Nida v Loebenstein (Trustee), in the matter of Nida (Bankrupt) (No 2) - [2024] FedCFamC2G 1337

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Nida v Loebenstein (Trustee), in the matter of Nida (Bankrupt) (No 2) [2024] FedCFamC2G 1337

File number: MLG 297 of 2024

Judgment of: JUDGE FORBES

Date of judgment: 9 December 2024

Catchwords: BANKRUPTCY – Annulment - application pursuant to s 153B of Bankruptcy Act for annulment of bankruptcy – whether sequestration order should ever have been made – where bankrupt contends that judgment debt obtained by fraud or misconduct of petitioning creditor or legal representatives – whether court should exercise discretion to go behind the judgment – where allegations about validity of judgment debt have previously been agitated – where Supreme Court of Victoria made findings about circumstances leading to default judgment – where this court previously held sequestration order properly made – whether s 153B gives rise to a new occasion for exercise of discretion to go behind judgment – whether discretion should be exercised
BANKRUPTCY – Statement of Affairs - application pursuant to s 33A of Bankruptcy Act to amend date of filing Statement of Affairs – whether bankrupt’s statement of affairs should be deemed to have been filed at earlier time – whether bankrupt believes on reasonable grounds that statement of affairs was previously filed with Official Receiver – whether statement of affairs compliant – where no objective evidence of earlier filing – where later produced document has been signed and pre-dated - where no reasonable grounds for the claimed belief – consideration of grounds relevant to the exercise of Court’s discretion
BANKRUPTCY – Proposal to Creditors for composition of debts - application for declarations and orders pursuant to s 73 of Bankruptcy Act requiring Trustee to put composition proposal to meeting of creditors – whether composition proposal is compliant with requirements of Act – whether mandatory for Trustee to convene meeting of creditors – where proposal is vague, confusing or otherwise inept – where proposal gives no guarantee or security of Trustee’s remuneration and costs and expenses of administration – where proposal leaves trustee exposed to ongoing costs after annulment – whether creditors can amend proposal at meeting - where judgment of Trustee is that composition proposal is non-compliant – whether court should exercise discretion to require proposal to be put to creditors

Legislation:
Bankruptcy Act 1966 (Cth) s 6A, 19, 30, 33A, 34A, 43, 54, 55, 56B, 56F, 73, 149, 153B, sch 2 item 90-15

Insolvency Practice Rules (Bankruptcy) 2016 (Cth) r 42-12, 42-145, 42-130, 75-175, 90-15

Civil Procedure Act 2010 (Vic)

Cases cited:
Adsett v Berlouis [1992] FCA 368

Alfio Peter Bulic v Commonwealth Bank of Australia Limited [2007] FCA 307

Ahern v Deputy Commissioner of Taxation (Qld) [1987] FCA 504

BKA Practice Co Pty Ltd v Nida [2021] FCCA 334

BKA Practice Co Pty Ltd v Nida [2022] FCA 1257

Compton v Ramsay Health Care Australia Pty Ltd (2016) 246 FCR 508

Corney v Brien (1951) 84 CLR 343

Emerson v Wreckair Pty Ltd (1992) 33 FCR 581

Ex parte James [1874] LR 9 Ch609

Frost v Sheehan [2008] FCA 1073

Hingston v Westpac Banking Corporation [2012] FCA 41

Hughes Aircraft Systems International v Air Services Australia [1997] FCA 558

Labocus Precious Metals Pty Ltd v Thomas [2007] FCA 1154

Maclean v Brylewski, in the matter of Maclean [2024] FCA 1005

Mandri v Nicholls as trustee for the bankrupt estate of Mandri [2017] FCCA 2728

Mann v Medical Practitioners Board of Victoria [2004] VSCA 148

Monroe Schneider Associates (Inc) v No. 1 Raberem Pty Limited (No. 2) (1992) 37 FCR 234

Petrie v Redmond [1943] St R Qd 71

Ramsay Health Care Australia Pty Ltd v Compton (2017) 261 CLR 132

Re David Hurt, ex parte Davis Hurt [1988] FCA 85

Re Lamb; Ex parte Registrar in Bankruptcy [1984] FCA 133

Re Williams (1968) 13 FLR 10

Nida v BKA Practice Co Pty Ltd (No 2) [2020] VSC 770

Nida v BKA Practice Co Pty Ltd [2020] VSC 158

Soloman v Official Receiver in Bankruptcy, in the matter of Soloman [2023] FCA 1462

Southern Hotels Pty Ltd, in the matter of Temple [2000] FCA 1406

Stratton v Bowles (No 2) [2015] FCA 43

Talent, in the matter of Talent v Official Receiver in Bankruptcy [2020] FCA 1294

Thompson v Hird [2023] FCA 1530

Vince (Trustee), in the matter of Sopikiotis (Bankrupt) v Sopikiotis [2012] FCA 573

Wangman v Official Receiver, Insolvency & Trustee Service Australia [2006] FCA 202

Wren v Mahony (1972) 126 CLR 212

Division: Division 2 General Federal Law

Number of paragraphs: 192

Date of hearing: 20 September 2024

Place: Melbourne

Applicant: In person

Solicitor for the First Respondent: Mr Serong; Serong Legal

Counsel for the Second Respondent: Ms Nambiar

Solicitor for the Second Respondent: Australian Government Solicitor

Counsel for the Petitioning Creditor: Mr Moon

Solicitor for the Petitioning Creditor: BKA Practice Co Pty Ltd
ORDERS

MLG 297 of 2024

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

IN THE MATTER OF THE BANKRUPT ESTATE OF ROONA NIDA (ALSO KNOWN AS ROONA FAZAL)

BETWEEN:
ROONA NIDA

Applicant

AND:
JOSEPH LOEBENSTEIN AS THE TRUSTEE OF THE BANKRUPT ESTATE OF ROONA NIDA

First Respondent

THE OFFICIAL RECEIVER

Second Respondent

BKA PRACTICE CO PTY LTD

Petitioning Creditor

ORDER MADE BY:

JUDGE FORBES

DATE OF ORDER:

9 DECEMBER 2024

THE COURT ORDERS THAT:
1.The applicant’s Further Amended Application filed on 9 August 2024 is dismissed.
2.Any party seeking costs in relation to this application shall file and serve a schedule of the costs claimed and a written submission (not exceeding 5 pages in length) in support of the claim by no later than 4.00pm on 10 January 2025.
3.If the applicant opposes any party’s claim for costs in relation to this application, she may file and serve a written submission (not exceeding 5 pages in length) in reply by 4.00pm on 7 February 2025.
4.The question of costs will be determined on the papers.

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

INTRODUCTION

[1]

EVIDENCE

[10]

BACKGROUND

[15]

ORDERS SOUGHT BY THE APPLICANT

[43]

Annulment of Bankruptcy (s 153B)

[43]

Applicant’s submissions

[45]

Trustee’s submissions

[60]

Creditor’s submissions

[70]

Consideration

[75]

Declaration that Bankruptcy Period has Passed (s 33A)

[97]

Statutory framework

[101]

Purported 17 December 2020 Statement of Affairs

[113]

May 2022

[120]

September 2023

[126]

October 2023

[128]

Consideration

[131]

Proposal to Creditors (s 73)

[144]

Legal framework

[146]

Composition proposal

[151]

Applicant’s submissions

[156]

Trustee’s submissions

[165]

Consideration

[178]

DISPOSITION

[189]

JUDGE FORBES
INTRODUCTION

The applicant, in this proceeding is Ms Roona Nida (also known as Roona Fazal). On 3 December 2020 an order was made by a registrar of this Court sequestrating Ms Nida’s estate. The petitioning creditor was BKA Practice Co Pty Ltd (BKA). The first respondent, Joseph Loebenstein, was appointed the trustee of Ms Nida’s bankrupt estate.
By an Application filed on 12 February 2024, the applicant seeks an order pursuant to s 153B of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act) for her bankruptcy to be annulled. The applicant contends that the sequestration order made on 3 December 2020 should never have been made because it was based an irregular default judgment, obtained due to the misleading or fraudulent conduct of the petitioning creditor BKA and its legal representatives.
By a Further Amended Application filed on 9 August 2024, the applicant proposes two alternative orders in the event the Court declines to annul her bankruptcy.
First, Ms Nida seeks an order pursuant to s 33A of the Bankruptcy Act, for a Statement of Affairs she provided to the Trustee in May 2022 to be deemed to have been lodged with the Official Receiver on 17 December 2020. The applicant seeks the order on the basis that she believes on reasonable grounds that she first lodged that Statement of Affairs on the earlier date. As the statutory period of bankruptcy endures for three years, the applicant submits that if her statement of affairs is deemed to have been lodged in December 2020, she must now be released from bankruptcy.
Secondly and alternatively, the applicant seeks an order pursuant to s 73 of the Bankruptcy Act and r 75-175 of the Insolvency Practice Rules (Bankruptcy) 2016 (Cth) (the Rules) compelling the Trustee to convene a meeting of creditors to consider a proposal for a composition to satisfy her debts. The applicant has formulated various composition proposals including most recently on 9 August 2024. Any such proposal needs to be approved by creditors in a creditors’ meeting. The Trustee has refused to convene a meeting of the bankrupt’s creditors because he believes the proposal does not comply with the requirements of the Bankruptcy Act and for other reasons.
On 9 September 2024, I acceded to an application by Ms Nida for the Official Receiver to be joined to these proceedings as a second respondent. I also made other orders clarifying the Further Amended Application and case management directions: Nida v Loebenstein (Trustee), in the matter of Nida (Bankrupt) [2024] FedCFamC2G 942.
On 20 September 2024, I heard the substantive application. Ms Nida was for the majority of the hearing self-represented. Mr Levine of counsel appeared for the applicant at the beginning of the hearing but his instructions were withdrawn. The first respondent, Joseph Loebenstein as the trustee of the bankrupt estate of Roona Nida, was represented by solicitor, Mr Serong. Ms Nambiar of counsel represented the second respondent, the Official Receiver. The petitioning creditor, BKA, was represented by Mr Moon of counsel.
Each of the parties presented arguments and sought to rely upon the affidavits and written submissions previously filed. Leave was granted for the applicant to tender the transcript of an earlier Magistrates’ Court hearing[1] and that was received after the close of submissions.
[1] This transcript was before AsJ Mukhtar in Nida v BKA Practice Co Pty Ltd [2020] VSC 158 (Mukhtar judgment)
I have carefully considered the parties’ written and oral submissions and the various documents and authorities on which the parties have relied. For the reasons set out below, I have decided that Ms Nida’s Further Amended Application should be dismissed.
EVIDENCE
Each of the parties filed affidavits prior to the hearing and these were consolidated into a Court Book (CB) prepared by the applicant.
The respondents and the petitioning creditor objected to large parts of Ms Nida’s affidavits on the grounds of relevance or because they contained what they submitted were scandalous, inflammatory and baseless allegations of fraud and professional misconduct. Rather than requiring individual rulings on the many objectionable paragraphs of Ms Nida’s evidence, the respondents were content for me to determine the relevance and weight of the applicant’s evidence in the light of all other evidence and oral submissions.
Subject to general objections as to relevance and inadmissibility, I received the following affidavits into evidence:
Applicant
(a)Roona Nida (also known as Roona Fazal) dated 9 February 2024 (First Nida affidavit), 9 May 2024 (Second Nida affidavit), 9 August 2024 (Third Nida affidavit), 17 September 2024 (Fourth Nida affidavit) and 9 February 2024 (Fifth Nida affidavit);
(b)Zelmai Fazal dated 8 May 2024 and 17 September 2024;
(c)Julian Burnside KC dated 2 May 2024;
(d)Tayseer El-Hiss dated 7 May 2024; and
(e)Aji David Madapilly dated 8 May 2024.
Trustee
(a)Joseph Loebenstein dated 11 June 2024 and 23 August 2024.
Official Receiver
(a)Matthew Jacob Sheppard dated 13 September 2024.
None of the deponents were required for cross-examination.
The petitioning creditor tendered the orders of the Magistrates’ Court of Victoria made on 9 May 2018 (default judgment)[2].
[2] Exhibit BKA1 in these proceedings
BACKGROUND
The issues to be addressed in this present hearing stem from a claim of debt lodged by a law firm, Belli King & Associates, against the applicant. In summary, Belli King & Associates allege that the applicant did not pay seven tax invoices, totalling $15,265.42, relating to the provision of their legal services to Ms Nida between December 2014 and June 2015.
The applicant has alleged in this Court and elsewhere[3] that the debt was not properly owed as she believed that the legal services had been provided to her for free. This impression sits uncomfortably at odds with evidence that the law firm sent a costs agreement[4], acted on Ms Nida’s instructions in relation to a non-litigious commercial matter and rendered invoices for which it demanded payment.
[3] Mukhtar judgment
[4] Court Book (CB) 692
Due to Ms Nida’s refusal to meet demands for payment of the invoices, on 19 September 2016 BKA filed a Complaint in the Magistrate’s Court of Victoria, seeking judgment for the recovery of the outstanding debt. A series of events then followed which have been the subject of findings:
(a)by Associate Justice Mukhtar of the Supreme Court of Victoria in Nida v BKA Practice Co Pty Ltd [2020] VSC 158;
(b)by Justice Ginnane of the Supreme Court of Victoria in Nida v BKA Practice Co Pty Ltd (No.2) [2020] VSC 770;
(c)by Judge A Kelly of the then Federal Circuit Court of Australia in BKA Practice Co Pty Ltd v Nida [2021] FCCA 334; and
(d)by Justice Anderson of the Federal Court of Australia in BKA Practice Co Pty Ltd v Nida [2022] FCA 1257.
I will return to the relevance of these other proceedings in due course. Suffice to say, for present purposes, each of those proceedings made findings about the course of events which led to the entry of default judgment against Ms Nida and/or the subsequent sequestration order which was based on that default judgment. The following summary of events is informed by their Honours’ findings and, where relevant, the evidence in this proceeding.
Ms Nida was served personally with the Magistrates’ Court complaint on 10 January 2017. A defence was due to be filed on 8 February 2017, but no defence was filed by that date. On 8 February 2017, BKA entered default judgment for $15,265 plus interest and costs.
On 26 April 2017, BKA issued a bankruptcy notice based on the judgment and made attempts to serve Ms Nida.
Ms Nida subsequently applied to set aside the default judgment. On 7 August 2017 the Magistrates’ Court set aside the judgment and ordered Ms Nida to pay costs fixed at $1,582. Those costs were paid.
Ms Nida’s solicitors filed a defence to the Complaint. In short, she alleged that the legal services had not been provided to her, but to a company incorporated for the purpose a commercial investment. She alleged that any instructions given by her were in her capacity of agent for the company. In the alternative she alleged that she was never informed she would have to pay for the legal services and did not expect to be charged.
On 9 May 2018, the matter was listed for trial in the Magistrates’ Court before Magistrate Connellan. Ms Nida was unable to appear due to medical reasons. She briefed counsel to appear on her behalf to seek an adjournment of the trial. Counsel presented two medical certificates to support the application.
The adjournment application was vigorously contested. It appears an issue also arose about the Magistrate’s prior dealings with Ms Nida and the possibility that she might consider a recusal application.
After hearing the parties, Magistrate Connellan adjourned the proceeding to 22 August 2018, apparently not on the grounds of Ms Nida’s medical condition but because of the Magistrate’s own apprehensions about perceived bias. The Magistrate ordered Ms Nida to pay the petitioning creditor’s costs of $1,476 by 11 June 2018, in default of which her defence would be struck out.
I pause at this juncture to mention that there was a transcript of this Court event and it formed part of the evidence which led to Associate Justice Mukhtar’s findings about the relevant course of events. It is clear from his Honour’s later judgment that he read that transcript, cited extensive passages from it and provided relevant footnotes to his findings.
Ms Nida did not meet the costs order made on 9 May 2018 and the self-executing order took effect. On 15 June 2018 an order was made and entered on the Magistrates’ Court register that Ms Nida’s defence was struck out.
The striking out of the defence gave BKA the procedural right to enter default judgment for the second time. Ms Nida claims not to have been given notice of BKA’s application. Notwithstanding, on 4 September 2018 the Magistrates’ Court entered default judgment on the claim for $15,265.41 together with interest of $927.64 and costs of $6,489.09.
On 25 September 2018 BKA served a bankruptcy notice on Ms Nida based on the default judgment.
On 1 October 2018 Ms Nida filed a summons in the Magistrates’ Court seeking to set aside the self-executing order of 9 May 2018. A week or so later on 9 October 2018 a Magistrate adjourned the hearing of the summons to 30 January 2019 after expressing doubts about the Court’s power to grant the relief sought. Ms Nida subsequently amended the summons.
On 18 October 2018 Ms Nida initiated proceedings in the Federal Circuit Court of Australia, seeking to have the bankruptcy notice set aside.
On 30 January 2019 the Magistrates’ Court found that the amended summons to set aside the self-executing order was incompetent. Ms Nida’s application was dismissed with an order that she pay indemnity costs.
On 31 January 2019 Ms Nida’s application to have the bankruptcy notice set aside was dismissed by a Registrar of the Federal Circuit Court and Ms Nida was deemed to have committed an act of bankruptcy on that day.
On 14 March 2019 BKA presented its creditors’ petition in this Court seeking an order for the sequestration of Ms Nida’s estate pursuant to s 43 of the Bankruptcy Act. The petition was served personally upon her on that date. The act of bankruptcy relied upon was Ms Nida’s failure to comply with the requirements of the bankruptcy notice.
On 21 May 2019, Ms Nida applied in the Supreme Court of Victoria for an extension of time to seek judicial review of various orders made by the Magistrates’ Court including the orders of Magistrate Connellan made on 9 May 2018. A hearing was conducted before Associate Justice Mukhtar on 19 and 20 September 2019. On 3 April 2020, Associate Justice Mukhtar delivered judgment and formally dismissed Ms Nida’s application for an extension of time[5]. The applicant then appealed this decision, which was again dismissed by Justice Ginnane on 20 November 2020[6].
[5] Mukhtar judgment
[6] Nida v BKA Practice Co Pty Ltd (No.2) [2020] VSC 770
In addition to the above applications, Ms Nida commenced proceedings against the petitioning creditor BKA and its counsel seeking to recover compensation for alleged breaches of the Civil Procedure Act 2010 (Vic).
After multiple adjournments over a period of 18 months, an order was made for the sequestration of Ms Nida’s estate on 3 December 2020.

The applicant has attempted to have this sequestration order, and her bankruptcy set aside.
On 21 January 2021, the applicant filed an application to review the sequestration order in the Federal Circuit Court of Australia. This application was dismissed on 25 February 2021 by Judge A Kelly[7].
[7] BKA Practice Co Pty Ltd v Nida [2021] FCCA 334 (Kelly judgment)
Relevantly, in the course of his judgment, Judge Kelly traversed the history of the Magistrates’ Court proceedings and the Supreme Court proceedings, noting Ms Nida’s various complaints about the conduct of those proceedings. Judge Kelly expressly rejected Ms Nida’s submission that she does not owe the money claimed by the petitioning creditor and her claim that the judgment was obtained by fraud. His Honour said there was no basis to Ms Nida’s claim that the bankruptcy notice was defective, and he endorsed Associate Justice Mukhtar’s observation that the bankrupt’s defence to the claim was “dubious” [8].
[8] Mukhtar judgment at [22]
Moreover, Judge Kelly discussed the circumstances in which it may be appropriate for the Bankruptcy Court to “go behind” a judgment[9]. I will return to his Honour’s discussion of this issue later in these reasons. Suffice to say, “standing back from the matter and having regard to the history of all the proceedings”[10], Judge A Kelly was not persuaded that there was a genuine dispute about Ms Nida’s liability under the judgment that required further investigation.
[9] Kelly judgment at [61]-[69]
[10] Kelly judgment at [68]
Judge Kelly’s decision was then appealed to Justice Anderson in the Federal Court of Australia, who dismissed the application on 25 October 2022[11]. Respectfully, his Honour’s survey of the authorities regarding the circumstances in which a Court should look behind a judgment and his reasons for not doing so are unimpeachable. Again, I will return to Justice Andersons’ reasons shortly.
ORDERS SOUGHT BY THE APPLICANT
[11] BKA Practice Co Pty Ltd v Nida [2022] FCA 1257 (Anderson appeal judgment)
Annulment of Bankruptcy
The primary order the applicant seeks is for the Court to annul her bankruptcy pursuant to s 153B of the Bankruptcy Act.
Section 153B(1) of the Bankruptcy Act states that:
“(1) If the Court is satisfied that a sequestration order ought not to have been made […] the Court may make an order annulling the bankruptcy.”
Applicant’s submissions
In her written submissions, the applicant highlighted that the Court’s power to annul a bankruptcy is supported by other provisions of the Bankruptcy Act. The applicant pointed to s 30(1) of the Bankruptcy Act which provides that:
(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.
Ms Nida also highlighted s 34A(1) of the Bankruptcy Act, which specifies the requisite standard of proof to be the balance of probabilities.
I accept that the Court has power to make an order annulling a bankruptcy if the Court is satisfied that the sequestration order should not have been made. The onus rests with the applicant to persuade the Court that such an order should be made. I also accept that before exercising its discretion the Court may be required to decide questions of law and to determine questions of fact – which it must do on the balance of probabilities. I do not think any other party takes issue with these guardrails.
In the present application, Ms Nida contends that the sequestration order ought not to have been made because it was based on an irregular default judgment. She claims the petitioning creditor, BKA, made false and misleading statements, which misled Magistrate Connellan into making an irregular default judgment which was then capitalised upon by the creditor. She submits that by reason of that conduct and the improper entry of a default judgment, the merit of her defence was never considered and the debt never properly proved.
The applicant submits that it is necessary to look behind the original judgment to consider the circumstances by which it was obtained. She maintains that the Magistrates’ Court was misled into striking out her defence and that she was unfairly deprived the opportunity to contest the underlying debt claim.
The premise of Ms Nida’s application for annulment is that if the Court looks behind the default judgment, the Court will discover that it was obtained by fraud or other improper means and will then be drawn to the conclusion that the sequestration order should never have been made. Ms Nida passionately argued that there are compelling reasons for the original judgment to be re-examined and for the fraud, misleading conduct and bad faith of BKA and its legal representatives to be exposed.
In support of her annulment application, the applicant also pointed to the public interest and the interests of justice in going behind the judgment, especially in circumstances where a party has misled the Court. Ms Nida cited Re Williams (1968) 13 FLR 10 and Mann v Medical Practitioners Board of Victoria [2004] VSCA 148 as examples where the Court has denounced the use of misleading submissions. The applicant also alleged that the first respondent, her trustee in bankruptcy, had been supportive of BKA’s misleading behaviour and that there is a need for the Court to supervise and reprimand the behaviour of public officials who promote such behaviour.
The applicant acknowledged previous judges had already considered and decided not to go behind the original judgment. However, the applicant emphasised that this is her first application seeking an annulment and her first time bringing an action under s 153B. The gist of the applicant’s submission is that an application seeking an annulment under s 153B gives rise to a new and separate occasion for the Court to consider the exercise of its discretion.
In her written submissions, Ms Nida cited Alfio Peter Bulic v Commonwealth Bank of Australia Ltd [2007] FCA 307 where at [12] the Court observed that:
“A sequestration order “ought not to have been made” if, on the facts known at the time of the annulment application, the Court would have been bound not to make the sequestration order.”
Given the Court is mandated to consider whether the “sequestration order should not have been made,” the applicant submits that the “look behind” issue is agitated afresh by this application and the Court should not be bound by what others have done previously. The applicant submits in effect that in order to perform its statutory task the Court must revisit all the background facts.
In her reply address, the applicant emphasised that her case before Associate Justice Mukhtar was an application for an extension of time for judicial review. She submitted that it was unnecessary in that case to go behind the original judgment and that his Honour’s findings should not guide the Court in the present case.
In her written submissions, the applicant also cited a large number of additional authorities which support this notion of “going behind” the original judgment[12]. However, her legal - and subsequent oral - submissions were lengthy and somewhat unstructured and the authorities she sought to rely on were selective. Her submissions were difficult to follow, but I am confident that my reasons capture the essence of her arguments.
[12] Emerson v Wreckair Pty Ltd (1992) 33 FCR 581; Compton v Ramsay Health Care Australia Pty Ltd (2016) 246 FCR 508; Ramsay Health Care Australia Pty Ltd v Compton (2017) 261 CLR 132; Ahern v Deputy Commissioner of Taxation (Qld) (1987) 76 ALR 137; Corney v Brien (1951) 84 CLR 343; Monroe Schneider Associates (Inc) v No 1 Raberem Pty Ltd (No 2) (1992) 37 FCR 234; Petrie v Redmond [1943] St R Qd 71
In her written submissions, Ms Nida reiterated her litany of allegations about BKA’s unethical and misleading conduct in various other court proceedings[13]. The applicant claimed that in other proceedings, BKA had misled the Court into dismissing an application she made for relief under the Civil Procedure Act. She submitted BKA misled the Associate Justice Mukhtar into erroneously dismissing her application for an extension of time. Ms Nida alleged that Judge A Kelly had been misled by the false submissions and affidavits filed by BKA into dismissing her review application in the Federal Circuit Court. Her overarching submission is that the judgments and orders obtained irregularly or in bad faith are ex debito justitiae and should be set aside.
[13] E.g. Applicants Outline of submissions at [4]-[7]
To further her claim for annulment, Ms Nida submitted that she is currently solvent and relied upon the Fifth Nida affidavit as evidence of that asserted fact. In that affidavit Ms Nida deposes to her interest in two properties known as 10 Girvan Circuit, Endeavour Hills and 1A Tayport Gardens, Endeavour Hills. She says that 1A Tayport is worth approximately $700,000 and is not subject to any mortgage. The other property at 10A Girvan is worth $754,053.30 but subject to a mortgage debt of $519,718.98, of which $112,439.67 was overdue as of 2 July 2024[14].
[14] Affidavit of Roona Nida dated 9 February 2024 (Fifth Nida affidavit); Annexure RN-80
Ms Nida deposes that the mortgagee, ANZ Bank, has expressed a “…willingness to refinance the home loan if my bankruptcy is annulled” and that she has “…no other major debts to pay and can easily refinance the home loan soon after the annulment of the bankruptcy”[15].
[15] Fifth Nida affidavit at [9]
Trustee’s submissions
The Trustee, Mr Loebenstein, asserted that the applicant has not provided a specific basis or any evidence upon which the Court should exercise its discretion to look behind the original judgment. As no new evidence has been presented, the Trustee submitted there is no utility in looking behind the original judgment, as other judges have been invited to do before. The trustee submitted that the application is little more than a case of Ms Nida advancing the same submissions in the hope of a different result.
The respondent referred to Maclean v Brylewski, in the matter of Maclean [2024] FCA 1005 (Maclean v Brylewski), where the Court at [33] affirmed that an applicant seeking an annulment of bankruptcy “must place before the Court all relevant material…so that the Court may be properly informed”. The applicant for annulment bears the onus.
It is submitted that the onus to produce relevant persuasive material is all the more burdensome where, as here, serious allegations are made about the manner in which the judgment was procured. In Thompson v Hird [2023] FCA 1530, the Court observed at [28]:
“[…] A party who seeks to establish that a judgment ought to be set aside due to fraud, ordinarily, must establish that the claim is based on newly discovered facts, that the facts are material and such as to make it reasonably probable that the claim will succeed and go beyond mere allegations of perjury on the part of witnesses at a trial, that the opposing party took advantage of the judgment and that party is shown by admissible evidence to have been responsible for the fraud in such a way as to render it inequitable that such a party should take the benefit of the judgment.”
The Trustee submits that the applicant falls well short of coming close to the threshold of making it reasonably probable that a claim of fraud will succeed. The applicant is reagitating arguments and allegations which have been unsuccessfully pressed elsewhere, in the hope they will this time stick. But the Trustee submits that there is nothing new in the facts alleged or the allegations raised which properly engages the discretion under s 153B.
Unsurprisingly, the Trustee submitted that Judge A Kelly and Justice Anderson have already considered and rejected the invitation to look behind the original judgment and that it is unnecessary and an abuse to re-visit this issue.
The Trustee added that annulment applications are closely tied to applications challenging sequestration orders – in the sense that both applications invariably seek to impugn the underlying judgment and debt. Therefore, given the applicant has previously challenged her sequestration order, her annulment application will merely revisit issues which have already been resolved. The Trustee submitted that this alone is a sufficient ground to refuse the application under s 153B.
Further, the Trustee reminded the Court that the power under s 153B is discretionary and that a Court is not obliged to annul a bankruptcy[16]. Of the various factors[17] which the Court should consider before exercising discretion under s 153B, the Trustee specifically noted that delay in the making of the application is an important consideration. As the applicant took a number of years to file her application for annulment, the trustee submits that the extensive delay should weigh heavily against the exercise of discretion under s 153B.
[16] Soloman v Official Receiver in Bankruptcy, in the matter of Soloman [2023] FCA 1462 (Soloman) at [20]
[17] Soloman at [22]
Relatedly, the Trustee also submitted that Ms Nida’s actions, in continuously postponing proceedings and causing delay, has left her creditors in a state of uncertainty. The Trustee submits this is unfair and therefore, in the interests of justice, the Court should not further entertain this matter.
The Trustee also expressed concern regarding the applicant’s claim to be solvent and submitted that the Court should not exercise its discretion to annul a bankruptcy where the evidence of solvency is problematic.
The Trustee submitted that there are significant conflicts between the various iterations of Statements of Affairs which Ms Nida has presented over time. For example, in a Statement of Affairs submitted on 3 October 2023 the applicant refers to unsecured liabilities to creditors running to more than $3 million. If that is true, the Trustee submits the Court cannot be satisfied on her most recent solvency affidavit that she has the equity in assets to discharge those liabilities.
Creditor’s submissions
BKA, who was separately represented in these proceedings, similarly argued that it is unnecessary for the Court to look behind the original judgment as the applicant’s original defence was struck out for valid reasons. The creditor pointed to paragraph 2 of the Orders made on 9 May 2018, which unambiguously states that Ms Nida’s defence was to be struck out upon her failure to meet the costs order. The creditor submits that Ms Nida’s defence was struck out for that reason alone and was not influenced by what she claims were “misleading submissions” filed by BKA.
Additionally, Associate Justice Mukhtar has in a contested proceeding already made findings of fact in relation to the relevant background. The petitioning creditor submitted that it would be an abuse for an application under s 153B to be used as a proxy Court of Review or Appeal to re-examine Associate Justice Mukhtar’s decision and findings. Justice Ginnane has already done so.
Furthermore, BKA endorses the Trustee’s submission that there is nothing new or different about the applicant’s evidence and submissions which should persuade this Court to look behind the original judgment. The creditor submits that Ms Nida is merely seeking to re-argue the same issues which have previously been addressed by other judicial officers.
The creditor denies the many allegations of misleading conduct and fraud directed at it by Ms Nida. They submit that there is nothing new about them and they should be seen as no more persuasive on this occasion than they have been before other Courts. The creditor says that there is no warrant for looking behind the judgment and thus no proper basis for a finding that the sequestration order should not have been made. The applicant fails to discharge her onus and the application should be dismissed.
Finally, like the Trustee, the creditor also points to the delay of the applicant in making an annulment application and encourages the Court to consider this factor in exercising its discretion under s 153B.
Consideration
The condition for the exercise of the Court’s discretion under s 153B is satisfaction that the sequestration order ought not to have been made. The applicant bears the onus of bringing the Court to that level of satisfaction on the material presented to it in support of the application.
In the present case, there is no objective evidence which would cause the Court to conclude that the sequestration order was irregular and not properly made. The order was made by a Registrar of the Federal Circuit Court based on the judgment debt and the act of bankruptcy. The application was contested by Ms Nida and the Registrar was satisfied that the sequestration order should be made.
The applicant then made an application for review of the Registrar’s decision, which was heard and determined by Judge A Kelly. That review was conducted de novo and the parties had every opportunity to put evidence and arguments before the Court. After hearing the contested application afresh, Judge A Kelly too was plainly satisfied that the requirements for the making of the sequestration order were made out.
Relevantly, Ms Nida urged Judge Kelly to “look behind” the judgment just as she has and for most of the same reasons she has pressed in this proceeding. For soundly articulated reasons Judge Kelly[18] did not consider it appropriate to exercise his discretion to do so. See in particular his Honour’s references to Beach J in Stratton v Bowles (No.2) [2015] FCA 43 at [27]-[42].
[18] Kelly judgment at [65]
Judge Kelly’s decision not to look behind the judgment was a principal ground for Ms Nida’s appeal of his Honour’s decision to the Federal Court. Indeed, Ms Nida submitted before Justice Anderson that the primary issue to be determined in the appeal was “in what circumstances can, and should, a bankruptcy court determining proof of debt under s 52(1)(c) of the Act exercise its discretion to go behind a judgment?”[19].
[19] Anderson appeal judgment at [6]
In the appeal Ms Nida submitted that while the Court has a “discretion” to “accept the judgment as a satisfactory proof of the petitioning creditor’s debt”, the discretion ought to be exercised reasonably as the Court has a statutory duty to be “satisfied” as to the existence of the petitioning creditor’s debt and the creditor should not be able to make a person bankrupt on a debt which may not be provable[20]. Ms Nida also submitted that circumstances tending to show fraud or collusion or a miscarriage of justice offer occasions for the exercise by the Court of Bankruptcy of its power to enquire into the consideration for the judgment.[21]
[20] Ahern v Deputy Commissioner of Taxation (Qld) [1987] FCA 504 at [146]
[21] Wren v Mahony (1972) 126 CLR 212 at 223
She also added that where the merits of a claim and counterclaim have not been tested in adversarial litigation, a judgment debt does not have the usual practical guarantee of reliability and that it is not always sufficient evidence to support a sequestration order against the estate of a judgment debtor.[22]
[22] Ramsay Health Care Australia Pty Ltd v Compton (2017) 261 CLR 123 at [67]-[68] (Ramsay)
In her submissions to Justice Anderson, the applicant argued that she had provided credible evidence to show that there are circumstances which make it appropriate to “go behind” the judgment to ascertain whether there was, in truth and reality, a debt. She submitted that Judge A Kelly had failed to read her evidence and had erred in failing to properly determine matters of fact and law. She submitted that if the Court had gone behind the default judgment debt it would have found that there was no debt owing to BKA because:
(1)the evidence provided by the petitioning creditor in justifying the bankruptcy proceedings omitted relevant evidence;
(2)her liability under the costs agreement which led to the default Judgment was never determined on the merits by way of adversarial litigation, because her defence had been struck out; and
(3)there had been irregularities in the manner in which the proceedings have been conducted in the Magistrates’ Court.

If the submissions made by Ms Nida in the present annulment application appear familiar, it is because they essentially replicate the very same arguments which she advanced before Justice Anderson on appeal. It is unnecessary to rehearse the petitioning creditor’s response to the arguments on appeal as they, too, conform substantially with their opposition to the current application.
Justice Anderson found that there was no error in Judge A Kelly’s approach including his decision not to go behind the judgment debt. Justice Anderson found that Judge Kelly had correctly identified the overarching proposition from the case of Ramsay Health Care Australia Pty Ltd v Compton (2017) 261 CLR 123, being that it is an essential obligation for the Court to be satisfied that there is a debt upon which a sequestration order can be made. Judge Kelly had also correctly stated the relevant principles regarding “going behind” the judgment and had correctly found that “…where a substantial question is demonstrated as to whether a debt is owing, the Court should proceed to investigate that question in order to decide whether it is open to it to make the sequestration order”[23]. Justice Anderson also endorsed Judge Kelly’s observation that the Court will not examine every judgment that he sought to be impugned and that “special circumstances must be established before it will do so”[24]. The judgment debtor bears the onus of satisfying the Court that such an investigation should be undertaken.
[23] Kelly judgment at [61]
[24] Anderson appeal judgment at [32]
In light of the above, Justice Anderson found that Judge Kelly’s exercise of discretion not to go behind the judgment had not miscarried. Ms Nida’s appeal on this ground, and all other grounds, was rejected.
A submission advanced by Ms Nida in this annulment application is that s 153B provides a new or fresh occasion for the Court to exercise its discretion to go behind the judgment.
I do not disagree that it should be open to a bankrupt in an application for annulment under s 153B to invite the Court to exercise its discretion to look behind the judgment as a means of ascertaining whether the sequestration order was properly made. However, whether or not to accede to that request remains within the discretion of the Court.
In this matter the exercise of my discretion may be properly informed by what has proceeded before this application. The exercise of my discretion will also be informed by the evidence and arguments advanced by the bankrupt and other parties in these annulment proceedings.
I agree with the submissions of the respondents that in the voluminous affidavit material relied upon by Ms Nida in these proceedings, she deposes to the many occasions on which she has, in various jurisdictions and at various times, called into question the validity of the default judgment. In my opinion the evidence and submissions upon which she seeks to impugn the default judgment have been aired, considered and thoughtfully determined in other proceedings in the Supreme Court of Victoria, the Federal Circuit Court and on appeal in the Federal Court of Australia.
I also accept the observation of the Trustee that proceedings which seek to set aside a sequestration order are closely related to annulment proceedings, at least insofar as each seek to impugn the underlying judgment debt and invite the Court to look behind it. While it is open to Ms Nida to invite the Court to look behind the judgment debt in the course of pressing her annulment application, the reality is that she is having another bite of the cherry and hoping that this Court will exercise its discretion differently.
The Court should not exercise its discretion without special circumstances being established. Having considered the evidence and submissions relied upon by Ms Nida, there is nothing new in this current application. Where allegations as serious as fraud and misleading and unethical conduct are alleged, the onus rests squarely with the bankrupt to produce newly discovered facts which would make it reasonably probable that such serious allegations can be made out.
Ms Nida has not discharged that onus.
Further and in any event, I am troubled about Ms Nida’s claim to be solvent. In considering the exercise of its discretion the Court should have regard to any arrangements the bankrupt has made to meet the creditors’ claims and to meet the claims of the Trustee in the administration of the estate. As I discuss later in this judgment, I am not satisfied that Ms Nida has made proper arrangements to do either of those things.
Ms Nida’s claim to solvency is dubious. I cannot reconcile her solvency affidavit with the claims she has made of having unsecured creditors of several million dollars. I do not accept the solvency affidavit to be a full and complete disclosure of the applicant’s financial affairs, such as to persuade me that she can meet the claims of her creditors, let alone the Trustee’s remuneration and expenses. I do not accept her claim that the ANZ Bank has expressed a “willingness” to refinance the properties in which she has an interest. Read properly and in its terms the correspondence from the ANZ reveals no more than a preparedness to talk to Ms Nida if she can demonstrate that her Trustee consents to a refinance[25].
[25] Fifth Nida affidavit, Annexure RN-81
In all the circumstances, I do not propose to exercise my discretion to look behind the default judgment. I am not satisfied that the sequestration order should not have been made. I am satisfied, as Judge A Kelly was previously, that the Judgment Debt was a proper foundation for the making of the sequestration order.
Accordingly, Ms Nida’s application for annulment of the bankruptcy pursuant to s 153B is dismissed.
Declaration that Bankruptcy Period has Passed
In paragraph 3 of the Further Amended Application Ms Nida seeks the following as an alternative to the relief sought under s 153B:
(a)an Order pursuant to s 33A(1) of the Act that the Applicant’s Statement of Affairs was filed for purposes of ss 54, 55, 56B, 56F;
(b)an Order pursuant to s 33A(2) of the Act that the Statement of Affairs is to be treated as having been filed at a time before it was actually filed;
(c)an Order that the applicant is discharged from bankruptcy by operation of law in accordance with s 149(1) of the Act;
(d)an Order that any property vested in the Trustee consequent upon the sequestration of her bankrupt estate (including for the avoidance of doubt the property at 10 and 10A Girvan Circuit (also known as 1A Tayport Gardens) Endeavour Hills in the State of Victoria excluding sums of money previously held or previously held by the Trustee in the bank accounts standing in the Applicant’s name and under the control of the Trustee is vested assets of the bankrupt estate and the Trustee will subject to any claims made by or the rights of any secured creditor or creditors because such property to be immediately vested back in her which property will vest in her;
(e)for the purposes of this ground 3, the “Statement of Affairs” referred to in paragraphs (a) and (b) shall mean the Statement of Affairs dated 17 December 2020 which was sent to the Trustee by the Applicant on 27 May 2022.
The applicant purports to have filed three statements of affairs: one on 17 December 2020, one on the 22 September 2023 and one on 3 October 2023.
The Official Receiver accepted for filing the applicant’s Statement of Affairs dated 3 October 2023. In the ordinary course the applicant will be discharged from bankruptcy on 4 October 2026, unless the Trustee objects to the discharge. As things currently stand, the Trustee has not objected and the applicant can expect to be discharged from bankruptcy in just under 2 years’ time.
By this application, the applicant seeks various orders whereby a Statement of Affairs she claims to have filed on 17 December 2020 would be treated as having been filed at that date. If such an order were made, the effective date of bankruptcy would be altered and the applicant would now be entitled to be discharged.
Statutory framework
Pursuant to s 54 of the Bankruptcy Act, a Statement of Affairs must be completed by the bankrupt and filed with the Official Receiver within 14 days of the bankrupt having been notified of the bankruptcy. A “Statement of Affairs” for the purposes of s 54 is a statement in approved form - see s 6A(2) of the Bankruptcy Act.
To the extent that a Statement is not properly completed, it will be ineffective and non-compliant for the purposes of s 54[26]. A lack of necessary information may be such that the purported statement is not in fact a proper statement of the bankrupt’s affairs.
[26] Vince (Trustee), in the matter of Sopikiotis (Bankrupt) v Sopikiotis [2012] FCA 573 at [9]; Wangman v Official Receiver, Insolvency and Trustee Service Australia [2006] FCA 202 at [55]
Pursuant to s 149(1)(a) of the Bankruptcy Act, a bankrupt is discharged from their bankruptcy three years after filing a Statement of Affairs. In effect, time does not begin to run until a proper Statement of Affairs is completed and filed with the Official Receiver.
The applicant submits that s 33A(1) and (2) of the Bankruptcy Act confers power on the Court to grant the relief she seeks.
Section 33A(1) states:
“If the Court is satisfied that a person believed on reasonable grounds that a statement of affairs that relates to the person's bankruptcy was filed for the purposes of section 54, 55, 56B, 56F or 57 at a time before it was actually filed, the Court may order that the statement of affairs is to be treated as having been filed at a time before it was actually filed.”
Additionally, s 33A(2) states that:
“If
(a) the Court is satisfied that a person believed on reasonable grounds that a debtor’s petition that relates to the person’s bankruptcy had been presented before it was actually presented; and
(b) the debtor’s petition has been accepted by the Official Receiver;
the Court may order that the debtor’s petition is to be treated for the purposes of sections 149 and 149A as having been accepted by the Official Receiver a time before it was actually accepted.”
The relief provided by s 33A of the Act is discretionary. In Talent v Official Receiver in Bankruptcy [2020] FCA 1294 (Talent)[27] at [6] Flick J relevantly observed in relation to the discretion that:
“- the section confers a discretion upon the court, namely that “the Court may order …”
- the discretion conferred is subject to a condition precedent, namely that the Court must be “satisfied that the person believed, on reasonable grounds, that the statement had already been filed”; and
- the term “filed” is expressly defined for the purposes of the section in a non-exhaustive manner in terms “includ[ing], presented, lodged or given.”
[27] See also Soloman v Official Receiver in Bankruptcy, in the matter of Soloman [2023] FCA 1462
In Talent at [7]-[8], Justice Flick added that the discretion under s 33A should be exercised in a manner which promotes the objects and purposes of the Bankruptcy Act as a whole. In that context his Honour said that the discretion is to be exercised in a manner which recognises or takes into account the following:
“-the importance of the statutory requirement imposed by s 54(1) of the Bankruptcy Act to file a statement of affairs “within 14 days from the day on which he or she is notified of the bankruptcy”;
-the public interest in there being available for inspection a document which discloses the property of a bankrupt, it being said that “it is in the interests of the public in the encouragement of morality in trading that the financial situation of a bankrupt be open to inspection” (Nilant v Macchia [2000] FCA 1528 at [29]);
-the fact that non-compliance with s 54 “is not a formal defect, or a mere irregularity” but a requirement which attracts a statutory penalty (Cable v Pattison [2003] FCA 1499 at [17]) per Hely J. See also: Nilant v Macchia [2000] FCA at [29], (2000) 104 FCR at 245 per Hill J). Section 54 does not “operate solely for the benefit of a petitioning creditor” (de Robilliard v Carver [2007] FCAFC 73 at [129]), (2007) 159 FCR 38 at 61 per Buchanan J (Moore and Conti JJ agreeing). See also: Scott v de Varda [2015] FCA 239 at [13] per Flick J);
-the importance of making available to creditors of a bankrupt the property disclosed in the statement of affairs;
-the statutory context in which a bankrupt is normally discharged from bankruptcy pursuant to s 149 of the Bankruptcy Act 3 years from the date upon which the statement of affairs was filed;
-the fact that the “bringing forward” of the date upon which a statement of affairs is “treated as having been filed” necessarily brings forward the date upon which a bankrupt would otherwise be discharged;
-the utility in continuing a bankruptcy and outstanding matters that remain to be administered;
-the attitude of the office of the Official Receiver be expected to provide a fairly objective view as to what is perceived to be in the public interest, the interests of creditors and the bankrupt […]
-the adequacy or completeness of the statement of affairs as is sought to be relied upon for the purposes of s 33A as compared to the statement of affairs subsequently filed […] and;
-the extent of any delay between when a bankrupt could have first sought relief under s 33A on the date upon which such relief was in fact sought.”
The basis upon which Ms Nida seeks relief under s 33A is her claim to a belief, on reasonable grounds, that a Statement of Affairs which purports to be dated 17 December 2020 and which was sent by her to the Trustee in bankruptcy on 27 May 2022, was in fact filed by her with the Official Receiver on 20 December 2020.
As Flick J observed in Talent the discretion conferred by s 33A is subject to a condition precedent, namely that the Court must be satisfied that the person believed, on reasonable grounds, that the statement had already been filed (i.e. presented, lodged or given). Accordingly, the critical question for the Court to determine before it can consider exercising its discretion is whether the Court is satisfied that Ms Nida believed, on reasonable grounds, that a compliant Statement of Affairs dated 17 December 2020 was filed with the Official Receiver on that date.
To inform the answer to that question it is necessary to traverse the history of events in a little detail.
Relevant background
As previously mentioned, Ms Nida claims to have filed 3 Statements of Affairs over a period of 3 years. Implicitly, she claims that each of those 3 Statements of Affairs were compliant and not defective for the purposes of s 54.
Purported 17 December 2020 Statement of Affairs
In an affidavit filed in these proceedings dated 9 August 2024, Ms Nida deposes at [12] that she filed her Statement of Affairs on 17 December 2020 and sent a copy to the Trustee. She deposes that she did not receive a notice from the Official Receiver that her Statement of Affairs was not accepted.
Despite deposing to these facts in her 9 August 2024 affidavit, the applicant has not provided any objective evidence to support her assertion that she filed a Statement of Affairs with the Official Receiver on or about 17 December 2020 or that she provided a copy of that document to the Trustee on or about that date.
In her oral submissions to the Court, Ms Nida said that she sent the Statement of Affairs by email on 17 December 2020, and therefore it should be regarded as having been filed. However, the applicant conceded that she does not possess a copy of the 17 December 2020 Statement of Affairs as allegedly produced by her on or about that date. The applicant also admits that she does not have any record of her having filed a Statement of Affairs with the Official Receiver on or about 17 December 2020.
She went on to say that she lost all of her emails in 2021 after her practising certificate was suspended and she changed her Gmail account.
The Official Receiver, who was granted leave to participate in these proceedings, could not find any evidence of Ms Nida having filed a Statement of Affairs in December 2020 despite its extensive searches[28].
[28] Affidavit of Matthew Sheppard sworn 13 September 2024
In her oral submissions in reply, Ms Nida conceded that she could not actually remember whether she sent a copy of the Statement of Affairs to the Official Receiver. However, she said that she could definitely remember sending it to the Trustee, a claim she repeated at least twice.
The Trustee deposes to the fact that he never received a copy of the 17 December 2020 statement from the applicant on or about that date[29]. Rather, the trustee deposes that on 25 June 2021 he referred Ms Nida to AFSA in respect of an offence relating to her having failed to provide him with a Statement of Affairs as required by the Act.
[29] Affidavit of Joseph Loebenstein sworn 23 August 2024 (Second Loebenstein affidavit) at [17]-[18]
May 2022
The Trustee gave evidence that Ms Nida did send a Statement of Affairs dated 17 December 2020 to his office on 27 May 2022, which the Trustee then provided to AFSA for the Official Receiver on the same day.
Ms Nida originally submitted that the document sent by her to the Trustee on 27 May 2022[30] which bears the date 17 December 2020 was the statement of affairs which she claimed to have filed with the Official Receiver in December 2020.
[30] Second Loebenstein affidavit, exhibit JL 16
However, the Trustee drew attention to the fact that the purported 2020 Statement of Affairs which it received from Ms Nida in May 2022 had been completed using a form which was not in existence in December 2020. Moreover, the Statement of Affairs was not completed on the form which the Trustee had provided to the applicant on or about 4 December 2020.
The Trustee sent a copy of this document to the Official Receiver. In his covering letter dated 9 June 2022, the Trustee stated:
“At the time of her bankruptcy, I sent the bankrupt a blank SOA form stamped with the code SoA 0920 on the bottom. The SOA sent to me by the bankrupt on 27 May 2022 has the code SoA 0322 stamped on the bottom and I understand this to mean that the latter form was not available for public use until or about March 2022. Notwithstanding this, the SOA supplied to me on 27 May 2022 bears the date 17 December 2020 beside the name of the “Applicant” and also beside the name of the person completing the “Declaration of authorised witness” section of the SOA”.[31]
[31] Second Loebenstein affidavit, exhibit JL 18
In her oral address to the Court, Ms Nida sought to explain these events. She said that she “transferred the information that was in the December 2020 Statement of Affairs into the 2022 statement”. Ms Nida said that she did not have a copy of the December 2020 document but she remembered what she had put into it and simply replicated that information into the later prepared document. She gave no explanation as to why the statement provided to the Trustee in May 2022 was dated 17 December 2020 and I can only assume that she was endeavouring to produce some kind of facsimile of the earlier “missing” Statement of Affairs.
The Statement of Affairs provided to the Trustee in May 2022 is incomplete in a number of material particulars and the applicant provided no response to certain questions within the form. For example, Nida failed to disclose that a property at 10 Girvan Circuit, Endeavour Hills was registered in the name of the bankrupt as at the date of bankruptcy. The applicant also failed to respond to:
“Q34 - Give details of your unsecured debts?
Q35 - In the last 12 months of be paid a creditor more than $1000 over and above your repayments”
Q36 -   In the last 12 months have you surrendered any assets to a creditor or has a creditor repossessed any assets?
Q45 -   Do you have any managed investments, such as an interest in mutual funds or other investments?
Q56 -   Are you currently, or do you have reason to believe you will soon be, involved in any legal proceedings including recovery action or family law matters?”
September 2023

The Trustee received another Statement of Affairs from the applicant on 22 September 2023. That Statement of Affairs was then provided to AFSA for the Official Receiver on the same day.
The Official Receiver recognised numerous deficiencies in this statement of affairs and rejected it on 27 September 2023. On the same day, the applicant was notified of the Official Receiver’s decision[32].
[32] Second Loebenstein affidavit, exhibit JL 21
October 2023
On 3 October 2023 another Statement of Affairs was provided to the Trustee by the applicant’s then solicitors. A copy of that document was then sent to AFSA for the Official Receiver the same day.
The October 2023 Statement of Affairs was accepted for filing by the Official Receiver. The October 2023 Statement of Affairs is the first such document of the applicant which has been accepted for filing.
The Trustee has pointed out that there are significant material differences between the 3 October 2023 Statement of Affairs and the Statement of Affairs which the applicant claims to have filed on 17 December 2020. For example, in the earlier document Ms Nida failed to respond to Question 34 “Do you have any unsecured creditors?”. By contrast, the October 2023 Statement of Affairs identifies 11 unsecured creditors and a total debt of $3,783.065.40. This is one of a number of unexplained differences.
Consideration
As things currently stand, the applicant’s period of bankruptcy will continue until 4 October 2026. The reference point for the period of bankruptcy is the applicant’s filing of a compliant Statement of Affairs on 3 October 2023.
As previously mentioned, the statutory precondition to the exercise of discretion under s 33A is the Court being satisfied of the bankrupt’s belief, on reasonable grounds, that a compliant Statement of Affairs had already been filed. Only if the Court is so satisfied, should the Court decide whether or not to exercise its discretion to backdate the Statement of Affairs which is the subject of the bankrupt’s belief.
In light of all the evidence, I am not persuaded that Ms Nida has reasonable grounds for believing that she filed a compliant Statement of Affairs on or around 17 December 2020.
I have very real doubts about whether Ms Nida filed any form of statement of affairs at that time. She has not produced any evidence of having done so. The applicant did not keep a copy of the document and she has no record of having sent it. Neither the Trustee nor the Official Receiver have been able to turn up any evidence of a document having been received by email from the applicant. I found Ms Nida’s evidence about her emails having been lost to be a convenient and unpersuasive excuse for the lack of evidence.
Ms Nida bears the onus of establishing that she has reasonable grounds for the belief that a Statement of Affairs was filed in December 2020. She has not discharged that onus.
In any event I have no doubt that if she did seek to file a Statement of Affairs as she claims, and it was in the form of the document sent to the Trustee on 27 May 2022, the purported Statement of Affairs was materially non-compliant and would not have been accepted for filing by the Official Receiver. For that reason, I would not exercise my discretion under s 33A even if it were open for me to do so.
I find the evidence regarding the May 2022 Statement of Affairs troubling. The document bears the date 17 December 2020. It appears that the document, when sent to the Trustee, was intended to pass as a copy of a document purportedly created by Ms Nida nearly 18 months earlier.
The Trustee was astute enough to pick up on the fact that the purported Statement of Affairs had been prepared on a form which did not exist until March 2022. Now, confronted with that uncomfortable truth, the applicant concedes that it was a newly created document, containing the same information and responses that she recalls having included in an earlier document. The explanation for backdating this newly created document has not been explained. I was unimpressed by Ms Nida’s explanation and find it very difficult to accept.
There are other reasons why I would decline to exercise my discretion under s 33A, even if the precondition had been met.
The filing of a proper Statement of Affairs is a matter of significance to creditors and the public interest. There is a public interest in having reliable documents available for inspection in bankruptcy cases. The evidence is that Ms Nida did not file a compliant Statement of Affairs until October 2023, more than three years after her act of bankruptcy.
Despite now claiming that she filed a Statement of Affairs in December 2020, and having subsequently filed different Statements of Affairs, it is only now in 2024 that Ms Nida has made an application for an order under s 33A. The delay is long and has not been explained. All the while the Trustee has been administering the applicant’s estate, contesting litigation and dealing with the applicant in relation to countless disputed issues. If Ms Nida had the reasonable belief she asserts, it is difficult to fathom why she was not moved to make an application earlier.
Insofar as the applicant might seek that I exercise discretion under s 33A in relation to the May 2022 and September 2023 Statements of Affairs, I declined to do so. Neither of those documents were compliant for the purposes of s 54 of the Bankruptcy Act. The Court should not backdate a document which is inherently incapable of being filed.
The application for an order pursuant to s 33A is dismissed.
Proposal to Creditors
By paragraphs 4(a) – (c) of her Further Amended Application, Ms Nida seeks the following relief:
(a)a declaration that a composition proposal she claims to have lodged with the Trustee on 9 August 2024 (annexed to her Further Amended Application as “Annexure 1”) is a proposal to her creditors for a composition in satisfaction of her debts for the purposes of s 73 of the Bankruptcy Act;
(b)alternatively, a declaration that a composition proposal she lodged with the Trustee on 7 February 2024 to be amended to conform with the 9 August 2024 proposal in the form of Annexure 1, is a proposal by the applicant to her creditors for a composition in satisfaction of her debts for the purposes of s 73 of the Act;
(c)an order pursuant to s 30 of the Bankruptcy Act and item 90-15 of the Insolvency Practice Schedule (Bankruptcy) (Bankruptcy Schedule) that the Trustee shall, within 7 days of the applicant lodging a sum of $5000 in accordance with paragraph 2(a)(i) of the composition proposal and r 75-175 (2B) of the Rules, convene a meeting of the applicant’s creditors within one month to consider the composition proposal.
Put simply, the applicant contends that she has formulated a composition proposal which she believes will be acceptable to her creditors. There is evidence that some of her creditors are favourably disposed to an earlier version of the composition proposal. Ms Nida submits that her Trustee in bankruptcy should put the 9 August 2024 proposal to her creditors for approval but the Trustee is unreasonably refusing to do so. She seeks the relief set out in paragraph 4 of her Further Amended Application to require the Trustee to convene a meeting for the creditors to express their view.
Legal framework
Relevantly, s 73(1) of the Bankruptcy Act states:
(1) Where a bankrupt desires to make a proposal to his or her creditors for:
(a) a composition in satisfaction of his or her debts; or
(b) […]
he or she may lodge with the trustee a proposal in writing signed by him or her setting out the terms of the proposed composition […] and particulars of any sureties or securities forming part of the proposal.
Where a proposal is lodged with the Trustee, the Trustee must give a copy to the Official Receiver within two business days.
By r 75-175 of the Rules, the Trustee is required to call a meeting of creditors and prior to any meeting send a copy of the proposal and a report on the proposal to the creditors. The report is required to indicate whether the proposal would benefit creditors generally and to name each creditor identified as a related entity. The Trustee may require the bankrupt to lodge with the Trustee an amount sufficient to meet the estimated meeting costs and Trustee’s expected remuneration associated with the meeting.
In addition to s 73 of the Bankruptcy Act and r 75-175 of the Rules, Ms Nida submits that the following provisions should frame the Court’s consideration of her claim that the Trustee has unreasonably refused to call a meeting of creditors:
·section 19(j) of the Bankruptcy Act which outlines the duties of the Trustee of a bankrupt to include “administering the estate as efficiently as possible by avoiding unnecessary expense”;
·item 45-1(4)(a) and (b) of the Bankruptcy Schedule, which permits the Court, when making orders, to consider whether the Trustee has faithfully performed their duties and has acted or failed to act in compliance with the Bankruptcy Act or the Rules;
·item 45-1(4)(d) and (e) of the Bankruptcy Schedule which prompts the Court to consider whether any person has suffered loss or damage due to the Trustee’s action and the consequences of those actions;
·rule 42-12 of the Rules which demands action from the Trustee to act in a clear, concise, objective, responsive, accurate and timely manner;
·rule 42-145 of the Rules which states “a registered trustee must consider the view of the creditors”.
In her written submissions, Ms Nida also cites authority for the uncontroversial propositions that the Trustee:
·has a duty to act justly[33];
·has a duty to act independently and to avoid conflicts of interest[34];
·must not conduct litigation recklessly and must ensure that any expenditure is reasonably as well as honestly incurred[35]; and
·must not misuse its power to punish the bankrupt[36]
[33] Ex parte James [1874] LR 9 Ch609 at 614; Re David Hurt, ex parte Davis Hurt [1988] FCA 85
[34] Re Lamb; Ex parte Registrar in Bankruptcy [1984] FCA 133; Hughes Aircraft Systems International v Air Services Australia [1997] FCA 558
[35] Adsett v Berlouis [1992] FCA 368
[36] Frost v Sheehan [2008] FCA 1073
Composition proposal
The applicant has put various iterations of a composition proposal to the Trustee, including:
(a)a composition proposal dated 6 October 2023;
(b)a composition proposal dated 7 February 2024;
(c)a modification, explanation or restatement of the composition proposal dated 7 February 2024 submitted on 20 March 2024.
The composition proposal in respect of which Ms Nida seeks declaratory relief and orders is dated 9 August 2024 and is annexed to her Further Amended Application. In the interests of brevity I will not set out the full details of that proposal in the body of this judgment. A redacted copy of the proposal is annexed to these reasons and marked as Annexure A.
Suffice to say, the proposal provides that Ms Nida will procure a third person to pay to the Trustee a “Composition Sum” and a “Remuneration & Costs Sum”. It is proposed that the Composition Sum will be made up of an initial amount which will be paid upon the calling of a creditors’ meeting, another amount which shall be paid upon the annulment of the bankruptcy and further series of payments made at 3 monthly intervals after the annulment. The Remuneration & Costs Sum is intended to cover the Trustee’s total remuneration, expenses and other reasonable costs as fixed by resolution of the creditors or such other amount as may be determined by this Court.
Both Ms Nida and the “third person” would be jointly and severally liable for the payments. The proposal seeks to give security for the composition by offering the Trustee a registered second mortgage over certain property and rights to enforce the mortgage and terminate the composition if there is a failure to pay.
The proposal identifies the creditors who will have a right to vote at the composition meeting, subject to their claims being admitted by the Trustee. It is proposed that the total compromise payment would first be applied towards the remuneration, expenses and other reasonable costs of the current Trustee, the rest to be applied to the claims of the creditors.
Applicant’s submissions
The applicant submits that the Trustee has a duty to convene a meeting if it receives a bona fide composition proposal from a bankrupt. She submits that the 9 August 2024 proposal is bona fide and compliant with the legislation and rules, which engages a duty under s 73 of the Bankruptcy Act for the Trustee to convene a meeting of creditors.
Ms Nida submits that the Trustee has simply refused to convene a meeting despite the reasonableness of the proposal and what she contends is its attractiveness to the creditors. She submits that the Trustee has not given any proper reasons for why it says the proposal is non-compliant. Ms Nida alleges that the Trustee is not acting justly in the administration of her estate, has a conflict of interest or is acting in self-interest in seeking, among other things, to protect and maximise its entitlement to remuneration.
The applicant referred to r 75-175(2)(a) of the Rules which states “the trustee must call a meeting of the creditors of the regulated debtor’s estate”. She submits that the Trustee is required to convene a meeting considering the mandatory language of this rule.
In her reply submission, Ms Nida rejected the Trustee’s submission that the composition proposal is non-compliant. She added that even if deficiencies are present in her proposal, that should not render the proposal non-compliant as such errors can be resolved by the parties during the creditors’ meeting. In support of that proposition, the applicant referred to r 75 -175(4) of the Insolvency Rules which states that “the regulated debtor (or, in the case of a deceased regulated debtor, the regulated debtor’s legal representative) may, at a meeting of the creditors, amend the terms of his or her proposal”.
Ms Nida acknowledged that under r 75-175(3) of the Rules, the Trustee may refuse to call a meeting if the proposal does make adequate provision for the payment of accrued renumeration that is:
(a)owing (at the time the proposal is lodged) in relation to the administration of the regulated debtor’s estate but are not able to be taken out of the debtor’s estate […]
However, Ms Nida argued that the Trustee’s entitlement to remuneration is not guaranteed and is always subject to the condition that any expenditure was “reasonably, as well as honestly incurred”[37]. Ms Nida said that provision for the Trustee’s remuneration and costs was covered in the proposal she created on 7 February 2024, and in subsequent proposals including the proposal of 9 August 2024. She submitted that the Trustee’s rejection of proposals has been unreasonable, as provision has been made for the Trustee to receive adequate renumeration, secured by a third party. Therefore, the applicant submits the proposal is adequate and therefore, the Trustee should be compelled to convene a creditors’ meeting.
[37] Adsett v Berlouis [1992] FCA 368
In her written submissions, Ms Nida referred to r 42-130 of the Rules which states “a registered trustee must consider the views of creditors”. Ms Nida added that there was evidence that that each of the creditors have provided proofs of debt in their affidavits and that they would have accepted and approved the February proposal if it had been put to them. In that context Ms Nida seeks to rely on creditors affidavits which were annexed as exhibits RN-10 to RN-14 of her first affidavit which demonstrate support of a composition proposal dated 6 October 2023 and the creditors subsequent supporting affidavits filed on 8 May 2024 in support of a later proposal.
Ms Nida added that any objection by the Trustee based on procedural issues should not be permitted to deny the substance of the creditors’ views. She submits that creditors should have greater control in the administration of the debtor’s estate and that the relative merit of a proposal for composition and whether it will benefit the bankrupts’ creditors generally should fall to be determined by themselves[38].
[38] Hingston v Westpac Banking Corporation [2012] FCA 41
Ms Nida argued that the Trustee has breached his duties in not properly considering the creditors’ interests and that the Court should disregard the Trustee’s opinion and compel the Trustee to convene a creditors’ meeting.
Trustee’s submissions
The Trustee opposes the orders and declarations sought by the applicant in her Further Amended Application. The Trustee’s position is that there is no proposal which is fit to be presented to the creditors.
The Trustee submits that the composition proposal dated 9 August 2024 which is annexed to the applicant’s Further Amended Application has not been lodged and therefore s 73 has not actually been engaged. But further and in any event the Trustee submits that s 73 is not engaged because the composition is not bona fide and compliant.
The Trustee maintains that it is his responsibility to ensure that a composition proposal is compliant before it can be presented to creditors[39]. The Trustee rejects Ms Nida’s submission that compliance should be left to the creditors and that creditors should be left to amend a non-compliant proposal at their meeting. The Trustee maintains that he, as the Trustee of the bankrupt estate, retains the right to decide whether or not to convene a creditors’ meeting.
[39] Labocus Precious Metals Pty Ltd v Thomas [2007] FCA 1154 (Labocus)
In Mandri v Nicholls as trustee for the bankrupt estate of Mandri [2017] FCCA 2728 (Mandri) at [87] and following, Judge A Kelly held that to be considered compliant for the purposes of s 73, a composition proposal must be bona fide and must not be vague or uncertain. Further, a compliant proposal is one which will not produce a result that conflicts with the rights established under the Bankruptcy Act, including the Trustee’s right to renumeration.
In Mandri at [88], Judge Kelly observed that:
“Section 75-175 is not engaged unless the proposal is a proposal lodged under s 73 of the Act. On one view, a proposal will not be a proposal under subsection 73(1) of the Act unless the criteria prescribed by that subsection are observed: cf Griffith University v Tang (2005) 221 CLR 99.”
The Trustee submits that the 9 August 2024 proposal falls well short of meeting the various tests for compliance set out in Mandri. The Trustee submits that the proposal contains vague and erroneous content and calculation errors. Further, the Trustee expresses concern that the compromise proposal subverts or denies rights conferred by the Bankruptcy Act, not the least of which is the Trustee’s right to receive renumeration.
In his oral submission to the Court, Mr Serong on behalf of the Trustee, pointed to numerous deficiencies in the composition proposal. He noted various mathematical errors within the proposal and submitted that those left Trustee in a situation of being unclear as to what Ms Nida actually intends.
Additionally, the Trustee pointed to paragraphs 8, 9 and 10 to demonstrate the uncertainty and lack of security provided within the proposal regarding his renumeration. The Trustee submitted that the proposal for the Trustee’s remuneration to be secured by a second registered mortgage over the property of a third party is vague and is made without any reference to the interests of the first mortgagee who may or may not allow such further encumbrance.
The Trustee submits that there is also no assurance as to when his remuneration will be paid, irrespective of whether it is fixed by the creditors or the Court. Mr Serong submitted that the Trustee may be “effectively left swinging” in relation to those payments.
Furthermore, the composition proposal anticipates that upon creditor approval, the bankruptcy will be immediately annulled and for there to be an immediate re-vesting of property back to Ms Nida. The Trustee points out that the re-vesting will occur at his own cost and expense and in circumstances where he is not in control of the title. The Trustee notes that the secured creditor (the bank which holds the mortgage over the property) may resist that course of conduct because of concerns about its own security.

The Trustee also submitted that there is evidence before the Court that the Trustee has written to each of the creditors and asked them to provide a proof of debt and effectively validate their claims. Those enquiries have been made because some of the creditors have claimed to have advanced cash monies to the applicant and the Trustee is not presently satisfied about such claims. This of course will have a bearing on who might be entitled to position the proposal.
The Trustee submitted these deficiencies demonstrate the proposal is not bona fide and therefore, should not be presented to the creditors.
Finally, the Trustee also expressed concerns that approving the applicant’s proposal would cause complex public policy ramifications. The Trustee submitted that approving the applicant’s proposal would set a precedent which encourages situations where a Trustee is forced to convene creditors’ meetings without guarantee of renumeration. Additionally, the form of renumeration being offered in the applicant’s proposal is a second mortgage: the Trustee asserted his would set an unfair precedent that, rather than recovering renumeration from the bankrupt directly, a Trustee would be forced to act and sell the residential property of other people.
Consideration
A composition proposal that is non-compliant for the purposes of s 73 of the Bankruptcy Act does not engage the operation of s 73[40].
[40] Mandri v Nicholls as trustee for the bankrupt estate of Mandri [2017] FCCA 2728 at [87] and following
It is primarily a matter for the Trustee as to whether the proposal is sufficiently formulated to go forward to a creditors’ meeting. As Judge A Kelly observed in Mandri, it is inappropriate to lay down definitional criteria upon which the detail and reality of the proposal are to be assessed[41].
[41] Mandri at [111]
In the present case, the Trustee has determined that the proposal is vague and uncertain in material respects. It is self-evident from the terms of the proposal that it contains arithmetic errors (in particular clause 2) and is internally incoherent. The Trustee submits, and I accept, that it is quite unclear precisely what is intended by the applicant. It is not in a state which could be put forward to creditors without the requirement for significant amendment.
By r 75-175 of the Rules the Trustee is, prior to any meeting of creditors, required to send a copy of the composition proposal and a report on the proposal to the creditors. Here the Trustee has made it plain that he considers the proposal to be so defective as to be non-compliant and not a proposal at all for the purposes of s 73.
I do not accept Ms Nida’s submission that the Trustee should call a creditors’ meeting and leave it to the creditors to sort out amongst themselves how the composition proposal should be amended prior to them voting upon it. Whilst there is room for the Trustee, in the exercise of his judgment, to put forward a proposal which contains simple correctable error and for creditors to regularise the proposal, it seems to me to be fundamentally at odds with authority for s 73 to be read as imposing an obligation on the Trustee to do so. The role of the Trustee in discharging his task of administering the bankrupt estate and protecting the interests of creditors generally requires the Trustee to exercise judgment as to whether the composition proposal is in a fit state to go forward.
As well as arithmetic errors, the Trustee has pointed to a number of other parts of the composition proposal which are vague and uncertain. In my view, identifying these errors is a case of the Trustee doing exactly what is required of him. It is a matter for the judgement of the Trustee to determine whether the composition proposal contains sufficient detail and is of underlying commercial substance[42].
[42] Labocus at [58]
The Trustee has also formed the view that the proposal lacks bona fides and will have the effect of subverting the proper operation of the Act. The Trustee submitted that the effect of the composition proposal will require the Trustee to rely on questionable security and that it will jeopardise the Trustee’s cover in full is remuneration (whether fixed by the creditors or determined by the Court).
As previously mentioned, Ms Nida argues that the Trustee is selfishly acting in his own interests and is concerned only with maximising his return. I reject that submission. The Trustee has been charged with the statutory task of administering the estate of the bankrupt and he is entitled to the remuneration and expenses of performing that task. Of course, the statutory task must be discharged in accordance with his duties but, in the absence of evidence that he has acted in breach of those duties, the Trustee’s interest in being remunerated is a relevant consideration.
In my view the Trustee has raised perfectly legitimate reasons for him to be concerned that his remuneration is at risk. I accept the Trustee’s submission that if the composition proposal was approved by creditors in its current form, the Trustee could be left in a state of considerable uncertainty as to whether or not his remuneration and the cost and expense of administration will actually be paid.
In the circumstances, I am satisfied that the composition proposal dated 9 August 2024 is non-compliant for the purposes of s 73 of the Bankruptcy Act. Accordingly, I am not persuaded that the relief sought by Ms Nida should be granted.
The application for the declarations and orders under s 73 is dismissed.
DISPOSITION
For the reasons set out above, I am not persuaded to make any of the declarations or orders sought in Ms Nida’s Further Amended Application. The application will be dismissed.
I propose to determine the question of costs (if any) on the papers.
I will afford any party seeking costs in respect of this application an opportunity to file and serve a schedule of costs claimed and a supporting submission (not exceeding 5 pages) by 4.00 pm on 10 January 2025.
If the applicant opposes any party’s claim for costs in relation to this application, she may file and serve a written submission (not exceeding 5 pages) in reply by 4.00pm on 7 February 2025.

I certify that the preceding one hundred and ninety-two (192) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Forbes.
Associate:
Dated: 9 September 2024
ANNEXURE A
s

File number:	MLG 297 of 2024
Judgment of:	JUDGE FORBES
Date of judgment:	9 December 2024
Catchwords:	BANKRUPTCY – Annulment - application pursuant to s 153B of Bankruptcy Act for annulment of bankruptcy – whether sequestration order should ever have been made – where bankrupt contends that judgment debt obtained by fraud or misconduct of petitioning creditor or legal representatives – whether court should exercise discretion to go behind the judgment – where allegations about validity of judgment debt have previously been agitated – where Supreme Court of Victoria made findings about circumstances leading to default judgment – where this court previously held sequestration order properly made – whether s 153B gives rise to a new occasion for exercise of discretion to go behind judgment – whether discretion should be exercised BANKRUPTCY – Statement of Affairs - application pursuant to s 33A of Bankruptcy Act to amend date of filing Statement of Affairs – whether bankrupt’s statement of affairs should be deemed to have been filed at earlier time – whether bankrupt believes on reasonable grounds that statement of affairs was previously filed with Official Receiver – whether statement of affairs compliant – where no objective evidence of earlier filing – where later produced document has been signed and pre-dated - where no reasonable grounds for the claimed belief – consideration of grounds relevant to the exercise of Court’s discretion BANKRUPTCY – Proposal to Creditors for composition of debts - application for declarations and orders pursuant to s 73 of Bankruptcy Act requiring Trustee to put composition proposal to meeting of creditors – whether composition proposal is compliant with requirements of Act – whether mandatory for Trustee to convene meeting of creditors – where proposal is vague, confusing or otherwise inept – where proposal gives no guarantee or security of Trustee’s remuneration and costs and expenses of administration – where proposal leaves trustee exposed to ongoing costs after annulment – whether creditors can amend proposal at meeting - where judgment of Trustee is that composition proposal is non-compliant – whether court should exercise discretion to require proposal to be put to creditors
Legislation:	Bankruptcy Act 1966 (Cth) s 6A, 19, 30, 33A, 34A, 43, 54, 55, 56B, 56F, 73, 149, 153B, sch 2 item 90-15 Insolvency Practice Rules (Bankruptcy) 2016 (Cth) r 42-12, 42-145, 42-130, 75-175, 90-15 Civil Procedure Act 2010 (Vic)
Cases cited:	Adsett v Berlouis [1992] FCA 368 Alfio Peter Bulic v Commonwealth Bank of Australia Limited [2007] FCA 307 Ahern v Deputy Commissioner of Taxation (Qld) [1987] FCA 504 BKA Practice Co Pty Ltd v Nida [2021] FCCA 334 BKA Practice Co Pty Ltd v Nida [2022] FCA 1257 Compton v Ramsay Health Care Australia Pty Ltd (2016) 246 FCR 508 Corney v Brien (1951) 84 CLR 343 Emerson v Wreckair Pty Ltd (1992) 33 FCR 581 Ex parte James [1874] LR 9 Ch609 Frost v Sheehan [2008] FCA 1073 Hingston v Westpac Banking Corporation [2012] FCA 41 Hughes Aircraft Systems International v Air Services Australia [1997] FCA 558 Labocus Precious Metals Pty Ltd v Thomas [2007] FCA 1154 Maclean v Brylewski, in the matter of Maclean [2024] FCA 1005 Mandri v Nicholls as trustee for the bankrupt estate of Mandri [2017] FCCA 2728 Mann v Medical Practitioners Board of Victoria [2004] VSCA 148 Monroe Schneider Associates (Inc) v No. 1 Raberem Pty Limited (No. 2) (1992) 37 FCR 234 Petrie v Redmond [1943] St R Qd 71 Ramsay Health Care Australia Pty Ltd v Compton (2017) 261 CLR 132 Re David Hurt, ex parte Davis Hurt [1988] FCA 85 Re Lamb; Ex parte Registrar in Bankruptcy [1984] FCA 133 Re Williams (1968) 13 FLR 10 Nida v BKA Practice Co Pty Ltd (No 2) [2020] VSC 770 Nida v BKA Practice Co Pty Ltd [2020] VSC 158 Soloman v Official Receiver in Bankruptcy, in the matter of Soloman [2023] FCA 1462 Southern Hotels Pty Ltd, in the matter of Temple [2000] FCA 1406 Stratton v Bowles (No 2) [2015] FCA 43 Talent, in the matter of Talent v Official Receiver in Bankruptcy [2020] FCA 1294 Thompson v Hird [2023] FCA 1530 Vince (Trustee), in the matter of Sopikiotis (Bankrupt) v Sopikiotis [2012] FCA 573 Wangman v Official Receiver, Insolvency & Trustee Service Australia [2006] FCA 202 Wren v Mahony (1972) 126 CLR 212
Division:	Division 2 General Federal Law
Number of paragraphs:	192
Date of hearing:	20 September 2024
Place:	Melbourne
Applicant:	In person
Solicitor for the First Respondent:	Mr Serong; Serong Legal
Counsel for the Second Respondent:	Ms Nambiar
Solicitor for the Second Respondent:	Australian Government Solicitor
Counsel for the Petitioning Creditor:	Mr Moon
Solicitor for the Petitioning Creditor:	BKA Practice Co Pty Ltd

ORDER MADE BY:	JUDGE FORBES
DATE OF ORDER:	9 DECEMBER 2024

INTRODUCTION	[1]
EVIDENCE	[10]
BACKGROUND	[15]
ORDERS SOUGHT BY THE APPLICANT	[43]
Annulment of Bankruptcy (s 153B)	[43]
*Applicant’s submissions*	[45]
*Trustee’s submissions*	[60]
*Creditor’s submissions*	[70]
*Consideration*	[75]
Declaration that Bankruptcy Period has Passed (s 33A)	[97]
*Statutory framework*	[101]
*Purported 17 December 2020 Statement of Affairs*	[113]
*May 2022*	[120]
*September 2023*	[126]
*October 2023*	[128]
*Consideration*	[131]
Proposal to Creditors (s 73)	[144]
*Legal framework*	[146]
*Composition proposal*	[151]
*Applicant’s submissions*	[156]
*Trustee’s submissions*	[165]
*Consideration*	[178]
DISPOSITION	[189]