5 September 2022 Mr Naumovic filed an interlocutory application in the SCSA seeking, among other things, that the Further Costs Order be set aside (“Costs Set Aside Application”): First Marinos Affidavit at [8] and Annexure VM-2; and
(ii)on 8 November 2022 the Costs Set Aside Application was heard and dismissed by the SCSA (Judge Bochner): First Marinos Affidavit at [9] and Annexure VM-3, and ex tempore Reasons for Judgment were delivered: Second Marinos Affidavit at [5] and Annexure VM-4 (“Costs Set Aside Judgment”).
Submissions
Mr Naumovic’s Submissions

Mr Naumovic submitted that:
(a)the Council is under the administration of Mr Jackson, and Mr Jackson is the Mayor and elected members of the Council, and as such makes all decisions in relation to the Council’s affairs. Mr Jackson in his capacity as the Administrator of the Council is responsible for the decision to seek to obtain the Bankruptcy Notice;
(b)the Council’s decision to seek to obtain a Bankruptcy Notice against him is a serious matter with lifelong ramifications not only for him, but also for his wife who will be affected by this action;
(c)Council relies on the Burke Affidavit. Prior to receipt of the Burke Affidavit he had always asserted that the Council’s purpose in obtaining the Bankruptcy Notice against him was a collateral abuse of process on a judgment and order (the Further Costs Order) that was obtained by default. The Bankruptcy Notice has been obtained maliciously and vexatiously with an ulterior motive to subvert the taxation process in the SCSA in order to avoid scrutiny of the conduct of the Council and its lawyers in their claim for costs and to make him illegible to run for Council at the next Council elections; and
(d)he takes seriously the veiled threat by Council in the Burke Affidavit at [37] as to being in contempt of court, and he hopes this does not impede or interfere with his right to be able to dispute the Bankruptcy Notice and have it set aside.
As to “admissions” by the Council in the Burke Affidavit Mr Naumovic submitted that:
(a)as admitted by Council: Burke Affidavit at [39], the purpose of the Council obtaining the Bankruptcy Notice was for debt recovery which is an abuse of process and it is improper for the Council to invoke this Court’s jurisdiction for that purpose;
(b)the Council has not asserted or provided any evidence to this Court that he is insolvent;
(c)the Bankruptcy Notice should be set aside because it is an abuse of process. In Mariconte v Nobarani [2020] FCA 1485 (“Mariconte”) the Federal Court of Australia revisited the Court’s inherent power to set aside bankruptcy notices due to an abuse of process and cautioned against the use of bankruptcy notices as a debt collection method. The applicant in Mariconte had failed to pay or challenge the restitution judgment, however, the Federal Court still determined that it was improper to use bankruptcy proceedings as an enforcement action when other avenues are available. Mariconte means that parties must strongly consider their purpose in issuing bankruptcy notices and ensure that other avenues of enforcement are contemplated first, and re-affirmed that the use of a bankruptcy notice to pressure debtors to pay a debt is improper;
(d)the Court should be critical and question why the Council failed to take any action to enforce the Further Costs Order in the SCSA, and the omission to act in that jurisdiction supports his application that the Bankruptcy Notice should be set aside as an abuse of process; and
(e)a consequence of not setting aside the Bankruptcy Notice, is that it will enable the Council and its lawyers to avoid being scrutinised in the taxation process, which is one of the purposes for obtaining the Bankruptcy Notice. The Burke Affidavit at [36] states that the Sealed Affidavits were sealed “as a result of the scandalous material within various affidavits filed by Mr Naumovic, regarding legal practitioners and law firms.” The Third Naumovic Affidavit at Annexure GN-3 contains four tax invoices from a barrister, Paul d’Assumpcao (“Barrister’s Invoices”). The detailed entries provide a lot more information as to the conduct of various parties and non-parties in that matter which supports what was said in the Sealed Affidavits as being true. Clearly the legal practitioners and their law firms also have a motive to subvert the taxation process in order to avoid scrutiny of their conduct in the matter which was scandalous conduct which will finally be exposed during the taxation process. This statement also supports his submission that these bankruptcy proceedings have been initiated to subvert the taxation process where the Council and its lawyers conduct will come under scrutiny by the SCSA.
As to the timing of the issuance of the Bankruptcy Notice Mr Naumovic submitted that:
(a)he was elected to the Council with the highest votes. In the Burke Affidavit at [39] it is asserted that Mr Jackson says he did not obtain the Bankruptcy Notice to prevent him from running for Council. Yet it clearly states on the Local Government Association of South Australia website that: “You cannot run for council if you are: bankrupt or receiving relief of insolvent debt”, something that Mr Jackson would know as a fact given his over 20 year history in working in local government. It was the motive of Mr Jackson to obtain the Bankruptcy Notice against him to preclude him from running for Council. This is supported by the fact that the Council did not apply to the SCSA to enforce the debt. The timing of the Council obtaining the Bankruptcy Notice supports this as it was at the Council’s request that the SCSA adjourn the taxation process to recommence no earlier than the 14 March 2022: First Naumovic Affidavit at [8.2] and Annexure GN-2a. The Council obtained the Bankruptcy Notice on the 13 January 2022, in the year that Council elections were to be conducted;
(b)he disputes the quantum of the debt claimed by the Council, which is still undergoing a taxation process in the SCSA, and as such a final determination in that matter has not been made by the SCSA. The Council obtained the Further Costs Order by default because he was not able to attend court for health reasons. The Council is trying to invoke this Court’s jurisdiction in bankruptcy in order to have the taxation proceedings halted which will result in the claim for costs not being scrutinised by the SCSA. Only 18 out of over 780 items have so far been addressed: Third Naumovic Affidavit at [15]. This process is far from over and the fact that the Council withdrew and reserved so many of the items clearly would indicate that the basis of the alleged debt owed is very questionable. It would be a miscarriage of justice if the taxation process is subverted by the actions of the Council in improperly obtaining a Bankruptcy Notice against him.
Mr Naumovic further submitted that:
(a)he has a counter-claim against the Council as detailed in his affidavits and pursuant to ss 40(1)(g) and 41(7) of the Bankruptcy Act and r 3.02(3) of the Federal Circuit and Family Court of Australia (Division 2) (Bankruptcy) Rules2021 (Cth) (“Bankruptcy Rules”):
(i)as deposed in the Second Naumovic Affidavit at [3] and Annexure GN-2, he has provided evidence to the Court that he has a counterclaim against the Council that is greater than the alleged debt that Council is claiming he owes and therefore the Bankruptcy Notice should be set aside;
(ii)the Council, through the Burke Affidavit, has not addressed that fact or even conceded that there is a claim, which is questionable conduct considering that the lawyers for the Council are also the lawyers for the Council in that counterclaim: Third Naumovic Affidavit at [3] and Annexures GN-1a, b, c and d;
(b)the Bankruptcy Notice is an abuse of process pursuant to s 41(6A)(b) of the Bankruptcy Act and r 3.02 of the Bankruptcy Rules, and as deposed in his affidavits, because:
(i)by the Council’s own admission: Burke Affidavit at [39] the Council has confirmed that the Bankruptcy Notice was obtained for an improper purpose, that is, to use it as a debt recovery mechanism which is impermissible as it is an abuse of process and on that admission alone the Bankruptcy Notice should be set aside; and
(ii)the Council has never applied or taken any steps to enforce that Judgment in the SCSA, even when the matter is still currently undergoing a taxation process.
As to legislation and jurisdiction, Mr Naumovic submitted that:
(a)Council has questioned this Court’s jurisdiction at [5] of the Notice of Opposition and at [36]-[37] of the Burke Affidavit;
(b)this Court does have jurisdiction in all matters relating to bankruptcy in accordance with s 27 of the Bankruptcy Act, and that is further supported by the article on the Federal Court website with the heading: “An introduction to the Jurisdiction of the Federal Court of Australia by Justice James Allsop 01 October 2007”:
(c)there is nothing to indicate that the Council will not pursue bankruptcy proceedings against him if there is default in complying with the Bankruptcy Notice and/or it does not get set aside. He has challenged the existence of the alleged debt which was obtained by default, and because the taxation process in the SCSA has not been finalised. If this matter does proceed further, pursuant to s 52 of the Bankruptcy Act, he would be seeking the Court to use its discretion and “go behind the judgement” to determine whether the debt is truly owing. In Ramsay Health Care Australia Pty Ltd v Compton [2017] HCA 28; (2017) 261 CLR 132; (2017) 91 ALJR 803; (2017) 345 ALR 534; (2017) 15 ABC(NS) 222; (2017) 122 ACSR 115, it was held that the Court may go behind a judgment debt in order to set aside sequestration orders if there has been a “miscarriage of justice”. Having a taxation process subverted by instigating bankruptcy proceedings is a miscarriage of justice.
At hearing Mr Naumovic made oral submissions:
(a)that he relied on a counterclaim greater than the debt owed: Transcript p 9, Fourth Naumovic Affidavit at [15]-[22], and that on this basis, the Bankruptcy Notice should be set aside; and
(b)that the Bankruptcy Notice is an “abuse of process”: Transcript p 9.
The Council’s Submissions
As to there being a final judgment and no grounds upon which it should be set aside:
(a)the debt upon which the Bankruptcy Notice is founded arises from the Further Costs Order. The Further Costs Order was made in response to the Interim Costs Application filed by the Council in which it sought a lump sum costs order against Mr Naumovic, and which was filed on 25 November 2020, some eight months prior to the SCSA determining the Council’s application;
(b)Mr Naumovic describes the taxation in the SCSA as “ongoing”. That description is misleading. The true situation is that the SCSA:
(i)assessed the bill of costs filed by the Council;
(ii)considered Mr Naumovic’s response to the bill of costs; and
(iii)was satisfied that Mr Naumovic’s ultimate liability to the Council would exceed $42,845.81 and ordered Mr Naumovic to pay the Council $42,845.81;
(c)if Mr Naumovic was dissatisfied with the Further Costs Order, his recourse was to appeal (or seek leave to file an appeal) with the SCSA. Mr Naumovic did not file or progress any appeal. Instead, he filed the Costs Set Aside Application which the SCSA dismissed. Mr Naumovic could have filed an appeal (or sought leave to file an appeal) against the SCSA order to dismiss the Costs Set Aside Application, but he did not undertake any such step;
(d)any appeal is now long out of time. Mr Naumovic has not filed evidence that any challenge to the Further Costs Order is in progress. The potential for further challenge is entirely speculative. Further, while Council does not in any way concede that Mr Naumovic could now bring any application in respect of the Further Costs Order, even if the SCSA did entertain such an application, the likelihood the SCSA would reduce the judgment pursuant to the Further Costs Order to less than $10,000 (the minimum threshold required to support a bankruptcy notice) is, at best, extremely remote; and
(e)the judgment (pursuant to the Further Costs Order) is a “final judgment” within the meaning of s 40(1)(g) of the Bankruptcy Act. There is no basis articulated on the material filed by Mr Naumovic by which the content of the judgment might be effectively challenged. No steps have been taken to progress such a challenge. Mr Naumovic is out of time. Mr Naumovic has not established a basis to set aside the bankruptcy notice by his filed evidence or as a matter of law.
As to counter-claim, set-off or cross-demand:
(a)Mr Naumovic asserts that he has various claims against the Council to set-off the Judgment Debt, however these assertions are without foundation:
(i)Mr Naumovic asserts that he has a claim against Mr Freytag and the Council for “Defamation and [separately] Misfeasance in Public Office.” Mr Naumovic provides no particulars whatsoever about either asserted claim against the Council and concedes that the action has been stayed. He does not explain why the action has been stayed, nor indicate if the stay is permanent or temporary. Given the action has been stayed and there is no evidence before this Court to suggest Mr Naumovic has taken any step to attempt to have the stay lifted since he filed his affidavit on 21 February 2022, little weight, if any should be given to Mr Naumovic’s reliance on that proceeding as evidence of a set-off;
(ii)Mr Naumovic asserts that he has a claim against the Administrator. The Administrator is not the judgment creditor. The Administrator is an entirely separate legal entity. Any claim Mr Naumovic has against the Administrator cannot be used by him to set-off the Judgment Debt; and
(iii)Mr Naumovic asserts that he has an unquantified claim for damages against the Council. Given the damages cannot be quantified, this potential action against the Council is not, even applying a principle of charity, capable of founding a set-off.
As to other grounds:
(a)Mr Naumovic asserts, without foundation, that the Bankruptcy Notice is not valid and an abuse of process. Mr Naumovic has a high bar to meet in making out these allegations. In Nobarani v Mariconte [2021] FCAFC 96; (2021) 18 ABC(NS) 128 (“Mariconte Appeal”) at [32] per Allsop CJ, Farrell and Derrington JJ the Full Court of the Federal Court said that:
32.It was not in dispute that, on the application to set aside the Bankruptcy Notice, Ms Mariconte bore the onus of establishing the purpose with which it was issued and that it was improper: Cavoli v Ell [2007] FCA 1191 at [17] (Cavoli v Ell); Royal v Nazloomian, in the matter of Royal [2019] FCA 555 at [31] (Royal v Nazloomian); Alhalek v Quintiliani trading as Kells Lawyers [2020] FCA 1272 at [67] (Alhalek v Quintiliani). The present weight of authority favours the view that the allegation of an abuse of process is a serious one which cannot be made without a sufficient factual foundation and the party alleging it bears a “heavy onus” in establishing its existence: Williams v Spautz [1992] HCA 34; 174 CLR 509 at 529; Prentice v Fewin Pty Ltd, in the matter of Prentice [2017] FCA 490 at [48]-[49] (Prentice v Fewin Pty Ltd); Royal v Nazloomian at [37].
(b)Mr Naumovic variously asserts that the Bankruptcy Notice should be set aside because it is an abuse of process. More specifically he asserts the Bankruptcy Notice is an abuse of process because:
(i)it is being used to subvert the taxation process;
(ii)it is being done to usurp the taxation process; and
(iii)it is oppressive;
(c)Mr Naumovic’s allegations concerning abuse of process are vexatious and embarrassing. The allegations are made without foundation and are not in admissible form. Further, in Singh v Fobupu Pty Ltd, in the matter ofSingh [2021] FCAFC 14; (2021) 17 ABC(NS) 592 (“Fobupu”), the Full Court of the Federal Court made the following observations at [25] and [54] per Rares, Farrell and Stewart JJ:
[25]Last, her Honour refused to go behind the two judgments because there was no reason to question them. In doing so, she applied what the Full Court had said in Rafidi v Commonwealth Bank of Australia [2020] FCAFC 26 at [13]-[14], namely:
In Re Briggs; Ex Parte Briggs v Deputy Commission of Taxation (WA) [1986] FCA 512; (1986) 12 FCR 310 at 312, Toohey J explained relevantly:
... It seems to me that, however formulated, the grounds upon which a bankruptcy notice may be set aside must relate to the form or content of the notice itself, service of the notice or the existence of the debt upon which the judgment and in turn the notice is founded. Having regard to the language of s 40(1)(g), reference to the existence of a debt must include the existence of a counter-claim, set-off or cross demand equal to or exceeding the amount of the debt.
A court hearing an application to set aside a bankruptcy notice is not hearing a petition for sequestration and the provisions of s 52(2), whereby a court may dismiss a petition if satisfied that the debtor is able to pay his debts or that for other sufficient cause a sequestration order ought not be made, cannot be imported into such an application. In my view a court faced with an application to set aside a bankruptcy notice is constrained to look only at the regularity of the notice itself (including service) and otherwise at the circumstances surrounding the existence of the judgment debt and any demand which the debtor may have against the creditor for a comparable amount.
In particular, the appellant did not take issue with the primary judge’s reliance upon the following passage from Xu v Wan Ze Property Development (Aust) Pty Ltd (in Liquidation) [2014] FCA 461 (2014) 315 ALR 523 (“Xu”) at [131]:
Except in a clear case, questions of fraud, collusion, lack of good faith and miscarriage of justice, or whether substantial reasons have been shown for questioning whether behind the judgment there was in truth and reality a debt due to the judgment creditor, are more apt to be dealt with after the exhaustion of those remedies and where the Court is dealing with an application to make a sequestration order against the estate of the debtor. No doubt the circumstances in which the Court will go behind a judgment cannot be formulated precisely.
…
[54] Next, Mr Singh argued that her Honour erred in failing to go behind the judgment debts. Having regard to the reasons that her Honour gave, and the authorities to which she referred in Rafidi [2020] FCAFC 26 at [13]-[14], this argument had no basis. Moreover, there was nothing suggestive of any conduct such as would entitle the Court to go behind the two judgment debts for costs, which were awarded by NCAT after, as Mr Singh acknowledged, he had had every opportunity to make submissions and address, first, NCAT on the making of each order and, secondly, the costs assessor on the quantification of the costs. This ground must be rejected.
(d)Mr Naumovic’s allegations about the validity of the Bankruptcy Notice and that it is an abuse of process are merely supposition. Mr Naumovic has not filed any evidence, or any admissible evidence, to support his allegations and therefore falls well short of establishing a “clear case.” As there is no “clear case” of “fraud, collusion, lack of good faith and miscarriage of justice, or whether substantial reasons have been shown for questioning whether behind the judgment there was in truth and reality a debt due to the judgment creditor,” the Court will “look only at the regularity of the notice itself (including service) and otherwise at the circumstances surrounding the existence of the judgment debt and any demand which the debtor may have against the creditor for a comparable amount.”
As to the unsealing of the Sealed Affidavit:
(a)Mr Naumovic also sought an order permitting him to “unseal” the Sealed Affidavit and the interlocutory application filed in the SCSA. The practical effect of Mr Naumovic’s application is that he is asking this Court to revisit or review a decision made by the SCSA, or alternatively that he is attempting to appeal the decision made by the SCSA in this Court. This Court has no jurisdiction to conduct appellate or judicial review of the decisions of the SCSA and cannot embark on the exercise that Mr Naumovic invites; and
(b)the proper course Mr Naumovic must follow if he wishes to challenge the sealing order made by the SCSA is to commence an appeal in the SCSA.

As to Mariconte, the Council submitted that:
(a)Mr Naumovic relies on the observations made in Mariconte to support his position, however that judgment was overturned on appeal in MariconteAppeal and at [42] per Allsop CJ, Farrell and Derrington JJ the following observation was made:
42. In the course of his reasons, Heerey J accepted that it was not an improper purpose to issue a bankruptcy notice for the purpose of having a debt paid, so long as the creditor intends to invoke the Court’s bankruptcy jurisdiction if it is not: Maxwell-Smith v S & E Hall Ply Ltd [2006] FCA 825 at [43]. His Honour concluded that there was no evidence before him to suggest that the creditor’s purpose in issuing the bankruptcy notice was other than for invoking the bankruptcy jurisdiction if the debt owing were not paid. In those circumstances, there was no basis on which to set the notice aside.
(b)by his own admission in his submission at [13], Mr Naumovic observes:
It is my submission that there is nothing to indicate that the [Council] will not pursue Bankruptcy proceedings against me if there is default in complying with the Bankruptcy Notice and/or it does not get set aside.
(c)the Council endorses Mr Naumovic’s submission for the purpose of further dispensing with Mr Naumovic’s complaint that the Bankruptcy Notice is an abuse of process.
As to the disposition of the matter the Council submitted that the Review Application should be dismissed, and an order made that Mr Naumovic pay the Council’s costs of the application. The Council did not, however, oppose Mr Naumovic being given an extension of time to comply with the Bankruptcy Notice until 21 days after the Court’s judgment on the Review Application.
On 17 November 2022 the Council filed further written submissions and submitted that:
(a)Mr Naumovic has committed an act of bankruptcy following the Registrar’s dismissal of the Set Aside Application (see Naumovic – Registrar’s Decision) as the time for compliance with the Bankruptcy Notice expired on 21 September 2022, and the date of the act of bankruptcy is therefore 22 September 2022: s 40(1)(g) Bankruptcy Act. Council has until 21 March 2023 to file its Creditor’s Petition;
(b)the filing of the Review Application does not stay the Registrar’s orders: Federal Circuit and Family Court (Division 2) (General Federal Law) Rules 2021 (Cth), r 21.03(4);
(c)the Council accepts that this Court considers the application de novo and a Judge of this Court exercises the original jurisdiction: Totev v Sfar [2008] FCAFC 35; (2008) 167 FCR 193; (2008) 247 ALR 180; (2008) 5 ABC(NS) 691 at [10] per Emmett J, and the Court therefore has the power to also extend time for compliance with the Bankruptcy Notice under s 41(6A) of the Bankruptcy Act;
(d)there are no proceedings on foot to set aside the underlying judgment: First Marinos Affidavit, and on 8 November 2022 the Costs Set Aside Application was heard and dismissed by the SCSA (Judge Bochner);
(e)the dismissal of the Costs Set Aside Application is final and there are no ongoing proceedings to set aside the Further Costs Order that underpins the Bankruptcy Notice, and the Review Application should be dismissed on this basis;
(f)in relation to the subpoena sought to be issued to the SCSA to produce documents, there is no utility in that order for the following reasons:
(i)there is no legitimate forensic purpose for the transcript of the taxation proceedings before the SCSA to be examined by this Court: Attorney-General (NSW) v Chidgey [2008] NSWCCA 65; (2008) 182 A Crim R 536. The party issuing a subpoena must identify expressly and precisely the legitimate forensic purpose for which access to the documents is sought;
(ii)it cannot be established that it is “on the cards” that the documents will materially assist Mr Naumovic to set aside the Bankruptcy Notice whereby this Court cannot examine the transcript of the SCSA. No reasons have been provided to question the transcript of the proceedings in the SCSA;
(iii)in relation to the documents sought to be produced by the Supreme Court of South Australia:
(A)the Interlocutory Application marked as FDN 89;
(B)the Affidavit of Mr George Naumovic marked as FDN 90; and
(C)the judgment in the amount of $42,845.81 in favour of the Council marked as FDN 94,
save for the Sealed Affidavit of Mr Naumovic marked as FDN 90, Mr Naumovic has a copy of these documents and could have provided this material to the Court under the cover of an affidavit. In any event, the judgment marked as FDN 94 is annexed to the Burke Affidavit;
(iv)Mr Naumovic’s application seeking to call Mr Jackson as a witness also has no utility. Mr Naumovic has not specified the forensic purpose in respect of which the viva voce evidence of Mr Jackson is required. Whilst this Court may hear evidence, the calling of Mr Jackson is irrelevant to an inquiry into the setting aside of the Bankruptcy Notice;
(v)the 23 documents that are sought by Mr Naumovic are also irrelevant to the setting aside of the Bankruptcy Notice, notwithstanding that they are also the subject of a permanent injunction issued by the SCSA;
(vi)Mr Naumovic only seeks the Restricted Documents for a collateral purpose and there is no legitimate forensic purpose for which the production of the Restricted Documents could serve to assist this Court in relation to the setting aside of the Bankruptcy Notice; and
(vii)where the issuing party fails to demonstrate a legitimate forensic purpose, the Court should refuse the request; and
(g)Mr Naumovic’s ancillary orders should be dismissed.
At hearing oral submissions were made that:
(a)Mr Naumovic does not appear to dispute the history of the proceedings leading up to the Set Aside Application;
(b)the effect of an order on an interim basis under the UCR is that r 195.13 operates to make it a judgment of, in this case, the SCSA: Transcript p 14;
(c)in reference to Mr Naumovic’s submission relying on UCR r 186.1, where a court may at any time correct an error in a judgment and may, if satisfied that the interests of justice so require, vary a judgment to set aside a judgment and reopen a proceeding, there is no prospect of success on seeking to set aside the Further Costs Order: Transcript p 14;
(d)relied on Stec v Orfanos [1999] FCA 457 (“Stec”) at [24] per Beaumont, Branson and Sundberg JJ where the Federal Court observed that:
Where a debtor seeks to set aside a bankruptcy notice on the ground that the debtor has a cross demand which equals or exceeds the amount of the judgment or order on which the bankruptcy notice is founded, the judgment on the one hand and the cross demand on the other must be mutual and due in the same right: Re Anderson; Ex parte Alexander (1927) 27 SR (NSW) 296; James v Abrahams (1981) 34 ALR 657; 51 FLR 16 at 27. The requirements that the two claims be ‘in the same right’ is directed to the capacities in which the claimants claim. Thus a claim by a judgment creditor personally cannot be answered by a claim against the creditor as a member of a partnership or as an executor or trustee. See Re Wedd; Ex parte Wedd (1961) 19 ABC 36; Re Molesworth (1907) 51 Sol Jo 653; Vogwell v Vogwell (1939) 11 ABC 75 at 89. But the requirement relevant to the present case is that the claims be mutual; that is that they be of the same kind or nature. Thus joint debts cannot be set off against several debts: Middleton v Pollock; Ex parte Knight and Raymond (1875) LR 20 Eq 515 at 518.
(e)in response to Mr Naumovic’s claim of a counterclaim, the Council submitted that:
(i)consent to the making of orders in a claim between Mr Naumovic and a third party, is irrelevant in the current proceedings as the third party is not present in these proceedings, and that on this basis alone the Court may not consider that to be a counterclaim;
(ii)for the purposes of the litigation there are three separate entities: Mr Jackson personally, Mr Jackson as the Administrator of the Council, and the suspended Council which continues to exist: s 273(5) of the LG Act;
(iii)in relation to proceedings in the MCSA at the Coober Pedy against Mr Jackson, the Council accepts that there has been a consent judgment entered but it is irrelevant for present purposes;
(iv)there is presently no evidence before this Court from Mr Naumovic detailing the damages that he would be entitled to if he was successful; and
(v)no abuse of process has taken place and any potential abuse of process by way of not taking enforcement action, is not a precondition to issuing any bankruptcy notice. Further, to the extent that the Council seeks to use the proceedings to recover the Judgment Debt, this is only an abuse of process if the Council were not minded to invoke the Court’s bankruptcy powers to seek a sequestration order, yet there is no evidence that at the time of issuing the Bankruptcy Notice the Council did not intend to sequestrate Mr Naumovic’s estate in the event of non-compliance with the Bankruptcy Notice: Mariconte Appeal at [42] per Allsop CJ, Farrell and Derrington JJ.
Mr Naumovic’s Reply
In reply, Mr Naumovic submitted that in accordance with Sch 1 of the LG Act, Mr Jackson, in his capacity as Administrator, is not a separate legal entity and is in fact the Council, and that ultimately there is no difference between the Administrator and the Council: Transcript p 21.
Consideration
Legislative provisions
The relevant legislative provisions of the FCFCA Act are as follows:
256 Review of power exercised by delegate
(1)A party to proceedings in which a delegate has exercised any of the powers of the Federal Circuit and Family Court of Australia (Division 2) under section 254 may:
(a) within the time prescribed by the Rules of Court; or
(b) within any further time allowed in accordance with the Rules of Court;
apply to the Court for review of that exercise of power.
The relevant legislative provisions of the Bankruptcy Act are as follows:
27 Bankruptcy courts
(1)The Federal Court and the Federal Circuit and Family Court of Australia (Division 2) have concurrent jurisdiction in bankruptcy, and that jurisdiction is exclusive of the jurisdiction of all courts other than:
(a) the jurisdiction of the High Court under section 75 of the Constitution; or
(b)the jurisdiction of the Federal Circuit and Family Court of Australia (Division 1) under section 35 or 35A of this Act.
(2)      To avoid doubt, subsection (1) does not:
(a)      confer jurisdiction in a criminal matter; or
(b)exclude the jurisdiction of a court of a State or Territory under the Judiciary Act 1903 in a criminal matter relating to this Act.
29 Courts to help each other
(1)All Courts having jurisdiction under this Act, the Judges of those Courts and the officers of or under the control of those Courts shall severally act in aid of and be auxiliary to each other in all matters of bankruptcy.
30 General powers of Courts in bankruptcy
(1)      The Court:
(a)has full power to decide all questions, whether of law or of fact, in any case of bankruptcy or any matter under Part IX, X or XI coming within the cognizance of the Court; and
(b)may make such orders (including declaratory orders and orders granting injunctions or other equitable remedies) as the Court considers necessary for the purposes of carrying out or giving effect to this Act in any such case or matter.
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;
41 Bankruptcy notices
(1)An Official Receiver may issue a bankruptcy notice on the application of a creditor who has obtained against a debtor:
(a) a final judgment or final order that:
(i) is of the kind described in paragraph 40(1)(g); and
(ii) is for an amount of at least the statutory minimum; or
(b) 2 or more final judgments or final orders that:
(i) are of the kind described in paragraph 40(1)(g); and
(ii) taken together are for an amount of at least the statutory minimum.
…
(6A)Where, before the expiration of the time fixed for compliance with a bankruptcy notice:
(a)proceedings to set aside a judgment or order in respect of which the bankruptcy notice was issued have been instituted by the debtor; or
(b)an application has been made to the Court to set aside the bankruptcy notice;
the Court may, subject to subsection (6C), extend the time for compliance with the bankruptcy notice
…
(6C) Where:
(a)a debtor applies to the Court for an extension of the time for complying with a bankruptcy notice on the ground that proceedings to set aside a judgment or order in respect of which the bankruptcy notice was issued have been instituted by the debtor; and
(b)the Court is of the opinion that the proceedings to set aside the judgment or order:
(i) have not been instituted bona fide; or
(ii) are not being prosecuted with due diligence;
the Court shall not extend the time for compliance with the bankruptcy notice.
Regulation 8 of the Bankruptcy Regulations states:
Application for bankruptcy notice
(1)This section sets out the requirements for an application to the Official Receiver for a bankruptcy notice by a person who has obtained against a debtor one, or 2 or more, final judgments or final orders of a kind described in paragraph 40(1)(g) of the Act.
(2)      The application must be in the approved form.
(3)The application must specify the final judgment or final order or each of those final judgments or final orders.
(4)      The application must include:
(a) if any final order specified in the application is an award that is a final order because of subparagraph 40(3)(a)(i) of the Act--both of the following:
(i)a copy of the award certified as a true copy by the arbitrator who made the award or by an officer of the Court who has compared the copy with the original award;
(ii)a sealed or certified copy of the order giving leave to enforce the award; and
(b)for any other final order or final judgment specified in the application--at least one of the following:
(i)        a copy of the sealed or certified judgment or order;
(ii)a certificate of the judgment or order sealed by the court that made the judgment or order (the relevant court ) or signed by an officer of the relevant court;
(iii)a copy of the entry of the judgment or order certified as a true copy of that entry and sealed by the relevant court or signed by an officer of the relevant court.
Rule 3.02 of the Bankruptcy Rules state:
3.02 Setting aside bankruptcy notice
(1)An application to set aside a bankruptcy notice under the Bankruptcy Act must be accompanied by an affidavit stating:
(a)      the grounds in support of the application; and
(b)      the date when the bankruptcy notice was served on the applicant.
(2)      A copy of the bankruptcy notice must be attached to the affidavit.
(3)If the application is based on the ground that the debtor has a counter‑claim, set‑off or cross demand referred to in paragraph 40(1)(g) of the Bankruptcy Act, the affidavit must also state:
(a)      the full details of the counter‑claim, set‑off or cross demand; and
(b)the amount of the counter‑claim, set‑off or cross demand and the amount by which it exceeds the amount claimed in the bankruptcy notice; and
(c)why the counter‑claim, set‑off or cross demand was not raised in the proceedings that resulted in the judgments or orders to which the bankruptcy notice relates.
(4)If the application is based on the ground that the debtor has instituted proceedings to set aside a judgment or order in relation to which the bankruptcy notice was issued, a copy of the application to set aside the judgment or order and any material in support of that application must also be attached to the affidavit.
(5)The application and supporting affidavit must be served on the respondent creditor within 3 days after the application is filed.
The hearing of a review application
A hearing under s 256(1) of the FCFCA Act is a hearing de novo and the relevant matter is considered afresh: Pattison v Hadjimouratis [2006] FCAFC 153; (2006) 155 FCR 226; (2006) 236 ALR 1; (2006) 4 ABC(NS) 367 at [3]-[20] per Nicholson J and [39] per Jacobson J; Cassimatis v Australian Securities and Investments Commission [2016] FCA 131; (2016) 334 ALR 350 at [12] per Edelman J (“Cassimatis”); Lavan Legal v Kenyon [2017] FCCA 2529; (2017) 326 FLR 20 (“Lavan Legal”) at [57] per Judge Lucev; University of Southern Queensland v Luck [2017] FCCA 639; (2017) 318 FLR 147 at [94] per Judge A Kelly.
In discussing the nature of a review of an order made by a Registrar, the Full Court of the Federal Court in Bechara v Bates [2021] FCAFC 34; (2021) 286 FCR 166; (2021) 388 ALR 414; (2021) 18 ABC(NS) 1 at [17] per Allsop CJ, Markovic and Colvin JJ observed that:
To underpin the validity of the delegation of judicial power of the Commonwealth to a non-judicial court officer there must be a rehearing de novo before a judge of the Court (whether Circuit Court or Federal Court). The review does not hinge, or focus, upon error in the decision of the registrar. It is a hearing de novo, in which the matter is considered afresh on the evidence and on the law at the time of the review, that is at the time of the hearing de novo. The importance of the de novo rehearing is Constitutional, being the supervisory condition that enables judicial power to be delegated to a registrar. All the jurisprudence stems from this requirement marked out by the High Court in the landmark decision in 1991 of Harris v Caladine [1991] HCA 9; 172 CLR 84, which is discussed in many of the cases referred to below.
A fresh hearing does not require the exclusion of the relevant record of the proceedings including the conclusion reached by the Registrar. In Cassimatis at [16] per Edelman J the Federal Court observed that in Sanders v Snell (No 2) (2000) 174 ALR 53 at 56 per Kirby J it was suggested that by not using the label “de novo” (that description is not used in s 256(1) of the FCFCA Act) there is an inference that the review may take into account, and place weight upon, the discretion of the Registrar particularly where the discretion is exercised with some frequency and skill. It is pertinent to observe that in this case an experienced Registrar of this Court delivered thoroughly well considered reasons for dismissing the Set Aside Application: see Naumovic – Registrar’s Decision.
Issues
Purpose of a bankruptcy notice
Before considering the issues it is pertinent to make some brief observations about the purpose of bankruptcy notices.
The issuance of a bankruptcy notice, followed by a failure to comply with that bankruptcy notice, brings about an act of bankruptcy upon which all creditors can found a creditors petition seeking a sequestration order: Re Athans; Ex parte Athans (1991) 29 FCR 302 (“Athans”) at 311 per Hill J; La Pegna & Anor v Deputy Commissioner of Taxation [2006] FMCA 1643; (2006) 204 FLR 364 (“La Pegna”) at [27] per Lucev FM. The legislative purpose is to “identify markers or criteria that point towards insolvency”: Australian Securities and Investments Commission v Forge [2003] FCAFC 274; (2003) 133 FCR 487; (2003) 1 ABC(NS) 429 (“Forge”) at [30] per Emmett J; La Pegna at [27] per Lucev FM. The legislative purpose exists for a public benefit to which the Court must have regard when exercising a discretion of this kind: Forge at [15] per Branson and Stone JJ and [29] per Emmett J; La Pegna at [27] per Lucev FM. Part of that public interest, as well as being a matter in the interests of creditors generally, is to ensure the appropriate determination of the relation-back date: Forge at [6] and [9] per Branson and Stone JJ; La Pegna at [27] per Lucev FM. There are potential adverse consequences if an act of bankruptcy is delayed, and it is in the interests of creditors generally, where a sequestration order ultimately follows, that the act of bankruptcy be earlier not later, and in the exercise of a specific discretion, such as that presently under consideration, that is a further factor which goes to whether or not to grant an application to set aside a bankruptcy notice, where the effect of doing so might be to delay the time at which the act of bankruptcy occurs: Warner v Frost [1999] FCA 830 at [8] per Hely J; Elliott v Water Wheel Holdings Ltd [2004] FMCA 37; (2004) 178 FLR 459 at [59] per McInnis FM; McPhee v Glentham Pty Ltd [2006] FMCA 1508 at [40] per Lucev FM. In Killoran v Duncan [1999] FCA 1574 (“Killoran”) at [14] per Gyles J the Federal Court observed that “[i]t may be most unfortunate if a bankruptcy notice were set aside in circumstances where the debtor is in fact insolvent”. In Clyne Deputy Commissioner of Taxation (NSW) (No 3) (1982) 13 ATR 466; (1982) 82 ATC 4484 (“Clyne (No 3)”), ATR at 476 per Lockhart J the Federal Court observed that “[t]he proper time to consider any adjournment of any relevant bankruptcy process or proceeding is upon the hearing of a bankruptcy petition, and not before”. An appeal against Clyne (No 3) was dismissed: Clyne v Deputy Commissioner of Taxation (NSW) (No 3) (1982) 13 ATR 686; (1982) 69 FLR 1; (1982) 45 ALR 323; (1982) 82 ATC 4690.
Power to set aside a bankruptcy notice

In R v Portus; Ex parte Federated Clerks Union of Australia [1949] HCA 53; (1949) 79 CLR 428; (1949) 23 ALJ 621 at 438 per Dixon J it was observed that:
…plainly the rule of the Federation when it uses the words ‘on behalf of’ is not contemplating the legal relation of principal and agent. The language as well as the context and subject matter shows that. For the rule speaks of the employees of the person or corporation who employs persons on behalf of the Commonwealth. The person or corporation is the employer, the principal in the contract of service. The employer is not the Crown or Government. The expression ‘on behalf of’ is used in a wider sense. It means for the purposes of, as an instrument of, or for the benefit and in the interest of, the Commonwealth.
The Administrator, administering affairs “on behalf of” the Council, is vested with the Council’s powers, functions and duties, and is an auxiliary or representative of the Council, and acts as an instrument of, and for the benefit and interest of the Council, but is not the Council itself. The fact that the Administrator is administering “on behalf of” the Council is indicative of the continued existence of the Council as a separate body corporate with legal capacity: LG Act, ss 35(1) and 36(1). It follows that the Administrator, and hence Mr Jackson, is not the Council, and the Council maintains a separate legal identity to that of an Administrator when an Administrator is appointed.
The fact that any liability incurred by an administrator is to be paid out of the funds of a defaulting council: LG Act, s 273(11), does not affect the conclusion reached in the preceding paragraph. If anything, it reinforces that conclusion because it recognises that it is necessary to provide that an administrator acting on behalf of a council must have any liability incurred met from the funds of a defaulting council. Otherwise, the administrator would be personally liable. Further, if the Administrator were the Council s 273(11) of the LG Act making provision for liability incurred by the Administrator would be unnecessary.
The Court notes that if Parliament had intended that a council be constituted by an administrator, that was a matter which could easily have been provided for by the addition of the words “or an administrator appointed under s 273(5)(b) of this Act” after the reference to the LG (Elections) Act in s 35(3) of the LG Act.
Interestingly, Mr Naumovic himself appears to recognise that the Council has a separate legal existence to the Administrator, as in the interlocutory application seeking leave to file the Proposed Amended MCSA Administrator Claim Mr Naumovic seeks to amend the MCSA Administrator Claim by adding the Council as a party in addition to the existing party (which is Mr Jackson in his capacity as Administrator). As noted at [89] above there is no evidence before the Court that leave to file the Proposed Amended MCSA Administrator Claim has been granted, or that the Council has otherwise been joined as a party to the MCSA Administrator Claim. As such the Council is not party to the proceedings involving the MCSA Administrator Claim.
It follows that the MCSA Administrator Claim lacks mutuality in respect of the Council as judgment creditor in these proceedings: Brown at 74 per Street CJ in Eq; Wedd; Stec at [24] per Beaumont, Branson and Sundberg JJ; Moorabool Developments at [17] per Hartnett FM, and in the circumstances it does not establish a counterclaim, set off or cross demand which Mr Naumovic can rely upon to have the Bankruptcy Notice set aside.
In circumstances where:
(a)the MCSA Adelaide Claim lacks sufficient substance;
(b)the MCSA Adelaide Claim, the MCSA Minor Civil Claim, and the MCSA Administrator Claim all lack mutuality; and
(c)the Contempt Costs Order is not of an amount which exceeds the sum of the Judgment Debt,
it is unnecessary to consider whether any of the MCSA Adelaide Claim, the MCSA Minor Civil Claim, the MCSA Administrator Claim, or the Contempt Costs Order, are a counterclaim, set off or cross demand which could have been set up in Judgment Debt action. And, it follows from (a), (b) and (c) above that Mr Naumovic has not established that he has a counterclaim, set off or cross demand which he can rely upon to have the Bankruptcy Notice set aside.
Abuse of process
Mr Naumovic asserts that the Bankruptcy Notice was issued for a collateral purpose and is therefore an abuse of process.
The onus of proving the existence of a collateral purpose lies on Mr Naumovic as the debtor: Cavoli v Etl [2007] FCA 1191; (2007) 5 ABC(NS) 363 at [17] per Heerey J, and more than mere assertion is required: Watts v Adelaide Bank Limited [2009] FCA 420; Mariconte Appeal at [32] per Allsop CJ, Farrell and Derrington JJ. In order to make out an abuse of process a party must establish more than:
(a)the mere obtaining of a judgment;
(b)the issuance of a bankruptcy notice; and
(c)the existence of a proceeding challenging the judgment: Seller v Deputy Commissioner of Taxation [2011] FCA 865; (2011) 84 ATR 501; (2011) 282 ALR 80; (2011) 9 ABC(NS) 195 at [25] per Flick J; Lavan Legal at [125] per Judge Lucev.
In short, the bar to proving abuse of process in such cases is set high: Mariconte Appeal at [32] per Allsop CJ, Farrell and Derrington JJ.
In considering whether the issuance of a bankruptcy notice is an abuse of process it must be borne in mind that an express object of a bankruptcy notice is to persuade the debtor to pay the debt the subject of the bankruptcy notice, and it is unarguable to say that issuing the bankruptcy notice as a means to secure payment, or with an intention or hope that the debt would be paid, is an abuse of process where sequestration proceedings are intended to be invoked upon noncompliance: Slack v Bottoms English Solicitors [2002] FCA 1445 at [20]-[21] per Spender J. If the purpose of a bankruptcy notice is to put pressure on a debtor to pay a debt rather than to invoke a court’s jurisdiction in relation to insolvency, then the filing of a bankruptcy notice is an abuse of process: Brunninghausen. It is not, however, an abuse of process if a creditor genuinely intends to pursue the matter if there is default in complying with the notice and there is no evidence of collateral purpose or undue pressure: Killoran at [12]-[13] per Gyles J. The relevant time to judge abuse of process is the time at which a bankruptcy notice is issued, and subsequent events generally have less relevance: Killoran at [13] and [15] per Gyles J.
In Kimber v The Owners Strata Plan No 48216 (No 2) [2018] FCA 406 (“Kimber (No 2)”) an allegation of abuse of process was raised, and the Federal Court having cited Brunninghausen and Killoran went on to observe with respect to the categories of abuse of process, and the facts of the particular case, as follows at Kimber (No 2) at [128]-[129] and [131] per Markovic J:
128 In HWY Rent Pty Ltd v HWY Rentals (in liq) (No 2) [2014] FCA 449 Perry J set aside a bankruptcy notice finding that its issue was part of a systematic abuse of process. At [74] her Honour said:
74 The categories of abuse of process are not closed. However, certain categories are well-established. As Justice McHugh observed in Rogers v R (1994) 181 CLR 251 at 286:
… abuses of procedure usually fall into one of three categories: (1) the court’s procedures are invoked for an illegitimate purpose; (2) the use of the court’s procedures is unjustifiably oppressive to one of the parties; or (3) the use of the court’s procedures would bring the administration of justice into disrepute. Many, perhaps the majority of, cases of abuse of procedure arise from the institution of proceedings. But any procedural step in the course of proceedings that have been properly instituted is capable of being an abuse of the court’s process. In Walton v Gardiner, Mason CJ, Deane and Dawson JJ said that the jurisdiction to stay proceedings that are an abuse of process “extends to all those cases in which the processes and procedures of the court, which exist to administer justice with fairness and impartiality, may be converted into instruments of injustice or unfairness.
129 Unlike the position in Brunninghausen, Ms Kimber has not sought to appeal the Local Court Judgment, and subject to the matters set out in [130] below, there is no evidence of her current financial status.
131 It may well be that Ms Kimber is solvent but as I have observed in the preceding paragraph, there is on this application insufficient evidence before me to draw that conclusion. Further, while there are a number of unsettling aspects to this matter, including that it appears on the evidence that the only method of enforcement of the Local Court Judgment has been by way of service of the Bankruptcy Notice and that it appears that the Owners Corporation has continued to charge Ms Kimber’s account with recovery expenses, there is insufficient evidence for me to draw a conclusion that there is any collateral purpose or undue pressure being applied by the Owners Corporation through the issue of the Bankruptcy Notice or that the Court’s processes are being used for an illegitimate purpose.
Mr Naumovic asserts that the Bankruptcy Notice was issued for a collateral purpose in that the Council seeks to place undue pressure on him to pay the Judgment Debt. For this purpose Mr Naumovic:
(a)relies on Brunninghausen; and
(b)points to the Burke Affidavit at [39] as evidence of that collateral purpose insofar as he says that Mr Burke there says that the Bankruptcy Notice is being used as a means of debt recovery.
The difficulty for Mr Naumovic is that, as he correctly submits: Naumovic Submissions at [13], there is nothing to indicate that the Council will not seek a sequestration order against him if there is default in complying with the Bankruptcy Notice. Further, there is nothing to indicate that the Court’s processes have not been genuinely invoked for that purpose, as opposed to the purported purpose of simply putting pressure on Mr Naumovic to pay the Judgment Debt. Thus, on all of the authorities, including Brunninghausen, there is no abuse of process in those circumstances: see, for example, Mariconte Appeal at [32] per Allsop CJ, Farrell and Derrington JJ; Killoran at [12]-[13] per Gyles J. The failure to seek to enforce the Further Costs Order under procedures set out in the UCR is not indicative of the purported purpose of simply putting pressure on Mr Naumovic to pay the Judgment Debt, in circumstances where there is effectively no dispute that the Council will seek a sequestration order if there is default in complying with the Bankruptcy Notice.
Mr Naumovic also asserts that the issuance of the Bankruptcy Notice is an abuse of process because it is oppressive in that it will “usurp” the taxation process in the proceedings in the SCSA in which the Further Costs Order was made, and thereby prevent an examination by Judge Bochner of the costs in those proceedings. Mr Naumovic asserts that the Council’s lawyers (both solicitors and Counsel) have a motive for ensuring the usurpation of the taxation process as it will avoid scrutiny of their costs and scandalous conduct.
Mr Naumovic’s argument in this respect falls at the first hurdle. The mere issuance of the Bankruptcy Notice does not stop or “usurp” the taxation process in the SCSA. That process can continue unimpeded until such time as a sequestration order issues, if one ever does.
If a sequestration order issues, Mr Naumovic’s property would vest in his trustee in bankruptcy: Bankruptcy Act, s 58. Further, any legal action “commenced by” Mr Naumovic is then stayed, until the trustee in bankruptcy makes election, in writing, to prosecute or discontinue the action, provided that the trustee in bankruptcy must make an election within 28 days after notice of an action is served upon the trustees in bankruptcy, and if the trustee in bankruptcy does not make an election the action is deemed to be abandoned: Bankruptcy Act, s 60(2) and (3). The injunction proceedings and related taxation proceedings in the SCSA would not be stayed under s 60(2) of the Bankruptcy Act because they are not proceedings “commenced by” Mr Naumovic.
To the extent that Mr Naumovic asserts that the taxation proceedings are oppressive because there being stopped or usurped denies him the opportunity to argue that the costs ordered to be paid the Further Costs Order might be reduced once the taxation proceedings are complete, this assertion fails for the reasons set out at [117]-[118] above.
There are several reasons why it is very difficult to see how it is that Mr Naumovic considers that the costs ordered to be paid in the Further Costs Order might be reduced.
First, as observed at [63] above:
It is unlikely in the highest degree that a Judge of the Supreme Court would make an interim order for costs in an amount greater than that which might be made upon completion of a taxation of costs. That is particularly so where, as in this case, the unchallenged evidence of Mr Burke: Burke Affidavit at [24.1]-[24.3], indicates that Judge Bochner noted that the amount sought to be paid in the Interim Costs Application, and ultimately ordered to be paid in the Further Costs Order was only $10,000 more than the disbursements incurred. In the circumstances the realistic likelihood is that there will be a further order for further costs to be paid by Mr Naumovic upon completion of the taxation of costs. Mr Naumovic’s argument on this point runs contrary to the relevant facts, experience and common sense, and must fail.
Second, insofar as Mr Naumovic seems to submit that in the Injunction Proceedings the lawyers costs are unjustified, and their conduct was “scandalous”, and that when proven the quantum of costs ordered to be paid in the Further Costs Order will be reduced, that submission is inconsistent with this Court’s observations at [63] above, as repeated in the preceding paragraph. Further, the only evidence that Mr Naumovic points to in support of this submission are four itemised tax invoices from a barrister, Mr d’Assumpcao (“Barrister’s Invoices”), who acted for the Council in the Injunction Proceedings: Third Naumovic Affidavit at Annexure GN-3. Mr Naumovic submitted that the entries in the Barrister’s Invoice provide more information as to the conduct of various parties and non-parties in the Injunction Proceedings and that it supports what was said in the Sealed Affidavits as being true. The Court has considered the Barrister’s invoices. Apart from the modesty, by modern standards, of the fees charged, the Barrister’s Invoices are unexceptional. They describe the work performed by Mr d’Assumpcao in preparing emails, attending on solicitors and their clients, drafting and settling emails and letters and court documents, and attending court in the kind of terms to be expected in a barrister’s tax invoice. Also, nothing on the face of those narrations would appear to lend any support to a suggestion that there was something scandalous involved in the conduct of Mr d’Assumpcao, or any other lawyer mentioned in the narrations, or that the lawyers were motivated by a desire to avoid scrutiny of their costs by the SCSA. Mr Naumovic made a very general allegation in this regard, without particularisation, and did not otherwise point to anything specific to justify this allegation. Having regard to the circumstances, and viewed objectively, the suggestion that there is something scandalous in relation to the conduct of the Council’s lawyers (both barrister and solicitors) in the Injunction Proceedings (or otherwise) is not made out on the evidence, and in the Court’s view Mr Naumovic’s suggestion is itself arguably scandalous: C2C Investments Pty ltd, in the matter of C2C Investments Pty Ltd v Leigh (No 3) [2012] FCA 680 at [6] per Yates J; Sims v Jooste & Ors (No 4) [2016] FCCA 2641 at [16] per Judge Lucev. The Court is fortified in that view by the unchallenged evidence of Mr Burke: Burke Affidavit at [36], that the Sealed Affidavits were themselves sealed as a result of the scandalous material in the Sealed Affidavits regarding lawyers.
Third, the SCSA (Judge Bochner) in the Costs Set Aside Judgment has already refused the Costs Set Aside Application, which sought to set aside the Further Costs Order. In the Costs Set Aside Judgment the SCSA:
(a)declined to set aside the Further Costs Order on the basis that “it is so long after the event that it would not be in the interests of the administration of justice to reopen the matter in the absence of any compelling reason” and no compelling reason had been presented;
(b)dismissed an application for leave to appeal the Further Costs Order on the basis that it was a judgment “made well over 12 months ago” and that there was “nothing” to suggest “that there would be any reason … [to] grant leave to appeal so long after the event” and that “[n]o grounds of appeal have been raised that suggest that any appeal would be successful”; and
(c)refused to grant a stay because no reason to do so had been given.
The Costs Set Aside Judgment adequately demonstrates how unlikely it is that there will be any reduction in costs arising from any further taxation of costs in the Injunction Proceedings.
It follows from the above that Mr Naumovic’s argument that that the issuance of the Bankruptcy Notice is an abuse of process because it is oppressive in that it will “usurp” the taxation process in the proceedings in the SCSA in which the Further Costs Order was made, and thereby prevent an examination by the SCSA of the costs in those proceedings, must fail.
Mr Naumovic submitted that the Council acted oppressively in seeking to issue the Bankruptcy Notice, or that its issuance was oppressive, because it was intended to, or would, prevent him from standing in the Council elections in 2022. There is no evidence that this was the Council’s (or alternatively the Administrator’s) intent in issuing the Bankruptcy Notice, and as observed at [115] above, the Council appears to be intent on moving for orders for sequestration of Mr Naumovic’s estate if the Bankruptcy Notice is not complied with. Mr Naumovic’s submission in this regard therefore fails.
Mr Naumovic also asserted that the failure to adjourn the hearing of the Interim Costs Application was oppressive, and therefore an abuse of process. On 23 August 2021 Mr Naumovic emailed the clerk to Judge Bochner and said he was not “well enough to attend court” and that he would “send through a medical certificate … in a separate email”: Burke Affidavit at Annexure TWB-11. The medical certificate is not in evidence, but is summarised in written submissions provided by the Council to the SCSA opposing any adjournment, as indicating that Mr Naumovic “does not feel too well”, “is advised to stay in Town [Coober Pedy] for about a week”, and that “[s]itting in a car worsens his pain as well”: Burke Affidavit at Annexure TWB-12, in response to which the clerk advised Mr Naumovic that he could appear by telephone at the hearing to argue for the adjournment: Burke Affidavit at Annexure TWB-13, but Mr Naumovic did not do so. The SCSA (Judge Bochner):
(a)was satisfied that Mr Naumovic had not provided an adequate explanation for non-attendance at the Interim Costs Application hearing;
(b)dismissed Mr Naumovic’s application for an adjournment; and
(c)conducted the hearing of the Interim Costs Application in Mr Naumovic’s absence: Burke Affidavit at [24.1].
Courts have a broad discretion in determining whether or not to adjourn proceedings: Myers v Myers [1969] WAR 19 at 21 per Jackson J, but in doing so must consider the interests of justice including issues of case management, delay and wastage of public resources: AON Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175; (2009) 83 ALJR 951; (2009) 258 ALR 14 at [30] per French CJ and [97]-[98] per Gummow, Hayne, Crennan, Kiefel and Bell JJ. Mere assertion of, illness or injury and the provision of “bare” medical certificates which do not properly or adequately explain the reason why a litigant cannot appear at a hearing is not sufficient to warrant the grant of an adjournment: NAKX v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCA 1559; Luck v Chief Executive Officer of Centrelink [2015] FCAFC 75; Zangmo v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2021] FCCA 1744 at [18]-[19] per Judge Lucev (and the Federal Court cases there cited). It is not evident how it is that the “health reasons” referred to by Mr Naumovic could be said to justify him not attending a hearing by telephone to argue for the adjournment, and, if then necessary, to argue the Interim Costs Application. It is plain that Mr Naumovic was given the opportunity to appear, but did not do so and did not adequately explain why not. On the evidence the SCSA considered Mr Naumovic’s request for adjournment, the reasons in relation thereto, and exercised its undoubted discretion not to grant an adjournment of the Interim Costs Application hearing. In the circumstances the Court is not satisfied that the SCSA’s refusal to adjourn the hearing of the Interim Costs Application was oppressive or an abuse of process. The decision of the SCSA (Judge Bochner) to proceed with the Interim Costs Application hearing was not oppressive and, therefore, not an abuse of process.
Going behind the judgment

Mr Naumovic seeks that the Court go behind orders made by the SCSA for the purpose of setting aside the Bankruptcy Notice.
Albeit that the Bankruptcy Act does not contain a specific power to go behind a judgment it is generally accepted that a bankruptcy court may do so: Gelonesi at [85] per Perry J. The power to do so is a power to go behind the judgment relied on to found a bankruptcy notice so as to inquire into the existence of the alleged debt: Briggs FCR at 312 per Toohey J; Olivieri v Stafford (1989) 24 FCR 413; (1989) 91 ALR 91 (“Olivieri”); FCR at 422 per Beaumont J, and is exercised on the basis that a bankruptcy notice which has been issued for a debt which is liable to be set aside or varied such that the creditor does not have a debt upon which the bankruptcy proceedings can be founded does not give effect to the provisions of the Bankruptcy Act: Olivieri at 429-430 per Gummow J. In considering the exercise of the power a bankruptcy court must take into account that a bankruptcy notice is not attended with the same adverse consequences as a sequestration order: see [38] above and cases there cited, and Xu v Wan Ze Property Development (Aust) Pty Ltd (in Liq) [2014] FCA 461; (2014) 315 ALR 523 at [118]-[121] and [131] per Robertson J.
There are a number of reasons why the Court does not consider it should go behind the Further Costs Order, namely that:
(a)the Further Costs Order is an order as to the quantum of costs made by an experienced Judge (Master) of a superior State court, and for the reasons set out at [41]-[67] above, there can be no doubt that, in so far as the Further Costs Order is concerned:
(i)it correctly assesses Mr Naumovic’s liability for costs on an interim basis; and
(ii)the realistic likelihood is that there will be a further order for further costs to be paid by Mr Naumovic on completion of the taxation of costs in the Injunction Proceedings;
(b)the Further Costs Order was preceded by the Initial Costs Order, made by a different experienced Judge (Master) of the SCSA, that Mr Naumovic pay the Council's costs of the Injunction Proceedings on a party/party basis;
(c)neither the Initial Costs Order nor the Further Costs were appealed by Mr Naumovic; and
(d)when the Costs Set Aside Application, seeking to set aside the Further Costs Order, was made, it was dismissed by the SCSA.
Pausing at this point, it can thus be observed that two Judges (Masters) of the SCSA have ordered the payment of costs in relation to the Injunction Proceedings, that the opportunity to appeal those orders was not taken up by Mr Naumovic, and that the SCSA has refused to set aside the Further Costs Order. That is sufficient in the Court's view to warrant the conclusion that the Court ought not to go behind the Further Costs Order.
Mr Naumovic also invites this Court to go behind both the Further Costs Orders and the Injunction Proceedings Final Orders, and in the course of doing so to issue a subpoena:
(a)to a Registrar of the SCSA to produce to this Court:
(i)the transcript of the taxation of costs proceedings before the SCSA (Judge Bochner); and
(ii)the Sealed Affidavit;
(b)to Mr Jackson to give evidence in these proceedings; and
(c)to the Council to produce the Restricted Documents.
For the reasons set out at [41]-[67] above, and see also [131] above, there is no reason to doubt the correctness of the Further Costs Order, and for that reason the production of the transcript of the taxation of costs proceedings before the SCSA (Judge Bochner) would serve no useful purpose in these proceedings. No cogent reason for requiring this Court to examine the transcript of the taxation of costs proceedings has been posited, and in those circumstances it is not appropriate for this Court to undertake the task which it seemingly is invited to undertake, namely, a detailed review of individual costs items in proceedings in a state Superior court: Briggs FCR at 312 per Toohey J.
In relation to the Sealed Affidavit it is not apparent, and there is no, or no sufficient, evidence, as to what legitimate forensic purpose issuing a subpoena to have the Sealed Affidavit produced to this Court in these proceedings would serve. In relation to the Sealed Affidavits the evidence in these proceedings: Burke Affidavit at [36] is that those affidavits were sealed by the SCSA because of the scandalous material therein concerning legal practitioners and law firms. That evidence is not to be doubted given that:
(a)it is unchallenged in these proceedings; and
(b)Mr Naumovic has made similarly scandalous allegations in these proceedings: see [86]-[88] above.
It is not therefore apparent what legitimate purpose might be served by this Court having resort to the Sealed Affidavit or the Sealed Affidavits.
In relation to issuing a subpoena to Mr Jackson it is not apparent what legitimate forensic purpose a summons to Mr Jackson would serve, and none was really posited by Mr Naumovic in these proceedings.
In relation to the Restricted Documents what Mr Naumovic seeks to do is have this Court go behind the Injunction Proceedings Final Orders, rather than the Further Costs Orders. What, in effect, is seemingly asked of this Court is for it to reconsider the outcome of the Injunction Proceedings, seemingly so that Mr Naumovic could somehow then gain access to the Restricted Documents for the purpose of challenging the Further Costs Orders. Mr Naumovic made vague assertions that these proceedings had a “whistle-blower element” to them and that this warranted this Court going behind the Injunction Proceedings Final Orders, but nothing of any substance to support those submissions was put before the Court, and certainly nothing to justify going behind the Injunction Proceedings Final Orders on the basis that they were wrongly decided, and therefore ought not to have resulted in the Initial Costs Orders and Further Costs orders being made. It is pertinent to observe that the Injunction Proceedings Final Orders were not appealed. On the basis of the materials before this Court, there is no or no sufficient evidence warranting the Court to go behind the Injunction Proceedings Final Orders (assuming, but without deciding, that for the purposes of the Restricted Documents argument that the Court has jurisdiction to do so in the manner seemingly contemplated by Mr Naumovic).
For the reasons set out at [129]-[138] above Mr Naumovic has failed to establish any reason for the Court to go behind any order of the SCSA, be it the Further Costs Order, Initial Costs Order or the Injunction Proceedings Final Orders.
Conclusion and Orders
For the above reasons the Court has concluded that there is no basis on which the Bankruptcy Notice can be set aside in this case. It follows that there will be an order that the Review Application be dismissed, and that the Registrar’s Orders be confirmed. There will also be an order that time for Mr Naumovic to comply with the terms of Bankruptcy Notice Number BN 255075 issued on 13 January 2022 be extended to 4.00pm on 8 March 2023.
The Court will hear the parties as to costs.

I certify that the preceding one hundred and forty-one (141) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Lucev.
Associate:
Dated: 22 February 2023

File number(s):	ADG 33 of 2022
Judgment of:	JUDGE LUCEV
Date of judgment:	22 February 2023
Catchwords:	BANKRUPTCY – Application to review Registrar’s decision not to set aside bankruptcy notice – whether interim costs order of Supreme Court of South Australia on interlocutory proceeding a final order in bankruptcy – whether counterclaim, set off or cross demand available – whether Administrator is the Council – whether counterclaims , set off or cross demand mutual – whether issuance of bankruptcy notice abuse of process – whether debt collection – whether intention to continue bankruptcy proceedings to sequestrate debtor – whether issuance of bankruptcy notice in relation to taxation of costs proceedings oppressive – whether costs might be reduced in taxation proceedings – whether lawyer’s conduct scandalous – whether issuance of bankruptcy notice oppressive because intended to prevent applicant from participating in Council elections – whether failure to adjourn taxation of costs proceedings oppressive - whether grounds to go behind judgment LOCAL GOVERNMENT – where Administrator appointed to exercise powers, functions and duties on behalf of the Council – whether Administrator is the Council WORDS AND PHRASES - “on behalf of”
Legislation:	Bankruptcy Act 1966 (Cth) ss 3, 27, 29, 30, 40, 41, 52, 58, 60 Federal Circuit and Family Court of Australia Act 2021 (Cth) s 256 Judiciary Act 1903 (Cth) s 39B Bankruptcy Regulations 2021 (Cth) reg 8 Federal Circuit and Family Court (Division 2) (General Federal Law) Rules 2021 (Cth) r 21.03 Federal Circuit and Family Court of Australia (Division 2) (Bankruptcy) Rules 2021 (Cth) r 3.02 Acts Interpretation Act 1915 (SA) s 34 Bankruptcy Act 1898 (NSW) Legislation Interpretation Act 2021 (SA) s 11 Local Government (Elections) Act 1999 (SA) ss 8, 35 Local Government Act 1999 (SA) ss 4, 10, 35, 36, 39, 51, 52, 272, 273, Sch 1 Supreme Court Act 1935 (SA) s 40 Enforcement of Judgments Act 1991 (SA) Uniform Civil Rules 2020 (SA) Ch 17, rr 183.1, 186.1, 194.1, 195.8, 195.13, 201.1, 201.5, 201.2, Sch 7
Cases cited:	AON Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175; (2009) 83 ALJR 951; (2009) 258 ALR 14 Attorney-General (NSW) v Chidgey [2008] NSWCCA 65; (2008) 182 A Crim R 536 Australian Securities and Investments Commission v Forge [2003] FCAFC 274; (2003) 133 FCR 487; (2003) 1 ABC(NS) 429 Bechara v Bates [2021] FCAFC 34; (2021) 286 FCR 166; (2021) 388 ALR 414; (2021) 18 ABC(NS) 1 Bhagat v Global Custodians Ltd [2002] FCA 223 Brunninghausen v Glavanics [1998] FCA 230 C2C Investments Pty ltd, in the matter of C2C Investments Pty Ltd v Leigh (No 3) [2012] FCA 680 Cassimatis v Australian Securities and Investments Commission [2016] FCA 131; (2016) 334 ALR 350 Cavoli v Etl [2007] FCA 1191; (2007) 5 ABC(NS) 363 Clyne Deputy Commissioner of Taxation (NSW) (No 3) (1982) 13 ATR 466; (1982) 82 ATC 4484 Clyne v Deputy Commissioner of Taxation (NSW) (No 3) (1982) 13 ATR 686; (1982) 69 FLR 1; (1982) 45 ALR 323; (1982) 82 ATC 4690 Dimitrov v Bendigo and Adelaide Bank Limited & Ors [2020] FCCA 3149 District Council of Coober Pedy v George Naumovic(No 2) [2020] SASC 159 District Council of Coober Pedy v Naumovic [2020] SASC 79 Elliott v Water Wheel Holdings Ltd [2004] FMCA 37; (2004) 178 FLR 459 Gelonesi v G Abignano (Investment) Pty Limited [2020] FCA 898 Glew v Harrowell, in the matter of Glew [2003] FCA 373; (2003) 198 ALR 331 Henderson, in the matter of Henderson v McCafferty [2000] FCA 1511 In re A Debtor [1958] 1 Ch 81; [1957] 2 All ER 551; [1957] 3 WLR 184 Jensen v Queensland Law Society Incorporated [2004] FCA 1630 Killoran v Duncan [1999] FCA 1574 Kimber v The Owners Strata Plan No 48216 (No 2) [2018] FCA 406 La Pegna & Anor v Deputy Commissioner of Taxation [2006] FMCA 1643; (2006) 204 FLR 364 Lavan Legal v Kenyon [2017] FCCA 2529; (2017) 326 FLR 20 Luck v Chief Executive Officer of Centrelink [2015] FCAFC 75 Luck v University of Southern Queensland [2015] FCA 286 Mariconte v Nobarani [2020] FCA 1485 Massih v Esber [2008] FCA 1452; (2008) 250 ALR 648 Maxwell v Moorabool Developments Pty Ltd [2004] FMCA 92 McPhee v Glentham Pty Ltd [2006] FMCA 1508 Myers v Myers [1969] WAR 19 NAKX v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCA 1559 Naumovic v District Council of Coober Pedy (unreported, Federal Circuit and Family Court of Australia (Division 2), 31 August 2022, Parkyn R) Nobarani v Mariconte [2021] FCAFC 96; (2021) 18 ABC(NS) 128 O’Shanassy v Wingecarribee Shire Council, in the matter of O’Shanassy [2018] FCA 1381 Olivieri v Stafford (1989) 24 FCR 413; (1989) 91 ALR 91 Patane v Asteron Life Ltd (formerly Royal & Sun Alliance Financial Services Ltd) (ACN 001 698 228) [2004] FCA 232; (2004) 2 ABC(NS) 85 Pattison v Hadjimouratis [2006] FCAFC 153; (2006) 155 FCR 226; (2006) 236 ALR 1; (2006) 4 ABC(NS) 367 R v Portus; Ex parte Federated Clerks Union of Australia [1949] HCA 53; (1949) 79 CLR 428; (1949) 23 ALJ 621 R v Toohey and Others; Ex parte Attorney-General for the Northern Territory [1980] HCA 2; (1980) 145 CLR 374; (1980) 54 ALJR 145; (1980) 28 ALR 27 Rafidi v Commonwealth Bank of Australia [2020] FCAFC 26; (2020) 17 ABC(NS) 386 Ramsay Health Care Australia Pty Ltd v Compton [2017] HCA 28; (2017) 261 CLR 132; (2017) 91 ALJR 803; (2017) 345 ALR 534; (2017) 15 ABC(NS) 222; (2017) 122 ACSR 115 Re Athans; Ex parte Athans (1991) 29 FCR 302 Re Brown (1923) 40 WN (NSW) 73 Re Briggs; Ex Parte Briggs v Deputy Commission of Taxation (WA) [1986] FCA 512; (1986) 12 FCR 310 Re Ling; Ex parte Commonwealth of Australia (1995) 58 FCR 129; (1995) 130 ALR 596 Re Wedd; Ex parte Parker [1962] WAR 42; (1962) 19 ABC 36; [1962] ALR 60 Rose v Merition Apartments Pty Ltd [2011] FMCA 721 Sanders v Snell (No 2) (2000) 174 ALR 53 Seller v Deputy Commissioner of Taxation [2011] FCA 865; (2011) 84 ATR 501; (2011) 282 ALR 80; (2011) 9 ABC(NS) 195 Sims v Jooste & Ors (No 4) [2016] FCCA 2641 Singh v Fobupu Pty Ltd, in the matter of Singh [2021] FCAFC 14; (2021) 17 ABC(NS) 592 Slack v Bottoms English Solicitors [2002] FCA 1445 Stec v Orfanos [1999] FCA 457 Swarbrick v Burge & Ors [2009] FMCA 985; (2009) 236 FLR 311 Totev v Sfar [2008] FCAFC 35; (2008) 167 FCR 193; (2008) 247 ALR 180; (2008) 5 ABC(NS) 691 University of Southern Queensland v Luck [2017] FCCA 639; (2017) 318 FLR 147 Warner v Frost [1999] FCA 830 Watts v Adelaide Bank Limited [2009] FCA 420 Williamson v Bendigo and Adelaide Bank Ltd [2021] FCCA 296 Xu v Wan Ze Property Development (Aust) Pty Ltd (in Liq) [2014] FCA 461; (2014) 315 ALR 523 Zangmo v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2021] FCCA 1744
Division:	Division 2 General Federal Law
Number of paragraphs:	141
Date of last submission/s:	24 November 2022
Date of hearing:	24 November 2022
Place:	Adelaide (delivered by video-link from Perth)
Applicant:	In person
Counsel for the Respondent:	Mr J Napier
Solicitor for the Respondent:	Norman Waterhouse

ADG 33 of 2022
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2) IN THE MATTER OF GEORGE NAUMOVIC V DISTRICT COUNCIL OF COOBER PEDY
BETWEEN:	GEORGE NAUMOVIC Applicant
AND:	DISTRICT COUNCIL OF COOBER PEDY Respondent

order made by:	JUDGE LUCEV
DATE OF ORDER:	22 FEBRUARY 2023