FEDERAL COURT OF AUSTRALIA

Kimber v Clark in his capacity as trustee of the property of Kimber (No 3) [2025] FCA 86

ORDERS

THE COURT ORDERS THAT:

1.    The application filed on 7 March 2023 for the applicant’s bankruptcy to be annulled is dismissed under s 31A of the Federal Court of Australia Act 1976 (Cth) and r 26.01 of the Federal Court Rules 2011 (Cth).

2.    The applicant is to pay the respondents’ costs as agreed or assessed.

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

REASONS FOR JUDGMENT

PERRY J:

1.    INTRODUCTION

1    The applicant, Ms Janelle Mary Kimber, is a regulated debtor who was discharged from bankruptcy on 23 August 2022. The respondents, Mr Alexander Clark and Mr Andrew Aravanis, are the trustees of the applicants' bankrupt estate. Despite Ms Kimber having been discharged from bankruptcy when these proceedings were commenced in 2023, her interest in a property located in Lane Cove remained vested in the respondents for the benefit of the unsecured creditors of her bankrupt estate. While that property was subsequently sold, the proceeds from the sale, insofar as they were to be directed to the bankrupt estate, had not been distributed as at 16 August 2023.

2    By an application filed on 7 March 2023 (the annulment application), Ms Kimber seeks an annulment of her bankruptcy pursuant to s 153B(1) of the Bankruptcy Act 1966 (Cth). Specifically, in the application, the applicant pleads:

1.    On the grounds stated in the accompanying affidavit prescribed by the Rules, the Applicant makes this claim pursuant to s.153B(1) and (2) of the Bankruptcy Act 1996;

(1)    If the Court is satisfied that a sequestration order ought not to have been made or, in the case of a debtor's petition, that the petition ought not to have been presented or ought not to have been accepted by the Official Receiver, the Court may make an order annulling the bankruptcy.

(2)    In the case of a debtor's petition, the order may be made whether or not the bankrupt was insolvent when the petition was presented.

2.    The Applicant seeks an Order that the bankruptcy of Janelle Mary KIMBER be annulled pursuant to s.153B of the Bankruptcy Act 1966 on the grounds that the Debtor’s Petition ought not to have been presented and ought not to have been accepted by the Official Receiver, for the reason that Janelle Mary KIMBER was always solvent and able to pay all valid debts.

3    By an amended interlocutory application, dated 5 December 2024, the respondents seek an order that the annulment application be summarily dismissed pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth) (FCA Act) and r 26.01 of the Federal Court Rules 2011 (Cth) (FCR) (summary dismissal application).

2.    PROCEDURAL BACKGROUND

4    On 7 March 2023, the applicant filed the annulment application, seeking relief against the respondents as trustees of the applicant’s estate. The applicant also sought interim relief in terms of a stay of the Writ of Possession and Notice to Vacate. Her application for interim relief was heard by Bromwich J on 28 March 2023 and dismissed on 31 March 2023. An application for leave to appeal from the orders of Bromwich J, and for leave out of time, was subsequently withdrawn at a hearing before Wigney J on 3 August 2023.

5    On 15 March 2023, the respondents filed for the annulment application to be struck out pursuant to r 16.21 of the FCR. The respondents further sought an interlocutory order that no further application by the applicant relating to the administration of her estate under the Bankruptcy Act be accepted for filing by the Court, except by leave. I note that an order of this kind, being a vexatious proceedings order, can be sought under Part VAAA of the FCA Act but cannot be made in relation to a person without giving the person an opportunity to be heard (s 37AO(4), FCA Act). At this stage, however, no application under Part VAAA has been made or submissions and evidence relevant to that issue filed and served by the parties. Accordingly, that issue must be put to one side for present purposes.

6    On 14 June 2023, the applicant sent a letter requesting that I recuse myself as presiding judge on the basis that I do not have the “impartiality required for the court to perform its tasks without prejudice or bias”.

7    The applicant’s reasons for the recusal application were as follows:

…your Honour was the original judge of the initial NSD 562/2016 case unduly dismissed by Registrar Tesorerio and in granting Grace Lawyers Daniel Radman a ‘surprised’ oral summary dismissal on 8 September 2016 under s 31A(2) of the Federal Court of Australia Act 1976, awarded costs were then included in the $250,000 claim that ultimately took my property.

8    In support of her application, the applicant filed written submissions on 26 October 2023 setting out my alleged conduct in previous matters involving the applicant, as well as her understanding of the application of the test in Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337 to her application for disqualification.

9    By orders made on 22 June 2023, the applicant’s letter dated 14 June 2023 was deemed to be an application for recusal (the recusal application).

10    The recusal application was initially set down for hearing on 4 December 2023, along with the annulment application. Subsequently, it was adjourned to 12 December 2023, with the recusal application to be heard and determined immediately before hearing of the annulment application (depending upon whether the recusal application was upheld). However, on 11 December 2023, the applicant requested that the hearing be adjourned. On the same day, I made orders adjourning the hearing to a date to be fixed and reserving costs in the circumstances noted on the orders, namely, that:

A.    The applicant is self-represented.

B.    The applicant’s request for the hearing on 12 December 2023 to be adjourned was not opposed by the respondents in circumstances where:

(i)     the respondents’ submissions were filed only on 8 December 2023, and therefore not in compliance with order 7 of the orders made by Registrar Hammerton-Cole on 15 June 2023 which required the respondents to file and serve an outline of submission by 4pm on 26 October 2023.

(ii)     the joint list of authorities was filed in [sic] 11 December 2023, and therefore not in compliance with order 9 of the of the orders of Registrar Hammerton-Cole on 15 June 2023 which required the respondents to file and serve any joint list of authorities by 4pn [sic] on 16 November 2023.

11    The recusal application and annulment application were subsequently relisted for hearing, after consultation with the parties, on 19 June 2024. The hearing was postponed to 24 June 2024 at my request, by an email dated 23 May 2024.

12    By orders dated 24 June 2024, the hearing was postponed to a date to be fixed following email correspondence and an attached psychological report from and on behalf of the applicant. By these orders, the email correspondence and attached psychological report was treated as an application by the applicant for the adjournment on 24 June 2024, with supporting evidence. The adjournment was not opposed.

13    A case management hearing was initially listed on 24 July 2024 but adjourned at the applicant’s request to 16 October 2024. At this hearing, new timetabling orders were made, and the recusal application was listed for 4 December 2024. Pending the outcome of this application, the summary dismissal application was listed for 5 December 2024.

14    Following a case management hearing on 21 November 2024, the applicant was granted until 4.00pm on Friday 22 November 2024 to inform the Court and respondents in writing as to whether she intended to press or revoke the recusal application. By email dated 25 November 2024 at 2.45pm, the applicant confirmed that she intended to press the recusal application.

15    The hearing of the summary dismissal application was adjourned to Friday 13 December 2024, depending on the outcome of the recusal application, to accommodate the applicant’s request that time be left between the hearings.

16    On 2 December 2024, the applicant filed a notice stating that “Janelle Kimber discontinues the whole of the Recusal proceeding”. The notice was accompanied by a letter from the applicant, dated 1 December 2024, setting out her reasons for seeking to discontinue the recusal application. Among other things, the applicant stated:

The complex issues at hand require focused attention for the efficient and effective application of the judicial process without further delay or possible complications.

17    On 2 December 2024, I made orders in the following terms:

1.    The application by the applicant for Justice Perry to recuse herself described in order 1 of the orders made on 22 June 2023 is discontinued in accordance with the applicant’s notice of discontinuance of the recusal application filed on 2 December 2024.

2.    The hearing of the application referred to in order 1 above is vacated.

18    I note that, in my view, no ground was raised in support of the recusal application suggesting that there was any proper basis for the application and the application for my recusal was therefore rightly not pressed by the applicant.

19    By an interlocutory application filed on 25 November 2024, the applicant sought leave to issue a subpoena. At a case management hearing on 4 December 2024, the applicant further sought an adjournment of the hearing of the summary dismissal application to enable her to issue the subpoena. In Kimber v Clark in his capacity as trustee of the property of Kimber (No 2) [2024] FCA 1405, I dismissed both applications.

20    At the case management hearing on 4 December 2024, I raised with the parties a concern that, while the respondent’s interlocutory application sought orders striking out the annulment application pursuant to r 16.21 of the FCR, the grounds articulated in the respondents’ submissions appeared to be more directed towards a summary dismissal application. If that was a correct characterisation of the application, I expressed the view that, as a matter of fairness to the applicant, this should be made clear on the face of the respondents’ interlocutory application. Accordingly, after counsel for the respondents confirmed that the interlocutory application was, in substance, a summary dismissal application, I made orders for the application to be amended so as to reflect the orders in fact sought by the respondents.

21    In accordance with orders dated 4 December 2024, the respondents filed the amended application for summary dismissal on 5 December 2024, seeking orders that the annulment application be dismissed pursuant to s 31A of the FCA Act and r 26.01 of the FCR.

22    On 11 December 2024 at 12:59AM, the applicant filed written submissions on the summary dismissal application without leave. The Court Registry wrote to the parties at 12:43PM on 12 December to convey that, while the submissions were filed without orders permitting their filing, I was minded to receive and consider the submissions at the hearing on 13 December 2024, subject to hearing any objection from the respondent. The respondent did not object to this course.

3.    EVIDENCE

23    In support of the summary dismissal application, the respondents rely on the following affidavits:

(1)    Affidavit of Alexander David Clark, affirmed on 15 March 2023;

(2)    Affidavit of Christie Lonnon, sworn on 17 March 2023; and

(3)    Affidavit of Alexander David Clark, affirmed on 16 August 2023.

24    In support of the annulment application, the applicant relies on:

(1)    Affidavit of Janelle Kimber, sworn on 6 March 2023;

(2)    Affidavit of Janelle Kimber, sworn on 15 March 2023;

(3)    Affidavit of Janelle Kimber, affirmed on 18 June 2024; and

(4)    Affidavit of Janelle Kimber, affirmed on 10 October 2024.

4.    RELEVANT PRINCIPLES: SUMMARY DISMISSAL

25    Section 31A of the FCA Act relevantly provides that:

(2)    The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:

(a)     the first party is defending the proceeding or that part of the proceeding; and

(b)     the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.

(3)    For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:

(a)     hopeless; or

(b)     bound to fail;

for it to have no reasonable prospect of success.

26    The test for summary dismissal laid down by r 26.01(1)(a) of the FCR (“no reasonable prospect of successfully prosecuting the proceeding”) is the same test for summary dismissal as that in s 31A of the FCA Act: Shammas v Canberra Institute of Technology [2014] FCA 71 at [13], [51] (Foster J). Rule 26.01 also provides for summary judgment to be given against a party where the proceeding is frivolous or vexatious, no reasonable cause of action is disclosed, or the proceeding is an abuse of Court process (r 26.01 (b), (c) and (d) respectively).

27    The principles governing the application of s 31A are well established and were summarised in Przybylowski v Australian Human Rights Commission (No 2) [2018] FCA 473 at [7] (Perry J) as follows:

(1)    The respondent as the moving party bears the onus of persuading the Court that the application has no reasonable prospects of succeeding: Australian Securities and Investments Commission v Cassimatis [2013] FCA 641; (2013) 220 FCR 256 (Cassimatis) at 271 [45] (Reeves J).

(2)    With respect to the scope of s 31A, French CJ and Gummow J explained in Spencer v Commonwealth [2010] HCA 28; (2010) 241 CLR 118 (Spencer) at [22], that the section:

… will apply to the case in which the pleadings disclose no reasonable cause of action and their deficiency is incurable. It will include the case in which there is unanswerable or unanswered evidence of a fact fatal to the pleaded case and any case which might be propounded by permissible amendment. It will include the class of case in the long-standing category of cases which are “frivolous or vexatious or an abuse of process”. The application of s 31A is not, in terms, limited to those categories.

(3)    Section 31A sets a lower threshold than the previous test for summary dismissal which required that the claim be “manifestly groundless” or “hopeless”: Spencer at [52]-[53] (Hayne, Crennan, Kiefel and Bell JJ). Nonetheless, the discretion must still be exercised with caution (Spencer at [24] (French CJ and Gummow J) and [60] (Hayne, Crennan, Kiefel and Bell JJ)).

(4)    An assessment of whether a proceeding has no reasonable prospects of success for the purposes of s 31A involves the making of value judgments in the absence of a full and complete factual matrix and argument, with the result that the provision vests a discretion in the Court: Kowalski v MMAL Staff Superannuation Fund Pty Ltd [2009] FCAFC 117; (2009) 178 FCR 401 (Kowalski) at [28] (the Court).

28    Consistently with these principles, Reeves J in Australian Securities and Investments Commission v Cassimatis [2013] FCA 641; (2013) 220 FCR 256 explained at [46] that:

… the determination of a summary dismissal application therefore does not require a mini-trial based upon incomplete evidence to decide whether the proceedings are likely to succeed or fail at trial. Instead, it requires a critical examination of the available materials to determine whether there is a real question of law or fact that should be decided at trial. Each application for summary judgment or summary dismissal has to be determined according to its particular circumstances. What is required is a practical judgment of the case at hand. The relevant circumstances will partly depend upon the stage which the proceedings have reached. Among other things, this will affect the materials available to the Court considering the application, for example, whether pleadings have been exchanged, or discovery of documents has occurred.

29    His Honour illustrated the application of these principles at [47]–[48] as follows:

Accepting there can be no “hard and fast” rule about this, as a general principle, these authorities show that the moving party on an application for summary dismissal of the present kind is likely to succeed on its persuasive onus if it is able to demonstrate to the Court that the applicant’s success in the proceedings relies upon a question of fact that can be truly described as fanciful, trifling, implausible, improbable, tenuous or one that is contradicted by all the available documents or other materials. Conversely, as a general principle, it is unlikely to succeed where, on a critical examination of all the available materials, the Court is satisfied that there appears to be a real question of fact to be determined between the parties. This is more likely to be the case where the available materials include pleadings that raise factual disputes that can be truly described as significant, substantial, plausible or weighty. A real question of fact is also more likely to exist where the question/s of fact concerned is/are complex, eg involving numerous different events or transactions over a long period of time.

Similarly, as a general principle, the moving party on an application for summary dismissal is likely to succeed on its persuasive onus if it is able to demonstrate to the Court that the applicant’s success in the proceedings relies upon a question of law that is straightforward and confined, or is trite in the sense that it is well settled on authority, such that the question can be resolved summarily without the necessity for a full trial. On the other hand, the moving party would be unlikely to succeed if the Court is satisfied that the applicant’s success in the proceedings relies upon a question of law that is serious or important, or is difficult and therefore likely to require lengthy argument for its resolution, or involves conflicting authority, or is apparently arguable, yet novel.

30    In line with these principles, summary dismissal is not necessarily warranted simply because the claim is poorly drafted, because a deficiency of that nature may be addressed by the grant of leave to amend.

31    The respondents further allege that the annulment application constitutes an abuse of process. Justice Deane in Oceanic Sun Line Special Shipping Co Inc v Fay [1988] HCA 32; (1988) 165 CLR 197 considered (at 247) that an abuse of process extends to proceedings that are “seriously and unfairly burdensome, prejudicial or damaging” or “productive of serious and unjustified trouble and harassment”. The High Court has further considered that it is an abuse of process to maintain an action which is doomed to fail: Walton v Gardiner [1993] HCA 77; (1993) 177 CLR 378 at 393 (Mason CJ, Deane and Dawson JJ).

5.    DISPOSITION OF THE APPLICATION FOR SUMMARY DISMISSAL

5.1    Principles relevant to the discretion to annul a bankruptcy

32    Section 153B(1) of the Bankruptcy Act confers power on the Court to annul a bankruptcy resulting from a debtor’s petition in circumstances where:

(1)    the debtor’s petition ought not to have been presented; or

(2)    the petition ought not to have been accepted.

33    In the case of a debtor’s petition, the Court may annul the bankruptcy even if the bankrupt was insolvent when the petition was presented (s 153B(2)). However, a lack of solvency when the petition was presented is a central issue to the extent that, as here, the bankrupt estate has unpaid creditors.

34    The applicable principles were helpfully discussed by RD Nicholson J in Symes v Holbrook [2003] FCA 96 in the following passage:

The application of the words "ought not to have been" in s 153B of the Act requires the court to consider not only the facts as they were at the time of the bankruptcy but as they may now be known as at that date, but excluding any facts occurring since the occurrence of the bankruptcy: Stankiewicz v Plata [2000] FCA 1185 per Drummond, Sackville and Dowsett JJ. …

The words "ought not to have been presented" as they appear in s 153B have been understood to mean generally that it is not possible for a debtor to establish that his or her bankruptcy should be annulled on that ground when it is clear that at that time the debtor was insolvent: Re Coyle (1993) 42 FCR 72 at 77 per Drummond J. In so stating his Honour referred to two cases in which voluntary bankruptcies had been annulled on the application of the bankrupt in the face of evidence of solvency. The circumstances in those cases were described by him as follows:

"In Re McCormack (unreported, 6 April 1990), Pincus J granted such an application where the evidence showed that the debtor was solvent at the time he presented his petition; it also seems that that continued to be in the position right up to the time the application was heard by his Honour, although there was reason to think that if an action then on foot went against the bankrupt, he would then become insolvent. In Re Goo Tuck; Ex parte Goo Tuck (1892) 2 BC (NSW) 95, annulment was ordered on the application of the bankrupt who was without assets and whose only liabilities were in respect of his involvement in a partnership. When he presented his petition, he was unaware that his infancy was an answer to the claims of all his creditors. At that time, the position thus was that he owed no enforceable debts of any kind, that is, he could probably be regarded as solvent."

The two cases cited by Drummond J were therefore ones where it was apparent that the debtor was not insolvent at the time the bankruptcy was declared.

In Re Almassy [1999] FCA 1004 Mansfield J examined the wording of s 153B and relevantly to the issues in this application said:

“In my judgment, it is necessary for the applicant to establish some circumstance which meant that she was not eligible to present the petition to establish that it ought not have been presented. It is only if that point is reached that the Court has a discretion to annul the bankruptcy.

The expression ‘ought not to have been made’ in s 153B in respect of a sequestration order being cancelled requires there to be shown that there was some matter upon which the order was made which was not in fact correct, although that might be shown not just from the facts as disclosed at the time, but as they would have been disclosed had all the true facts been disclosed at the time of the making of the order: Re Gollan (1992) 40 FCR 38 at 40-42 per Spender J and cases referred to therein. In Re Whithall (unreported, Federal Court, Kiefel J, No QG 7598 of 1997, 7 August 1998), Kiefel J said that it was necessary to show that, on the true facts, the judicial officer was bound not to make a sequestration order: see also per Fisher J in Re Frank (1987) 16 FCR 396.

In respect of the expression ‘ought not to have been received’, a similar threshold has been required. I have referred to decisions on that expression above. Moore J in Re Abbas (at 142) noted that the expression ‘ought not to have’ has been treated as comprehending circumstances where the Registrar or judge making the order was not aware of facts that, had they been known, would have resulted in no sequestration order being made. His Honour noted also that a similar approach had been adopted to the expression ‘ought not to have been presented’ in relation to a debtor's petition. Thus, if the debtor was solvent at the time the petition was presented, the bankruptcy can be annulled: Re McCormack (unreported, Federal Court, Pincus J, 6 April 1990); Re Coyle (1993) 42 FCR 72.

There is every reason to apply the expression ‘ought not to have’ consistently to the terms ‘made’ ‘presented’ and ‘received’ in s 153B: Registrar of Titles (WA) v Franzon (1975) 132 CLR 611 at 618 per Mason J.”

It was not in contest in this proceeding that the primary Court was required to approach the section looking first to find whether ineligibility is established and then exercising the general discretion made appropriate by the use of the word "may". Nor was it in contest that the Court was entitled to consider not only the case as disclosed at the time the order was made, but as it would have been disclosed had all the true facts been known: Re Williams [1968] 13 FLR 10 at 23; Re Dunn [1949] 1 Ch 640; Re Scott (1975) 6 ALR 558; Re Ditfort (1988) 19 FCR 347; Re Gollan (1992) 40 FCR 38. The case the appellant was required to make was one required to be discharged to the civil onus: Edelsten v Deputy Commissioner of Taxation (NSW) (1989) 86 ALR 257.

5.2    The parties’ submissions

35    The respondents submitted that the application should be summarily dismissed on three primary grounds:

(1)    failure to disclose a reasonable cause of action;

(2)    the absence of admissible evidence of any basis on which to contend that the trustees engaged in misleading and wrongful conduct; and/or

(3)    the application constitutes an abuse of process.

36    Ms Kimber opposed the application for summary dismissal for reasons which may be summarised as follows.

(1)    The annulment application is based predominantly on the fact that the debtor’s petition should not have been presented and received by the receiver because Ms Kimber was solvent and she was induced into making a debtor’s petition assisted by Mr Clark. As to her solvency, Ms Kimber relied upon BSF Partners’ report as to her solvency in March 2019 and submitted that there was no change in her circumstances between March 2019 and August 2019 when she presented the debtor’s petition.

(2)    Summary dismissal should be reserved for the clearest of cases, which this case was not. There are many significant unresolved complex factual and legal issues requiring a full hearing and there is a lack of evidence in support of the summary dismissal application. In addition to disputing facts in relation to her solvency, Ms Kimber denies the validity of the creditors’ claims and contends that a full hearing is necessary in order to explain why they are not valid. She contends that it is the Court’s role to investigate the legitimacy of the underlying debt especially where, as here, serious allegations of collusion, fraud and the like have been made.

(3)    There are also allegations against the trustee in relation to their administration of the estate, including that they have broken promises to look into the legitimacy of the debts, causing her extreme distress, and there has been trustee misconduct even in relation to “the formal documents”. In Ms Kimber’s submission, these allegations need to be looked into further. Further, she contends that a statement of claim had been filed on her behalf which had been completed under duress with the assistance of the trustee despite his fiduciary duty to protect her property.

(4)    The costs agreement between The Owners – Strata Plan No 48216 (Strata Owners) and Grace Lawyers was invalid and Ms Kimber did not have the opportunity to participate in the conciliation between Grace Lawyers and the lawyers for the trustees about costs.

(5)    There has been “[c]umulative prejudice … [with] judgment upon judgment upon judgment, getting misinformation” and a failure to disclose or investigate critical evidence. Ms Kimber has also suffered from procedural barriers with many disadvantages in procedural terms leading to difficulties in presenting evidence and responding to proceedings.

(6)    With respect to the judgment debt in favour of the Strata Owners, Ms Kimber alleges as follows:

(a)    The “most vital thing that … needs to take place” is for the Court to go behind the Local Court judgment which is “foundational” and is “what everything else rests on”. As Markovic J dismissed the application to do so, the evidence has not been heard, no subpoenas have been issued and no witnesses have been called.

(b)    There is a public interest in going behind the judgment, as the recent Four Corners investigation into strata corporations illustrates.

(c)    There is a class of persons benefiting from intentionally pursuing a debt that is false, and the debt was based upon misrepresentations as to facts and omissions of fact.

(7)    To dismiss the matter summarily would breach procedural fairness. This is because Ms Kimber is unrepresented and part of her disability is that stress induces confusion which makes it difficult for her to present her case. Ms Kimber said that she needs a good amount of time to be organised and not focus on other things, and to have the opportunity to go through the evidence more fully by going through the affidavits and exhibits “one by one”.

(8)    The cumulative impact of these matters underscores the need for a comprehensive hearing.

5.3    The application should be summarily dismissed

37    Contrary to Ms Kimber’s submissions, this is a clear case where the application should be summarily dismissed. The application for an annulment is respectfully without any merit.

38    First, the annulment application contains scandalous, vexatious and frivolous material. The respondents submit that part of the basis upon which the application is made is that the first respondent engaged in misleading and wrongful conduct. However, the respondents correctly submit that these allegations are not supported by any admissible or persuasive evidence and do not rise above bare assertion, despite their seriousness. As such, the allegations should not have been made.

39    Secondly, the respondents submit that the annulment application fails to disclose a reasonable cause of action. While the respondents accept that the Court has a discretion to annul a bankruptcy, they contend that there is no reasonable prospect that the Court would exercise its discretion to do so. I agree for the following reasons.

(1)    The Court requires a compelling basis on which to annul a bankruptcy such as a satisfactory proposal to pay out creditors and meet the costs of administering the estate. However, Ms Kimber seeks an annulment without conditions and therefore a complete immunity from the debts proved in the bankruptcy and the costs of the administration of the estate. She has led no evidence of any proposal that will benefit creditors or address the trustees’ remuneration and costs. Nor, indeed, has she led any evidence of her financial position. This is so notwithstanding the very significant amount required to annul the bankruptcy. As at 16 August 2023, the estimated amount required to annul the applicant’s bankrupt estate was $1,105,547.97.

(2)    Ms Kimber asserts in her evidence that her assets exceeded her debts when she presented her petition and seeks to rely upon the solvency report from BSF Partners. However, that report considers Ms Kimber’s financial position as at March 2019 and therefore does not establish her solvency at the time when she presented her debtor’s petition in August 2019. The bare assertion by Ms Kimber that her financial position in August 2019 was the same as in March 2019 takes the matter no further. Nor, in any event, does the solvency report take into account the known creditors which are set out in Mr Clark’s August 2023 affidavit. If those debts had been factored in, the report by BSF Partners would have been different. I also agree with the respondents that, even if Ms Kimber had not presented her petition, the creditor’s petition would have been likely to succeed, as the costs order against her in that proceeding indicates and there being no evidence before the Court that Ms Kimber was solvent when she presented the debtor’s petition (or indeed that she is today). As Bromwich J stated in Kimber v Clark in his capacity as trustee of the property of Kimber [2023] FCA 310 (Kimber [2023]) at [15]:

…I readily infer that had the debtor’s petition not been presented, the most likely outcome was that the creditor’s petition would have resulted in the making of a sequestration order and thereby Ms Kimber’s bankruptcy in any event. That alone is a telling indicator against the discretion being likely to be exercised to annul the debtor’s petition.

(3)    Ms Kimber also contends that she was solvent at the time of the debtor’s petition on the basis that there were no valid debts. Leaving aside the absence of any apparent basis on which to contest the validity of the other debts, Ms Kimber contended that this Court should go behind the original judgment debt to the Strata Owners in the Local Court. While the parties are not identical and there is (as the respondents submitted) therefore no res judicata between the parties to this proceeding, nonetheless the respondents pointed to the detailed consideration by Markovic J of the application in that case by Ms Kimber to go behind the Local Court judgment. The respondents submitted that this Court should find that any such application would be unsuccessful for the same reasons which her Honour gave in that case for declining to do so. I agree with this submission. As Markovic J held in Kimber v The Owners Strata Plan No 48216 (No 2) [2018] FCA 406 at [104]–[106]:

Ms Kimber did not appeal the Local Court Judgment. There is evidence that Ms Kimber prepared a notice of intention to appeal for filing in the District Court but she accepted that it was never filed and she never pursued an appeal. The Local Court Judgment was obtained after a contested hearing. It is evident from the material relied on before me that the parties were given an opportunity to provide evidence and to make submissions to that court. The Local Court Judgment was not obtained by default or in the absence of Ms Kimber nor could it be said that there was any fraud or collusion which resulted in the obtaining of that judgment, being the most frequent, but not the only circumstance in which the Court will go behind a judgment: Ramsay at [48]-[49].

Ms Kimber is not satisfied with the outcome of the contested hearing. Her submissions suggest that the result was wrong in law but she did not appeal the Local Court Judgment, which she was entitled to do. Ms Kimber complains that she was not aware of the Local Court Proceeding. That may have been so at the time of its commencement but the evidence shows that by 19 March 2009 she was aware of the proceeding and was on notice that, if she did not pay the full amount due, judgment would be entered against her. The Default Judgment was then entered because Ms Kimber failed to pay the full amount due, albeit only by a small amount. The Default Judgment was successfully set aside by Ms Kimber some four years later and, after several interlocutory steps and a contested hearing, the Local Court Judgment was entered.

Ms Kimber was not legally represented in the Local Court Proceeding and in particular at the hearing which resulted in the Local Court Judgment. The evidence discloses that she has had no legal representation in any of the proceedings referred to above, either before the Local Court, NCAT, the Supreme Court or in this Court. I accept that self-represented litigants face challenges in presenting their case to the court but that fact in and of itself does not mean that Ms Kimber was not able to argue her case on the merits before the Local Court. Ms Kimber has not provided any evidence to suggest otherwise nor has she satisfied me that there was any other reason for the Court to go behind the Local Court Judgment, for example, by establishing that there was any arguable error in that judgment. There are no special circumstances evident here. Taking account of all the circumstances, I am not satisfied that I should exercise my discretion to go behind the judgment.

(4)    The Bankruptcy Act is intended to serve the public interest in the orderly and just administration of insolvent persons by gathering in, and realising, the assets of the bankrupt and distributing them in accordance with the Act in a manner that endeavours to meet their debts. Ms Kimber, however, seeks to set all that has occurred in the administration of her estate to nought since she lodged her debtor’s petition, to ignore the interests of creditors, and to leave the trustees unremunerated. That outcome would be contrary to the public interest underlying bankruptcy.

(5)    In the exercise of the discretion in s 153B, the Court should also have regard to the fairness and justice of the situation. In this case, administration of the bankruptcy has been lengthy and complex in part due to the large number of applications which Ms Kimber has made in connection with the administration of the bankruptcy. As such, I agree with the respondents that Ms Kimber is in part responsible for making the administration of the estate more lengthy and expensive than ought to have been the case. I also agree that it would be unfair to deprive the trustees of any remuneration which would be the consequence of an annulment of the bankruptcy without conditions.

(6)    Delay in seeking the annulment is also a significant factor. As the respondents submit, it is far too late now for Ms Kimber to seek an annulment on the basis of a debt which is many years old, especially where Ms Kimber presented her own petition for bankruptcy. In this regard, Bromwich J similarly observed in Kimber [2023] at [16] that:

It is noteworthy that the application for annulment of the debtor’s petition was not made until over three and a half years after it was presented, with no suggestion made by Ms Kimber that she had not been aware of the alleged circumstances upon which she now relies for a very considerable period of time, measured in years. Her explanation for this delay was that she believed that Mr Clark was going to make the application for annulment on her behalf. Despite the extensive, although meandering, cross-examination of Mr Clark, Ms Kimber did not come close to establishing any sound basis for her holding any such belief, no matter how genuine and heartfelt. The trustees rely on that delay as an important discretionary reason for refusing relief by way of the stays sought if that point was reached. Had that point been reached, I would have been most unlikely to have exercised the discretion in Ms Kimber’s favour by reason of that delay, which was left without any satisfactory explanation.

(7)    While an annulment generally results in a re-vesting of the property of the bankrupt, this cannot occur for the reason that the sole asset of the bankrupt estate has already been sold. There cannot therefore be restitution in that sense.

40    Finally, the respondents submit that the annulment application constitutes an abuse of process. The respondents submit that Ms Kimber was on notice from at least 31 March 2023 that her application was doomed to fail when Bromwich J held in Kimber [2023] at [17] that:

Ms Kimber has fallen well short of establishing that she has any arguable prospect of obtaining an annulment of her bankruptcy … That is because the allegations of error and impropriety upon which she relies rise no higher than that – bare allegations – mostly based upon assertions made upon her subjective interpretation of documents and events, rather than the proper proof of the factual assertions upon which she relies.

41    The respondents submit that in circumstances where the applicant has nonetheless sought to continue to prosecute her application, and continued to file irrelevant evidence, the annulment application is without merit and should fail as an abuse of process. In my view, that submission is plainly correct. In all of the circumstances, therefore, it would be fruitless to allow the applicant an opportunity to amend her application.

6.     CONCLUSION

42    For these reasons, the annulment application should be summarily dismissed under s 31A of the FCA Act and r 26.01 of the FCR with costs.

Associate:

Dated:    17 February 2025