Taouk v Lawyers Pty Ltd Trading as Yazbeck Law

In *Taouk v Lawyers Pty Ltd Trading as Yazbeck Law*, the applicant debtor sought to set aside a bankruptcy notice issued by the respondent creditor. The dispute centred on whether the judgment debt underpinning the bankruptcy notice was subject to a stay at the time of its issuance, thereby rendering the notice invalid. The matter was heard by Dowdy J in the Federal Court of Australia.

The primary legal issue before the court was the construction and effect of section 86 of the *Legal Profession Uniform Law Application Act 2014* (NSW) in relation to a costs assessment review. Specifically, the court had to determine whether this provision operated to stay the judgment debt, and consequently, whether the bankruptcy notice, which was predicated on that debt, should have been issued.

Dowdy J found that the judgment debt upon which the bankruptcy notice was issued was indeed stayed under section 41(3)(b) of the *Bankruptcy Act 1966* (Cth) due to the ongoing costs assessment review. The court reasoned that the stay provided by section 41(3)(b) of the *Bankruptcy Act* was operative, meaning the judgment debt was not enforceable at the time the bankruptcy notice was issued. Consequently, the bankruptcy notice should not have been issued. The court ordered that the bankruptcy notice be set aside.