Owners - Strata Plan 93392 v Sethi, in the matter of Sethi
[2025] FedCFamC2G 897
•13 June 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Owners - Strata Plan 93392 v Sethi, in the matter of Sethi [2025] FedCFamC2G 897
File number(s): SYG 268 of 2025 Judgment of: JUDGE ZIPSER Date of judgment: 13 June 2025 Catchwords: BANKRUPTCY – Application for stay of sequestration order made by registrar pending hearing of application for review of registrar’s decision – applicable principles in considering whether to grant stay – whether arguable case – balance of convenience
PRACTICE AND PROCEDURE – Interim non-publication order
Legislation: Bankruptcy Act1966 (Cth) ss 43, 52(1), 52(2), 52(3)
Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 231, 233, 234, 256(1), 256(2)
Federal Court Rules 2011 (Cth) r 36.08
Strata Schemes Management Act 2015 (NSW) s 8
Cases cited: Ashwood v Ashwood [2024] FedCFamC2G 88
Bechara v Bates [2021] FCAFC 34; 286 FCR 166
Endresz v Australian Securities and Investments Commission [2014] FCA 1139
Fang v Lin [2024] FedCFamC2G 747
Ghosh v Miller (No 3) [2016] FCA 1293
Nolten v Groeneveld Australia Pty Ltd [2011] FCA 1494
Singh v Owners Strata Plan No 11723 [2012] FCA 538
Young v Hughes Trueman Pty Ltd [2017] FCA 616
Division: Division 2 General Federal Law Number of paragraphs: 61 Date of hearing: 29 May 2025 Place: Parramatta Counsel for the Applicant: Shelley Scott Solicitor for the Applicant: Mills Oakley Respondent: Appeared in person ORDERS
SYG 268 of 2025 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
IN THE MATTER OF AKHIL SETHI
BETWEEN: THE OWNERS - STRATA PLAN 93392
Applicant
AND: AKHIL SETHI
Respondent
ORDER MADE BY:
JUDGE ZIPSER
DATE OF ORDER:
13 JUNE 2025
THE COURT ORDERS THAT:
1.The application by the respondent (Mr Sethi) to stay the execution of a sequestration order made by a registrar on 27 March 2025 is dismissed.
2.The respondent pay the costs of the applicant (The Owners – Strata Plan 93392) of and incidental to the application for a stay.
3.If either party seeks to vary order 2 (Variation Application), subject to the party notifying the Court and other party of the Variation Application by 20 June 2025, the Variation Application will be heard during the hearing of the application for review on 27 June 2025.
4.Pursuant to ss 230, 233 and 234 of the Federal Circuit and Family Court of Australia Act 2021 (Cth), the name of the respondent is not to be disclosed upon publication of these orders and the accompanying judgment until 5 pm on 27 June 2025.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE ZIPSER
INTRODUCTION
This judgment addresses and provides reason in relation to:
(a)an interim application by the debtor, Mr Sethi, to stay the execution of a sequestration order made by a registrar of the Court on 27 March 2025 under the Bankruptcy Act1966 (Cth) (Act) (Stay Application), which application was heard by me on 29 May 2025; and
(b)an adjournment application made by Mr Sethi at the commencement of the hearing on 29 May 2025.
BACKGROUND
The following background is principally based on information in documents previously filed by the parties in this proceeding.
On 6 March 2024, the following order was made in a proceeding in the Supreme Court of New South Wales between Mr Sethi as plaintiff and The Owners - Strata Plan 93392 (which is the applicant in this proceeding) (Creditor) as defendant:
Order, pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW), the plaintiff pay the defendant’s costs of the proceedings, and of the notice of motion filed 17 November 2023, in the gross sum of $213,000.
On 6 December 2024, a bankruptcy notice founded on the judgment debt and issued on 4 December 2024 (Bankruptcy Notice), was served on Mr Sethi.
Mr Sethi neither filed an application to contest the Bankruptcy Notice nor paid the judgment debt within 21 days after service of the Bankruptcy Notice. It followed that on 27 December 2024 Mr Sethi committed an act of bankruptcy.
On 29 January 2025, the Creditor filed a creditor’s petition which commenced this proceeding. The creditor’s petition sought a sequestration order under s 43 of the Act against the estate of Mr Sethi based on Mr Sethi’s non-compliance with the Bankruptcy Notice.
On 21 February 2025, the creditor’s petition was served on Mr Sethi.
On 27 March 2025, there was a hearing of the creditor’s petition before a registrar of the Court. Prior to the hearing, Mr Sethi did not file any documents which indicated the ground or basis on which he opposed the making of a sequestration order. The Court’s electronic file does not indicate whether Mr Sethi attended the hearing. The registrar made the following orders at the end of the hearing:
1. The estate of Akhil Sethi be sequestrated under the Bankruptcy Act 1966.
2. The Applicant Creditor’s costs fixed in the sum of $8353.75 be paid from the estate of the Respondent Debtor in accordance with the Bankruptcy Act 1966.
3. A copy of this order be provided by the Applicant Creditor to the Official Receiver in Sydney within 2 days.
On 17 April 2025, Mr Sethi lodged an application for review of the registrar’s orders (Review Application). Mr Sethi sought the following orders:
1. The orders made by Registrar Morgan on 27 March 2025 in proceeding SYG268/2025 be set aside.
2. The creditor petition be dismissed.
3. An order to stay the execution of the orders made by Registrar Morgan on 27 March 2025 in proceeding SYG268/2025.
4.Any such further order as court deems fit.
On 13 May 2025, at the first return date in respect of the Review Application, Mr Sethi requested that the Stay Application, which was sought in the Review Application as an interlocutory order, be listed for hearing. I listed the Stay Application for hearing on 29 May 2025 and made the following procedural orders:
1. Mr Sethi file and serve all materials (evidence and a written submission) in support of his application to stay the execution of orders made by Registrar Morgan on 27 March 2025 (Stay Application) by 4 pm on 21 May 2025.
2.The Owners – Strata Plan 93392 (Owners) file and serve all materials (evidence and a written submission) in opposition to the Stay Application by 4 pm on 26 May 2025.
3. Mr Sethi file and serve all evidence on which he wishes to rely at a final hearing of his application for review lodged on 17 April 2025 by 4 pm on 28 May 2025.
On 14 May 2025, an affidavit of Mr Sethi sworn on 24 April 2025 was accepted for filing. The affidavit contained Mr Sethi’s evidence in support of the Stay Application (Stay Affidavit).
On 22 May 2025, the Court issued, at the request of Mr Sethi, a subpoena directed to the Creditor’s current solicitor, Mills Oakley (MO Subpoena). The documents listed in the schedule to the MO Subpoena were:
(a)the costs agreement between the Creditor and Mills Oakley;
(b)“all correspondence … sent to or received from any agent of the [Creditor] in order to commence Mills Oakley’s engagement and legal representation for the [Creditor]”;
(c)a copy of Mills Oakley’s trust account showing monies placed by or on behalf of the Creditor in Mills Oakley’s trust account in order to have the legal representation commenced; and
(d)a copy of all invoices for the work of Mills Oakley or its agent sent to the Creditor.
I explain the relevance of the MO Subpoena below.
As stated above, on 13 May 2025 I ordered that Mr Sethi “file and serve all evidence on which he wishes to rely at a final hearing of his application for review … by 4 pm on 28 May 2025”. I made this order so that, at the hearing of the Stay Application, I could understand the ground or basis of Mr Sethi’s opposition to the making of a sequestration order and consider the evidence on which he relied. Mr Sethi had not filed any evidence in response to this order by 29 May 2025.
ADJOURNMENT APPLICATION
On 29 May 2025, there was a hearing of the Stay Application before me. Mr Sethi appeared for himself. Shelley Scott of counsel appeared for the Creditor.
At the commencement of the hearing, Mr Sethi requested an adjournment of the hearing of the Stay Application. He relied on an affidavit sworn earlier that day (Adjournment Affidavit).
In the Adjournment Affidavit, Mr Sethi stated that he sought an adjournment of the hearing on the following grounds:
(a)On 30 April 2025, Mr Sethi was evicted from his place of residence and, as a result, he did “not have access to important and essential resources, documents and reference materials relevant to my case”: Adjournment Affidavit at [7].
(b)Mr Sethi “require[d] additional time to seek legal advice and secure representation to ensure my rights are adequately protected”: Adjournment Affidavit at [10].
(c)On 22 May 2025, the MO Subpoena was issued by the Court at the request of Mr Sethi. Mr Sethi also planned to prepare and serve a notice to produce on the Creditor. Mr Sethi stated in the Adjournment Affidavit:
Any of my further evidence and submissions on the Application for Review rely on the production of the documents and things in the subpoena and the foreshadowed Notice to Produce.
(d)Mr Sethi was unwell in the last few days and, as a result, he was “unable to adequately prepare for and present my case at the hearing”: Adjournment Affidavit at [16].
The Creditor opposed Mr Sethi’s request for an adjournment of the hearing.
At the hearing on 29 May 2025, after discussing some matters with Mr Sethi, I refused to adjourn the hearing of the Stay Application. I stated I would provide reasons in my judgment in respect of the Stay Application. My reasons follow.
In relation to Mr Sethi’s complaint in paragraph 17(a) above about an eviction and no access to documents, first, Mr Sethi was aware of this problem on 13 May 2025 when he requested that the Stay Application be listed for hearing, and he did not oppose a hearing date on 29 May 2025. Second, Mr Sethi did not explain how the “important and essential resources” and “documents” were relevant to the Stay Application. Third, Mr Sethi’s evidence did not persuade me that a short adjournment would overcome Mr Sethi’s claimed difficulty in accessing the “important and essential resources” and “documents”.
In relation to Mr Sethi’s request for additional time to seek legal advice, referred to in paragraph 17(b) above, first, the creditor’s petition was served on Mr Sethi on 21 February 2025. Mr Sethi has had more than sufficient time to obtain legal advice. Second, as stated above, on 13 May 2025 Mr Sethi requested that the Stay Application be listed for hearing, and he did not oppose a hearing date on 29 May 2025. If he had difficulty obtaining legal advice at the time, he was aware of the difficulty.
In relation to Mr Sethi’s reference to the MO Subpoena and a possible notice to produce, referred to in paragraph 17(c) above, I discussed with Mr Sethi the forensic purpose of the documents in respect of which he sought production. In relation to the discussion:
(a)As stated above, although I directed on 13 May 2025 that Mr Sethi file and serve all evidence on which he wished to rely at a final hearing of the Review Application, Mr Sethi filed no evidence. At the hearing on 29 May 2025, Mr Sethi explained to me that all the evidence on which he intends to rely at the hearing of the Review Application will be produced in response to the MO Subpoena, a notice to produce to be issued to the Creditor, and perhaps a subpoena to be issued to a previous solicitor of the Creditor.
(b)The documents sought by Mr Sethi in the MO Subpoena are described in paragraph 12 above. Their relevance to issues which might arise at a hearing of the Review Application is not apparent. I asked Mr Sethi to explain the relevance of the documents to his case. Mr Sethi replied that the underlying matter is a conspiracy and not a strata dispute, that the solicitor of the Creditor in the Supreme Court proceeding was not retained by the Creditor, that it is not the Creditor but instead another party that has taken steps to bankrupt Mr Sethi, and therefore Mr Sethi is not liable to the Creditor in respect of the debt which founded the Bankruptcy Notice. He stated that the documents sought in the MO Subpoena will prove this.
(c)I understood from Mr Sethi that, in relation to the notice to produce and subpoena to the Creditor’s previous solicitor which Mr Sethi was considering preparing, the documents have the same forensic purpose.
It follows from the matters in the above paragraph that the documents sought by Mr Sethi in the subpoenas and notice to produce, while they might be relevant to the hearing of the Review Application, are not directly relevant to the Stay Application. Accordingly, there was no need to adjourn the hearing of the Stay Application until the documents are produced.
In relation to Mr Sethi’s complaint in paragraph 17(d) above that he was unwell, first, Mr Sethi did not produce any medical evidence, either to prove that he had an illness or ailment or, if he had an illness or ailment, the illness or ailment had a detrimental impact on his ability to prepare for, or appear at, the hearing of the Stay Application. Second, based on my observations, Mr Sethi did not appear unwell at the hearing on 29 May 2025. Third, as explained above, Mr Sethi filed his evidence in support of the Stay Application on 14 May 2025. He was not ill at that time.
Further, the adjournment application was made at the last minute and, if I adjourned the hearing of the Stay Application, this would cause a costs prejudice to the Creditor.
For the above reasons, Mr Sethi did not persuade me that it was necessary or appropriate to adjourn the hearing of the Stay Application.
NATURE OF APPLICATIONS
Application for review
As stated in Fang v Lin [2024] FedCFamC2G 747 at [22]-[24], in partial reliance on Bechara v Bates [2021] FCAFC 34; 286 FCR 166 at [27]:
(a)A hearing under s 256(1) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (FCFCA Act) seeking review of a Registrar’s exercise of power is a hearing de novo and the creditor’s petition is considered afresh. The review does not hinge or focus upon error in the decision of the Registrar.
(b)In a hearing de novo the petitioning creditor is the true applicant and carries the onus of proving the application by bringing forward the evidence required by s 52(1) of the Act. The only onus of the debtor/bankrupt who actively opposes the creditor’s petition is to prove either solvency or any other sufficient cause under s 52(2).
(c)The petitioning creditor must prove, and the Court must be satisfied, that the requirements for the making of a sequestration order have been established.
(d)If the Court concludes that the making of a sequestration order is appropriate, the Court will dismiss the review application, leaving the Registrar’s extant order in place.
Power to grant stay
Mr Sethi, in the Review Application, seeks “an order to stay the execution of orders made by Registrar Morgan on 27 March 2025”.
A question is whether there is any utility in making the order sought by Mr Sethi and, if so, the precise benefit to Mr Sethi. In Endresz v Australian Securities and Investments Commission [2014] FCA 1139 (Endresz) at [8]-[11] Beach J stated:
[8] It is apparent from the provisions and operation of the Bankruptcy Act 1966 (Cth) (the Act) that it is inapposite to talk of a stay of a sequestration order as such. When a sequestration order is made, it takes immediate and automatic effect by force of the Act. There is an immediate vesting of property in the trustee in bankruptcy. Moreover, after-acquired property of the bankrupt vests as soon as it is acquired. See, generally, Nand v FujiXerox Australia Pty Ltd [2014] FCA 757 at [3] per Yates J. It is conceptually incoherent to contemplate a judicial stay order as being available to countermand automatic legislative operation where no question of invalidity is involved.
[9]In concept, one can only consider whether there should be a stay of any proceedings or action under a sequestration order, rather than a stay of the order itself. So much is made plain by the language of s 52(3) of the Act which uses the language of “stay all proceedings under a sequestration order”. I interpolate at this point that s 52(3) also has a time limit of 21 days. Nevertheless, in the Court’s appellate jurisdiction under r 36.08, such a time bar does not limit the Court’s power thereunder. A separate source of jurisdiction can be invoked, rather than that applicable under s 52(3).
[10]Further, reference should also be made to s 37(2)(a) of the Act, which provides that the Court does not have power to suspend the operation of a sequestration order.
[11]In summary, the Court only has power to stay proceedings or action under the sequestration order. The present interlocutory applications do not identify what proceedings or action ought to be stayed and why. They fail in limine on this aspect alone.
As in Endresz at [11], Mr Sethi’s application does not identify what proceeding or actions ought to be stayed and why, and therefore may fail on this aspect alone.
Another question is the source of this Court’s power to make the order sought by Mr Sethi. Mr Sethi has not identified the statutory power which permits the Court to make the order.
Section 52(3) of the Act confers a power to “stay all proceedings under a sequestration order for a period not exceeding 21 days”. If Mr Sethi seeks a stay for more than 21 days, presumably he must identify a different statutory power.
Another source of power to stay a sequestration order made by a Registrar may be s 256(2) of the FCFCA Act. Section 256(1) and (2) provide:
(1) A party to proceedings in which a delegate has exercised any of the powers of the Federal Circuit and Family Court of Australia (Division 2) under section 254 may:
(a) within the time prescribed by the Rules of Court; or
(b) within any further time allowed in accordance with the Rules of Court;
apply to the Court for review of that exercise of power.
(2) The Federal Circuit and Family Court of Australia (Division 2) may, on application under subsection (1) or on its own initiative, review an exercise of power by a delegate under section 254, and may make any order or orders it thinks fit in relation to the matter in respect of which the power was exercised.
There is a useful discussion of this power in Ashwood v Ashwood [2024] FedCFamC2G 88 (Ashwood) at [47]-[49].
Principles governing exercise of power to stay
In Nolten v Groeneveld Australia Pty Ltd [2011] FCA 1494 at [24] Kenny J stated in respect of the principles applicable to the grant of a stay under r 36.08 of the Federal Court Rules 2011 (Cth):
Rule 36.08 of the Rules confers a broad discretion to order a stay notwithstanding that an appeal shall not operate as a stay of execution or of proceedings under the judgment appealed from. In Powerflex Services Pty Ltd v Data Access Corporation (1996) 67 FCR 65, a Full Court of this Court held that the appropriate test for a stay under the equivalent of Rule 36.08 of the current Rules was that set down in Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685, namely, whether the applicant for a stay showed a reason or an appropriate case to warrant the exercise of discretion in his favour. More specifically, with respect to an application for a stay of a sequestration order, the question is whether there is an arguable point on the proposed appeal and whether the balance of convenience favours the granting of a stay: see Freeman at [3]-[4]; Coleman at 303; Beames v Rigby [2002] FCA 806 at [2]; Kellow v Dudzinski [2003] FCA 238 (“Dudzinski”) at [8]; and Shirreff v Beck Legal Pty Ltd [2010] FCA 1407 at [67], (2010) 119 ALD 284 at 293-294 [67]. The test for a stay under s 52(3) of the Act is not materially different.
This test has been stated in subsequent Federal Court judgments, such as Ghosh v Miller (No 3) [2016] FCA 1293 (Ghosh) at [24], and Young v Hughes Trueman Pty Ltd [2017] FCA 616 (Young) at [29].
Two matters arise in considering whether the same principles apply where a bankrupt, having applied under s 256(1) of the FCFCA Act for review of a sequestration order made by a Registrar, seeks a stay of the sequestration order until the determination of the application for review.
First, a question is whether the bankrupt must show that there would be an arguable point he or she would raise on the hearing of the application for review. In Fang v Lin at [28] and [44] Judge Bingham considered that the applicant must show an arguable case. But in Ashwood Judge Manasouridis, after considering at [24]-[39] the nature of an application for review, stated at [51] that “it is doubtful that on an application for a stay of a Registrar’s sequestration order the debtor must show that there would be an arguable point he or she would raise on the hearing of the application for review”. His Honour at [51] and [61(b)] considered that the ability or otherwise of the debtor to show an arguable point to be raised at the hearing of the application for review may be a factor in considering the balance of convenience.
Second, a question is, in respect of the balance of convenience, whether an onus lies on the applicant for a stay or on the opposing party. Where a party seeks a stay pending the determination of an appeal, an onus may rest on the moving party to show that the balance of convenience favours the granting of a stay: see for example Singh v Owners Strata Plan No 11723 [2012] FCA 538 (Singh) at [56]. In Ashwood Judge Manousaridis, after considering at [24]-[39] the nature of an application for review, stated at [51]:
… the hearing of a creditor’s petition on an application for review is prosecuted by the creditor, not the debtor. To the extent there is an onus on an application for a stay of a Registrar’s sequestration order, it may be that it would rest on the creditor to show that the balance of convenience favours a stay of the sequestration order not being granted.
The proposition that an onus may “rest on the creditor to show that the balance of convenience favours a stay of the sequestration order not being granted” may be inconsistent with the proposition referred to in paragraph 35 above that the applicant for a stay must “show a reason or an appropriate case to warrant the exercise of discretion in his favour”. I am bound by Federal Court authority.
APPLICATION OF PRINCIPLES TO FACTS
Whether arguable case
At a hearing de novo of a creditor’s petition before a judge:
(a)If the creditor satisfies the Court of proof of the matters in s 52(1) of the Act, subject to the debtor establishing one of the two matters in s 52(2), the Court may (and is likely to) make a sequestration order.
(b)If the creditor does not satisfy the Court of proof of the matters in s 52(1) or if, pursuant to s 52(2), the debtor proves “he or she is able to pay his or her debts” or there is an “other sufficient cause a sequestration order ought not to be made”, the Court may dismiss the creditor’s petition.
It appears that Mr Sethi does not contend:
(a)that the Court should not be satisfied of proof of the matters in s 52(1); or
(b)that he is able to pay his debts.
Mr Sethi appears to contend that there is an “other sufficient cause a sequestration order ought not to be made” within the meaning of s 52(2) of the Act. The “other specific cause” appears to be that, according to Mr Sethi, he does not owe to the Creditor the judgment debt which founded the Bankruptcy Notice.
As explained above, in a context where:
(a)Mr Sethi was directed on 13 May 2025 to file all evidence in support of the Review Application by 28 May 2025;
(b)Mr Sethi did not file any evidence; and
(c)Mr Sethi told me at the hearing on 29 May 2025 that all evidence on which he intends to rely would be produced in response to the MO Subpoena, a notice to produce to be issued to the Creditor, and possibly a subpoena to a former solicitor of the Creditor,
I asked Mr Sethi to explain the relevance of the documents sought in the MO Subpoena and the proposed notice to produce and additional subpoena. Mr Sethi replied that the underlying matter is a conspiracy and not a strata dispute, that the solicitor of the Creditor in the Supreme Court proceeding was not retained by the Creditor, that it is not the Creditor but instead another party that has taken steps to bankrupt Mr Sethi, and therefore Mr Sethi is not liable to the Creditor in respect of the debt which founded the Bankruptcy Notice. He stated that the documents sought in the MO Subpoena will prove this. I do not understand Mr Sethi’s explanation. According to the Bankruptcy Notice, the judgment debt arose from a costs order made by a judge of the Supreme Court in a proceeding commenced by Mr Sethi against the Creditor. Based on the limited documents before the Court, it appears that Mr Sethi chose to sue the Creditor, and a judge then ordered that Mr Sethi pay the Creditor’s costs in the amount of $213,000. It appears obvious that Mr Sethi is liable to the Creditor.
To the extent that Mr Sethi appears to be concerned that one or more individuals have instructed the Creditor’s solicitor on behalf of the Creditor, the Creditor is an owners corporation under the Strata Schemes Management Act 2015 (NSW). Pursuant to s 8 of that Act, the owners corporation is constituted by “the owner of the lots from time to time in [the] strata scheme”. It appears obvious that one or more owners, or a property agent retained by the Creditor, would provide instructions to the Creditor’s solicitor.
For the above reasons, Mr Sethi has not identified an arguable case at the hearing of the Review Application.
Balance of convenience
For the following reasons, I am not persuaded that the balance of convenience favours the granting of a stay.
First, Mr Sethi has not provided “admissible evidence” (Singh at [29]) concerning prejudice he may suffer if a stay is not granted. He stated in the Stay Affidavit at [8]-[11]:
The unlawful eviction has put me in extremely dire circumstances and have caused significant disruption to my living including my ability to prepare for the hearing.
I am currently seeking legal advice and support in relation to this matter and can provide any supporting documentation if required.
Due to the circumstances being created by unlawful eviction and the complexity of the case, I require additional time to seek legal advice and secure representation to ensure my rights are adequately protected.
I am actively seeking legal assistance and representation which I believe is necessary to ensure I am able to present my case properly. I've made several enquiries but have not been able to secure the appropriate representation as yet.
While these paragraphs identify possible difficulties a bankrupt might suffer, the Stay Affidavit does not contain admissible evidence to establish that Mr Sethi might suffer any of these difficulties.
Mr Sethi stated in vague terms in oral submissions that he is the director of a company which operates a business. But his affidavit says nothing about these matters. Vague assertions in oral submissions are not admissible evidence.
Second, as in Endresz at [11], Mr Sethi has not identified the proceedings or actions which ought to be stayed, and why.
Third, neither party has provided evidence to inform the Court of whether a trustee has been appointed for Mr Sethi’s estate and, if so, the trustee’s position in relation to the Stay Application. I am cautious about granting a stay when evidence has not been put before the Court of these matters. In connection with this point, as in Endresz at [21], Mr Sethi has not “pointed to any precise actual or anticipated action or proceedings of the [trustee]” that he wants restrained.
Fourth, if a trustee has been appointed, as stated in Endresz at [26], “there is a public interest in not restraining [the trustee] from engaging in such investigations as it thinks fit in terms of the affairs of” Mr Sethi.
Fifth, as stated in Singh at [57] and [58], “the Court generally expects, in an application for interlocutory relief of the type brought by [the debtor], there should be evidence as to the financial position of the party seeking a stay of a sequestration order”, and “the failure to provide evidence of solvency [weighs] as a factor … in the balance of convenience”. Mr Sethi has not provided any evidence concerning his financial position. Even if Mr Sethi is not solvent, evidence of Mr Sethi’s financial position would assist the Court in understanding whether there are other creditors (which may be relevant in considering whether to grant a stay – see Young at [72]) and whether there would be a risk of Mr Sethi dissipating assets if a stay is granted (see Ghosh at [69]).
Sixth, if Mr Sethi had demonstrated an arguable case, in considering the balance of convenience, as in Ashwood, this factor may weigh in favour of granting a stay. But where, as in the present matter, Mr Sethi has not identified an arguable case, this factor does not weigh in favour of granting a stay.
Seventh, on 29 May 2025 I directed that the Review Application be listed for final hearing on 27 June 2025. Mr Sethi has not identified any real prejudice he may suffer, or any other reason to warrant the grant of a stay, in this short period.
COSTS
My inclination is that costs of this interlocutory application should follow the event. Since I did not hear submissions on costs at the hearing on 29 May 2025, I will order that Mr Sethi pay the Creditor’s costs of and incidental to the Stay Application, but permit either party to seek to vary the costs order at the hearing of the Review Application on 27 June 2025, so long as that party informs my chambers and the other party of the variation application by email by 20 June 2025.
NON-PUBLICATION ORDER
At the end of the hearing on 29 May 2025, Mr Sethi sought a “non-publication order” in respect of my judgment concerning the Stay Application. Mr Sethi had not previously raised this issue with the Court, nor filed any evidence in support of the application. I understand that Mr Sethi was requesting that his name not be published when my judgment is published. The Creditor does not oppose this request.
Section 231(1) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (FCFCOAAct) specifies the grounds on which the Court may make a non-publication order. Mr Sethi has not identified the ground on which he relies. It is not evident that any ground applies in the present matter.
Sections 233 and 234 of the FCFCOA Act permit the Court to make an interim non-publication order and specify or limit the period of the order.
I will make an order which prevents disclosure of Mr Sethi’s name when my judgment is published which operates until 5.00 pm on 27 June 2025. If Mr Sethi wants to extend the operation of the non-publication order, I require that he file and serve by 4.00 pm on 25 June 2025 a written submission and any evidence on which he wishes to rely in support of an application to extend the non-publication order. His materials must establish one of the grounds in s 231(1) and that it is appropriate to extend the non-publication order.
I certify that the preceding sixty-one (61) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Zipser. Associate:
Dated: 13 June 2025
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