Federal Court of Australia

Thompson v Lane (No 2) [2025] FCA 951

ORDERS

THE COURT ORDERS THAT:

1.    The application for an extension of time to seek leave to appeal is dismissed.

2.    The applicant is to pay the respondent's costs of the application in any event.

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

REASONS FOR JUDGMENT

VANDONGEN J:

1    The applicant, Emma Thompson, became a bankrupt on 1 July 2020 after she presented a debtor's petition to the Official Receiver on 26 June 2020. Since then, Ms Thompson has regularly engaged in litigation with the respondent, Morgan Lane, who is her trustee in bankruptcy.

2    In Thompson v Lane (Trustee) (No 3) [2022] FCA 128 (Thompson No 3), Ms Thompson unsuccessfully sought to have her bankruptcy annulled, pursuant to ss 153B(1) and 153B(2) of the Bankruptcy Act 1966 (Cth). Then, in Thompson v Lane (Trustee) [2023] FCAFC 32 (Thompson Appeal), Ms Thompson was unsuccessful in an appeal against the decision in Thompson No 3.

3    Ms Thompson was automatically discharged from bankruptcy on 2 July 2023. In a letter dated 3 July 2023, the respondent informed Ms Thompson that although she was no longer bankrupt, the administration of her bankrupt estate would be ongoing. The respondent gave Ms Thompson several reasons why that would occur, namely that:

(a)    her final income contribution assessment was yet to be made;

(b)    there were assets to be dealt with by the trustee;

(c)    assets that had vested in the trustee in bankruptcy remain vested in the trustee; and

(d)    certain requests for information were still outstanding.

4    As the primary judge observed at [20] of her Honour's reasons for decision, Ms Thompson harbours an ongoing conviction that she should never have been declared bankrupt. Further, it is readily apparent that Ms Thompson believes that because she has now been discharged from bankruptcy, there is no legal basis on which the respondent can continue to administer her bankrupt estate. Ms Thompson is also unhappy about the way the respondent has administered her estate.

5    On 17 October 2023, Ms Thompson filed an originating application in the Queensland registry, which was purportedly made pursuant to ss 19 and 149 of the Bankruptcy Act, and pursuant to ss 42-60, 65-25 and 70-56 in Sch 2 of the Bankruptcy Act, which is titled Insolvency Practice Schedule (Bankruptcy) (Insolvency Practice Schedule). In that application, Ms Thompson sought a final order that the respondent cease acting as the trustee of her bankrupt estate.

6    In addition to that final order, Ms Thompson sought interim orders that the respondent forthwith cease to act as trustee, and that he pay her the sum of $334,213.88, being an amount standing to the credit of the 'Worrells File Account' (which appears to be what Ms Thompson understood was the amount recovered by the respondent from his administration of her bankrupt estate). Then, in a subsequent interlocutory application, Ms Thompson sought interim orders that were in substantially the same terms as those sought in her originating application, although she sought payment of a substantially larger amount of money from the Worrells File Account, namely, $523,528.37.

7    Later, in written submissions filed on the morning of the hearing of her applications for interim and interlocutory orders, Ms Thompson sought alternative relief. In that regard, Ms Thompson sought orders compelling the respondent to provide her with various documents and information. Those orders were sought in the alternative to the interim orders sought in both the originating application and in the subsequent interlocutory application.

8    The primary judge was not satisfied that Ms Thompson was entitled to any interim relief. Accordingly, the primary judge refused to make the interim orders sought in the originating application and in Ms Thompson's written submissions. The primary judge also dismissed Ms Thompson's interlocutory applications and made an order that she was to pay the respondent's costs of, and incidental to, the interlocutory proceedings on a party-party basis: Thompson v Lane [2024] FCA 1234.

9    Ms Thompson now applies for an extension of time to seek leave to appeal against the primary judge's orders.

10    For the following reasons, I am of the view that Ms Thompson's application for an extension of time to seek leave to appeal against the orders made by the primary judge must be dismissed, with costs.

11    Before dealing with Ms Thompson's contentions made in support of her application for an extension of time, it is necessary to briefly summarise the primary judge's decision. Then, after referring to the legal framework within which Ms Thompson's application falls to be determined, I will explain why I have reached the conclusion that the proposed grounds of appeal are devoid of merit and that granting an extension of time would therefore be an exercise in futility.

The primary judge's decision

12    As Ms Thompson sought orders on an interim basis, the primary judge considered that it was necessary for her to demonstrate that there was a serious question to be tried as to the entitlement to the relief sought, that damages would not be an adequate remedy, and that the balance of convenience favoured granting the interim relief sought. In that respect, her Honour referred to what was said about the principles to be applied in determining applications for interlocutory injunctions, by Gleeson CJ and Crennan J in Australian Broadcasting Corporation v O'Neill [2006] HCA 46; (2006) 227 CLR 57 at [19].

13    The primary judge then considered Ms Thompson's various applications for interim relief by reference to two topics:

(1)    the effect of Ms Thompson's discharge from bankruptcy; and

(2)    whether the respondent should be removed as the trustee of Ms Thompson's bankrupt estate.

14    In relation to the first of those topics, the primary judge noted (at [22] of her Honour's reasons) that Ms Thompson's discharge from bankruptcy had, to some extent, informed the various forms of relief sought. In that regard, the primary judge noted that Ms Thompson's contentions included that:

(a)    the respondent had no legal basis on which to continue to administer her estate;

(b)    the respondent should provide 'full and frank details' regarding the basis on which he continued to administer the bankrupt estate; and

(c)    monies held by Worrells (the respondent's insolvency firm) should be paid to Ms Thompson because they had re-vested to her when she was discharged from bankruptcy.

15    The primary judge observed that Ms Thompson had misunderstood the nature of a discharge from bankruptcy, referring to s 152 of the Bankruptcy Act (which imposes ongoing duties on a bankrupt, after discharge, to assist a trustee in the realisation and distribution of property as is vested in the trustee) and to several well-known authorities: Pegler v Dale [1975] 1 NSWLR 265; Daemar v Industrial Commission of New South Wales [No 2] (1990) 22 NSWLR 178; Re Balhorn; Ex parte Balhorn and Official Trustee (1981) 39 ALR 223 at 226; and Hudson Jnr v Whalan [1998] FCA 1064 at [7]. In that regard, the primary judge concluded that the respondent was well within his rights to continue to administer the bankrupt estate pursuant to the Bankruptcy Act, to the extent that the administration of the bankruptcy is incomplete, and that he was not required to return monies (held by Worrells) that had been vested in him during the period of bankruptcy.

16    Accordingly, the primary judge found that there was no serious question to be tried concerning the respondent's entitlement to continue to administer the estate, or to hold property (including the money being held by Worrells), even though Ms Thompson had been discharged from bankruptcy.

17    In relation to the second topic, namely, whether the respondent should be removed as trustee of Ms Thompson's bankrupt estate, the primary judge concluded that the Court had wide powers to remove a trustee in bankruptcy on its own initiative, and that Ms Thompson was at liberty to ask the Court to exercise such a power. In that respect, the primary judge noted that Ms Thompson alleged that the respondent had failed to faithfully perform the duties of a registered trustee, and to comply with the Bankruptcy Act and the Insolvency Practice Schedule. Ms Thompson alleged that the respondent had contravened:

(a)    s 19 of the Bankruptcy Act;

(b)    s 65-25 of the Insolvency Practice Schedule; and

(c)    s 70-56 of the Insolvency Practice Schedule.

18    The primary judge understood that in both Ms Thompson's interlocutory applications and in her originating application, she sought removal of the respondent because she was of the view that:

(a)    he had failed to provide information in response to her requests;

(b)    he had improperly paid monies out of an administration account;

(c)    there were issues in relation to the respondent's appointment as trustee; and

(d)    there were alleged breaches by the respondent of his duties under s 19 of the Bankruptcy Act.

19    The primary judge dealt with each of these aspects of Ms Thompson's contentions in turn, noting that her consideration of those contentions was only at an interlocutory level.

20    First, the primary judge considered whether there was a serious question to be tried that the respondent had failed to answer Ms Thompson's requests for information. In that context, her Honour noted that s 70-56 of the Insolvency Practice Schedule conferred on a bankrupt a right to request certain information from the trustee in bankruptcy, and a corresponding obligation on the trustee to comply with that request in certain circumstances. The primary judge also noted that Ms Thompson sought alternative orders for 'full and frank details and all documents' to be provided to her in relation to the administration of her bankrupt estate.

21    After referring to examples of Ms Thompson's various requests that she had previously made to the respondent for information and documents, and the respondent's evidence about Ms Thompson's requests and his submissions in response, the primary judge said the following, at [46]:

In my view the evidence of the trustee concerning the history of his provision of all relevant information to Ms Thompson is credible, and should be accepted. At this interlocutory level, based on the evidence before the Court, I am not satisfied that there is a question to be tried regarding the alleged failure of the trustee pursuant to [s 70-56 of the Insolvency Practice Schedule] to provide information to Ms Thompson, or alleged breach of duty by the trustee in this regard.

(emphasis added)

22    It may be seen that the primary judge concluded that there was no serious question to be tried that the respondent had failed to comply with s 70-56 of the Insolvency Practice Schedule or otherwise breached his duty as trustee, based on her assessment of the respondent's evidence.

23    The primary judge then dealt with the question of whether there was a serious question to be tried that the respondent had improperly paid money out of the administration account. In that regard, she referred to s 65-25 of the Insolvency Practice Schedule, which provides that a trustee in bankruptcy must not pay money out of an administration account for an estate otherwise than for purposes related to the administration of the estate, or in accordance with the Bankruptcy Act, or in accordance with a direction of the Court.

24    The primary judge noted that in her originating application, Ms Thompson had also referred to s 42-60 of the Insolvency Practice Schedule, although that provision does not exist. Ultimately, the primary judge proceeded on the basis that Ms Thompson had intended to refer to r 42-60 of the Insolvency Practice Rules (Bankruptcy) 2016 (Cth) (Insolvency Practice Rules), which is an instrument made under the Bankruptcy Act. Rule 42-60 of the Insolvency Practice Rules essentially obliges trustees to only incur costs that are necessary and reasonable.

25    Ms Thompson also sought orders, in the alternative, that the respondent provide 'full and frank details and all documents' to evidence that all costs, charges and expenses that the trustee sought to be paid for the administration of the bankrupt estate were necessary, reasonable in amount, and reasonably incurred.

26    After considering in detail Ms Thompson's many complaints about the respondent's expenditure, and by reference to the respondent's affidavit evidence that was before her Honour, the primary judge concluded as follows at [54]-[55]:

As is clear from both the present proceedings, and previous litigation between Ms Thompson and the trustee, law firm Shand Taylor has represented the trustee, and continues to represent the trustee, in his ongoing disputes with Ms Thompson. I further note that monies paid to Arila Lodge CTS 14237 [Ms Thompson's former unit] plainly relate to payment of costs to the Body Corporate [of Arila Lodge] as ordered in previous litigation. Such costs orders have been the subject of earlier consideration by this Court.

There is no material before the Court to suggest, even at a prima facie level, that there has been wrongdoing by the trustee in respect of payment of monies by the trustee referable to the bankrupt estate of Ms Thompson. In the circumstances on the material before me I am not satisfied that there is a serious question concerning the payment of monies by the trustee as alleged by Ms Thompson.

(emphasis added)

27    Finally, the primary judge considered whether there was a serious question to be tried that the respondent had contravened s 19 of the Bankruptcy Act. Section 19 imposes several duties on a trustee of a bankrupt estate. In this context, the primary judge summarised Ms Thompson's many allegations, as set out in a concise statement filed on 5 December 2023, which alleged that the respondent had failed to act in accordance with his duties. It is unnecessary to reproduce all of those allegations. It is sufficient to note that, under cover of several allegations that the respondent had failed to provide her with various information about the administration of her bankrupt estate, Ms Thompson complained about the circumstances relating to the commencement of her bankruptcy, as well as the basis on which the respondent has continued to administer her bankrupt estate, hold property and expend money. Ms Thompson also made several allegations that the respondent has made false statements and has engaged in fraud.

28    Having already found there was no material to support many of Ms Thompson's claims that the respondent had failed to provide her with information, or that he had made improper payments, the primary judge concluded that there was no serious question to be tried concerning the alleged breaches of the trustee's duties. In that regard, the primary judge said the following at [58]-[65]:

A number of these claims have already been dealt with by me in relation to the alleged failure of the trustee to provide information to Ms Thompson, and allegedly improper payments by the trustee, and I have found there is no material before me to support such claims even at an interlocutory level.

I am also satisfied on the material before me that there is no serious question to be tried concerning alleged breaches by the trustee of other duties under s 19 of the Bankruptcy Act. I have formed this view for the following reasons.

In respect of Ms Thompson's claims concerning historical events referable to the commencement of her bankruptcy (including for example whether or not her Debtor's Petition should have been accepted, whether the debt the subject of the bankruptcy notice was valid, and whether Ms Thompson was ever actually insolvent), these issues have been considered and resolved in previous proceedings before this Court (including the decisions of Logan J in [Thompson No 3] and the Full Court on appeal in [Thompson Appeal]. It is entirely inappropriate for such issues to be revisited in the applications currently before me.

Further orders sought by Ms Thompson by way of further relief, pursuant to paras 2(e) and (h) [of Ms Thompson's written submissions], seek particulars or go to an issue reminiscent of discovery, and largely appear to reflect an intention by Ms Thompson to relitigate issues which were the subject of the proceedings before Logan J and the Full Court. As I noted in the hearing, that is 'water which has long ago passed under the bridge' (transcript ll 21-22 p 5).

Ms Thompson made several submissions that the decisions of Logan J, and the Full Court on appeal, were based on false assertions made by the respondent, that the respondent had misled the Court in those proceedings and that the judgment of Logan J was obtained by fraud.

[The primary judge referred to D'orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 233 CLR 121, and to the principles of finality in litigation]

As noted by Thomas J in Storry v Weir (No 2) [2022] FCA 1360, the threshold for a judgement [sic] to be challenged on the basis of fraud is very high. As his Honour observed in that case:

15.    Allegations of fraud are 'extremely serious' and the fraud must be 'directly material' to the judgment challenged: Wu Avin Operations Pty Ltd (No 2) [2006] FCA 792 at [24] (per Kenny J).

The present proceedings are not a means through which Ms Thompson can relitigate her loss before Logan J. That judgment was appealed, and upheld by the Full Court. It is not for this Court to entertain an attempt to relitigate, or to order particulars or discovery on issues which have long since been decided by both the Federal Court at first instance and the Full Court on appeal.

29    Ultimately, the primary judge said that she was not satisfied that Ms Thompson was entitled to any interim relief. Her Honour was, however, persuaded that the respondent was entitled to an order for costs. Noting that Ms Thompson was no longer bankrupt, the primary judge ordered that those costs should be paid by Ms Thompson personally.

30    Having summarised the primary judge's reasons for dismissing Ms Thompson's applications for interim relief, it is convenient to briefly refer to the legal principles that govern this Court's approach to applications for extensions of time to seek leave to appeal.

The relevant legal framework

31    Section 24(1A) of the Federal Court of Australia Act 1976 (Cth), read with s 24(1)(a), relevantly provides that an appeal shall not be brought from an interlocutory judgment unless the Court or a judge gives leave to appeal. Pursuant to r 35.13 of the Federal Court Rules 2011 (Cth), an application for leave to appeal must be filed within 14 days after the date on which judgment was pronounced or the order was made, or before a date fixed by the Court from which leave to appeal is sought. The orders Ms Thompson seeks to appeal against were made on 24 October 2024. Accordingly, any application for leave to appeal was required to be filed by 7 November 2024. However, Ms Thompson filed an application for an extension of time to seek leave to appeal on 19 November 2024.

32    A grant of an extension of time is not automatic, but an extension of time may be allowed to enable the Court to do justice between the parties: Gallo v Dawson (1990) 64 ALJR 458 at 459 (McHugh J). The question of whether to extend time in a particular case is not answered by reference to express criteria: Peczalski v Comcare [1999] FCA 366 at [19]. However, when considering whether to grant an extension of time, relevant considerations include the length of the delay, the adequacy of the explanation for the delay, any prejudice that arises from the grant of an extension and the merits of the proposed substantive application: AZO24 v Commonwealth of Australia [2025] FCAFC 77 at [35].

33    Where an extension of time is sought for leave to appeal, it is necessary to appreciate that leave to appeal will generally be refused unless the application for leave establishes that: (a) the decision giving rise to the orders is attended by sufficient doubt to warrant it being considered by a Full Court; and (b) substantial injustice would result if leave were refused. These considerations are cumulative and leave to appeal will not be granted unless each limb of the test is made out: AIX20 v Director-General of Security [2025] FCAFC 38 at [13]; see also Bienstein v Bienstein [2003] HCA 7 at [29].

34    It is clear, therefore, that neither an extension of time nor leave to appeal will be granted if the proposed appeal has no real prospects of success: FJE20 v Minister for Home Affairs [2022] FCAFC 45; (2022) 293 FCR 14 at [9]; and Franklin v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] FCAFC 18 at [25], citing BQQ15 v Minister for Home Affairs [2019] FCAFC 218 at [33]. If a proposed appeal has no real prospects of success an extension of time would be futile.

35    Finally, as McEvoy J noted in Chen v Birbilis [2023] FCA 1644 at [26]:

The Court is to consider the proposed appeal at a 'reasonably impressionistic level' and assess whether the proposed appeal is 'sufficiently arguable' or has 'reasonable prospects of success': MZABP v Minister for Immigration and Border Protection [2015] FCA 1391; (2015) 242 FCR 585 at 597-598 [62]-[63] (Mortimer J). The Court does not 'descend into a complete or full determination of the issues': AZAFF v Minister for Immigration, Citizenship and Multicultural Affairs [2022] FCAFC 176 at [58] (Collier, Farrell and Abraham JJ); GOK18 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2021] FCAFC 169 at [32] (Collier, Rangiah and Derrington JJ).

36    In that regard, see also BQQ15 at [33].

37    Having explained the relevant legal framework within which Ms Thompson's application for an extension of time is to be determined, I will now consider whether that application should be allowed.

Should there be an extension of time within which to seek leave to appeal?

The evidence

38    In support of her application for an extension of time, Ms Thompson relies on an affidavit that she swore on 19 November 2024, to explain why there had been a delay in filing an application for leave to appeal. At the hearing of the application, Ms Thompson also advised that she wishes to rely on two further affidavits, sworn on 17 March and 22 May 2025, neither of which had been filed in these proceedings. Ms Thompson advised that she had attempted to file the affidavit of 22 May 2025 by emailing it to the Queensland registry of the Court, but it had not yet been accepted for filing. The affidavit of 17 March 2025 appeared to have been filed in proceedings in the District Court of Queensland, which were or are currently on foot between Ms Thompson and a body corporate of certain premises in Toowong, Queensland (the Toowong Property). After counsel for the respondent was given the opportunity to review those two further affidavits, she advised that the respondent only objected to the affidavit sworn 17 March 2025, on the basis that it was irrelevant.

39    The evident purpose of the affidavit of 22 May 2025 was to exhibit three pieces of correspondence. The first was a letter from a Queensland law firm to Ms Thompson, relating to the enforceability of a costs agreement between the body corporate of the Toowong Property and its legal advisors. The second was a letter from a different firm of solicitors, who were then acting on behalf of the respondent, which was addressed to the body corporate's legal advisors. That letter was concerned with the impact of Ms Thompson's bankruptcy on certain proceedings that were then pending in the District Court of Queensland. The third is a document Ms Thompson says she provided to the respondent, in which she appears to make extensive comments about various proofs of debt submitted to the respondent.

40    In her affidavit of 17 March 2025, Ms Thompson made various allegations about having been locked out of the Toowong Property, that the body corporate of that property had been operating 'invalidly and insolvently', and that there was no jurisdiction for the body corporate to commence proceedings against her. In addition to other documents, the same two letters from legal firms that were attached to her affidavit of 22 May 2025 were also attached to this affidavit.

41    In my view, none of that material is relevant to the question of whether an extension of time to seek leave to appeal against the primary judge should be granted.

42    The respondent relied on an affidavit of Roderick Ernest O'Sullivan, a director of the solicitors for the respondent who has had conduct of this matter at all relevant times, which is dated 8 April 2025. In the affidavit of the respondent dated 5 April 2024, which is annexed to Mr O'Sullivan's affidavit, the respondent relevantly deposed that he has formed the view that Ms Thompson is the legal and equitable owner of the Toowong Property. Mr O'Sullivan says that the respondent commenced proceedings in this Court on 5 April 2024 (QUD 176 of 2024) in which an order for vacant possession of the Toowong Property was sought. According to Mr O'Sullivan, those proceedings have been effectively stayed awaiting the outcome of this application, with the result that the respondent has been unable to progress his administration and finalisation of Ms Thompson's bankrupt estate.

43    I should note here that Ms Thompson's application for an extension of time was initially allocated to another judge's docket. However, on 17 February 2025, that judge decided to recuse themselves from dealing with the matter and orders were made that the application be reallocated to another judge.

Explanation for the delay in filing an application for leave to appeal

44    There was only a relatively short delay before Ms Thompson took steps to appeal against the primary judge's orders. On all the evidence before me, it is apparent that the reason for the delay was that Ms Thompson did not realise that she was required to file an application for leave to appeal by 7 November 2024. As soon as Ms Thompson realised that she had failed to comply with the necessary procedural steps, when she sought to file an application for leave to appeal on 18 November 2024, she then promptly filed the necessary application for an extension of time to seek leave to appeal on 19 November 2024.

45    The respondent did not make any submissions about the delay in seeking leave to appeal, or about Ms Thompson's reasons for that delay. The respondent did, however, submit that he has been prejudiced because of the delays caused by Ms Thompson's originating application, essentially for the reasons set out in Mr O'Sullivan's affidavit of 8 April 2025.

46    Although it may be accepted that the proceedings commenced by the originating application have delayed the progress of other proceedings commenced by the respondent, the relevant question is whether the approximate 12 day delay in filing an application for leave to appeal has prejudiced, or will prejudice, the respondent. In all of the circumstances, it is difficult to see how the respondent could have been relevantly prejudiced by that delay.

47    Having dealt with the delay in filing an application for an extension of time, it is then necessary to deal with what is, in my view, the determinative question of whether any of the proposed grounds in Ms Thompson's draft notice of appeal have reasonable prospects of success.

Do any of the proposed grounds of appeal have reasonable prospects of succeeding?

48    Although Ms Thompson has a law degree, it has been challenging to clearly identify the reasons why she says the primary judge erred in refusing to grant the interim relief sought. The proposed grounds, and Ms Thompson's submissions in support of her application, fail to clearly identify the alleged errors. However, and doing the best I can, the following contentions emerge.

49    Firstly, Ms Thompson was denied procedural fairness because the primary judge determined her applications for interim relief in accordance with what was said by Gleeson CJ and Crennan J in Australian Broadcasting Corporation v O'Neill (at [19]), without first drawing that case to her attention.

50    Secondly, the primary judge erred in concluding that there was no serious question to be tried concerning the respondent's entitlement to continue to administer Ms Thompson's bankrupt estate and to hold property, including the funds standing to the administration account relating to Ms Thompson's bankrupt estate, in circumstances in which Ms Thompson was discharged from bankruptcy on 2 July 2023.

51    Thirdly, the primary judge erred in failing to remove the respondent as trustee of Ms Thompson's bankrupt estate.

52    Fourthly, the primary judge erred in refusing to make orders pursuant to ss 65-25 and 70-56 of the Insolvency Practice Schedule, or other orders, requiring the respondent to provide 'full and frank' information to Ms Thompson.

53    Finally, Ms Thompson contends that the primary judge erred in making an order that she pay the respondent's costs of, and incidental to, the interlocutory proceedings on a party-party basis.

54    Responsibly, the respondent has not made any submissions about the merits of Ms Thompson's application, other than to observe that he has not identified any errors in the primary judge's reasons.

55    I will deal with each of these contentions in turn.

Is it reasonably arguable that Ms Thompson was denied procedural fairness?

56    As I have already observed, the primary judge determined Ms Thompson's various applications for interim orders by considering whether there was a serious question to be tried as to the entitlement to the relief sought, whether damages would not be an adequate remedy, and whether the balance of convenience favoured granting the interim relief sought. In her Honour's reasons, the primary judge cited a passage from the joint reasons of Gleeson CJ and Crennan J in Australian Broadcasting Corporation v O'Neill (at [19]), as authority for taking that approach. However, Ms Thompson complains that she was not given any prior notice of the existence of that decision or that it would be used by the primary judge to decide her applications. Ms Thompson says that this meant that she was unable to deal with her applications within the legal framework adopted by the primary judge.

57    Based on my review of the materials, including the transcript of the hearing that took place before the primary judge, it does appear as though Ms Thompson's attention was never drawn to Australian Broadcasting Corporation v O'Neill. However, it is not correct to say that Ms Thompson was therefore denied procedural fairness or that the primary judge thereby fell into jurisdictional error.

58    The transcript reveals that towards the end of the hearing, and after the primary judge indicated that the parties would be given time to file further written submissions in relation to the alternative interim orders sought by Ms Thompson, the following exchange took place:

HER HONOUR: All right. So thank you. So this unfortunately puts this matter - the resolution of this matter into the distance. I'm just wondering if I should also make an order that the matter be adjourned part heard or - it's probably not necessary, I think. The fact of the matter is the matter is not over today; that's all I'm saying. Perhaps I will simply make an order that the continuation of the hearing be conducted on the papers, and that makes it clear. Is there anything further?

MS THOMPSON: I've heard in some proceedings an order gets made that either party is at liberty to make an application.

HER HONOUR: I'm - - -

MS THOMPSON: Is that what you were thinking?

HER HONOUR: That's exactly where I was going, Ms Thompson, but I'm not inclined to have any more.

MS THOMPSON: Okay.

HER HONOUR: That's why I said I think a line needs to be drawn. I was going to say there be liberty to apply, but I don't think this is appropriate. I do not think that there needs to be further applications made at this point, at least in relation to the interim application. It's only the interim application that I'm hearing at this stage.

MS THOMPSON: Yes, your Honour.

HER HONOUR: So if there - if anyone comes up with something new, it's not - I think we need to draw a line under this particular application at this stage. Can I also just make the observation that this is an interim application that I'm hearing at the moment. Interim applications tend to require, among other things, that there be - that the applicant satisfy the court of the merits of the case, the balance of convenience such - it uses that. That's something else I will need to have a look at in the context of this - and determination of this application.

MS THOMPSON: Sorry, could I just ask your Honour to repeat that - that I satisfy the court of the merits of the application?

HER HONOUR: All right. Because this is an interlocutory - this is not the main originating application I'm hearing at the moment. Interim or interlocutory applications also require the party - the moving party to satisfy the court that there's merits in the substantive application, that the balance of convenience supports the interim orders sought, that there may be other issues which are relevant. So that's something I will also need to give some consideration to on the material before me. Now, is there anything else? No?

MR O'SULLIVAN: No, your Honour.

HER HONOUR: Thank you. Court Officer, please adjourn.

MS THOMPSON: Thank you, your Honour.

(emphasis added)

59    Accordingly, while Ms Thompson's attention may not have been specifically drawn to Australian Broadcasting Corporation v O'Neill, in circumstances in which Ms Thompson was afforded the opportunity to make further written submissions, the primary judge put her on notice that she was minded to determine the interim applications by reference to the merits of those applications and to the balance of convenience. Regardless, it is not reasonable to suggest that Ms Thompson did not at least appreciate that the primary judge would decide whether to make any of the interim orders sought by reference to the merits of Ms Thompson's applications, which is precisely what her Honour did.

60    It is true that the primary judge did not specifically alert Ms Thompson to the need to address the question of whether damages would be an adequate remedy. However, the primary judge refused to grant the interim relief sought by Ms Thompson because there were no serious questions to be tried. That conclusion relieved the primary judge of the need to then go on to determine whether damages would have been an adequate remedy. Accordingly, even if Ms Thompson did not have prior notice of the potential relevance of whether damages would have been an adequate remedy, there was no practical injustice, as she was not deprived of a realistic possibility of a different outcome: Nathanson v Minister for Home Affairs [2022] HCA 26; (2022) 276 CLR 80.

61    In my view, the contention that Ms Thompson was denied procedural fairness is devoid of merit and has no reasonable prospects of success.

Is it reasonably arguable that the primary judge erred in concluding that there was no serious question to be tried concerning the respondent's entitlement to continue to administer Ms Thompson's bankrupt estate and to hold property?

62    It is not reasonably arguable that the primary judge erred in concluding that there was no serious question to be tried that the respondent was not entitled to continue to administer Ms Thompson's bankrupt estate, or to hold the property of that estate. In that regard, it is well established that property that has vested in a trustee in bankruptcy continues to be so vested, and that a trustee is required to continue to administer a bankrupt estate, even after discharge of the bankruptcy.

63    As was explained by McLelland J in Gosden v Dixon (1992) 107 ALR 329 at 331:

In general terms, where a person becomes a bankrupt, property that belonged to him at the commencement of the bankruptcy or is acquired by him before his discharge vests in the relevant trustee and constitutes property which is available to be realised and divided among the bankrupt's creditors. That, I think, is the effect of ss 58(1) and 116 of the Bankruptcy Act. A discharge from the bankruptcy releases the bankrupt from his debts and enables him to retain property which he subsequently acquires free of any claim by the trustee. That, I think, is the effect of ss 153 and 116 of the Act. However, a discharge does not cause to be revested in the bankrupt any property which has vested in the trustee prior to the discharge from bankruptcy. In regard to such property the trustee is still bound to collect and realise it, and to distribute the proceeds among the creditors, notwithstanding the discharge. These propositions are clearly established by several decisions including Pegler v Dale (1975) 6 ALR 62; [1975] 1 NSWLR 265; Re Balhorn; Ex parte Balhorn and Official Trustee (1981) 39 ALR 223; Daemer v Industrial Commission (1990) 22 NSWLR 178; 99 ALR 789. In the words of Lockhart J in Re Balhorn at 226:

'The trustee of a bankrupt's estate is still bound to collect, realise and distribute such of the bankrupt's property as was vested before discharge in the trustee.'

Is it reasonably arguable that the primary judge erred in failing to remove the respondent as trustee of Ms Thompson's bankrupt estate?

64    This contention may be disposed of shortly. There is nothing to suggest that Ms Thompson would suffer substantial injustice if an extension of time and leave to appeal against the primary judge's orders were refused. In that regard, it is important to note that in her originating application, which remains on foot, Ms Thompson seeks a final order that the respondent cease acting as trustee of her bankrupt estate. That application for final relief remains unaffected by the primary judge's decision.

65    In any event, I am of the view that it is not reasonably arguable that the primary judge erred in refusing Ms Thompson's applications for an interim order that the respondent cease acting as the trustee of her bankrupt estate.

66    As I briefly outlined earlier at [18] of these reasons, the primary judge approached Ms Thompson's applications for an interim order to remove the respondent as the trustee in bankruptcy on the basis that it was contended that:

(a)    the respondent had failed to comply with s 70-56 of the Insolvency Practice Schedule and with his general duties as trustee, by failing to comply with Ms Thompson's requests for information;

(b)    the respondent had improperly paid money out of the administration account, thereby failing to comply with s 65-25 of the Insolvency Practice Schedule, and with r 42-60 of the Insolvency Practice Rules; and

(c)    the respondent had otherwise failed to comply with several duties imposed on him by s 19 of the Bankruptcy Act.

67    The primary judge concluded that there was no serious question to be tried in relation to any of those contentions.

68    As I have already noted, at [21]-[22] of these reasons, the primary judge rejected the first contention, having found that the respondent's evidence about the information that had been provided to Ms Thompson during the administration of her bankrupt estate was credible and should be accepted. There is nothing in the materials before me to suggest that it is reasonably arguable that the primary judge erred in accepting the respondent's evidence in this respect. It was plainly open to the primary judge to accept the respondent's evidence, at an interlocutory stage, and to conclude on that basis that there was no serious question to be tried as to whether the respondent had failed to comply with s 70-56 of the Insolvency Practice Schedule, or with any other duty as trustee to provide information to Ms Thompson.

69    In relation to the second contention, and as the primary judge recognised by reference to a concise statement filed on 5 December 2023, Ms Thompson's complaints about money being paid out of the administration account focused on the payment of legal costs to the respondent's solicitors and on payments that were made to a body corporate associated with the Toowong Property.

70    In dealing with Ms Thompson's complaints, the primary judge referred to the affidavit evidence relied on by the respondent in reaching a conclusion that there was no evidence to suggest, even at a prima facie level, that any money had been improperly paid out of the administration account. Specifically, the primary judge referred to an email annexed to the respondent's affidavit dated 25 January 2024, which had been sent by the respondent's solicitor, to Ms Thompson on 30 November 2023. In that email, the respondent's solicitor set out, in tabular form, details of all of the legal costs paid out of Ms Thompson's bankrupt estate, which were said by the solicitor to have been paid pursuant to s 109(1)(a) of the Bankruptcy Act (which makes provision for the priority of making payments out of a bankrupt estate) or were paid in accordance with court orders.

71    The primary judge also referred to the respondent's evidence set out in an affidavit dated 15 February 2024. In that affidavit, the respondent:

(a)    referred to other affidavits filed in QUD 113 of 2021 (proceedings relating to Thompson No 3), in which he had provided details of the costs incurred in administering the bankrupt estate at that time;

(b)    said that his insolvency firm had made 'real-time reporting of time, costs and outlays' incurred by him in the administration of the bankrupt estate available via the firm's website, and noted that based on his communications with Ms Thompson, she has accessed that information;

(c)    provided updated information about the legal and other administrative payments made since 30 November 2023; and

(d)    noted that by a resolution of creditors made on 21 August 2020, his own fees were approved up to an amount of $26,617.01, in respect of which, at the date of the affidavit, he had only drawn the amount of $691.24 in payment of his fees.

72    It is evident that the primary judge accepted the respondent's evidence, as her Honour was plainly entitled to do. In that regard, her Honour said at [54]:

As is clear from both the present proceedings, and previous litigation between Ms Thompson and the trustee, law firm Shand Taylor has represented the trustee, and continues to represent the trustee, in his ongoing disputes with Ms Thompson. I further note that monies paid to Arila Lodge CTS 14237 plainly relate to payment of costs to the Body Corporate [relating to the Toowong Property] as ordered in previous litigation. Such costs orders have been the subject of earlier consideration by this Court.

73    There is nothing in the materials before me that suggest that the primary judge erred in finding that there was no evidence of any relevant wrongdoing by the respondent in connection with payments of money out of the administration account of Ms Thompson's bankrupt estate. I am far from persuaded that it is reasonably arguable that the primary judge was wrong to conclude that there was no serious question to be tried in that respect.

74    In relation to the third contention, earlier in these reasons at [28], I set out the primary judge's reasons for concluding that there was no serious question to be tried that the respondent had contravened s 19 of the Bankruptcy Act. The primary judge observed that she had already dealt with many of Ms Thompson's allegations that the respondent had failed to comply with s 19 when dealing with Ms Thompson's contentions that the respondent had failed to provide information, and that he had made improper payments. This observation was plainly correct. In that respect, I have already concluded that it is not reasonably arguable that the primary judge erred in deciding that those matters did not give rise to any serious question to be tried.

75    Ms Thompson has also failed to demonstrate that it is reasonably arguable that the primary judge erred in concluding that, on the material before her, there was no serious question to be tried in relation to the balance of her allegations that the respondent had failed to comply with s 19 of the Bankruptcy Act. In my view, the primary judge was correct to observe, in effect, that Ms Thompson's contentions amounted to an impermissible attempt to challenge, by a side-wind, the result in both Thompson No 3 and the Thompson Appeal, and to relitigate issues that have now been finally decided.

Is it reasonably arguable that the primary judge erred in refusing to make orders that the respondent comply with s 70-56 of the Insolvency Practice Schedule or to make other orders requiring the respondent to provide 'full and frank' information to Ms Thompson?

76    I have already dealt with this contention in the context of Ms Thompson's argument that it is reasonably arguable that the primary judge erred in refusing to make an order that the respondent be removed as trustee of her bankrupt estate. For the reasons I have already given at [68], a contention that the primary judge erred in refusing to make orders that the respondent comply with s 70-56 of the Insolvency Practice Schedule or that he otherwise provide information to Ms Thompson, is devoid of merit.

Did the primary judge err in making an order that Ms Thompson was to pay the respondent's costs of, and incidental to, the interlocutory proceedings on a party-party basis?

77    In order to understand this contention, it is necessary to set out Ms Thompson's proposed ground of appeal, in full:

Collier J has failed to identify that there is no valid basis for a costs order to be made, as;

a)    there is no valid costs agreement between the respondent and Shand Taylor Lawyers; noting that the costs agreement dated 8 July 2021 exhibited on pages 48 to 51 of the respondent's affidavit dated 25 January 2024 is not a valid costs agreement between the respondent and Shand Taylor Lawyers; and

b)    the decision Bingham v Boensch [2023] FCA 117 confirmed the requirement for 'an agreement about the payment of legal costs' as prerequisite for payment of legal costs and there is no filed evidence of 'an agreement about the payment of legal costs' between the respondent and Shand Taylor Lawyers; and

c)    Shand Taylor Lawyers, has failed to comply with the requisite requirements of relevant legislation including;

Legal Professional Act 2007 [sic - Legal Profession Act 2007 (Qld)], including s.308 and s.315, s.340 and s.341; and

Legal Profession Regulation 2017 [(Qld)], including s.69; and

Australian Solicitors Conduct Rules 2012 [(Qld)], including Rules 3, 5 and 19; and

d)    The Federal Court Rules 2011 [(Cth)];

i.    Rule 40.06 provides for costs that have been improperly, unreasonably or negligently incurred to be disallowed; and

ii.    Schedule 1 Dictionary states;

'costs as between party and party means only the costs that have been fairly and reasonably incurred by the party in the conduct of the litigation'

Shand Taylor Lawyers has failed to inform the Court of all relevant facts and failed to comply with legislation, thus their legal costs have not been 'fairly and reasonably incurred' and should be disallowed.

e)    there is no valid basis to cut-and-paste into the decision, from the respondent's affidavit dated 25 January 2024, that; 'A costs order against the applicant was appropriate in circumstances where she had now been discharged from bankruptcy'.

f)    The respondent does not have 'a right to full indemnity out of the trust estate against all costs, charges and expenses incurred' as is incorrectly stated in paragraph 69 of the decision.

A bankruptcy trustee is only entitled to be paid a reasonable amount for necessary work properly performed in the administration a regulated debtor's estate, and a bankruptcy trustee must not derive profit or advantage from the administration of the estate.

The respondent is not entitled to payment in the circumstances that exist, namely that the respondent has not acted properly nor in accordance with all requirements of being the bankruptcy trustee, and the respondent has caused the Court to be misled.

(original emphasis)

78    I have previously dealt with similar arguments in Thompson v Ellis (No 2) [2025] FCA 649.

79    In proposed grounds 1(a), (b) and (c) Ms Thompson argues, in effect, that it was not open to the primary judge to make a costs order because there was no 'valid' costs agreement between the respondent and the solicitors who represented him before the primary judge. However, as I concluded in Thompson v Ellis, even if the premise of Ms Thompson's argument were to be accepted, it is not reasonably arguable that the primary judge's decision to order that Ms Thompson pay the respondent's costs amounted to an erroneous exercise of her Honour's discretion.

80    As I said in Thompson v Ellis, Ms Thompson's contentions appear to amount to an argument that the primary judge failed to find that the 'indemnity principle' was not satisfied when she made costs orders in favour of the respondent. That principle was explained by O'Bryan J in Natch v Stennson Pty Ltd (No 2) [2024] FCA 1498 at [51] as follows:

An order for costs against an unsuccessful litigant aims to provide the successful party with some level of indemnity for the legal costs the successful party would not have incurred had it not been necessary to uphold his or her rights in court. Such a costs order does not entitle the successful party to recover more than they have paid or are liable to pay to their own lawyer, and this forms the basis of the indemnity principle - that a party ordered to pay any other party's costs is obliged to pay only those costs which the other party is legally obliged to pay to their lawyers.

(citations omitted; emphasis added)

81    However, the existence of a costs agreement that satisfies the requirements of the Legal Profession Act 2007 (Qld), and which obliges a client to pay costs to their lawyers, is not a prerequisite for the making of a costs order or for undertaking a costs assessment. As Martin CJ said in Huntingdale Village Pty Ltd (Receivers and Managers Appointed) v Corrs Chambers Westgarth [2018] WASCA 90 at [143]:

[I]t is not correct to say that the entitlement to charge and be paid costs is determined by the legislation which governs a legal practitioner's conduct. The entitlement to charge and be paid costs arises from the agreement of retainer between practitioner and client. Statutory regulation of the rights arising from such agreements does not alter their fundamental source.

82    In the absence of proof of an agreement to the contrary, a solicitor who acts on instructions for a party on the record is taken to be entitled to look to that party for costs: Marsh v Baxter [No 2] [2016] WASCA 51 at [37]‑[38]. Further, the existence of a retainer gives rise to an implied undertaking on the part of the client to pay costs: Pryles & Defteros (a firm) v Green [1999] WASC 34; (1999) 20 WAR 541 at [30]; Olympic Holdings Pty Ltd v Lochel [2004] WASC 61 at [172]; Oil Basins Limited v Watson [2017] FCAFC 103; (2017) 252 FCR 420 at [75]; and Gray v Lavan (a firm) [2024] WASCA 147 at [11]‑[20] (Buss P and Mitchell JA), [130]-[134] (Vandongen JA).

83    I also dealt with Ms Thompson's contention in proposed ground 1(b) of her draft notice of appeal in Thompson v Ellis at [46]-[48]. As I have explained, the decision in Bingham v Boensch [2023] FCA 117 is of no assistance to Ms Thompson as that case was concerned with the obligations to pay costs as between a legal practitioner and their own client, not costs as between party and party.

84    It is also not reasonably arguable that the primary judge's decision to order that Ms Thompson pay the respondent's costs based on any of the contentions in (d), (e) or (f) of proposed ground 1. There is no substance to Ms Thompson's contention in proposed ground 1(d), because Ms Thompson did not apply for an order pursuant to r 40.06 of the Federal Court Rules. Further, it is open to Ms Thompson to contend before a taxing officer that costs have been improperly, unreasonably or negligently incurred, as such an officer will have the power to disallow any such costs. In those circumstances, no substantial injustice would result if an extension of time to seek leave to appeal on this ground were refused.

85    In circumstances in which the primary judge's decision, that it was appropriate to make an order that Ms Thompson pay the respondent's costs of her applications for interim orders, was discretionary, the bare contention in proposed ground 1(e) that her Honour's decision was in error has no prospects of success.

86    The contention made in proposed ground 1(f) is also without merit. Although the primary judge referred to a submission made by the respondent about a trustee's right to an indemnity out of Ms Thompson's bankrupt estate, the existence of that right did not bear on the question of whether Ms Thompson should pay the respondent's costs personally.

87    For these reasons, Ms Thompson's contention that the primary judge erred in making an order that she pay the respondent's costs of, and incidental to, her applications for interim relief is not reasonably arguable.

Conclusion

88    As I have concluded that none of Ms Thompson's contentions are reasonably arguable, her application for an extension of time to seek leave to appeal must be dismissed.

89    There are no reasons why the costs of this application should not follow the event. As Ms Thompson has been discharged from bankruptcy, it is appropriate that an order be made that Ms Thompson pay the respondent's costs of the application on a party-party basis.

One final issue

90    In her written submissions, Ms Thompson appeared to contend, for various reasons, that the decision in Thompson No 3 'must be set aside'. Ms Thompson also argued that although she had unsuccessfully attempted to file an application under r 39.05 of the Federal Court Rules, in which she sought to set aside the judgment or orders made in Thompson No 3, the determination of her application for an extension of time to seek leave to appeal should await the hearing and determination of that further application.

91    It is plainly not open to me to make an order setting aside the judgment or orders made in Thompson No 3, in the context of an application for an extension of time to seek leave to appeal against the decision of the primary judge. Further, insofar as Ms Thompson argued that the hearing and determination of her application for an extension of time should await determination of what was then only a potential application under r 39.05, that argument cannot be accepted.

Associate:

Dated:    13 August 2025