Federal Court of Australia

Scott (Trustee), in the matter of Stolyar (Bankrupt) v Stolyar (No 10) [2025] FCA 439

ORDERS

THE COURT ORDERS THAT:

1.    The oral application made by the first respondent for a stay or alternatively an adjournment of the hearing of the applicant’s interlocutory application filed on 7 March 2025 is dismissed.

2.    The first respondent is to pay the applicant’s costs of the application referred to in Order 1.

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

REASONS FOR JUDGMENT

(REVISED FROM TRANSCRIPT)

MARKOVIC J:

1    On 7 March 2025, the applicant, Andrew Scott in his capacity as Trustee of the bankrupt estates of Ian Stolyar and Beth Ngoc Nguyen filed an interlocutory application (Trustee’s IA) seeking a series of orders in relation to the further administration and sale of assets which was necessitated by orders made in this proceeding, following a lengthy hearing, on 6 September 2022 (6 September 2022 Orders). The Trustee’s IA, in effect, seeks orders in three categories in relation to a property situated at 3/10 Longworth Avenue, Point Piper, New South Wales (Longworth Avenue Property). First, the Trustee seeks the fixing of his costs and disbursements with respect to his appointment as the receiver of the Longworth Avenue Property. Secondly, he seeks his release as receiver of that property. Thirdly, he seeks the release to him of the proceeds of sale of the Longworth Avenue Property which were paid into Court following its sale.

2    The Trustee’s IA was first listed for hearing on 10 April 2025. On that occasion, the first respondent to the application, Faina Stolyar, sought an adjournment of its hearing, insofar as it sought relief in relation to the Longworth Avenue Property. Mrs Stolyar, who has from time to time in the course of this proceeding not been legally represented, had recently appointed Ms Zali Burrows, solicitor, to act for her. Over the objection of the Trustee, I granted the adjournment sought by Mrs Stolyar.

3    At the time I was informed that Mrs Stolyar wished to oppose the Trustee’s IA insofar as it sought payment of his costs, and in particular, to challenge the quantification of those costs. I was also informed that Mrs Stolyar was obtaining advice from senior counsel in relation to the bringing of a proceeding to have the principal judgment in this proceeding set aside, based on an allegation there had been a fraud on the Court in obtaining that judgment.

4    On 10 April 2025, I made orders (10 April 2025 Orders) for the filing of evidence and submissions by Mrs Stolyar in response to the Trustee’s IA and for the Trustee to file and serve any evidence and submissions in reply.

5    Mrs Stolyar did not file any evidence or submissions in accordance with the 10 April 2025 Orders. Late this morning, just prior to the adjourned listing of the Trustee’s IA, an affidavit affirmed by Ms Burrows and some draft orders were sent to my Chambers and, I am informed, at the same time to the Trustee’s solicitors. Mrs Stolyar relies on Ms Burrow’s affidavit, the effect of which is that she now seeks orders in two categories. First, that the Trustee’s IA and a further interlocutory application filed by the Trustee on 24 April 2025, which concerns the receivership of a different property, should be stood over to be determined by another judge. Secondly, that the moneys held in Court which represent the net proceeds of sale of the Longworth Avenue Property should not be released, according to the proposed draft order:

...pending determination of an application for a stay of proceedings for the determination of an application to the Federal Court of Australia seeking to set aside the judgment of Markovic J 16 June 2022 for proceedings NSD 861 of 2019.

6    The effect of the latter is, it seems to me, an application for a stay of the principal judgment and, in particular, the 6 September 2022 Orders insofar as they have not already been executed.

7    In summary, Ms Burrows submitted that Mrs Stolyar was not seeking that I recuse myself on the basis of any actual or apprehended bias; rather, she was seeking that a different judge ought to determine whether there was a serious question to be tried on a prima facie basis, namely that the primary judgment should be set aside for fraud. As Ms Burrows puts it in her affidavit, that is not a matter that I should determine, because I would not be in a position to set out my:

...own thought processes of analysing the evidence of the judgment, which in the circumstances [it] is respectfully submitted that is appropriate that another judge should determine.

8    As to the basis for the stay, Ms Burrows submitted that to have the primary judgment set aside for fraud was a serious matter. In her affidavit, she deposes to the fact that she has been asked to advise on nine allegations of fraud upon the Court. She raises, by way of example, one matter which turns on a bank statement in the name of the bankrupts, Ian Stolyar and Beth Ngoc Nguyen, for an account held with the Commonwealth Bank with account number ending 6864, which Ms Burrows says was omitted from the court book relied on at trial and from the proceeding and which, Mrs Stolyar submits, could have materially affected my findings.

9    In the alternative to a stay, and if I was not minded to grant a stay, Ms Burrows sought on behalf of Mrs Stolyar an adjournment of the hearing of the Trustee’s IA.

10    Having regard to the submissions made on behalf of Mrs Stolyar this morning and the evidence relied on, I am not minded to accede to her application either that the Trustee’s IA be referred to another judge for determination, that there be a stay, in effect, of the 6 September 2022 Orders insofar as the money paid into Court in relation to the Longworth Avenue Property is concerned, or that the hearing of the Trustee’s IA should be adjourned.

11    I will briefly state my reasons.

12    First, there is, in my view, no proper basis upon which the Trustee’s IA ought to be referred to a different judge for determination. This proceeding has been before me for some years now. I not only determined the primary proceeding, but I have dealt with numerous interlocutory applications since then. That a proceeding may be brought alleging that the 6 September 2022 Orders were obtained by fraud is not, in my view, a matter that is relevant to the determination of the Trustee’s IA. If such a proceeding is brought, then it may well be heard and determined by another judge. However, that is a matter to be determined at another time once the proceeding, if it is to be pursued, is filed. As Ms Burrows accepted, there is no allegation or evidence which suggests any apprehended or actual bias on my part.

13    As to the question of a stay pending the determination of the proposed proceeding to set aside the 6 September 2022 Orders, it is relevant to consider the history of this proceeding. Mrs Stolyar alleged that the 6 September 2022 Orders should be said set aside because of a fraud on the Court as early as November 2023. At the time, Mrs Stolyar filed an application seeking, among other things, an order that the 6 September 2022 Orders be stayed pending the outcome of an application to set aside the primary judgment. I heard that application on 30 November 2023 and delivered reasons refusing the stay: see Scott (Trustee), in the matter of Stolyar (Bankrupt) v Stolyar (No 3) [2023] FCA 1529.

14    One of the bases upon which Mrs Stolyar said there should be a stay because the judgment had been obtained by fraud was reliance upon the very bank statement which is now thrown up and once again relied upon as an example of the fraud upon the Court. I addressed that bank statement in Stolyar (No 3) at [45], noting, first, that there was no evidence that the bank statement was in the possession of the Trustee at any time so that it could be said that he intentionally withheld it from the Court, the same holds true today, and that, in any event, having reviewed the document, I found it difficult to see how it could have made a difference to the outcome of the hearing.

15    Mrs Stolyar sought leave to appeal from Stolyar (No 3). That application was refused on 5 December 2023: see Scott (Trustee), in the matter of Stolyar (Bankrupt) v Stolyar (No 4) [2023] FCA 1555.

16    Nothing has changed since November 2023, when Mrs Stolyar’s application was made, and today, at least insofar as the Commonwealth Bank statement identified as an example of the alleged fraud for today’s purposes is concerned. Ms Burrows says in her affidavit that she is advising on nine allegations of fraud, but there is no evidence before me, nor any draft pleading to suggest what they are. That proceeding has not been commenced, and while I accept it may be a complicated proceeding, there is no evidence as to when it might be commenced, and no further elucidation of any other issues it might raise.

17    In any event, the balance of convenience would not favour the granting of a stay. Mrs Stolyar submitted that if the net proceeds of sale of the Longworth Avenue Property were disbursed to the Trustee, assuming an order was made on the Trustee’s IA to that effect, there was a risk that if she was ultimately successful in her proceeding to have the 6 September 2022 Orders set aside, that the Trustee may not be able to repay those monies. However, there is absolutely no evidence to suggest that is the case. The Trustee is a partner of PricewaterhouseCoopers accountants, and as I have already said, there is no suggestion that that firm would not be able to repay the monies in that event.

18    Further, the Trustee has had the benefit of his judgment since 6 September 2022, that is for some two and a half years. He should, assuming he can satisfy me that the orders he seeks in the Trustee’s IA should be made, be able to enjoy the fruits of his judgment, particularly in circumstances where the 6 September 2022 Orders were the subject of an unsuccessful appeal, and an unsuccessful application for special leave to appeal to the High Court.

19    For the same reasons, I would not accede to any application to adjourn the hearing of the Trustee’s IA. As set out above, an adjournment of the hearing of that application was already granted on one occasion and Mrs Stolyar was given time to file any evidence she wished to rely on in opposition to that application. As I explained to Ms Burrows, the Court’s resources are limited and cannot simply be administered for the benefit of particular litigants. Added to that is the additional cost of adjourning this application yet again, a cost that would be borne by the Trustee. Although a costs order might be made in his favour, there is no evidence to suggest that Mrs Stolyar would be able to satisfy any such order.

20    For those reasons, I refuse the application made by Mrs Stolyar orally this morning on the basis of Ms Burrow’s affidavit. The application is dismissed with costs.

Associate:

Dated:    6 May 2025