Obrart v Grego

In *Obrart v Grego*, heard by Judge Manousaridis, the applicant, Ms Obrart, sought to enforce a bankruptcy notice based on two judgment debts totalling $341,347.95 entered against Mr Grego in the District Court of New South Wales. These judgment debts arose from two costs certificates issued under the *Legal Profession Act 2004* (NSW), which purportedly assessed costs for legal services and disbursements provided by Ms Obrart to Rosebridge Nominees. Mr Grego did not dispute Ms Obrart's ability to prove the matters specified in section 52(1) of the *Bankruptcy Act 1966* (Cth), but argued that a sequestration order should not be made as the debts underlying the judgment were not true debts.

The central legal issues before the court were whether the debts evidenced by the judgment were valid, and consequently, whether Mr Grego had committed an act of bankruptcy. Mr Grego contended that the debts were not genuine on three grounds: firstly, that the costs agreement underpinning the first costs certificate was void; secondly, that the costs assessor assessed costs for the second certificate based on a costs agreement that was not applicable to the invoice in question; and thirdly, that Ms Obrart had submitted a fabricated costs disclosure letter with her applications for assessment.

Judge Manousaridis considered whether the costs assessor had fallen into jurisdictional error by assuming the work was reasonably performed and the costs reasonable in the absence of objection from Mr Grego. The court also considered Ms Obrart's application to reopen her case to provide evidence of the costs agreements attached to her applications for assessment. The judge invited further submissions on these points and on the implications of any such assumptions by the costs assessor.