FEDERAL COURT OF AUSTRALIA

Pineview Property Holdings Pty Ltd v Dimitriou (No 2) [2019] FCA 1416

ORDERS

THE COURT ORDERS THAT:

1.    A sequestration order under the Bankruptcy Act 1966 (Cth) be made against the estate of George Dimitriou.

2.    The costs of the applicant be assessed by a Registrar of the Court and be paid from the bankrupt estate of George Dimitriou in accordance with the Bankruptcy Act 1966 (Cth).

THE COURT NOTES THAT:

1.    The date of bankruptcy was 15 May 2018.

2.    A consent to act as trustee signed by Louise Ann Thomson has been filed under s 156A of the Bankruptcy Act 1966 (Cth).

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

REASONS FOR JUDGMENT

WIGNEY J:

1    This judgment is the culmination of a long, drawn-out and tortuous hearing of a creditor’s petition.

2    On 30 June 2016, White J of the Supreme Court of New South Wales handed down judgment and made orders in the matter of Rubino & Anor v Pineview Property Holdings Pty Limited & Ors [2016] NSWSC 904. The plaintiffs in that matter, Mrs Biagina Rubino and Ms Lee Rubino (as executrix of the estate of the late Mr Alfio Rubino) had sued a number of parties, including Pineview Property Holdings Pty Limited, in respect of what could shortly be described as a series of property and financial transactions gone wrong. The litigation soon escalated and spawned a number of cross-claims against numerous other parties. In one of the cross-claims, Pineview and one of its directors, Ms Susan Huybers, sued Mr George Dimitriou, who had been retained to arrange or facilitate some of the financial transactions. The orders made by White J on 30 June 2016 included an order giving “judgment for the second cross-claimant (Pineview) against the third, fourth and fifth cross-defendants in the sum of $1,276,389.29…”. Though not expressly named in the order, Mr Dimitriou was the third cross-defendant on the third cross-claim. The fourth and fifth cross-defendants on the third cross-claim were Wyse & Young International Pty Ltd and Wyse Accounting Pty Ltd (Wyse companies), which are companies associated with Mr Dimitriou.

3    Mr Dimitriou did not pay the judgment debt to Pineview. On 18 April 2018, the Official Receiver issued a bankruptcy notice in relation to Mr Dimitriou on the application of Pineview. The bankruptcy notice stated that the creditor, Pineview, claimed that Mr Dimitriou owed it $1,276,389.29 “as per the attached final judgment/s or final order/s” and attached the orders made by White J on 30 June 2016. It also stated that Mr Dimitriou was required, within 21 days after service of the bankruptcy notice, to either “pay the creditor the amount of the debt claimed” or make arrangements to the creditor’s satisfaction for settlement of the debt. The bankruptcy notice was served on Mr Dimitriou on 24 April 2018.

4    Mr Dimitriou did not pay Pineview $1,276,389.29 within the specified 21 days. Nor did he make any arrangements to Pineview’s satisfaction for settlement of the debt.

5    On 12 July 2018, Pineview filed a creditor’s petition in this Court seeking a sequestration order against Mr Dimitriou. It alleged that Mr Dimitriou committed an act of bankruptcy in failing to comply with the bankruptcy notice.

6    Mr Dimitriou opposed the creditor’s petition.

7    Unfortunately, Pineview’s attempts to have the creditor’s petition heard and determined in a timely fashion have been frustrated by repeated adjournment applications, changes of legal representation and other procedural applications by Mr Dimitriou which have been productive of considerable delay. Even more unfortunately, Mr Dimitriou’s grounds for opposing the application changed over time and, for the most part, lacked clarity.

8    Ultimately, the questions for determination are whether the Court is satisfied that the “matters” referred to in s 52(1) of the Bankruptcy Act 1966 (Cth) have been proved and, if so, whether Mr Dimitriou has satisfied the Court of one or other of the matters in s 52(2) of the Bankruptcy Act. If satisfied that the matters in s 52(1) of the Bankruptcy Act have been proved, and Mr Dimitriou has not established either of the matters in s 52(2) of the Bankruptcy Act, the Court may make a sequestration order against Mr Dimitriou’s estate.

9    For the reasons that follow, Pineview has proved each of the matters in s 52(1), Mr Dimitriou has not established either of the matters in s 52(2), or raised any other valid or meritorious objection to the creditor’s petition, and a sequestration order under the Bankruptcy Act should accordingly be made.

MR DIMITRIOU’S GROUNDS OF OPPOSITION TO THE CREDITOR’S PETITION

10    Mr Dimitriou’s initial notice of opposition to the creditor’s petition, which was filed on 15 August 2018, identified a large number of grounds of opposition. Mr Dimitriou was unrepresented at the time he filed that notice.

11    The creditor’s petition was initially listed for hearing on 24 October 2018. Mr Dimitriou was represented by counsel at that hearing. He applied for an adjournment and for leave to file an amended notice of opposition. The adjournment application was granted over Pineview’s objection and Mr Dimitriou was given leave to file an amended notice of opposition. The creditor’s petition was listed for hearing on 14 December 2018.

12    The amended notice of opposition, which was eventually filed on 2 November 2018, contained three grounds.

13    The first ground was that Mr Dimitriou was able to pay his debts and that s 52(2)(a) of the Bankruptcy Act therefore applied to him.

14    The second ground was, in essence, that the bankruptcy notice which had been served on Mr Dimitriou was invalid or a “nullity”. While the particulars of that ground were somewhat unclear, and the submissions ultimately advanced in support of it did not greatly assist, the essence of Mr Dimitriou’s argument in support of this ground was that, while the orders made by White J on 30 June 2016 were attached to the bankruptcy notice, those orders did not specifically identify or refer to him by name. The bankruptcy notice was, so it was argued, accordingly likely to mislead. It also appeared to be asserted that the orders were not in fact attached to the bankruptcy notice when it was issued, or at least that a signed or sealed version of the orders was not attached.

15    The third ground was that there was a “sufficient cause” why a sequestration order ought not be made and that s 52(2)(b) of the Bankruptcy Act accordingly applied. The amended notice of opposition did not identify what that sufficient cause was. The evidence and written submissions filed on behalf of Mr Dimitriou also did not greatly assist in identifying the nature of the sufficient cause. Ultimately, this ground appeared to involve two contentions: first, that the Court should go behind White J’s judgment and find that he is not in fact indebted to Pineview; and second, that Mr Dimitriou’s present position was one of “temporary lack of liquidity” and he was likely in the near future to obtain the “fruits” of various actions which were pending in the Supreme Court of New South Wales.

16    Mr Dimitriou sought a further adjournment when the creditor’s petition was next before the Court on 14 December 2018. He was represented by a solicitor on that occasion. The adjournment application was refused and the hearing proceeded. Judgment was reserved.

17    The events that occurred after judgment was reserved are summarised later in these reasons. It suffices at this point to note that Mr Dimitriou was eventually granted leave to re-open his case and to file a further amended notice of opposition. The grounds particularised in the further amended notice of opposition, which was filed on 20 June 2019, will be detailed later in these reasons. It suffices at this point to make the following observations.

18    First, the further amended notice of opposition included a ground which corresponded or coincided with the second ground in the amended notice of appeal: that the bankruptcy notice was invalid because the orders which were attached to it did not identify Mr Dimitriou as one of the parties. It was not contended that the orders, or a sealed copy of the orders, was not attached when the bankruptcy notice was issued.

19    Second, the further amended notice included the ground that Mr Dimitriou was able to pay his debts.

20    Third, the further amended notice again included a ground under s 52(2)(b) of the Bankruptcy Act. The particulars of the “sufficient cause”, however, were new and differed markedly from what had been advanced at the hearing on 14 December 2018. The contention that the Court should go behind the judgment of White J appeared to be abandoned, as did the contention that Mr Dimitriou was only suffering a temporary lack of liquidity. The new particulars, which will be explained in detail later, concerned the fact that Pineview held the judgment debt on trust and that the beneficiaries wished to have it transferred to them.

GROUND ONE: MR DIMITRIOU’S ABILITY TO PAY HIS DEBTS

21    Despite this ground being included in the amended notice of opposition, at the hearing on 14 December 2018, Mr Dimitriou appeared to abandon his contention that he was able to pay his debts. No such submission was advanced. The only submission that was advanced was that Mr Dimitriou was suffering a temporary lack of liquidity and that he should be given further time in which to remedy that situation by recovering debts that he claimed were due to companies in which he had an interest. That claim is dealt with in the context of ground three.

22    Even putting the apparent abandonment of this claim to one side, Mr Dimitriou did not adduce any evidence that was capable of making good the proposition that he was able to pay his debts as at the date of the hearing on 14 December 2018.

23    The question whether Mr Dimitriou proved that he was able to pay his debts as at the date of the further hearing on 21 August 2019 is addressed later.

GROUND TWO: VALIDITY OF THE bankruptcy notice

24    It may readily be accepted that a bankruptcy notice which does not attach a final judgment or order fails to meet an essential requirement of the Bankruptcy Act. The two contentious issues are: first, whether the bankruptcy notice served on Mr Dimitriou did not meet that requirement because the orders which were attached to the notice did not specifically refer to Mr Dimitriou by name; and second, if it did meet that requirement, whether it was nevertheless a nullity because it had the capacity to mislead Mr Dimitriou as the debtor named in the notice.

25    Section 41(2) of the Bankruptcy Act provides that a bankruptcy notice must be a notice in the form prescribed by the Bankruptcy Regulations 1996 (Cth). Regulation 4.02(1) of the Regulations provides that the form of bankruptcy notice set out in Form 1 is prescribed for the purposes of s 41(2) of the Bankruptcy Act. The part of Form 1 which describes the debt claimed to be owed by the debtor includes the words “as per the attached final judgment/s or final order/s”.

26    In Curtis v Singtel Optus Pty Ltd [2014] FCAFC 144; 225 FCR 458, it was held (at [29]) that the effect of s 41(2) of the Bankruptcy Act and reg 4.02(2) of the Regulations was to require a copy of the final judgment or order to be attached to the bankruptcy notice at the time of issue. The debtor in Curtis claimed that judgment or order was not attached to the bankruptcy notice. That bankruptcy notice had been issued electronically and the debtor raised the rather esoteric argument that attaching separate “pdf” copies of the bankruptcy notice and the judgment or order did not satisfy the requirement that the judgment be attached to the notice. The Full Court rejected that argument. The Full Court indicated that it would in any event have been satisfied that there had been substantial compliance with the requirement within reg 4.02(3) of the Regulations.

27    Mr Dimitriou appeared at certain points during his submissions to suggest that the orders made by White J were not attached to the bankruptcy notice when issued by the Official Receiver and that Curtis was wrongly decided. Ultimately, however, Mr Dimitriou did not adduce any evidence to substantiate any such submission and appeared to abandon it. The main argument was that the orders that were attached to the bankruptcy notice did not satisfy the essential requirement that the orders or judgment be attached to the notice because the orders made by White J did not specifically refer to him by name. The orders simply referred to judgment being entered against the third, fourth and fifth cross-defendants in the sum of $1,276,389.29.

28    The difficulty with that argument, however, is that there is nothing in the Act, the Regulations or Form 1 which specifically mandates that the attached judgment or order must refer to the debtor by name. The apparent purpose of requiring a copy of the relevant judgment or order to be attached is to identify for the debtor the judgment or order upon which the notice is founded: American Express International Inc v Held (1999) 87 FCR 583 at [14]. That purpose is achieved if the judgment or order upon which the notice is founded is attached, even if that judgment or order does not refer to the debtor by name.

29    The more difficult question is whether a bankruptcy notice which attaches an order which does not specifically refer to the debtor by name is a substantial defect because it could reasonably mislead the debtor as to what is necessary in order to comply with the notice: Kleinwort Bensen Australia Limited v Crowl (1987-88) 165 CLR 71 at 79. In such a case, the notice is a nullity whether or not the debtor is in fact misled: Kleinwort at 80.

30    It is permissible, in determining whether a debtor could reasonably be misled by a bankruptcy notice, to have regard to facts extraneous to the notice itself: Re Wimborne; Ex parte the Debtor (1979) 24 ALR 494 at 499. In that case, the question was whether the debtor could have been misled because the bankruptcy notice referred to the indebtedness arising from a High Court judgment the effect of which was to vary an earlier Supreme Court judgment. In considering that question, Lockhart J had regard to, amongst other things, the terms of the orders made in both the Supreme Court and the High Court and to the fact that the judgment debtors were represented by counsel at the hearings in both courts. His Honour concluded as follows (at 500):

I mention these matters because, in my opinion, they establish that the judgment debtors could not have been misled by the description of the final order in the bankruptcy notice being that of the High Court. They must have known that the order of the Supreme Court of New South Wales was varied by the High Court in the terms to which I have referred already.

It is clear from the cases to which I have referred that, although the courts draw a definite distinction between the possibility of the debtor being misled and the question whether he was misled in fact, the latter being an impermissible field of inquiry, it is the capacity of the bankruptcy notice to mislead the debtor to whom the notice is directed that matters, not some hypothetical debtor. Hence the relevance of the facts relating to the conduct of the proceedings in the Supreme Court of New South Wales and the High Court as gleaned from the orders of those courts and forming part of the evidence in this application.

31    In St George Wholesale Finance Pty Ltd v Spalla [2000] FCA 1094; 181 ALR 682, Heerey J described the principle that the Court could look at facts extraneous to the bankruptcy notice itself as being an “application of the modern rule that documents are to be construed in the light of the surrounding circumstances, that is to say the extrinsic facts, viewed objectively, which are within the knowledge of the parties” (at [35]). His Honour cited, in that context, the decision of the High Court in Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 at 347-352. The principle has been accepted and applied in numerous decisions of this Court: see Godfrey v Weriton Finance Pty Ltd [2013] FCA 1057; 221 FCR 363 at [64] and the cases there cited.

32    The extraneous facts or surrounding circumstances in this matter included that Mr Dimitriou and the companies associated with him were legally represented throughout the proceedings before White J. When his Honour made orders on 30 June 2016, he also published extensive reasons. Those reasons clearly identified Mr Dimitriou as the first cross-defendant on the second cross-claim and the third cross-defendant on the third cross-claim. The reasons also clearly explained the nature of Pineview and the other cross-claimants’ cross-claim against Mr Dimitriou and the companies associated with him, the basis upon which his Honour found Mr Dimitriou and the companies liable, and the calculation of the amount that was the subject of the relevant order: see Rubino v Pineview at [20]-[21]; [258]–[376].

33    Between the date that the orders were made by White J and the bankruptcy notice was issued, Mr Dimitriou and the Wyse companies took numerous steps with a view to appealing the orders and having them stayed until the appeal was determined. Mr Dimitriou and the Wyse companies filed a notice of intention to appeal on 28 July 2016 and an amended notice of appeal on 10 November 2016. They also filed a notice of motion seeking a stay of the orders on 27 November 2016. A conditional stay was granted by Brereton J on 9 December 2016, though it appears that Mr Dimitriou did not satisfy the condition. Mr Dimitriou and the Wyse companies’ appeal was dismissed on 3 July 2017 through self-executing orders made by Beazley P on 5 June 2017. An application filed by Mr Dimitriou to extend time for compliance with the orders made by Beazley P was dismissed by Meagher JA on 10 October 2017. Mr Dimitriou and the Wyse companies’ application to set aside that decision was dismissed on 26 March 2018. An application by Mr Dimitriou alone for a stay of enforcement of the judgment of White J was dismissed by Parker J on 19 March 2018.

34    It is somewhat doubtful, even in the absence of those extraneous facts or surrounding circumstances, that the fact that the orders attached to the bankruptcy notice issued to Mr Dimitriou could reasonably have misled Mr Dimitriou as to what was necessary to comply with the notice. The notice clearly indicated to Mr Dimitriou that to comply with the notice he was required to pay Pineview $1,276,389.29 (or make an arrangement to Pineview’s satisfaction for settlement of that debt) and attached the orders that gave rise to that indebtedness. The fact that the orders did not specifically refer to Mr Dimitriou by name was unlikely to have misled him as to what he was required to do to comply with the notice. Having regard to the extraneous facts and surrounding circumstances, there could be no doubt whatsoever that the bankruptcy notice was not capable of misleading Mr Dimitriou or a debtor in his position. There could be no doubt whatsoever that Mr Dimitriou, or any debtor in his position, would most likely have been aware, or reasonably have been able to work out, that Mr Dimitriou was the third cross-defendant referred to in the orders against whom Pineview had obtained judgment for $1,276,389.29.

35    It follows that Mr Dimitriou’s contention that the fact that the bankruptcy notice attached orders which did not specifically refer to him by name did not constitute a substantial defect. The bankruptcy notice as issued did not fail to meet any requirement made essential by the Bankruptcy Act and was not reasonably capable of misleading Mr Dimitriou.

ground tHREE: sufficient cause why a sequestration order ought not be made?

36    The submissions which were advanced on Mr Dimitriou’s behalf at the hearing on 14 December 2018 were that a sequestration order should not be made for two reasons.

37    First, it was contended that Mr Dimitriou was not indebted to Pineview for the amount referred to in the bankruptcy notice. That was said to be because he had a counter-claim, set-off or cross-demand against Pineview which exceeded the judgment debt by $18,895.38.

38    Second, it was claimed that Mr Dimitriou’s position, as at the date of the 14 December 2018 hearing, was one of “temporary lack of liquidity” and that he was likely in the near future to obtain the benefit of various positive judgments in his favour.

39    As was noted earlier, the further amended notice of opposition, which was filed in June 2019, appeared to abandon both of those contentions and to raise a new contention based on the fact that Pineview was said to hold the judgment debt on trust. That new contention will be addressed later in these reasons. For more abundant caution the original contentions or arguments in relation to this ground should be addressed despite the fact that they appeared to be abandoned in the further amended notice of contention.

Is Mr Dimitriou indebted to Pineview for the amount in the notice?

40    Before addressing this question, it is necessary to deal with two procedural issues that arose at the hearing on 14 December 2018.

Procedural issues

41    The first issue was whether Mr Dimitriou ought be permitted to raise this objection at all because it was not properly particularised in his amended notice of grounds of opposition to the creditor’s petition.

42    Mr Dimitriou was not legally represented when he filed his initial notice of opposition. By the time the creditor’s petition came on for hearing, Mr Dimitriou had managed to secure legal representation by counsel who was apparently experienced in the law of bankruptcy. He secured an adjournment of the hearing to enable him to file an amended notice of opposition, settled by counsel, and to file further evidence. The amended notice of opposition that was filed by leave deleted a number of the original grounds of opposition. The grounds which were deleted included that Mr Dimitriou had a “counter-claim, set-off and cross-demand that is greater than the sum claimed in the Bankruptcy notice” (ground 3 in the original notice), that Mr Dimitriou did not “owe the money claimed by the creditor” (ground 6(c) in the original notice), that there were “substantial reasons for the Court to go behind the judgment” (ground 6(d) in the original notice) and that Mr Dimitriou had a “genuine and arguable claim against the creditor for an equivalent amount of the debt” (ground 6(e) in the original notice).

43    Thus, Mr Dimitriou appeared to have abandoned any claim, in opposition to the creditor’s petition, that he was not indebted to Pineview, or that he had a counter-claim, set-off or cross-demand against Pineview, or that there were substantial reasons to go behind the judgment. The written submissions filed on Mr Dimitriou’s behalf only obliquely referred to Mr Dimitriou’s apparent contention that he did not owe Pineview anything because of certain “offsets” he had against Pineview. The written submissions did not directly identify this contention as being the basis for the claim that there was a sufficient cause for the Court to refuse to make a sequestration order. It was only towards the very conclusion of the oral submissions made on Mr Dimitriou’s behalf that the claim that the Court should go behind the judgment and consider Mr Dimitriou’s claim that he was not indebted to Pineview resurfaced.

44    Pineview objected to Mr Dimitriou being permitted to raise this argument in the circumstances. It was submitted, in that context, that Pineview had proceeded on the basis that Mr Dimitriou’s only objections to the creditor’s petition were that the bankruptcy notice was a nullity and that Mr Dimitriou was only suffering from temporary liquidity. It only became apparent to Pineview that Mr Dimitriou was pursuing an objection based on the allegation that he had set-off claims towards the very end of Mr Dimitriou’s submissions, after forensic decisions had been made concerning objections to evidence and cross-examination. Pineview submitted that the course taken by Mr Dimitriou was unfair and had caused it prejudice.

45    There was considerable merit in Pineview’s contention concerning the unfair manner in which Mr Dimitriou pursued this particular objection to the creditor’s petition. It may fairly be accepted that Pineview’s failure to object to parts of Mr Dimitriou’s evidence and the decision not to cross-examine Mr Dimitriou was at least in part conditioned by the fact that Pineview was proceeding on the basis that Mr Dimitriou was not pursuing any claim that the Court should go behind the judgment because Mr Dimitriou had set-off claims against Pineview.

46    In all the circumstances, however, it would be unfortunate for this aspect of the matter to be determined on the basis of a procedural issue. That is all the more so given that, subject to any issues arising from the fact that Mr Dimitriou was not cross-examined, Pineview was able to adequately respond to the arguments advanced by Mr Dimitriou in relation to this objection. The preferable course, in all the circumstances, was to permit Mr Dimitriou to advance this objection, but only on the basis that his evidence concerning the existence of relevant set-off claims was not to be taken to be unchallenged or conceded by Pineview. As will be seen, for the most part, Mr Dimitriou’s evidence concerning his set-off claims consisted of bare assertions or conclusions. That evidence will be approached on the basis that Pineview had essentially put to Mr Dimitriou that those assertions were not true, or that there was no basis for them, and that he maintained that they were true and there was a basis for them.

47    The second procedural point concerned the documentary evidence that Mr Dimitriou sought to rely on. Mr Dimitriou’s affidavits purported to introduce as documentary exhibits a very large number of documents contained in four lever-arch folders. Most of the exhibited documents were not referred to or identified in the body of the affidavits and the exhibit was not appropriately indexed. The provenance and relevance of most of the exhibited material was by no means apparent or self-explanatory. The exhibit was provisionally admitted into evidence on the basis that only those documents which were specifically identified and the relevance of which was explained in the course of submissions would be admitted into evidence.

48    As events transpired, Mr Dimitriou only took the Court to a few documents. Some of those documents were affidavits that Mr Dimitriou had sworn for the purposes of, or filed in, proceedings in other courts. Those affidavits were only admitted into evidence on the strictly limited basis that they were evidence that Mr Dimitriou had relied on those affidavits in other proceedings and were not evidence of the truth of their contents. Had Mr Dimitriou wanted to rely on any of the facts deposed to in those other affidavits, he should have deposed to those facts in the affidavit or affidavits he swore for the purpose of this proceeding. It was oppressive and unfair of him to simply exhibit those affidavits to the affidavits sworn in this proceeding, particularly given that the other affidavits also annexed many documents.

Relevant principles – Going behind a judgment

49    The existence of a judgment is prima facie evidence of a debt: Corney v Brien (1951) 84 CLR 343 at 355. A judgment is, however, never conclusive evidence of a debt in bankruptcy proceedings and the Court may “go behind” the judgment to investigate whether there was a good debt to support it: Corney at 347. In Wren v Mahoney (1972) 126 CLR 212, Barwick CJ (with whom Windeyer and Owen JJ agreed) said (at 224):

The judgment is never conclusive in bankruptcy. It does not always represent itself as the relevant debt of the petitioning creditor, even though under the general law, the prior existing debt has merged in a judgment. But the Bankruptcy Court may accept the judgment as satisfactory proof of the petitioning creditor’s debt. In that sense that court has a discretion. It may or may not so accept the judgment. But it has been made quite clear by the decisions of the past that where reason is shown for questioning whether behind the judgment or as it is said, as the consideration for it, there was in truth and reality a debt due to the petitioning creditor, the Court of Bankruptcy can no longer accept the judgment as such satisfactory proof. It must then exercise its power, or if you will, its discretion to look at what is behind the judgment: to what is its consideration.

50    In Ramsay Health Care Australia Pty Limited v Compton [2017] HCA 28; 261 CLR 132, Kiefel CJ, Keane and Nettle JJ (at [43]), with whom Edelman J relevantly agreed (at [97], [110]), made it clear that this statement should not be given the “artificially narrow application” that the appellant in that case urged, which was that the bankruptcy court’s discretion to go behind a judgment after a contested hearing was enlivened only in the event of some fraud, collusion or miscarriage of justice. Rather, the categories in which the court will inquire into the validity of the judgment debt are not closed or constrained to any fixed categories. The discretion to go behind the judgment will be enlivened whenever there are “substantial reasons … for questioning whether behind [the] judgment there was in truth and reality a debt due to the petitioner”: Wren at 225 (per Barwick CJ); referred to with approval in Ramsay at [65] (per Kiefel CJ, Keane and Nettle JJ) and [110] (per Edelman J).

Are there substantial reasons for questioning whether the debt is owing?

51    Mr Dimitriou argued that his case was similar to the respondent’s case in Ramsay. In Ramsay, the appellant commenced proceedings against the respondent in the Supreme Court of New South Wales claiming money that was said to be owing under a guarantee. The appellant’s statement of claim put the quantum of the respondent’s indebtedness in issue, however the respondent raised only a non est factum defence and did not put quantum in issue. That defence was unsuccessful and judgment was entered against the respondent for an amount which had been certified by the appellant pursuant to a clause in the guarantee. The respondent failed to comply with a bankruptcy notice based on the judgment and the appellant subsequently presented a creditor’s petition.

52    The respondent in Ramsay opposed the creditor’s petition on the basis that there was no debt owing and filed an interim application seeking an order that there be a separate determination of whether the court should exercise its discretion to go behind the judgment to investigate the debt on which the creditor’s petition was based. At the hearing of that application, the respondent produced a “reconciliation” which he contended showed that the appellant in fact owed money to the company whose indebtedness was guaranteed by the respondent. The reconciliation was supported by evidence. There was also evidence from one of the liquidators of the company whose debt was guaranteed by the respondent to the effect that it was more likely that the appellant was indebted to that company than vice versa. Counsel for the appellant conceded before the primary judge that there was enough evidence to show that there was a matter that upon further inquiry might lead to a different result.

53    The primary judge in Ramsay dismissed the interim application and held that he had no discretion to go behind the judgment. That decision was overturned by the Full Court and the appellant’s appeal to the High Court was dismissed. The plurality in the High Court (Kiefel CJ, Keane and Nettle JJ) upheld the Full Court’s finding that there was a substantial question as to whether the debt on which the appellant relied was owing. Two considerations appeared to be significant to their Honours in arriving at that conclusion. The first was that the unexplained failure of the respondent’s legal representatives to present the respondent’s case on its merits gave rise to a concern that this was not a judgment which was “the outcome of the rigorous processes of adversarial litigation” (at [70]-[71]). The second was that there was evidence before the primary judge “which, while it remained uncontradicted, was apt to suggest that the debt was not truly owing” (at [71]).

54    The difficulty for Mr Dimitriou is that the facts and circumstances in Ramsay are far removed from the facts and circumstances of this case. That is so for at least three reasons: first, Mr Dimitriou did not adduce any cogent or reliable evidence to suggest that the judgment upon which the bankruptcy notice and creditor’s petition was based was not the outcome of the rigorous processes of adversarial litigation; second, Mr Dimitriou did not adduce any cogent or reliable evidence which was apt to suggest that the debt is not truly owing; and third, counsel for Pineview did not concede that there was enough evidence to show that there was any matter which upon further inquiry might lead to a different result.

55    In his affidavit filed in support of his notice of opposition, Mr Dimitriou simply asserted that he had a counter-claim, set-off or cross-demand in an amount which exceeded the amount claimed in the bankruptcy notice and creditor’s petition. No details of that counter-claim, set-off or cross-demand were provided in the body of the affidavit. Mr Dimitriou also asserted that the counter-claim or set-off was not raised in the proceedings before White J. He did not, however, explain why that was so. Perhaps more significantly, this bare assertion was contradicted by assertions contained in another affidavit sworn by Mr Dimitriou, and by submissions which were made on his behalf, the effect of which was to concede that the set-off claims were raised before White J, but were not “fully argued” or “fully considered”.

56    As has already been adverted to, Mr Dimitriou’s affidavit purported to exhibit a large bundle of documents which filled four lever-arch folders. That bundle was not appropriately indexed or paginated and included affidavits apparently sworn for the purposes of other proceedings which also annexed or exhibited documents. For the reasons already given, only those documents within that bundle that the Court was individually and specifically taken to were admitted into evidence and, to the extent that those documents comprised affidavits filed in other proceedings, those affidavits were admitted only as evidence of what Mr Dimitriou had asserted in those proceedings, not as evidence of the truth of their contents.

57    The documents in the exhibit that the Court was taken to showed that Mr Dimitriou had made assertions about the existence of set-off claims against Ms Huybers in other proceedings, most notably proceedings in the Federal Circuit Court of Australia, and that he had prepared various schedules and spreadsheets to that end. Some documents that were said to be source documents for the schedules were also annexed to the affidavits, though the affidavits did not themselves provide any, or any adequate, explanation of the schedules or their contents, or any adequate description or narrative of the underlying documents. Perhaps more significantly, the affidavits did not provide any proper factual basis for the assertion that the items referred to in the schedules or spreadsheets were payments or transactions which were properly credited to Mr Dimitriou, or properly set-off against any debt owed by Mr Dimitriou to Pineview.

58    As has already been noted, Mr Dimitriou’s amended notice of opposition deleted those paragraphs of the original notice of opposition that referred to him not being indebted to Pineview, or having a cross-claim against Pineview which exceeded the amount of the judgment debt. Shortly prior to the hearing, however, Mr Dimitriou filed an interlocutory application seeking an adjournment of the hearing. That application was supported by another affidavit sworn by him. The adjournment application was refused, however, Mr Dimitriou was granted leave, ultimately without opposition, to read certain paragraphs of that affidavit in support of his opposition to the creditor’s petition. In one of those paragraphs, Mr Dimitriou asserted that the “balance of that claim [the third cross-claim in the proceedings before White J] was not fully considered in the decision of Justice White” and that “on balance of account, I am in fact a creditor of Pineview …and that Pineview is indebted to me in the sum of $18,895.38”.

59    Mr Dimitriou also annexed to his affidavit sworn on 14 December 2018 three detailed schedules or spreadsheets: one headed “Rubino Group & Pineview Group & Susan Huybers Group Reconciliation period from May 2010 to August 2012”; one headed “Susan Huybers Disbursement as at 22 January 2016”; and one headed “Wyse Accounting Pty Ltd Account Transactions [Accrual]”. The schedules and spreadsheets were by no means self-explanatory, and yet Mr Dimitriou’s affidavit contained no, or no satisfactory, explanation of exactly what the schedules or spreadsheets depicted, or purported to depict, and no satisfactory explanation of the provenance of the information contained in them. It would appear that those were the same schedules that had been relied on in the proceedings in the Circuit Court, though as noted earlier, the explanations given in the affidavits filed in those proceedings were also by no means satisfactory, let alone cogent. The calculations in the schedules did not appear to marry up in any comprehensible way to the assertions contained in Mr Dimitriou’s affidavit.

60    Two further important points should be made concerning the schedules or spreadsheets upon which Mr Dimitriou apparently relied.

61    First, the schedules or spreadsheets do not distinguish between payments or amounts that it was said should be set-off against the judgment in favour of Pineview, as opposed to payments or amounts that might properly be set-off against the judgment in favour of Ms Huybers. Indeed, the majority of the entries in the schedules appear to relate to payments made to, or for the benefit of, Ms Huybers. The basis upon which it might be contended that those amounts were able to be set-off against Mr Dimitriou’s liability to Pineview was not explained.

62    Second, the schedules do not indicate which of the payments or transactions were the subject of consideration and determination in the proceedings before White J. As will be seen, it is abundantly clear that in the proceedings before White J, Mr Dimitriou contended that certain payments which had been made to, or for the benefit of, Pineview and Ms Huybers should be set-off against any amounts for which he was held liable to those parties. So much so was conceded on Mr Dimitriou’s behalf in this proceeding. It was, however, asserted that Mr Dimitriou’s set-off or counter-claim against Pineview and Ms Huybers was not fully raised before White J. Putting aside, for present purposes, the fact that the basis of that assertion was never provided or explained, the difficulty with the schedules or spreadsheets relied on by Mr Dimitriou is that they do not identify which, if any, of the payments or transactions depicted in them were not raised in the proceedings before White J.

63    In summary, on just about any view, the evidence relied on by Mr Dimitriou in these proceedings concerning the existence of a set-off or cross-claim against Pineview was unsatisfactory and inadequate. For the most part, it consisted of little more than bare assertion. To the extent that the schedules or spreadsheets rose above bare assertion, they were confusing, not properly explained and not appropriately supported or verified by admissible, let alone cogent or comprehendible, evidence.

64    The assertions in Mr Dimitriou’s affidavit and the documentary exhibits must also be considered in light of White J’s reasons for judgment and the events that followed the handing down of that judgment.

65    White J’s reasons for judgment were, to say the very least, detailed and comprehensive. His Honour dealt with Pineview’s cross-claim against Mr Dimitriou at [258] to [306]. Pineview claimed the sum, which is referred to in the reasons as “$2,000,820 (sic) plus interest” from Mr Dimitriou and companies associated with him. The claim properly appeared to be for $2,000,720 (see Rubino v Pineview at [8]) which, in simple terms, represented the loan funds that Mr Dimitriou had secured on behalf of Pineview. Justice White found that Mr Dimitriou was liable to Pineview because he disbursed the proceeds of the loan in breach of his fiduciary duty (see [261] – [263]), had committed the tort of deceit (see [264]) and was liable for damages for unconscionable conduct in contravention of s 20 of the Australian Consumer Law (see [265]). His Honour found that Pineview was entitled to judgment against Mr Dimitriou and the two companies associated with him for the monies received by them “except insofar as the moneys were applied to meet the liabilities of Pineview” (see [273]).

66    Importantly, at [287] to [300], White J dealt at considerable length with claims by Mr Dimitriou and the companies associated with him that Pineview was required to give credit for numerous payments that were supposedly made for or on its behalf. His Honour found that Mr Dimitriou was entitled to a credit in respect of a number of payments. The judgment amount of $1,276,389.29 was arrived at by deducting those payments for which Mr Dimitriou was entitled to a credit from the total moneys that Mr Dimitriou and the companies associated with him received from the bank.

67    It should also be noted in this context that White J also found that Mr Dimitriou and the companies associated with him were also liable to indemnify Ms Huybers against her liability to the bank under the guarantee she gave in respect of the loan to Pineview (see [309]). His Honour also dealt at length with claims that Mr Dimitriou and the companies associated with him made in respect of payments that were said to have been made for the benefit of Ms Huybers (see [315] – [375]). His Honour annexed to the reasons a schedule entitled “Susan Huybers reconciliation as at 14 June 2016” which depicted Mr Dimitriou’s set-off claims against Ms Huybers.

68    It is thus abundantly clear that White J considered and made detailed findings about Mr Dimitriou’s set-off claims against Pineview and Ms Huybers. There is nothing in the judgment to suggest that Mr Dimitriou was prevented or inhibited in any way from adducing evidence and presenting arguments in support of his set-off claims against both Pineview and Ms Huybers. That is completely at odds with Mr Dimitriou’s bare assertion, in the affidavits filed in this proceeding, that his supposed cross-claim or set-off against Pineview and Ms Huybers was either not raised in the proceedings before White J at all, or was not “fully considered” in White J’s judgment.

69    As was noted earlier, Mr Dimitriou filed an appeal against the orders and judgment of White J. His amended notice of appeal contained 192 grounds. Significantly, only one of those 192 grounds concerned White J’s findings concerning Mr Dimitriou’s set-off claims. That ground, ground 187, appeared to assert no more than that White J erred in not accepting all of the claimed set-off amounts. It was not contended that Mr Dimitriou was prevented or inhibited in any way from adducing evidence or advancing arguments in support of his set-off claims.

70    In any event, as also noted earlier, Mr Dimitriou’s appeal was dismissed because he did not comply with orders made in relation to the conduct of the appeal. His attempt to effectively reverse that dismissal was rejected by Meagher JA. In the course of considering Mr Dimitriou’s application, Meagher JA considered Mr Dimitriou’s grounds of appeal and the submissions that he had made in support of them. That included Mr Dimitriou’s grounds of appeal concerning the findings made by White J in relation to Mr Dimitriou’s set-off claims. His Honour concluded that Mr Dimitriou’s grounds of appeal had no realistic prospects of success: Dimitriou v Huybers [2017] NSWCA 262 at [56]. Mr Dimitriou’s application for review of the decision of Meagher JA was dismissed: Dimitriou v Huybers (No 2) [2018] NSWCA 62.

71    It should also be noted that Meagher JA acknowledged that it would be open to Mr Dimitriou to apply for an extension of time to commence fresh appeal proceedings. There is no evidence to suggest that Mr Dimitriou has sought an extension of time to commence fresh appeal proceedings.

72    Mr Dimitriou made another attempt to re-agitate his set-off claims or cross-claim against Pineview in an application to stay White J’s judgment. That application was heard by Parker J in the Supreme Court of New South Wales on 6 March 2018. His Honour rejected the application: Rubino v Pineview Properties Pty Ltd (No 6) [2018] NSWSC 340. Parker J dealt with Mr Dimitriou’s assertions in relation to his set-off claims as follows (at [22]):

Mr Dimitriou also asserted that there were liabilities on the part of Ms Huybers or Pineview which should be set off against the judgment liabilities. In determining the quantum of the judgments, White J considered a number of items of set-off or allowance. Some he accepted and some he did not. It was not clear to me from Mr Dimitriou’s submissions whether the liabilities to which he referred in the application before me were ones which had been considered by White J and rejected, or whether they arose separately. It was not even clear which judgments they should allegedly have been set off against. Either way, I do not think these submissions advance Mr Dimitriou’s position. To the extent that the claimed set-offs had been rejected by White J, Mr Dimitriou needed to identify, as a first step, arguable grounds of appeal against his Honour’s decision, and then to identify relevant grounds of appeal and submissions which it could be said had been erroneously discounted by Meagher JA. Mr Dimitriou did not do this. To the extent that the alleged liabilities arose separately from the matters considered by White J, they fall outside the scope of these proceedings and the appeal. The proper approach would have been for Mr Dimitriou to commence substantive proceedings in an appropriate court with a view to obtaining a judgment which could be used as a basis for set off (see Civil Procedure Act 2005 (NSW), ss 21 and 22) or at least a stay of execution pending determination of the proceedings. No such independent proceedings appear to have been brought.

73    There is no evidence to suggest that Mr Dimitriou has taken up Parker J’s suggestion to commence “independent proceedings” in an appropriate court in respect of any set-off claims that were not fully litigated before White J.

74    As discussed later, Mr Dimitriou did, subsequent to the hearing on 14 December 2018, commence separate proceedings in this Court against Pineview and other parties. It also appears that Mr Dimitriou subsequently commenced, or at least intended to commence, proceedings in the Supreme Court which essentially mirrored the separate proceedings commenced in this Court. It suffices at this point to note that those separate proceedings appear to raise an entirely different set-off argument to the argument which was raised in opposition to the creditor’s petition at the hearing on 14 December 2018.

75    That was not the end of Mr Dimitriou’s attempts to stay the judgment of White J. On 13 December 2014, the day prior to the hearing of Pineview’s creditor’s petition, Mr Dimitriou filed yet another notice of motion in the Supreme Court seeking, amongst other things, an order that the orders made against him by White J be stayed. The basis of that application appears again to be that “upon the balance of account” of the claims as between Mr Dimitriou, Pineview and Ms Huybers, or on the basis of what is said to be a claim which Mr Dimitriou has “by way of equitable set-off”, Pineview is in fact indebted to Mr Dimitriou in an amount of $18,895.38. The affidavit filed in support of this affidavit, which is another affidavit sworn by Mr Dimitriou, effectively simply annexed the schedules or spreadsheets referred to earlier. The application had obviously not been heard as at the date of the 14 December 2018 hearing.

76    In the submissions made on Mr Dimitriou’s behalf in this proceeding, it was conceded that Mr Dimitriou had raised the set-off claim in the proceedings before White J, or at least that “there were certainly aspects of the set-off claim that were run and considered”. It was submitted, however, that “the whole of the set-off was not looked at”. There are a number of problems with that submission. First, and most significantly, to the extent that it was supported by any evidence, that evidence rose no higher than bare assertion by Mr Dimitriou. Second, no attempt was made to identify exactly what part or parts of the alleged set-off claim were not raised before White J. That was similar to the problem identified by Parker J. Third, even if some aspects of the set-off claim were not raised before White J, no explanation, and certainly no adequate or satisfactory explanation, was given for why that was so.

77    In his submissions, Mr Dimitriou relied on the fact that he was not cross-examined on his affidavit, in particular in relation to his assertion that he has a set-off or cross-claim that exceeded the amount claimed in the bankruptcy notice and creditor’s petition and that that claim was not raised in the proceedings before White J. He was also not cross-examined on his affidavit evidence that Pineview in fact owed him $18,895.38. As indicated earlier, the fact that Mr Dimitriou was not cross-examined may be explained by the fact that Mr Dimitriou had amended his notice of opposition in a way which suggested that he did not intend to raise any opposition based on the existence of a cross-claim or set-off. Pineview claimed that there it had not challenged that assertion by Mr Dimitriou because the set-off claim had been abandoned by Mr Dimitriou in the amended notice of opposition. That claim only resurfaced at the very end of his submissions in the context of the otherwise unparticularised claim that there was “other sufficient cause” why a sequestration should not be made. The failure to cross-examine should not, in those circumstances, be taken to be a concession by Pineview that Mr Dimitriou’s evidence about those matters should be accepted as being unchallenged or undisputed.

78    Even putting that consideration to one side, the fact remains that Mr Dimitriou’s evidence rose no higher than bare assertion and was deserving of little weight. It was tolerably clear that Pineview’s position was that the set-off claims had been fully litigated before White J and that Mr Dimitriou’s bare assertion to the contrary was disputed and deserving of no weight. The absence of cross-examination should be considered in that context.

79    In all the circumstances, Mr Dimitriou failed to demonstrate that there were “substantial reasons” for questioning whether behind the judgment of White J there was in truth and reality a debt due to Pineview. The evidence adduced by Mr Dimitriou did not reliably or persuasively demonstrate that his claimed set-off was not fully litigated before White J or that there was any failure on his part to “present his … case on its merits in the litigation that led to the judgment”: cf. Ramsey at [70]. The evidence adduced by Mr Dimitriou on that issue did not rise beyond bare assertion. He did not even attempt to explain what parts of his claim were not raised before White J and why or in what circumstances they were not raised. The judgment of White J comprehensively dealt with all of the claims advanced by Mr Dimitriou concerning payments that he alleged had been made to, or on behalf of, Pineview and which therefore should be set-off against the amount that his Honour otherwise found that Mr Dimitriou was liable to Pineview. There is nothing in the judgment itself which suggests that Mr Dimitriou was not given every opportunity to adduce whatever evidence he chose to adduce and advance whatever arguments he wanted to advance in respect of the alleged set-off claims.

80    Even if Mr Dimitriou’s bare assertion that his set-off claims were not fully considered by White J was to be accepted, he nevertheless did not adduce any, or any satisfactory or comprehendible evidence concerning the nature or details of his claims that were not considered by White J. All he did was assert the quantum of that claim and tender schedules or spreadsheets that were neither self-explanatory nor properly supported or verified by admissible, let alone cogent, evidence. The schedules did not appropriately delineate between payments or transactions that were raised before White J and those that were supposedly not, or delineate between payments or transactions that were said to provide a set-off against amounts payable to Pineview, as opposed to Ms Huybers. In all the circumstances, the evidence was not “apt to suggest that the debt was not truly owing”: cf. Ramsey at [71]. Nor was there any concession by Pineview that the evidence adduced by Mr Dimitriou was sufficient to show a matter that upon further inquiry might lead to a different result: cf. Ramsay at [19].

81    Justice White’s judgment was handed down over two years ago. In the lengthy period since the judgment was handed down, Mr Dimitriou has unsuccessfully sought to appeal the judgment and unsuccessfully sought to stay its execution. It is readily apparent that in the course of so doing, Mr Dimitriou has been unable to articulate any arguable appeal ground in relation to White J’s findings concerning the set-off claims advanced by Mr Dimitriou in that proceeding. Nor has he been able to adequately articulate any arguable claims of set-off against Pineview that were not raised in the proceeding before White J, let alone adduce any acceptable evidence of any such claims.

82    Finally, it should be reiterated that the manner in which Mr Dimitriou sought to raise this ground of opposition to the creditor’s petition was most unacceptable. He initially included in his notice of opposition the contention that there were substantial reasons to go behind the judgment and the contention that he had a genuine and arguable claim against Pineview. His notice of opposition was supported by an affidavit that did little more than make a series of broad and sweeping assertions and exhibit an amorphous mass of documents which for the most part remained unexplained. After securing the services of counsel, he then amended his notice of opposition to delete any express claim that the Court should go behind the judgment or any contention that he had a counter-claim or set-off claim against Pineview. After failing to secure an adjournment of the hearing of the creditor’s petition and his opposition to it, he then sought to re-agitate those claims, without appropriate notice to Pineview, under the guise of the broad and general ground that there was “other sufficient cause” why a sequestration order ought not be made. Even then, the submissions that were made on Mr Dimitriou’s behalf failed to satisfactorily articulate the precise nature of Mr Dimitriou’s counter-claim or set-off claim against Pineview, failed to delineate those parts of the counter-claim or set-off that were not litigated before White J, and failed to identify the evidence that was said to support those parts of the claims.

83    The unsatisfactory manner in which Mr Dimitriou pursued this aspect of his opposition to the creditor’s petition cast considerable doubt on the genuineness of his claims and considerable doubt on Mr Dimitriou’s assertion that there were any reasons, let alone substantial reasons, for questioning whether behind the judgment there was in truth and reality a debt due to Pineview.

84    I am, in all the circumstances, not persuaded or satisfied that Mr Dimitriou has demonstrated that this is an appropriate case for the Court to exercise its discretion to go behind the judgment of White J. This ground of opposition to the creditor’s petition is accordingly rejected.

Mr Dimitriou’s “temporary lack of liquidity” claim

85    Mr Dimitriou’s claim that a sequestration order should not be made because he was only suffering a temporary lack of liquidity and that he would soon obtain the fruits of other litigation may be dealt with in short terms.

86    It may be accepted that “in certain circumstances, but not in all circumstances, the fact that the debtor has pending before a court a legitimate claim to funds sufficient to satisfy the petitioning creditor’s debt will amount to “other sufficient cause” not to make a sequestration order”: Ling v Enrobook Pty Ltd (1997) 74 FCR 19 at 25A-B and the cases there cited. Where the Court is satisfied that “the debtor is well advanced with litigation likely to result in the debtor being in a position to pay his or her debts [that] may well provide a basis for a finding that there is a ‘sufficient cause’ for a sequestration order not to be made”: Ling at 26D. The authorities do not suggest, however, that “it is in the public interest to allow insolvent debtors to prosecute litigation generally”; rather they recognise only that “it is not in the public interest for a debtor to be forced into bankruptcy by reason of a state of insolvency likely to be of only short duration”: Ling at 26D-E.

87    Mr Dimitriou’s case that he was only suffering a temporary or short term lack of liquidity was based on his evidence concerning three cases which were said to be pending in the Supreme Court of New South Wales. Mr Dimitriou was not personally a party to any of those proceedings.

88    The following summary of the evidence concerning those three cases is based on the evidence as it was at the time of the hearing on 14 December 2018. As has already been noted, Mr Dimitriou was eventually granted leave to reopen his case. Mr Dimitriou was permitted to reopen his case in part because there had been some developments in one of the three cases. Mr Dimitriou also adduced some further evidence which bore on these cases, in particular evidence concerning the value of the properties which were said to secure the debts or alleged debts. That evidence will be considered later in the context of Mr Dimitriou’s further amended notice of opposition and the ground that he was able to pay his debts.

89    The first case involved litigation in the Supreme Court of New South Wales between Defined Property Investment Pty Limited and Mr Corrado Sanna. Mr Dimitriou’s evidence was that he was the sole director of Defined Property and that Wise Partners Pty Limited was its “parent” shareholder. Mr Dimitriou claimed that the litigation involved a debt of over $3 million that was owed by a company identified as DCL Constructions Pty Limited. That debt was guaranteed by Mr Sanna. At the time Mr Dimitriou swore his affidavits, the trial judge, Brereton J had reserved his judgment in the matter.

90    The second case involved litigation in the Supreme Court of New South Wales between Wise & Young Pty Limited and Mr Darren Culley. The litigation involved a claim by Wise and Young that Mr Culley was indebted to it for about $350,000 under a mortgage. According to Mr Dimitriou, Mr Culley had admitted that he was indebted to Wise and Young under the mortgage, but only in the sum of about $230,000. Aside from the quantum of the debt, the precise nature of the dispute in the litigation was unclear, though in his summary of the proceedings Mr Dimitriou referred to an application for summary judgment. Otherwise, the proceedings appeared to be at a fairly early stage.

91    The third case involved litigation in the Supreme Court of New South Wales between Wise & Young and parties referred to only as Furlong and Leishman. According to Mr Dimitriou, judgment in favour of Wise and Young had already been entered in the proceedings for just over $1 million and that, together with interest, the claim totalled almost $1.3 million as at December 2018. That judgment or its enforcement had, however, been stayed and the litigation was continuing.

92    The difficulty for Mr Dimitriou was that, putting aside his evidence concerning these three cases, he led no evidence whatsoever concerning his solvency. His claim that he was suffering “at worst … a temporary lack of liquidity” did not rise any higher than bare assertion.

93    As for the three cases, even if Mr Dimitriou’s short and optimistic summary of those cases was accepted, the difficulty for him was that it was entirely unclear when he might be expected to obtain the fruits of that litigation. Taking his evidence at its highest, it might perhaps have been open to find that companies associated with him had judgments entered in their favour, or might have judgments entered in their favour at some point in time in the near future. There was, however, no indication in the evidence of whether the defendants in those proceedings would or would be likely to appeal any such judgments, or whether the defendants had any assets which could be readily realised to meet the judgments against them, or against which the judgments could be enforced. Perhaps more significantly the judgments were all, or were all likely to be, in favour of companies associated with Mr Dimitriou, not Mr Dimitriou personally. There was no evidence of the financial state of those companies. It could not, in those circumstances, be inferred or concluded that Mr Dimitriou would ultimately be able to access the fruits of the litigation received by the companies so as to meet his personal debts.

94    Finally, it should be noted that Pineview obtained its judgment against Mr Dimitriou more than two years ago. Mr Dimitriou committed an act of bankruptcy by failing to comply with the bankruptcy notice and the creditor’s petition was filed over a year ago. Mr Dimitriou opposed the creditor’s petition, as he was entitled to do. Mr Dimitriou has, however, largely been responsible for the delays since the filing of his notice of opposition. He obtained an adjournment of the initial hearing of the creditor’s petition. Following the hearing of the creditor’s petition he has taken a number of steps which have had the effect of delaying the delivery of judgment in this matter. He has effectively already bought himself time.

95    I am not persuaded, in all the circumstances, that Mr Dimitriou’s expectation that he might in the near future obtain the fruits of various court actions amounts to a “sufficient cause” for a sequestration order not to be made against him. I am not satisfied that the limited evidence adduced by Mr Dimitriou bears out his assertion that he has only temporary liquidity problems. Nor am I satisfied that it is likely that Mr Dimitriou will personally receive sufficient funds in the near future from the ongoing cases in the Supreme Court of New South Wales such that he will be in a position to pay his debts. I am not persuaded that the possibility that Mr Dimitriou might at some stage in the future obtain some benefit from the litigation in which companies associated with him are currently involved warrants any further delay in the determination of Pineview’s creditor’s petition.

Mr Dimitriou’s INITIAL attempts to reopen his case AND delay the delivery of judgment

96    On 1 March 2019, Mr Dimitriou and two companies associated with him commenced separate proceedings in this Court (proceedings No. NSD 372 of 2019). The relief sought in the originating application included various declarations and orders. One of the declarations was in the following terms: “that the judgment in the proceedings 2013/00301976 [the judgment of White J handed down on 30 June 2016] is not a proper judgment for the purposes of bankruptcy of the Second Applicant [Mr Dimitriou] … and that if it is a judgment that the court is entitled to go behind”. One of the orders sought was in the following terms: “an Order setting off the whole amount of the quantum of the disbursed funds against the judgment of the Fourth Respondent [Pineview] obtained by it (and against each of the Applicants) in the Supreme Court proceedings 2013/00301976. The “disbursements” were the monies disbursed by Mr Dimitriou from the funds loaned by the ANZ bank to Pineview.

97    Mr Dimitriou also sought interlocutory relief in those separate proceedings. That interlocutory relief included an order in the following terms: “the delivery of judgment in bankruptcy proceedings NSD 1245 of 2018 [these proceedings] between the Second Applicant [Mr Dimitriou] and the Fourth Respondent [Pineview], and presently reserved before his Honour, be stayed pending the hearing and determination of this action”. Pineview filed an interlocutory application in the separate proceedings in which it sought an order that the proceedings be dismissed pursuant to r 26.01(1) of the Federal Court Rules 2011 (Cth) on the basis that they are frivolous and vexatious, that no reasonable cause of action was disclosed, and an abuse of process.

98    The interlocutory applications filed by Mr Dimitriou and Pineview in the separate proceedings were heard on 8 May 2019. The outcome of those applications is dealt with in a separate judgment. It is relevant to note, however, that in the course of submissions in support of his application, Mr Dimitriou made an oral application to reopen his case in this proceeding in opposition to Pineview’s creditor’s petition. Mr Dimitriou submitted that his purpose in reopening his case was so that he could apply to amend the notice of objection to make it plain that his case was that the Court should go behind the judgment and determine his set-off claims against Pineview. He also submitted that he wanted to set out his set-off claims in “much clearer detail”.

99    Mr Dimitriou’s application to reopen was dismissed. The main reason for dismissing the application was that Mr Dimitriou had been given ample opportunity to adduce evidence and present arguments in support of his opposition to Pineview’s creditor’s petition. As events transpired, he advanced a case which included that the Court should go behind the judgment to consider his set-off claims, albeit that those arguments were put in the context of the general ground that his set-off claims gave rise to a “sufficient cause” not to make a sequestration order.

100    Mr Dimitriou did not adduce any evidence in support of his application to reopen. He asserted from the bar table, however, that he only amended his original notice of opposition on the basis of advice received by his then counsel. He said that he was not happy about deleting the ground relating to going behind the judgment and always wanted to pursue that case. Those assertions, even if accepted, did not justify the reopening of his case. Mr Dimitriou had been permitted to advance his case concerning his set-off claims and his arguments in support of the Court exercising its discretion to go behind the judgment. Mr Dimitriou advanced no good reason for why he should be given more time to explain his set-off claims in greater detail.

101    On 3 June 2019, Mr Dimitriou attempted to file yet another interlocutory application in this matter. That interlocutory application relevantly sought an order that delivery of judgment in this matter be stayed “pending determination of the final claims for relief in this action”. It also sought an identical order in respect of the separate proceedings No. NSD 372 of 2019. It is not entirely clear what that means. The affidavit that Mr Dimitriou attempted to file in support of that application was yet another affidavit sworn by him. It would appear from that affidavit that Mr Dimitriou claimed that the judgment in this matter should not be handed down for three reasons: first, Brereton J was handing down judgment in the proceedings between Defined Property and Mr Sanna on 7 June 2019; second, Mr Dimitriou’s further application for a stay of enforcement of the judgment of White J had been listed for hearing before Henry J in the Supreme Court of New South Wales in August 2019; and third, Mr Dimitriou wanted to instigate settlement discussions.

102    Mr Dimitriou was directed to provide the Court with short written submissions which identified what, if any, new facts or considerations had arisen since the hearing and explained why his further interlocutory application should be accepted for filing. He was granted on his request an extension of time to file those written submissions. No written submissions were received. Instead, Mr Dimitriou notified my chambers that he had engaged new counsel and a new solicitor and sought a further extension of time to allow his new representatives time to prepare the submissions on his behalf. A short extension of time was granted to Mr Dimitriou for that to occur. Mr Dimitriou did not provide any submissions in accordance with the Court’s direction. Instead, the following day, my chambers received a communication from Mr Dimitriou’s new solicitors and counsel advising that an application would be made for leave to reopen Mr Dimitriou’s case and for leave to file a further amended notice of opposition.

LEAVE TO REOPEN AND THE FURTHER AMENDED NOTICE OF OPPOSITION

103    Mr Dimitriou’s application for leave to reopen was opposed by Pineview. On this occasion, however, the application was based on events which had occurred since the hearing on 14 December 2018 which appeared to provide a proper basis for reopening Mr Dimitriou’s case. Leave to reopen and to file a further amended notice of opposition was accordingly granted. The matter was listed for further hearing on 1 August 2019. Orders were made for the filing of further evidence and written submissions.

104    As has already been noted, the further amended notice of opposition included a ground which corresponded with ground two of the amended notice of opposition: that the bankruptcy notice was invalid because the orders attached to it did not identify Mr Dimitriou by name and were accordingly apt to mislead. As events transpired, Mr Dimitriou did not advance any further submissions in support of that ground at the further hearing. The merits of the contention that the bankruptcy notice was invalid or apt to mislead because the attached order did not identify Mr Dimitriou by name was considered in detail earlier. It has no merit for the reasons already given.

105    The second ground in the further amended notice of opposition was that Mr Dimitriou was able to pay his debts. The ability of the debtor to pay his or her debts is to be assessed as at the date of the hearing of the creditor’s petition. The contention that Mr Dimitriou was able to pay his debts was effectively abandoned at the hearing on 14 December 2018. As Mr Dimitriou was granted leave to reopen and there was a further hearing, however, it was necessary to address this question again as at the date of the further hearing.

106    The third ground of the further amended notice of opposition was in the following terms:

Pursuant to section 52(2)(b), a sequestration order should not be made in that:

a.    The Applicant holds the judgment debt in Supreme Court of New South Wales proceedings 2013/00301976 as trustee for Lee Rubino (as executor of the estate of the late Alfio Rubino) and Biagina Rubino (the Rubino Parents).

b.    The judgment debt is the only asset now held by the Applicant. The Applicant has no duties to perform other than in respect of the judgment debt.

c.    The Applicant has no liabilities, other than those that may arise for legal fees and costs of proceedings relating to the enforcement of the judgment debt.

d.    As beneficial owners of the judgment debt, the Rubino Parents wish to release the Respondent from the judgment debt as part of a settlement of the obligations that they owe to the Respondent.

e.    As beneficial owners of the judgment debt and costs order, the Rubino Parents wish to have the judgment debt and costs order assigned to them and/or registered in their own names, to the exclusion of the Applicant.

107    Mr Dimitriou did not comply with the orders requiring him to file his further evidence and submissions in support of the further amended notice of opposition. At the hearing on 1 August 2019, he appeared unrepresented. He sought, and was ultimately granted, a further adjournment. The matter was listed for hearing on 21 August 2019. Further orders were made for the filing of evidence and written submissions. At the request of Pineview, a case management hearing was also listed on 12 August 2019, which was after Mr Dimitriou was supposed to have served his evidence. Mr Dimitriou again failed to comply with the orders concerning the filing of his evidence and submissions.

108    At the case management hearing on 12 August 2019, Mr Dimitrou, who by this time was represented by a new solicitor and new counsel, applied for a further adjournment and for further time in which to file evidence. That application was refused: Pineview Property Holdings Pty Ltd v Dimitriou [2019] FCA 1342.

MR DIMITRIOU’S ABILITY TO PAY HIS DEBTS AS AT 21 AUGUST 2019

109    Neither Mr Dimitriou nor counsel for Pineview took the Court to any authorities, or made any submissions, concerning the relevant principles to apply in relation to the operation of s 52(2)(a) of the Bankruptcy Act or what it would take for the Court to be satisfied that the debtor, in this case Mr Dimitriou, is able to pay his debts. Fortunately, for reasons which will become apparent, the circumstances of this case make it unnecessary to consider the relevant authorities or principles in any, or any considerable, detail. Following is a short summary of some of the principles that are relevant to Mr Dimitriou’s case.

110    It is tolerably clear that the appropriate time at which to determine whether the debtor is able to pay his or her debts is at the time of the hearing: Christou v Demandem Holdings Pty Ltd [2012] FCA 695 at [104]; Turco & Co Pty Ltd v Pendella Holdings Pty Limited; In the matter of Pendella Holdings Pty Ltd [2010] FCA 213 at [58]. That does not mean that events that may occur in the near future should necessarily be ignored: Ace Contractors & Staff Pty Ltd v Westgarth Development Pty Ltd [1999] FCA 728 at [44].

111    It is also readily apparent that the debtor bears the onus of satisfying the Court that he or she is able to pay his or her debts: Knudsen & Yates trading as The Hargreaves Practice, in the matter of Sanders v Sanders [2003] FCA 1079 at [22].

112    To satisfy s 52(2)(a) of the Bankruptcy Act, it is not necessary for a debtor to establish that he or she has immediate cash resources to pay all his debts or liabilities in full: Re Sarina; Ex parte Wollondilly Shire Council (1980) 43 FLR 163; 30 ALR 266 at 268. A debtor may be able to show that they can pay their debts if it can be shown that they have access to, or may be able to, procure moneys “by reali[s]ation by sale or by mortgage or pledge of [their] assets within a relatively short time – relative to the nature and amount of the debts and to the circumstances, including the nature of the business, of the debtor”: Sandell v Porter (1966) 115 CLR 666 at 670; see also Australia & New Zealand Banking Group Ltd v Foyster [2000] FCA 400 at [17]; Eykamp v Deputy Commissioner of Taxation [2010] FCA 797 at [7] and the cases there cited.

113    Where the debtor claims that they are able to pay their debts because they have a claim against someone else which will realise an amount equal to or greater than their debts, the debtor must satisfy the court that the claim has “sufficient validity” before it can be relied on as an asset that can be used to pay the debtor’s debts: Re Kostezky; Ex parte Milder Elfman Szmerling Krycer Pty Ltd (1996) 67 FCR 101 at 106. The claim must “provide sufficient cause to override the rights of an individual creditor to get its debt paid when it is … long overdue: Re Capel; Ex parte Caram Finance Australia Ltd (unreported, Federal Court of Australia, Finn J, 9 April 1998) at p 9.

114    A debtor’s ability to pay their debts does not generally include an ability to pay debts from the money of other people: International Alpaca Management Pty Ltd v Ensor [1999] FCA 72 at [19].

Evidence relevant to Mr Dimitriou’s ability to pay his debts

115    Mr Dimitriou did not himself give any sworn evidence that he was able to pay his debts. Indeed, he adduced very little, if any, evidence concerning his personal financial position.

116    Mr Dimitriou did not adduce any evidence concerning his debts or liabilities as at the date of the hearing. It is clear, however, that he has debts. Even putting the judgment debt owing to Pineview to one side, he has not paid the judgment debt in favour of Ms Huybers. He has also been ordered to pay the costs of various unsuccessful applications. To give but two examples to which the Court’s attention was directed, Mr Dimitriou was ordered to pay costs, including Pineview’s costs, in Dimitriou v Huybers [2017] NSWCA 252 and Rubino v Pineview Properties Pty Ltd (No 6) [2018] NSWSC 340. While Mr Dimitriou made various assertions from the bar table about his ability to pay the debts arising from those costs orders, he adduced no evidence that he had access to any cash resources, or was able to realise any assets within the near future, to enable him to pay those debts.

117    Perhaps more significantly, Mr Dimitriou adduced no evidence concerning cash or assets owned by him. The extent of his evidence in relation to his assets was that he held shares in Wise and Young, which in turn owned shares in various other private companies, including Wise and Young and Defined Property. Mr Dimitriou made it clear that he held all his assets or “wealth” through his direct or indirect shareholdings in those private companies. Mr Dimitriou did tender his tax returns for the tax years ending 30 June 2017, 2018 and 2019. Those tax returns were signed the day before the final hearing. In the absence of any sworn evidence from Mr Dimitriou about the tax returns, or any other documentary evidence supporting any of the statements made in them, the tax returns were not admitted as evidence of the truth or accuracy of any of the statements made in them.

118    To the extent that Mr Dimitriou advanced any case that he was able to pay his debts, that case was based on the proposition that the companies in which he had a direct or indirect shareholding would be in a position to recover or realise significant debts owed to them. Most of those debts had been the subject of litigation. Some of that litigation was referred to earlier in these reasons. The litigation appeared to be long running and complex. Some of the debts were secured by mortgages or other forms of security held over real property.

119    Most if not all of the evidence concerning the debts owed to the companies associated with Mr Dimitriou consisted of documentary evidence. In short summary, as at the date of the final hearing following Mr Dimitriou’s successful application to reopen his case, the documentary evidence tendered by Mr Dimitriou was capable of establishing the following facts.

120    First, on 7 June 2019, Brereton J in the Supreme Court of New South Wales gave judgment in favour of Wyse & Young International Pty Limited and on 3 July 2019 ordered that Mr Sanna pay Wyse & Young the sum of $62,056.95; that Mr Sanna and DCL Construction pay Wyse & Young $124,227.61; that Mr Sanna pay Defined Properties the sum of $530,622.73; and that DCL Construction Group Pty Limited (in liquidation) pay Defined Properties the sum of $2,591,972.34: see Wyse & Young International Pty Limited v Sanna [2019] NSWSC 683 and Wyse & Young International Pty Limited v Sanna (No 2) [2019] NSWSC 868 at [31]. Brereton J also made various declarations relating to mortgages and other securities which secure the judgment debts. There were, however, complexities concerning the securities and the enforcement of the judgments. Justice Brereton ultimately transferred the proceeding to this Court so those issues could be resolved: Wyse & Young International Pty Limited v Sanna (No 2) [2019] NSWSC 868. The proceedings are now before Markovic J (NSD 1135/2019). Some orders have been made to progress that proceeding. There is, however, no evidence to suggest how long it will take to resolve those proceedings or what the outcome is likely to be. The relief sought by Wyse & Young and Defined Properties appears to be opposed. It would also appear that on 23 July 2019 a notice of intention to appeal the principal judgment of Brereton J was filed in the Supreme Court of New South Wales.

121    The properties over which mortgages or other security is held to secure the judgment debts against Mr Sanna and DCL Construction are properties at Copacabana and Green Valley. Mr Dimitriou adduced evidence which indicated that the Copacabana property was valued at between $900,000 and $1,000,000 and the Green Valley property was valued at between $640,000 and $700,000.

122    Second, on 8 November 2018, Sackar J in the Supreme Court of New South Wales gave judgment in favour of Wise & Young over land at The Hill in Newcastle to secure the repayment of $1,070,000 plus interest: see Furlong and Leishman v Wise & Young Pty Ltd & Ors (No 2) [2018] NSWSC 1987. His Honour also ordered or declared that the property at The Hill was subject to an equitable mortgage in favour of Wise & Young. That security interest was the subject of a caveat over the land. Mr Dimitriou tendered a valuation report which valued the property at The Hill at between $2,150,000 and $2,350,000. The land in Newcastle would appear to be owned by Mr Mark Leishman and Ms Kathleen Furlong. Mr Dimitriou tendered a document which suggested that Wise & Young claims that Ms Furlong and Mr Leishman owe it just over $1.4 million. The precise nature and status of that claim was and is, however, at best unclear.

123    Third, Mr Dimitriou adduced some evidence concerning a claim that he says Wise & Young has against Mr Culley and others based on a Deed of Loan, Guarantee and Indemnity. That claim was referred to earlier in these reasons. There was evidence tendered which suggested that the indebtedness, or alleged indebtedness, of Mr Culley to Wise & Young was secured by a mortgage over land at Cessnock. Mr Dimitriou tendered evidence which suggested that the land at Cessnock was valued at between $440,000 and $470,000.

124    It may be accepted, on the basis of the documentary evidence tendered by Mr Dimitriou, that at some stage in the future, Wise & Young and Defined Properties may be able to recover some or perhaps even all of the debts which are apparently owed to them by Mr Sanna, DCL Construction, Ms Furlong and Mr Leishman and Mr Culley. Exactly when any actual funds will be able to be recovered is at best unclear. It cannot be inferred that any actual recovery is likely to occur in the near future. The nature and circumstances in which the debts were incurred would appear to be complex and contentious and it cannot be inferred that the enforcement of any securities and the recovery of any funds will be without complication.

125    In any event, the fundamental problem for Mr Dimitriou is that the fact that Wise & Young, Defined Properties or any other company in which he holds any direct or indirect interest might be likely to recover some debts owed to them at some stage in the future does not assist him in his endeavour to satisfy the Court that he is able to pay his debts. That is because, despite being given every opportunity to do so, Mr Dimitriou failed to adduce any evidence whatsoever concerning the financial position of any of the companies. Putting aside the debts that are owed, or claimed to be owed to the companies, there is no evidence whatsoever concerning the assets of the companies. Nor is there any evidence as to whether the companies have earned any income or made any profits over the last few years, or are even trading. Perhaps most significantly, there is virtually no evidence about the liabilities of any of the companies.

126    The only evidence concerning the liabilities of the companies was evidence which was adduced by Pineview which suggested that the Commissioner of Fines Administration had commenced and prosecuted winding up proceedings against, relevantly, Wise & Young, Wyse Partners Pty Ltd and Defined Property Group Pty Limited. It would appear that the winding up proceedings have been heard by Rees J and that her Honour proposed to make orders on 29 August 2019. Mr Dimitriou asserted from the bar table that there had been, or may have been, some settlement of those proceedings, though he did not adduce any evidence in that regard other than to tender photocopies of two bank cheques made out to the Commissioner of Fines Administration.

127    In the absence of any, or any satisfactory, evidence concerning the financial position of Wise & Young, Wyse Partners and Defined Property Group Pty Limited, it is not possible to be satisfied that Mr Dimitriou will be able to access or use any funds that may ultimately be able to be recovered by those companies at some stage in the future for the purposes of paying his personal debts. There is no basis to infer that the companies will be in any position to lawfully pay dividends to Mr Dimitriou, or loan him funds, or that Mr Dimitriou would recover any equity should those companies be wound-up.

128    At the very conclusion of his submissions, Mr Dimitriou effectively conceded that he was presently unable to pay his debts. He submitted that he would need six months to bring the various proceedings and claims concerning his companies to a head. I am not persuaded that there is any sound basis in the evidence for Mr Dimitriou’s submission in that regard. I am also not satisfied that it would be reasonable or in the best interests of Mr Dimitriou’s creditors, including Pineview, to delay the determination of those proceedings any further. It has already been over a year since the creditor’s petition was first presented.

129    In all the circumstances, I am not satisfied on all the evidence that Mr Dimitriou is able to pay his debts for the purposes of s 52(2)(a) of the Bankruptcy Act.

GROUND THREE OF THE FURTHER AMENDED NOTICE OF OPPOSITION

130    Ground three of the further amended notice of opposition, as set out earlier, raised a difficult, complex and somewhat unusual issue. The resolution of this issue was not assisted in any way by the approach of the parties. For his part, Mr Dimitriou did not adduce any affidavit or oral evidence concerning this ground. He simply tendered certain documents. One of the potentially critical documents did not emerge until the very last moment. Pineview did not assist in the elucidation of the relevant facts, though when pressed it ultimately conceded, through its counsel, that it did not dispute certain facts that were potentially relevant to the resolution of the issue. The Court was given virtually no assistance in relation to the relevant legal issues or principles in relation to this ground.

Relevant facts and evidence in support of this ground

131    The starting point is to consider what, if any, evidence was adduced in support of the five statements or contentions in relation to this ground as articulated in the further amended notice of opposition.

132    The first contention is that Pineview holds the relevant judgment debt as trustee for Lee Rubino (as executor of the estate of the late Alfio Rubino) and Biagina Rubino (the Rubinos). Mr Dimitriou did not adduce any evidence from Lee or Biagina Rubino in relation to the nature or terms of the relevant trust. Nor was any trust deed tendered. There is, however, support for this contention in the judgment of White J. At [302], his Honour states:

If Pineview recovers moneys pursuant to the judgments to be entered against Dimitriou, Wyse & Young and Wyse Accounting as outlined at para [300] above, the recovery would be trust property for which it would be required to account to the Rubinos, except insofar as it was entitled to have recourse to the moneys in order to indemnify itself against liabilities it had properly incurred in execution of the trust. That would include its liability to repay Huybers’ loan. But it would not thereby incur any further loss by reason of its having to account for any moneys recovered to the Rubinos.

133    His Honour then went on to consider other liabilities which might be the subject of Pineview’s right of indemnity or reimbursement from the trust assets.

134    Ultimately, Pineview did not dispute that it would hold any amounts that it ultimately recovers in respect of the judgment debt on trust for the Rubinos, subject to its right to have recourse to the trust assets so as to indemnify or reimburse itself in respect of any liabilities it had properly incurred from its execution of the trust. It may accordingly be accepted that, subject to the potential operation of the November 2016 deed, Pineview holds the judgment debt on trust for the Rubinos. It should be reiterated, however, that while Pineview may hold the judgment debt on trust, it nonetheless retains the right to have recourse to trust assets to satisfy its right of indemnity or reimbursement.

135    The second contention relevant to this ground of opposition is that the judgment debt is the only asset now held by Pineview and that Pineview “has no duties to perform other than in respect of the judgment debt”. Mr Dimitriou did not adduce any evidence in relation to this contention. It is also somewhat difficult to comprehend exactly what is meant by the claim that Pineview has no duties to perform other than “in respect of the judgment debt”. That statement seems to accept or comprehend that Pineview has a continuing duty, as trustee, to recover or enforce the judgment debt. The contention that Pineview has no other duties as trustee, however, appears to put the matter too highly. While the trust deed was not in evidence, general principles would suggest that while it is still the trustee of the trust, Pineview will continue to have duties as trustee. There does not appear to be any suggestion, let alone evidence, that Pineview has been removed as trustee, or that the trust no longer exists.

136    The third contention relevant to this ground is that Pineview has no liabilities, other than those that may arise from legal fees and costs of the proceedings relating to the enforcement of the judgment debt. Mr Dimitriou again did not adduce any evidence in relation to this contention. Nor did Pineview. There is accordingly no evidence concerning the extent of Pineview’s liabilities.

137    It is, however, tolerably clear from the evidence that Pineview has incurred considerable costs and expenses in endeavouring to enforce the judgment debt the subject of this proceeding. Even putting this proceeding to one side, there is evidence that Mr Dimitriou and the companies associated with him have unleashed a torrent of applications in this Court and the Supreme Court of New South Wales which relate in one way or another to the enforcement of the judgment debt. Mr Dimitriou filed an appeal and made various applications in relation to that appeal. He has filed applications which seek to stay the execution of the judgment of White J. He has also commenced proceedings against Pineview and others, both in this Court and the Supreme Court of New South Wales, which in one way or another involve collateral challenges to the judgment of White J.

138    It is, in all the circumstances, open to infer that Pineview has incurred considerable costs arising from the applications and proceedings filed by Mr Dimitriou since the judgment of White J was handed down. The significant point to note is that Pineview is entitled to have recourse to the trust assets to indemnify itself in respect of those costs and expenses. That appears to be implicitly accepted in the further amended notice of opposition. It will be necessary in due course to revisit Pineview’s right of indemnity in respect of those costs in the context of the contention that the Rubinos are able to require the judgment debt to be assigned to them or registered in their names.

139    The fourth and fifth contentions in respect of this ground in the amended notice of opposition relate, in broad terms to an apparent settlement or compromise between Mr Dimitriou and the Rubinos and the fact that the Rubinos apparently wish to have the judgment debt assigned to them as part of that settlement. It is convenient to deal with these two contentions together. They provide the crux of this ground of opposition to the creditor’s petition.

140    As has already been noted, the Rubinos were not called to give evidence about any agreement they had reached with Mr Dimitriou, or any wish that they might have to assign the judgment debt. Mr Dimitriou relied essentially on the terms of a deed that was executed and entered into in June 2019 between Lee Rubino, Biagina Rubino, Francesco (Frank) Rubino, himself, Wise & Young and Wise Accounting Pty Limited (the June 2019 deed). There was no dispute that the deed had been executed by all parties.

The June 2019 Deed

141    The June 2019 deed is unfortunately poorly drafted. Its terms are not entirely clear.

142    The recitals to the deed provide a brief summary of the proceedings before White J. That summary relevantly includes that White J had made orders that Lee, Biagina and Frank Rubino pay the costs of Mr Dimitriou, Wyse & Young and Wise Accounting and that Mr Dimitriou, Wyse & Young and Wise Accounting pay Pineview’s costs. The recitals also include that Lee, Biagina and Frank Rubino, on the one hand, and Mr Dimitriou, Wyse & Young and Wise Accounting, on the other “wish to mutually release each other from all debts and claims they may have against each other”, including the judgment of White J in favour of Pineview.

143    The key operative provisions are clauses 1, 2 and 3 which provide as follows.

1.    The Wyse Parties shall jointly and severally release the Rubinos jointly and severally from all debts, claims, costs orders and causes of action whatsoever apart from the obligations incumbent upon them by operation of this Deed. This is conditional upon the Judgment being registered in the Rubinos names and release being given in clause 2 below.

2.    The Plaintiffs shall release the Wyse Parties from the Judgment and the Pineview Costs Order, including any liability for interest arising from such orders before or after 30 June 2016, immediately upon the registration of the Judgment into their names, and this release shall be taken to have been made effective at that time.

3.    In addition to the provisions of the previous clause, within 7 days of the registration of the Judgment into their names the Parties shall execute a Mutual Deed of Release by which the Wyse Parties shall release the Rubinos and the Plaintiffs shall release the Wyse Parties, such Deed of Release is to be between the Rubinos and the Wyse Parties and is to provide as Follows:

“The Plaintiffs hereby release the Wyse Parties from the Judgment (being the judgment in order 3(d) made by White J in Supreme Court of NSW proceedings no 2013/310976 on 30 June 2016), interest from 9 March 2002 up to 30 June 2016 and any interest accrued on those amounts since 30 June 2016 as well as the Pineview Costs Order (being the costs ordered by White J in [8] of his Reasons dated 3 August 2016 in Supreme Court Proceedings no 2013/310976) and the Wyse Parties hereby jointly and severally release the Rubinos, jointly and severally, from all claims, costs, debts and causes of action whatsoever.”

144    Clause 4 of the deed requires Biagina and Lee Rubino to instruct their lawyers to write to Pineview’s lawyers and demand that the judgment of White J in favour of Pineview be transferred to them, failing which the Rubinos would commence proceedings within one week to compel Pineview to do so.

145    Clause 5 provides that within 10 days of the execution of the deed, Biagina and Lee Rubino were required to commence proceedings in the Supreme Court of New South Wales to have the judgment of White J registered in their names if that had not already occurred.

146    Clause 6 provides that Mr Dimitriou was to indemnify Biagina and Lee Rubino in respect of the costs of those proceedings.

147    Clause 7 is also important. It provides as follows.

George [Mr Dimitriou] shall pay any amount reasonably required by the Supreme Court into Court as security for any amount Pineview claims it is entitled to be indemnified for as trustee in order to part with the Judgment [of White J].

148    The following points may be made concerning the operation of these clauses of the June 2019 deed.

149    First, clause one purports to operate to release each of the Rubinos from all debts or claims that Wyse & Young, Wise Accounting and Mr Dimitriou may have against them. It would appear, from the recitals to the deed, that the only claim that Mr Dimitriou and his companies have against the Rubinos is the costs order made by White J. Perhaps more importantly, this release is said to be conditional on the judgment being registered in the Rubinos’ names after being transferred to them by Pineview.

150    Second, clause two purports to operate to release Mr Dimitriou and his companies from any liabilities they may have to Biagina and Lee Rubino under or as a result of the judgment of White J. Critically, however, that release is only to be effected upon the registration of the judgment in the names of Biagina and Lee Rubino.

151    Third, clause three of the deed provides for the execution of a further deed which would have the effect of releasing Mr Dimitriou and his companies from any liability that they have to Biagina and Lee Rubino under the judgment of White J. That deed, however, was only required to be executed after the registration of the judgment into the names of Biagina and Lee Rubino.

152    Fourth, clause 7 of the deed amounts to an acknowledgement by Mr Dimitriou that before the judgment could be transferred to or registered in the names of Biagina and Lee Rubino, it would be necessary to ensure that any right that Pineview had to be indemnified or reimbursed from the trust assets had been satisfied or discharged.

153    Fifth, there is no evidence that Pineview has transferred the judgment to Biagina and Lee Rubino. It is tolerably clear that it has not. There is also no evidence that the judgment has been registered in the names of Biagina and Lee Rubino, or that Biagina and Lee Rubino have commenced any proceedings, or indeed taken any step, to compel Pineview to transfer the judgment to them or have it registered in their names. It is tolerably clear that none of those things has occurred. Nor is there any evidence to suggest that any of those events or occurrences are likely to occur within the foreseeable future, if at all.

154    Sixth, it follows that the releases in clauses 1 and 2 are inoperative. A condition precedent to the operation of those clauses has not occurred.

155    The upshot is that, whatever may be the wishes of Biagina and Lee Rubino, as beneficiaries of the judgment debt, the judgment debt has not been transferred to them or registered in their names. As mere beneficiaries, they have no right to release Mr Dimitriou from his liabilities to Pineview under the judgment. The deed does not operate as any such release, in any event, as the operation of the purported release is conditional on the judgment having been transferred to them.

156    It should finally be noted in relation to the potential relevance of the June 2019 deed that, whatever that deed may make provision for, Pineview cannot be compelled to transfer the judgment debt to the Rubinos unless and until Pineview’s right of indemnity or reimbursement from the trust assets has been fully satisfied or discharged. If a trustee has incurred liabilities in the performance of a trust and is entitled to be indemnified against those liabilities out of the trust property, the trustee is entitled to retain possession of the trust property as against the beneficiaries: Octavo Investments Pty Ltd v Knight (1979) 144 CLR 360 at 369-370. The trustee cannot be compelled to surrender the trust property to the beneficiaries until the trustee’s right or claim to reimbursement has been satisfied: Chief Commissioner of Stamp Duties (NSW) v Buckle (1998) 192 CLR 226 at 246. Subject to the discussion that follows, there is no evidence that Pineview’s right or claim to reimbursement has been satisfied.

157    In all the circumstances, I am not satisfied that the execution of the June 2019 provides any reason not to make a sequestration order against Mr Dimitriou.

158    The slightly more difficult question is whether the fact that Pineview holds the judgment debt, or perhaps more accurately, will hold any funds it recovers in respect of the judgment debt, on trust for Biagina and Lee Rubino, provides any reason not to make the sequestration order in circumstances where they have communicated a wish to release Mr Dimitriou from any liability under the judgment. The answer to that question again hinges to a large extent on Pineview’s right of indemnity or reimbursement from trust assets. The resolution of the question became slightly more difficult as a result of evidence that emerged at the eleventh hour. That evidence was evidence concerning a deed of settlement between Pineview, its director Ms Huybers, and Biagina, Lee and Frank Rubino which was executed on 24 November 2016 (the November 2016 deed). The relevance of that deed is that it potentially bears on Pineview’s right of indemnity in respect of some of the expenses and costs it has incurred as trustee.

The November 2016 deed

159    While the copy of the November 2016 deed that was tendered was not signed by Ms Huybers or executed by Pineview, Pineview conceded and agreed that it had been executed by all of the parties. Like the June 2019 deed, the November 2016 deed is poorly drafted and not entirely easy to decipher.

160    The recitals to the November 2016 deed make it tolerably clear that it was intended to “settle all outstanding matters including costs” between the parties to the deed. The parties to the deed were Pineview, Ms Huybers, the estate of the late Alfio Rubino by his executor Lee Rubino and Biagina Rubino, Green Global Pty Ltd, the Registrar General of New South Wales, Salvatore Russo and Francesco Rubino. Following is a short summary of the key operative parts of the deed.

161    First, clauses 2(a) to 2(c) require Pineview to “transmit” two properties in Galston held by it as trustee for the Rubinos to Rubino Investments Pty Limited as trustee for the Rubinos. Clauses 2(d) and (g) require the Rubinos and Rubino Investments Pty Ltd to obtain finance sufficient to discharge the mortgage held by the ANZ bank over the two properties. It should be noted, in this context, that in his judgment at [303] and [304], White J addressed what might happen if ANZ bank executed its power of sale in respect of the Galston properties and the possible implications of a sale in terms of Pineview’s right of indemnity. If, as appears to be the case, the Galston properties were transferred as provided for in the November 2016 deed, the potential issues referred to in [303] and [304] of White J’s judgment essentially disappear.

162    Second, the effect of clauses 2(e) and (f) is that the Rubinos essentially accept the quantification of the costs order made by White J against them in favour of, relevantly, Pineview and waive the right to have Pineview’s costs assessed. The accepted quantification was $500,000.

163    Third, the effect of clauses 2(g), (h) and (i) is that the Rubinos were to pay $325,000 of the $500,000 they owed to Pineview in respect of costs by 30 November 2016. The balance of that debt, which was to be secured by a mortgage over the two Galston properties, was required to be repaid by 30 March 2017. It should be noted in this context that during the course of the hearing on 21 August 2019, Pineview conceded and agreed that the Rubinos had complied with these clauses and that Pineview had been paid the monies due to it.

164    Fourth, clauses 3(b) and (c) provide for mutual releases of the parties. Clause 3(b), pursuant to which, relevantly, Pineview releases “The Rubinos”, being the estate of the late Alfio Rubino by his executor Lee Rubino and Biagina Rubino, is in the following terms:

On and from the date of full payment of the monies referred to in paragraph 2(f) Russo, Huybers, Pineview, Green Global and the Registrar General of NSW release and discharge The Rubinos and Frank from all Claims which Russo, Huybers, Pineview, Green Global and the Registrar General:

(a)    now have;

(b)    at any time have;

(c)    may have; or

(d)    but for this deed, could or might have had,

against The Rubinos and Frank arising out of or in connection with the proceedings (including any investigations and other legal proceedings not otherwise specified in this Deed), and Russo, Huybers, Pineview, Green Global and the Registrar General and any other property (whether real or tangible) held by them or any other matter the subject of this Deed.

In this clause, the term “proceedings” also includes all subject matters raised in any pleadings, evidence (including annexures and exhibits), submissions, or any other document served between the parties in those proceedings.

165    Clause 3(c), which is the Rubinos release of, relevantly, Pineview is in identical terms.

166    Finally, clause 3(a) makes it clear that no provision in the deed affects any claim that any party to the deed may have against Mr Dimitriou and some named companies associated with Mr Dimitriou for “further compensation arising out of the misappropriation of monies, fee, unpaid compensation”.

167    Mr Dimitriou appeared to contend that the effect of the November 2016 deed was that Pineview no longer had any right of indemnity in respect of its costs and expenses incurred in execution of the trust. To the extent that any such submission was made, it is rejected.

168    The effect of the deed would appear to be that Pineview could not make any further claim against the Rubinos arising out of or in connection with the proceedings before White J. That would include any claim in respect of costs incurred in those proceedings and perhaps, though this is not entirely clear, any costs incurred in related proceedings. Pineview’s right of indemnity is not, however, a claim against the Rubinos. It is a right to recover its costs and expenses incurred in execution of the trust from the trust funds. The fact that the Rubinos are the beneficiaries of the trust does not make the right of indemnity a claim against them.

169    As noted earlier, however, it may be accepted that one effect of the deed is that Pineview’s possible future indemnity claims that White J discussed in [303] and [304] of the judgment are no longer in issue. Those possible claims do not, however, relate in any way to any costs properly incurred by Pineview in, for example, seeking to enforce the judgment or in defending other claims or applications by Mr Dimitriou and his companies relating to the judgment or its enforcement.

170    I am not satisfied that the terms of the November 2016 deed ultimately have any bearing on whether a sequestration order should be made against Mr Dimitriou. Pineview is entitled to continue to enforce the judgment of White J, or to recover from Mr Dimitriou the amount owing to it by reason of the judgment. There is no reason to doubt that Pineview has incurred costs and expenses in seeking to enforce the judgment, including in defending the applications and claims filed by Mr Dimitriou that effectively sought to delay or stay the enforcement of the judgment, and that those costs and expenses were properly incurred by Pineview in its execution of the trust. The November 2016 deed has no bearing on Pineview’s right of indemnity in that regard.

171    If Pineview ultimately recovers any funds in respect of the judgment debt, it may have recourse to those funds to satisfy its right of indemnity. It must then account for the balance to the Rubinos. The fact that Pineview must ultimately account to the Rubinos in respect of the balance of the moneys recovered in respect of the judgment debt does not provide any reason or “sufficient cause” pursuant to s 52(2)(b) of the Bankruptcy Act not to make a sequestration order under the Bankruptcy Act.

Conclusion and disposition

172    None of Mr Dimitriou’s grounds of opposition to Pineview’s creditor’s petition have any merit.

173    The bankruptcy notice is not a nullity by reason of the fact that the orders attached to it did not specifically refer to Mr Dimitriou by name.

174    Mr Dimitriou did not demonstrate that there was another “sufficient cause” why a sequestration order should not be made against him. None of the contentions or submissions advanced by him in that regard had any merit. He did not establish that there were substantial reasons for questioning whether behind the judgment of White J there was in truth and reality a debt due by him to Pineview, or that there was any other proper basis upon which the Court should exercise its discretion to go behind the judgment. He did not establish that he was suffering only a temporary lack of liquidity or that the possibility that he might obtain some benefit from litigation that companies associated with him were engaged in provided a sufficient cause why a sequestration order should not be made against him. While Mr Dimitriou established that Pineview effectively held the judgment debt on trust for the Rubinos and that the Rubinos wanted the judgment debt transferred to them, that had not occurred at the time of the hearing. Nor was Mr Dimitriou able to demonstrate that it was ever likely to occur, given the issues surrounding Pineview’s right of indemnity or reimbursement from the trust assets.

175    Finally, Mr Dimitriou failed to prove that he was able to pay his debts.

176    There was otherwise no issue or dispute that Pineview had proved all that was required for a sequestration order to be made by the Court pursuant to s 52 of the Bankruptcy Act. The affidavit verifying the petition was sufficient for the purposes of s 52(1)(a) of the Bankruptcy Act; there was evidence that the petition had been properly served on Mr Dimitriou as required by s 52(1)(b) of the Bankruptcy Act; and there was evidence that the debt upon which Pineview relied was still owing as required by s 52(1)(c) of the Bankruptcy Act. It follows that a sequestration order against the estate of Mr Dimitriou should be made.

Associate:    

Dated:    30 August 2019