Thomas v Ejueyitsi

Case [2025] FCA 1167

FEDERAL COURT OF AUSTRALIA

Thomas v Ejueyitsi [2025] FCA 1167 

File number(s): NSD 1393 of 2024
Judgment of: CHEESEMAN J
Date of judgment: 22 September 2025
Catchwords: BANKRUPTCY – sequestration order – where application for review of sequestration order made by Registrar – where review conducted as a hearing de novo – whether petitioning creditors have established onus to prove matters in s 52(1) of the Bankruptcy Act1966 (Cth) – whether petitioning creditors have discharged onus on civil standard to establish that Bankruptcy Notice personally served on debtor – whether debtor discharged onus on civil standard to establish able to pay debts within the meaning of s 52(2)(a) of the Bankruptcy Act – whether sequestration order should be made. Held: sequestration orders made
Legislation:

Bankruptcy Act 1966 (Cth) ss 40(1)(g), 41(7), 43, 51, 52,

Federal Court of Australia Act 1976 (Cth) s 35A

Bankruptcy Regulations 2021 (Cth) r 10(1)(a)

Federal Court (Bankruptcy) Rules 2016 (Cth) r 7.06

Federal Court Rules 2011 (Cth) rr 1.39, 3.11

Cases cited:

Alam v QBE Insurance (Australia) Ltd [2018] FCA 1560

Axon v Axon [1937] HCA 80; 59 CLR 395

Bechara v Bates [2021] FCAFC 34

Blatch v Archer (1774) 1 Cowp 63; 98 ER 969

Briginshaw v Briginshaw (1938) 60 CLR 336

Coates Hire Operations Pty Ltd v D-Link Homes Pty Ltd [2011] NSWSC 1279

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union of Australia v Australian Competition and Consumer Commission [2007] FCAFC 132; 162 FCR 466

Culleton v Balwyn Nominees Pty Ltd [2017] FCAFC 8; 343 ALR 632

Deputy Commissioner of Taxation v Bayconnection Property Developments Pty Ltd [2012] FCA 363; 127 ALD 64

Do (Trustee), Andrew Superannuation Fund v Sijabat [2023] FCAFC 6; 295 FCR 584

Ejueyitsi v Thomas & Anor [2022] NSWDC 490

Ejueyitsiv Western Sydney University & Ors [2023] HCASL 143

Ejueyitsi v Western Sydney University [2023] NSWCA 126

Francis v Eggleston Mitchell Lawyers Pty Ltd [2014] FCAFC 18

Mangano v Bullen [2025] FCAFC 42

Robson as former trustee of the estate of Samsakopoulos v Body Corporate for Sanderling at Kings Beach CTS 2942 [2021] FCAFC 143; 286 FCR 494

Sarina v Council of the Shire of Wollondilly [1980] FCA 175; 48 FLR 372

Shaw v Yarranova Pty Ltd [2017] FCAFC 88; 252 FCR 267

Szepesvary v Weston as trustee of the bankrupt estate of Aaron Szepesvary [2018] FCAFC 224; 363 ALR 379

Totev v Sfar [2008] FCAFC 35; 167 FCR 193
Division: General Division
Registry: New South Wales
National Practice Area: Commercial and Corporations
Sub-area: General and Personal Insolvency
Number of paragraphs: 115
Date of hearing: 12 September 2025
Counsel for the Applicants: Ms H Cohley
Solicitor for the Applicants: Clyde & Co
Solicitor for the Respondent: Mr P Beazley of Beazley Lawyers

ORDERS

NSD 1393 of 2024
BETWEEN:

JOY THOMAS

First Applicant

BARNEY GLOVER

Second Applicant
AND:

VINCENT EJUEYITSI

Respondent

ORDER MADE BY:

CHEESEMAN J

DATE OF ORDER:

22 SEPTEMBER 2025

THE COURT…

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Thomas v Ejueyitsi [2025] FCA 1167
Case
[2025] FCA 1167
Decision Date

CaseChat Overview and Summary

In the matter of Thomas v Ejueyitsi, the court conducted a de novo review of a sequestration order application brought by the petitioning creditors against Mr. Ejueyitsi. The primary dispute centred on whether the creditors had met their burden of proof regarding the service of a Bankruptcy Notice on Mr. Ejueyitsi and whether he could pay his debts, as required by sections 52(1) and 52(2)(a) of the Bankruptcy Act 1966 (Cth). The creditors argued that they had fulfilled their obligations by proving that the Bankruptcy Notice was served on Mr. Ejueyitsi and that he had not demonstrated his ability to pay his debts. Conversely, Mr. Ejueyitsi claimed that he could pay his debts and that there were sufficient grounds to prevent the sequestration order. The court had to determine whether the creditors had established the necessary elements on a civil standard of proof and if Mr. Ejueyitsi had discharged his burden regarding his financial capability.

The court found that the petitioning creditors had indeed proven the service of the Bankruptcy Notice on Mr. Ejueyitsi, satisfying the requirements of section 52(1)(a) of the Bankruptcy Act. Additionally, the court was not convinced by Mr. Ejueyitsi’s evidence regarding his ability to pay his debts, thereby upholding the creditors’ burden under section 52(2)(a). Consequently, the court concluded that the discretionary power to make a sequestration order under section 52(1) of the Act was indeed activated. The court further noted that Mr. Ejueyitsi did not provide sufficient justification to avoid the sequestration order under section 52(2). Therefore, the court decided to exercise its discretion and make the sequestration order against Mr. Ejueyitsi.

The final orders of the court included the sequestration of Mr. Ejueyitsi's estate under the Bankruptcy Act 1966 (Cth), the taxation and payment of the applicants' costs from the bankrupt estate, and the requirement for a copy of the order to be provided to the Official Receiver in Sydney within two days. The court also noted that the act of bankruptcy occurred on 6 July 2024.

Orders

Orders of the court

1. The estate of Vincent Ejueyitsi (also known as Babatunde Vincent Ejueyitsi) be sequestrated under the Bankruptcy Act 1966 (Cth).

2. The applicant creditors’ costs be taxed and paid from the bankrupt estate of Vincent Ejueyitsi in accordance with the Act.

3. A copy of this order is to be provided by the applicant creditors to the Official Receiver in Sydney within two (2) days.

THE COURT NOTES THAT:

A. The date of the act of bankruptcy is 6 July 2024.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

The present review being conducted de novo requires a judge to take a “fresh look” at the issues on a complete rehearing of the facts and the law. Error does not need to be demonstrated on the part of the Registrar for success in the review.BACKGROUND The petitioning creditors claim in respect of a debt that arises from costs orders made by the District Court of New South Wales on 20 October 2022: Ejueyitsi v Thomas & Anor [2022] NSWDC 490. The litigation between Mr Ejueyitsi and Ms Thomas and Mr Glover was initiated by Mr Ejueyitsi in the Local Court of New South Wales at Parramatta. The primary claim and the proceedings at each level of appeal have been dismissed, essentially as disclosing no reasonable cause of action, with costs orders being made against Mr Ejueyitsi. In February 2022, Mr Ejueyitsi commenced in the Small Claims Division of the Local Court at Parramatta. Mr Ejueyitsi first issued proceedings against Ms Thomas, who was at the relevant time an employee of Western Sydney University (WSU), in relation to a decision by the WSU to disenroll Mr Ejueyitsi from a course following non-payment of fees. Mr Ejueyitsi alleged that WSU had failed to inform him that a subject he enrolled in was not “covered by Fee-Help/HECS” and sought relief in the amount of $50,000 against Ms Thomas. Mr Ejueyitsi later amended his pleading to add Mr Glover, the then Vice Chancellor of WSU, as the second defendant. In June 2022, Mr Ejueyitsi’s claim was struck out by the Local Court and he was ordered to pay Ms Thomas’ and Mr Glover’s costs as agreed or assessed. In August 2022, Mr Ejueyitsi sought to appeal the decision of the Local Court proceeding to the District Court of New South Wales. In October 2022, the District Court summarily dismissed the appeal as disclosing no reasonable cause of action and ordered costs against Mr Ejueyitsi in the specified gross sum of $13,000 on an ordinary basis up to 15 September 2022 and on an indemnity basis thereafter. In November 2022, Mr Ejueyitsi sought judicial review of the District Court’s summary dismissal in the New South Wales Court of Appeal. In February 2023, Mr Ejueyitsi filed an amended summons adding WSU as a respondent to the Court of Appeal proceeding, notwithstanding that WSU was not a party to the proceedings below. Mr Ejueyitsi was represented at the hearing of the appeal. In June 2023, the Court of Appeal dismissed the summons with costs: Ejueyitsi v Western Sydney University [2023] NSWCA 126. In July 2023, Mr Ejueyitsi applied for special leave to appeal the judgment and order of the Court of Appeal. On 12 October 2023, the High Court of Australia (Gordon and Steward JJ) refused Mr Ejueyitsi’s application for special leave: [2023] HCASL 143. In April 2025, Mr Ejueyitsi commenced a second proceeding against WSU and Ms Thomas in the Local Court Small Claims Division in Sydney alleged to arise from broadly the same facts and circumstances relied upon in the first Local Court proceeding, seeking relief in the reduced amount of $20,000.BANKRUPTCY PROCEEDING

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Mr Ejueyitsi did not submit that there was a sufficient cause not to make the sequestration order for the purpose of s 52(2) of the Bankruptcy Act. Having regard to the whole of the evidence before me, I am satisfied that the discretion to make a sequestration order is enlivened and that it is appropriate to make such an order.CONCLUSION For the reasons I have given, I will exercise the discretion to make a sequestration order against Mr Ejueyitsi. In short, I am satisfied that the petitioning creditors have established that the Bankruptcy Notice was served on Mr Ejueyitsi on 14 June 2024 and that he committed an act of bankruptcy on 6 July 2024. Being satisfied that the requirements as to jurisdiction under s 43 of the Bankruptcy Act are met and that the petitioning creditors have established each of the matters specified in ss 52(1)(a) to (c) of the Bankruptcy Act, the discretion to make a sequestration order against Mr Ejueyitsi is enlivened. I am not satisfied that Mr Ejueyitsi discharged his onus that he is able to pay his debts in accordance with s 52(2)(a) of the Bankruptcy Act. I am further satisfied that it is appropriate to exercise the discretion arising under s 52(1) of the Act to make a sequestration order. I will make orders accordingly.

Ratio Decidendi

Legal Principle Established

The Court has power to make a sequestration order on satisfaction of the following criteria pursuant to s 43(1) of the Bankruptcy Act which relevantly provides that:Jurisdiction to make sequestration orders (1) Subject to this Act, where:(a) a debtor has committed an act of bankruptcy; and (b) at the time when the act of bankruptcy was committed, the debtor:(i) was personally present or ordinarily resident in Australia;…the Court may, on a petition presented by a creditor, make a sequestration order against the estate of the debtor. The act of bankruptcy presently relevant is that described in s 40(1)(g) of the Bankruptcy Act:Acts of bankruptcy(1) A debtor commits an act of bankruptcy in each of the following cases: …(g)if a creditor who has obtained against the debtor a final judgment or final order, being a judgment or order the execution of which has not been stayed, has served on the debtor in Australia or, by leave of the Court, elsewhere, a bankruptcy notice under this Act and the debtor does not:(i)where the notice was served in Australia--within the time fixed for compliance with the notice; or …comply with the requirements of the notice or satisfy the Court that he or she has a counter - claim, set - off or cross demand equal to or exceeding the amount of the judgment debt or sum payable under the final order, as the case may be, being a counter - claim, set - off or cross demand that he or she could not have set up in the action or proceeding in which the judgment or order was obtained; Section 41(7) of the Bankruptcy Act provides:Where, before the expiration of the time fixed for compliance with a bankruptcy notice, the debtor has applied to the Court for an order setting aside the bankruptcy notice on the ground that the debtor has such a counter-claim, set-off or cross demand as is referred to in paragraph 40(1)(g) , and the Court has not, before the expiration of that time, determined whether it is satisfied that the debtor has such a counter-claim, set-off or cross demand, that time shall be deemed to have been extended, immediately before its expiration, until and including the day on which the Court determines whether it is so satisfied. A failure to comply with s 41(7) of the Bankruptcy Act is not a procedural irregularity capable of cure, but rather is fatal to jurisdiction: Van Eps v Child Support Registrar [2023] FCA 1068 at [31] (Collier J). Section 51 of the Bankruptcy Act provides:Subject to section 109 [of the Bankruptcy Act], the prosecution of a creditor’s petition to and including the making of a sequestration order on the petition shall be at the expense of the creditor. Section 52 of the Bankruptcy Act relevantly provides:(1) At the hearing of a creditor’s petition, the Court shall require proof of:(a)the matters stated in the petition (for which purpose the Court may accept the affidavit verifying the petition as sufficient);(b)service of the petition; and (c)the fact that the debt or debts on which the petitioning creditor relies is or are still owing;and, if it is satisfied with the proof of those matters, may make a sequestration order against the estate of the debtor. …(2)If the Court is not satisfied with the proof of those matters, or is satisfied by the debtor:(a)that he or she is able to pay his or her debts; or (b)that for other sufficient cause a sequestration order ought not to be made;it may dismiss the petition.