Federal Court of Australia

Palmer v Lazar, in the matter of Lazar (Bankrupt) [2025] FCA 966

ORDERS

THE COURT ORDERS THAT:

1.    The first respondent’s application for a further adjournment of the applicant’s application be dismissed.

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

REASONS FOR JUDGMENT

(Delivered ex tempore; revised from transcript)

WIGNEY J:

1    The applicant in this matter is Mr Christopher John Palmer, the Trustee of the bankrupt estate of Mr John Zlatko Lazar (the Bankrupt). The Trustee commenced proceedings against the Bankrupt and two other parties seeking, among other things, an order under s 30(1)(b) of the Bankruptcy Act 1966 (Cth) directing the Bankrupt to transfer his interest in a property to the Trustee (the Trustee’s application). The Bankrupt initially did not engage at all with the Trustee or the Court in relation to the Trustee’s application. However, he belatedly appeared at the hearing of the Trustee’s application and sought a lengthy adjournment. While the Bankrupt did not provide an adequate explanation for his prior disengagement with the proceeding, I reluctantly granted him an adjournment for one week. When the matter was called on for hearing the following week, the Bankrupt appeared and sought a further adjournment. This judgment addresses and determines that further adjournment application.

2    It is unnecessary to describe the nature of the proceeding in any detail. The separate judgment that determines the Trustee's application provides sufficient details. These reasons for judgment should be read in conjunction with that judgment: see Palmer as trustee of the Estate of J Z Lazar v J Z Lazar (a bankrupt) & Ors (No. 2) [2025] FCA 967.

3    Before providing a short chronological account of what has occurred in the proceeding to date, it is relevant to note that the Trustee was appointed trustee of the Bankrupt's estate as long ago as March 2015. Since that date, the Bankrupt has manifestly failed to provide any cooperation or assistance to the Trustee. He has, among other things, failed to provide a Statement of Affairs as required by s 54 of the Bankruptcy Act and failed to respond to the Trustee's requests to provide particulars of his income: see s 77 of the Bankruptcy Act. Indeed, he has effectively ignored the Trustee and failed to respond, or meaningfully respond, to virtually all of the Trustee’s communications in relation to the administration of his bankrupt estate.

4    In relation to the application which is currently under consideration, the Trustee repeatedly endeavoured to secure the Bankrupt’s cooperation in respect of the transfer of the relevant property prior to the commencement of the proceeding. The Bankrupt effectively ignored the Trustee's attempts to have him cooperate in respect of the transfer the property. The Trustee was effectively compelled to commence this proceeding so he could finalise the administration of the estate.

CHRONOLOGY OF THE PROCEEDING TO DATE

5    For the reasons that follow, it is not appropriate to grant the further adjournment application sought by the Bankrupt. To understand why that is so, it is necessarily to briefly outline the chronology of the proceedings and the Bankrupt’s failure to meaningfully engage with either the Trustee or the Court.

6    The Trustee's application, which is dated 7 March 2025, was accepted for filing in this Court on 11 March 2025.

7    The Trustee's application and his supporting affidavit were served on the Bankrupt as long ago as 20 March 2025. The proceeding was listed for a first case management hearing on 5 June 2025.

8    The Court advised the Bankrupt by email of the listing date and time of the first case management hearing. The Bankrupt did not respond to that email or file any notice of appearance or notice of address for service.

9    The Court sent a further email to the Bankrupt shortly prior to the first case management hearing. That email again provided the Bankrupt with details in relation to the hearing and provided a link which he could use to appear remotely at the case management hearing if necessary.

10    The Bankrupt did not appear at the first case management hearing on 5 June 2025. Nor did he communicate with the Trustee or the Court about his non-appearance. In those circumstances, orders were made in his absence. Those orders, among other things, required the Bankrupt to file and serve: any evidence upon which he wished to rely by 3 July 2025; and his written submissions in respect of the Trustee's application by 28 July 2025. The Trustee’s application was listed for hearing on 30 July 2025.

11    The Court sent a copy of the orders that were made on 5 June 2025 at the first case management hearing to the Bankrupt by email.

12    The Bankrupt did not file any evidence or submissions in accordance with the orders that were made on 5 June 2025. Nor did he communicate with the Trustee or the Court in relation to the further conduct of the proceeding. He did not, for example, seek an extension of time in which to file his evidence or submissions, or advise the Trustee or the Court that he had not been able to file any evidence or submissions, or otherwise respond to the proceeding, because he had not been able to secure any legal advice or assistance in relation to the matter.

13    The Trustee's application was called on for hearing at 10.15 am on 30 July 2025. The Bankrupt's name was called outside the Courtroom three times by a court officer. He did not appear.

14    The hearing commenced in his absence at 10.20 am. After the Trustee had adduced all his evidence in support of his application, and counsel had addressed the Court, my associate received a communication which indicated that the Bankrupt was attempting to use the link to appear at the hearing remotely. After considerable efforts, my associate assisted the Bankrupt to appear remotely by audio link.

15    When he was able to appear and communicate with the Court, the Bankrupt made an oral application for an adjournment. Needless to say, his application was not supported by any evidence. Nor was the Trustee or the Court given any advance notice of the adjournment application.

16    I do not intend to repeat what the applicant said in support of his initial adjournment application. It is sufficient to say that the Bankrupt sought a lengthy adjournment so he could consult with solicitors concerning the Trustee's application. When pressed to indicate when he had first consulted solicitors about the matter, he claimed that he had sent some solicitors the Trustee's application and supporting affidavits about a month prior to the hearing. He claimed that the solicitors were unable to appear at the hearing. His account of his attempt to secure legal representation lacked credibility or plausibility. The Bankrupt was also asked why he had otherwise done nothing since March of 2025 when he was first served with the Trustee's application and supporting materials. He failed to provide a credible or comprehendible explanation for his inaction in respect of the application. He also failed to provide any credible explanation for his almost complete lack of engagement with the Trustee in respect of the subject matter of the application.

17    Despite the Bankrupt’s inability to provide a cogent or credible explanation for his failure to engage with the proceeding up to that point, and the implausibility of his account in respect of his purported attempt to retain legal representation, I granted him a short adjournment of one week so that he could consult with his solicitors. Importantly, however, I made orders for him to file and serve any evidence upon which he wished to rely, either in opposition to the Trustee's application or in support of any further adjournment application, on or before 4 pm on 4 August 2025. I clearly explained to the Bankrupt that, if he wished to make a further adjournment application, he should file an affidavit which set out the facts which indicated why he needed a further adjournment and why he had been unable to prepare for the hearing or retain solicitors in time for the hearing.

18    The Bankrupt did not file any evidence in accordance with that order. Nor did he communicate with the Trustee or the Court, or give the Trustee or the Court any advance notice that he intended to seek a further adjournment.

FURTHER ADJOURNMENT APPLICATION

19    When the matter was called on for hearing at 10.15 am on 6 August 2025, the Bankrupt again appeared via audio link. He acknowledged that he had not filed any evidence in accordance with the orders previously made by the Court, but nonetheless applied for a further adjournment of approximately one month. He claimed that he had consulted a lawyer (who he named), but claimed that the lawyer was not able to immediately assist him or appear at the hearing. He claimed that he intended to take steps to deposit funds into the lawyer's trust accounts so that the lawyer could represent him. Needless to say, those claims were not supported by any affidavit evidence.

20    When questioned by the Court about the availability of any possible grounds for opposing the orders sought in the Trustee’s application, the Bankrupt claimed that the Trustee had already secured sufficient funds to pay his creditors. He claimed that he had been unable to access those funds because of the Trustee's actions. He contended, or appeared to contend, that the Trustee’s application was unnecessary and that it was unnecessary for the Trustee to sell the property because the Trustee had already secured sufficient funds to discharge all his debts.

21    There are a number of fundamental problems with the Bankrupt's adjournment application.

22    First, for the reasons that would already be apparent from the above chronology of the proceeding, the Bankrupt's conduct in relation to the proceeding to date has been manifestly unsatisfactory and unacceptable. He was served as long ago as March 2025 but failed to engage at all with either the Trustee or the Court in any way prior to the day that the matter was listed for hearing. He has provided no credible or reasonable explanation for his complete failure to engage with the proceedings until the eleventh hour.

23    Second, despite being given a short adjournment and the opportunity to file evidence in support of any further adjournment application, the Bankrupt failed to file any evidence, either in relation to the Trustee's application generally, or in support of his further adjournment application. While I entertained the Bankrupt’s submissions in relation to his need for a further adjournment, his claims were entirely unsupported by evidence. The Trustee was thereby effectively denied any opportunity to test the Bankrupt’s claims, either by adducing evidence or by cross-examination.

24    Third, the reasons given by the Bankrupt for opposing the Trustee's application in the proceeding were not only unsupported by any evidence, but were contradicted by the evidence that had been adduced by the Trustee in support of his application. Without going into any detail in that regard, the Trustee’s evidence demonstrated that, at the time of the hearing, the Trustee had been unable to gather-in sufficient funds to discharge all of the creditors of the Bankrupt’s estate. The most recent figures suggested that the Trustee has approximately $88,000 in funds available to distribute to creditors, whereas the amount currently outstanding to creditors is approximately $160,000. Those figures do not take into account all of the outstanding expenses incurred by the Trustee in the administration of the estate, or the Trustee's remuneration.

25    It should also be noted that, insofar as the Bankrupt appeared to criticise the Trustee’s administration of his bankrupt estate, as counsel for the Trustee submitted, the Trustee’s application effectively just seeks to formalise what already should have occurred. That is, the Bankrupt's interest in the property subject of the application vested in the Trustee upon it being devolved to the Bankrupt and the Bankrupt should already have cooperated with the Trustee to transfer the property into the Trustee’s name. The Trustee was effectively compelled to commence this proceeding because the Bankrupt’s name remains on the title to the property and he has failed to engage with the Trustee at all in relation to transferring the property into the Trustee's name: see s 77(1)(e) of the Bankruptcy Act.

CONCLUSION AND DISPOSITION

26    The Trustee’s application for a further adjournment must be dismissed.

27    The Bankrupt has failed to provide any reasonable or acceptable explanation for his almost complete disengagement with this proceeding until the death knell. I am not persuaded that he has made any genuine attempt to consult or retain a lawyer. I am not persuaded that he has made any attempt to grapple with this proceeding. He has, instead, adopted a “head in the sand” approach until it finally dawned on him that he could do so no longer.

28    I am also entirely unpersuaded that, even if the Bankrupt is granted further time to consult with his lawyers in relation to the Trustee's application, he will be able to put forward any reasonable defence or grounds for opposing the orders sought by the Trustee.

29    Any further adjournment application in my view will simply result in the Trustee unnecessarily incurring further legal fees and expenses. Somewhat ironically, that would ultimately be to the Bankrupt’s detriment given the high likelihood that, once the property is sold and the remaining creditors paid out, there will be a surplus to be distributed to the Bankrupt upon the final administration of the estate. Every further expense incurred by the Trustee will ultimately come out of the money that would otherwise be distributed to the Bankrupt.

30    In all the circumstances, I am not persuaded that it is appropriate to grant the first respondent, the Bankrupt, any further adjournment. I will accordingly proceed with the hearing. I will, of course, give the Bankrupt an opportunity to make whatever submissions he wants to make in respect of the Trustee’s application.

Associate:

Dated:    18 August 2025