FEDERAL COURT OF AUSTRALIA
Sammut v Lawrence [2025] FCA 1040
File number(s): NSD 856 of 2024
NSD 1251 of 2024Judgment of: RAPER J Date of judgment: 29 August 2025 Catchwords: BANKRUPTCY AND INSOLVENCY – applications to set aside two bankruptcy notices – whether the applicant has a counter-claim, set-off or cross demand equal to, or in excess of, the judgment debt pursuant to s 40(1)(g) of the Bankruptcy Act 1966 (Cth) that could not have been set up below – whether the issue of the bankruptcy notices are an abuse – applications dismissed PRACTICE AND PROCEDURE – application for a vexatious proceedings order under s 37AO of the Federal Court of Australia Act 1976 (Cth) – whether the applicant has frequently instituted or conducted vexatious proceedings in Australian courts or tribunals – vexatious proceedings order made Legislation: Bankruptcy Act 1966 (Cth) ss 40(1)(g), 41(2A)(a), (7)
Evidence Act 1995 (Cth) s 91
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 8(2)
Federal Circuit and Family Court of Australia (Consequential Amendments and Transitional Provisions Act 2021 (Cth) sch 5 s 18(a)
Federal Court of Australia Act 1976 (Cth) Pt VAAA, ss 37AM, 37AO, 37AR, 37M
Building and Construction Industry Security of Payment Act 1999 (NSW)
Civil and Administrative Tribunal Act 2013 (NSW) s 60(1)
Home Building Act1989 (NSW)
Legal Profession Uniform Law Application Act 2014 (NSW) ss 74(2), 75(1)(a), 79(a), 83–89
Limitation Act 1969 (NSW) s 14
Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 (NSW)
Cases cited: Alhalek v Quintiliani trading as Kells Lawyers [2020] FCA 1272
Capsanis, in the matter of Capsanis v Owners – Strata Plan 11727 [2000] FCA 1262
Cavoli v Etl [2007] FCA 1191
Clyne v Deputy Commissioner of Taxation (NSW) (No 4) [1982] FCA 166; 42 ALR 703
Ezekiel-Hart v Council of the Law Society (ACT) [2025] FCA 551
Fokas v Mansfield as Trustee of the Bankrupt Estate of Maria Fokas (No 2) [2020] FCA 30
HWY Rent Pty Ltd v HWY Rentals (in liq) (No 2) [2014] FCA 449
Killoran v Duncan, in the matter of Killoran [1999] FCA 1574
Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; 243 CLR 361
Lawrence v Sammut (unreported, NSD 1022 of 2021, Goodman J)
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Details
- AGLC
- Sammut v Lawrence [2025] FCA 1040
- Case
- [2025] FCA 1040
- Decision Date
CaseChat Overview and Summary
In the matter of Sammut v Lawrence, the applicant, Mr Lawrence, sought to set aside two bankruptcy notices issued to him. The respondents, Ms Sammut and Mr Ciantar, counter-claimed and sought to have Mr Lawrence's conduct in initiating and conducting the proceedings declared vexatious. The legal issues before the court included whether Mr Lawrence had a counter-claim, set-off, or cross demand that could not have been set up below the judgment debt under section 40(1)(g) of the Bankruptcy Act 1966 (Cth) and whether the issuance of the bankruptcy notices constituted an abuse of process. The court considered the evidence presented by Mr Lawrence and found it to be inconsistent and not consistent with contemporaneous circumstances. The court concluded that Mr Lawrence had instituted or conducted vexatious proceedings and dismissed his applications to set aside the bankruptcy notices.
The court found that Mr Lawrence's evidence was inconsistent and not consistent with the contemporaneous circumstances. The court found that Mr Lawrence had instituted or conducted vexatious proceedings, as evidenced by the orders and reasons in the identified proceedings. The court found that Mr Lawrence had failed to accept the finality of litigation and continued to re-agitate failed claims, reflective of an unfortunate fixation. The court found that Mr Lawrence had repeatedly relied upon voluminous, incomprehensible submissions and materials and brought misconceived costly interlocutory disputes. The court found that Mr Lawrence's vexation was illustrated by his conduct precipitating the orders and reasons given in Proceedings 14 and 19. Mr Lawrence would not pay the judgment debts, then after a bankruptcy notice issued, Mr Lawrence would bring an application to set aside the notice. Mr Lawrence would then pay the debt at a later date to facilitate the vexation which allows him to continue simultaneously maintaining the challenge to the debt (by the re-agitation of failed claims) which he would be otherwise prevented from by an act of bankruptcy.
The court found that Mr Lawrence's evidence was inconsistent and not consistent with the contemporaneous circumstances. The court found that Mr Lawrence had instituted or conducted vexatious proceedings, as evidenced by the orders and reasons in the identified proceedings. The court found that Mr Lawrence had failed to accept the finality of litigation and continued to re-agitate failed claims, reflective of an unfortunate fixation. The court found that Mr Lawrence had repeatedly relied upon voluminous, incomprehensible submissions and materials and brought misconceived costly interlocutory disputes. The court found that Mr Lawrence's vexation was illustrated by his conduct precipitating the orders and reasons given in Proceedings 14 and 19. Mr Lawrence would not pay the judgment debts, then after a bankruptcy notice issued, Mr Lawrence would bring an application to set aside the notice. Mr Lawrence would then pay the debt at a later date to facilitate the vexation which allows him to continue simultaneously maintaining the challenge to the debt (by the re-agitation of failed claims) which he would be otherwise prevented from by an act of bankruptcy.
Orders
Orders of the court
1. Pursuant to s 37AO(2)(a) of the Federal Court of Australia Act 1976 (Cth):
(a) all current proceedings instituted by Mr Lawrence in this Court be stayed; and
(b) Mr Lawrence be prohibited from continuing any current proceedings in this Court without making an application for leave to continue and obtaining leave.
2. Pursuant to s 37AO(2)(b) of the Act, Mr Lawrence be prohibited from instituting proceedings in this Court without making an application for leave to institute proceedings in accordance with s 37AR of the Act and obtaining leave.
3. Mr Lawrence’s two applications to set aside two bankruptcy notices issued on 30 April 2024 and 21 October 2024 be dismissed.
4. Mr Lawrence pay Ms Sammut’s and Mr Ciantar’s costs in both proceedings NSD856 of 2024 and NSD1251 of 2024, as agreed or assessed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
For the reasons which follow, Mr Lawrence has failed to establish that the two bankruptcy notices should be set aside and Ms Sammut and Mr Ciantar have established that Mr Lawrence has frequently instituted or conducted vexatious proceedings and I should make vexatious proceedings orders. The evidenceMr Lawrence’s evidence As best as the Court could decipher, Mr Lawrence relied upon the affidavits sworn by him on 1 November 2024, 19 February 2025, 21 February 2025 and 26 May 2025, in support of his application. However, the Court notes that no substantive submission was made in closing by Mr King with reference to any aspect of Mr Lawrence’s evidence. Nonetheless, that evidence is telling in a number of respects. By Mr Lawrence’s affidavit of 1 November 2024 (filed in support of his application to set aside the fifth bankruptcy notice) but ultimately relied upon in each proceeding, Mr Lawrence claims solvency without providing sufficient evidence to prove the same. Mr Lawrence deposes, consistent with the representations made by him to Ms McLean (which were annexed to the affidavit) and by his (then) Counsel five days later at the case management hearing, on 6 November 2024, that he was withdrawing his application to set aside the fourth bankruptcy notice and was in the process of making financial arrangements to pay the amount under that notice. Curiously, in Mr Lawrence’s subsequent affidavit, of 19 February 2025, he deposes a different story, that he had only paid the amount payable in the fourth bankruptcy notice under duress and paid it on a conditional basis. For the reasons set out below, the allegation of duress is not made out. These two aspects of Mr Lawrence’s evidence reveal that his evidence was itself inconsistent and also that he deposes to matters which cannot be accepted as they are not consistent with the contemporaneous circumstances, revealed from the transcript of the case management hearings before the Court. Also telling and unfortunate, is that Mr Lawrence refers, in his 1 November 2024 affidavit, to the fact that “on three occasions, the Court found in my favour”. Whilst Mr Lawrence’s subjective belief is not relevant to the determination of whether proceedings are vexatious, one is able to discern his misguided view. For example, Mr Lawrence refers to the proceedings before Justice Schmidt in which he was successful in reducing the cost debt owed by approximately $29,000. But Mr Lawrence omits reference to the fact that he was required to pay the costs generated from that fight (being in excess of $115,000) (as identified in Lawrence v Sammut (No 5) [2023] NSWSC 1476) caused by the manner in which he conducted himself in the proceedings. Further, Mr Lawrence suggests that he was successful in a proceeding before Justice Goodman, when the matter was resolved by consent. It is unclear how this could be categorised as a success. By his affidavit of 26 May 2025, tendered after Ms McLean’s oral evidence, Mr Lawrence makes a number of allegations as to communications he said he had with Ms McLean prior to and after the issuing of the second bankruptcy notice on 29 October 2021 (BN254572) and as to other alleged events around the first, fourth and fifth bankruptcy notices. For the reasons given below, I do not accept that Mr Lawrence’s subjective intentions are relevant to the determination of whether proceedings are vexatious. Further, as reasoned below, I do not accept that Ms McLean made any threat to Mr Lawrence.
Decision
Reasons for decision
It is not necessary to the disposition of this application to give consideration to Mr Lawrence’s initiation and conduct of proceedings in the NCAT. However, it is my view that, had it been necessary to do so, I would have found that Proceedings 13 and 16 were vexatious proceedings. In Proceeding 16, Mr Lawrence was ordered to pay Ms Sammut and Mr Ciantar’s costs (a departure to the ordinary rule of each party pays its own costs: Civil and Administrative Tribunal Act 2013 (NSW) s 60(1)), as the presiding Senior Member in making the finding that Mr Lawrence’s claim “has no tenable basis in fact or law and that his application was lacking in substance”: at [27] also noted that Mr Lawrence had been warned shortly after lodging his application that the “Tribunal did not have jurisdiction to consider this claim, but he chose to proceed with it despite the warning so provided”: at [28] (Emphasis added). Conclusion Mr Lawrence has instituted or conducted the following proceedings which, I find, are to be characterised as vexatious for the purposes of s 37AO of the Federal Court Act: Proceedings 1, 3, 4, 5 and 15 (in the Supreme Court), Proceeding 2 (in the High Court) and Proceedings 11, 12, 14, 19 and 20 (in the Federal Court). I would exercise my discretion and make the orders even if Proceedings 19 and 20 were not included. I am of the view that Mr Lawrence’s conduct, in the vexatious proceedings, is also a furtherance of the abuse of process. The above disposition reveals that Mr Lawrence frequently instituted or conducted vexatious proceedings. This is revealed, amongst other factors, from the orders and reasons in the identified proceedings above. Those reasons and orders are not relied upon to prove a fact in issue in those proceedings but, as s 37AO(6) expressly authorises, and as s 91 of the Evidence Act permits, they illustrate the course taken and the outcome which may be relied upon in order to determine whether the proceedings are vexatious: Fokas at [66]. They reveal that Mr Lawrence has failed to accept the finality of litigation and continues to re-agitate failed claims, reflective of an unfortunate fixation. By this failure, Mr Lawrence has repeatedly relied upon voluminous, incomprehensible submissions and materials and brought misconceived costly interlocutory disputes. This pattern is exposed by the unfortunate, labyrinthine consequences of Mr Lawrence’s failed first instance proceedings before Henry J (Proceeding A), where the costs upon costs of failed reviews, interlocutory proceedings and appeals led to costs almost doubling the initial judgment debt. The proceedings reveal that, notwithstanding being unrepresented or even when represented, Mr Lawrence does not conduct proceedings in a manner consistent with the obligation to further a just, quick and cheap resolution of the issues. The same was illustrated by the proceedings that emanated from Proceeding B. Mr Lawrence’s vexation was illustrated by his conduct precipitating the orders and reasons given in Proceedings 14 and 19. Mr Lawrence would not pay the judgment debts, then after a bankruptcy notice issued, Mr Lawrence would bring an application to set aside the notice. Mr Lawrence would then pay the debt at a later date to facilitate the vexation which allows him to continue simultaneously maintaining the challenge to the debt (by the re-agitation of failed claims) which he would be otherwise prevented from by an act of bankruptcy.
Ratio Decidendi
Legal Principle Established
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