FEDERAL COURT OF AUSTRALIA

Rufford v Sheahan (as Trustee), in the matter of Rufford [2025] FCA 1072

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to s 104(2) of the Bankruptcy Act 1966 (Cth), the respondent’s decisions be varied so that:

(a)    The proof of debt lodged by Australian Bureau Monitoring Pty Ltd (now Rufford’s Mess Pty Ltd) is to be partially rejected to the extent of $24,500.00 and admitted in the amount of $184,694.06; and

(b)    The proof of debt lodged by Suretek Pty Ltd is to be partially rejected to the extent of $45,420.90 and admitted in the amount of $120,863.00.

2.    Within 7 days of the date of this order, the parties are to file submissions of no more than two pages on the costs order that should be made following judgment in this proceeding.

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

REASONS FOR JUDGMENT

STELLIOS J:

1    This proceeding involves an application for review pursuant to s 104 of the Bankruptcy Act 1966 (Cth) of the respondent’s decision under s 102 of the Bankruptcy Act in relation to two Proofs of Debt.

2    The respondent, as trustee in the applicant’s bankruptcy, did not take an active role in the proceeding other than to provide the Court with such information, evidence and submissions as necessary to assist in determining the review.

3    For the reasons that follow, the applicant has been largely unsuccessful in discharging his onus of establishing that the debts forming the basis of the Proofs of Debts are not owing.

BACKGROUND

4    The Proofs of Debt arise from the applicant’s association with two companies, Australian Bureau Monitoring Pty Ltd (ABM) and Suretek Pty Ltd, over the period from October 2015 to October 2018. There is very little documentary evidence to support the establishment of the essential facts of those relationships.

5    The debts sought to be proved under s 82 of the Bankruptcy Act are alleged to be owing by the applicant to ABM and Suretek. As will be further explained, the debts arise from claims by ABM and Suretek that the applicant made payments from the accounts of those companies without approval.

6    The background has been taken from four affidavits:

(1)    An affidavit sworn by the applicant on 12 January 2022 (there was also a date of 29 May 2020 on page 2 of the affidavit, but the discrepancy is immaterial) (the 2022 affidavit);

(2)    An affidavit sworn by the applicant on 8 February 2021;

(3)    An affidavit sworn by Mr Glenn Smith on 6 November 2020 (the Smith affidavit); and

(4)    An affidavit affirmed by the applicant on 11 September 2024 (there was also a date of 19 February 2024 on page 2 of the affidavit, but the discrepancy is immaterial) (the 2024 affidavit).

7    Affidavits (1) to (3) were sworn for the purposes of a proceeding in the Supreme Court of New South Wales. The plaintiffs in that Supreme Court proceeding were ABM and Suretek which were controlled by Mr Smith. The applicant, along with his son, Luke Rufford, and his wife, Lynette Rufford, were named as defendants. In essence, the Supreme Court proceeding sought recovery of payments alleged to have been unlawfully made by the applicant during his association with ABM and Suretek.

8    The 2024 affidavit was filed in this proceeding. It refers by cross-reference to parts of the 2022 affidavit and annexes an index of the Supreme Court exhibit bundle which is included as document 17 in the index to the Tender Bundle in this proceeding.

The applicant’s arrangement with ABM/Suretek

9    It is common ground that the applicant was engaged by ABM. The nature of that arrangement has been the subject of some dispute. The applicant also claims that Ruffcom Pty Ltd, a company owned by Lynette Rufford, but ostensibly controlled by the applicant, was engaged to provide consulting services to Suretek. The applicant claims that he provided those services. Mr Smith denies that Ruffcom was authorised to provide any services to Suretek. Ruffcom was deregistered on 5 February 2018.

The Supreme Court proceeding

10    In the Supreme Court proceeding, ABM and Suretek sought to recover damages arising from the alleged unlawful payments made by the applicant. Relevantly, those payments were alleged to include the following categories:

(1)    Payments identified in Schedule A to the Supreme Court Further Amended Statement of Claim (SCFASOC) described as “Endeavour Fleet Lease Payments” in the amount of $49,039.84. These comprised lease payments to Endeavour Fleet in relation to two motor vehicles and a ride-on lawnmower supplied to the applicant and Luke Rufford. It was alleged that the applicant and/or Luke Rufford caused ABM to pay these amounts without approval.

(2)    Payments identified in Schedule B to the SCFASOC described as “ABM Payments for Personal Expenses” in the amount of $82,096.28. It was alleged that the applicant and/or Luke Rufford caused ABM to pay these amounts without approval. The payments included premiums for life insurance policies, telephone bills for Ruffcom, Origin Energy utility fees, and household furniture and renovations.

(3)    Payments identified in Schedule C to the SCFASOC described as “SG Payments for Personal Expenses” in the amount of $11,770.16. It was alleged that the applicant caused Suretek to make these payments without approval. The payments comprised insurance premiums and legal costs.

(4)    Payments identified in Schedule D to the SCFASOC described as “ABM Purported Consultancy Fees” in the amount of $78,057.94. It was alleged that the applicant and/or Luke Rufford caused or contributed to ABM making these payments, without approval, which purported to be consulting fees for services of the applicant and/or Luke Rufford.

(5)    Payments identified in Schedule E to the SCFASOC described as “SG Purported Consultancy Fees” in the amount of $154,561.74. It was alleged that the applicant caused Suretek to make these payments, without approval, which purported to be consulting fees for the applicant’s services.

11    The applicant accepted that the payments were made, but claimed that they were made with Mr Smith’s consent. The applicant also cross-claimed alleging defamation against Mr Smith.

The Bishop Collins report

12    The claims made by ABM and Suretek in the Supreme Court proceeding were based on a review report prepared by Bishop Collins Audit Pty Limited and dated 27 March 2019. The background section of that report contained the following:

[Suretek] engaged [Bishop Collins] to conduct a limited financial review in order to ascertain the potential financial loss to [Suretek] and [ABM] (collectively “the Group”) identified by [Suretek’s] management in October 2018 arising from alleged fraud.

The purpose of the Report is to allow the Group to obtain legal advice on the legal recourse available to the Group against their former officers [the Applicant] and Luke Rufford in relation to the financial losses sustained by the Group as the result of any unlawful conduct engaged in by those individuals.

13    The review period was limited to 1 December 2015 to 31 October 2018. The report stated that the assumptions upon which the report was based included that:

(1)    Luke Rufford was employed by ABM as a director in place of the applicant. It was agreed between ABM and the applicant that Luke Rufford was not to receive any remuneration for his role as a nominal director;

(2)    The applicant was engaged by the Group to be a shadow director of ABM and the financial controller of ABM and Suretek; and

(3)    The monthly agreed remuneration for the applicant was $5,000 for his services provided to ABM and Suretek.

14    The report also stated that the review was conducted in accordance with Australian Standard on Review Engagements 2405 “Review of Historical Financial Information Other than a Financial Report”. The report further stated the following qualification:

A review is limited primarily to inquiries of relevant personnel, inspection of evidence and observation of, and enquiry about, the operation of the control procedures for a small number of transactions or events. A review is designed to provide a moderate level of assurance in relation to the areas included within the scope. An audit, providing a high level of assurance, will not be performed. The review procedures undertaken provide less assurance than an audit. Consequently, an audit opinion, providing a high level of assurance, is not expressed. A review does not provide all of the evidence that would be required in an audit, thus the level of assurance provided is less than in an audit.

15    No reliance was placed on the general ledger because the board and management stated that the integrity of the general ledgers for both ABM and Suretek were unreliable. Instead:

(1)    Bishop Collins accessed files, records and other financial documentation made available by management.

(2)    In consultation with management Bishop Collins “considered and management concluded on the legitimacy and validity of transactions reviewed”.

(3)    The general ledgers and payroll were scrutinised for transactions that might be irregular.

16    Of particular relevance, the report noted the following observations:

(1)    The applicant received an agreed amount of $5,000 per month as remuneration.

(2)    It is not clear whether the applicant was engaged as a salaried employee or an independent contractor. The Group’s employment records indicated that the applicant was included on the payroll and PAYG withholding tax was paid.

(3)    Around April 2017, the applicant increased his fees from $5,000 to $6,000 per month.

(4)    Ruffcom invoiced Suretek on a monthly basis. On the understanding that there was no supplier agreement, the view was expressed that those payments were invalid.

(5)    The applicant presented invoices from Ruffcom after Ruffcom was deregistered in February 2018.

(6)    The applicant was the only person making payments from ABM’s bank account. The applicant paid personal expenses via ABM’s bank account.

(7)    The applicant maintained a loan account in ABM’s books. The loan account was also included in the financial reports of ABM.

(8)    The applicant and Luke Rufford caused ABM to make lease payments to Endeavour Fleet.

(9)    GST was claimed on the applicant’s personal expenditure.

17    The report outlined “potentially unauthorised, disputed and fraudulent transactions” but noted “for the Board’s attention that the identified disputed transactions must be investigated for validity (that is, independently reconfirm each transaction as being for an invalid business purpose)”.

18    The purported invalid transactions were grouped under headings that correspond to Schedules A to E in the Supreme Court proceeding. The only discrepancy is in relation to Schedule E — “SG Purported Consultancy Fees”. The report identified a total amount of $151,372.94. The amount claimed in Schedule E to the SCFASOC was $154.561.74, a discrepancy of $3,188.80.

19    The respondent’s solicitor explained the discrepancy as likely arising from an error in one of the entries in the report when checked against National Australia Bank (NAB) statements annexed to the Smith affidavit. The report recorded a figure of $7,358.89, whereas the NAB statement showed a figure of $10,547.69. The original figure was included in the Amended Statement of Claim, but then revised upward in the SCFASOC. I accept that explanation.

Bankruptcy and Proofs of Debt

20    On 28 January 2020, a Registrar of the Court made an order that the estate of the applicant be sequestrated under the Bankruptcy Act. On 18 June 2020, the respondent and Mr Ian Russell Lock were appointed as joint and several trustees. The respondent became the sole trustee by certificate dated 11 June 2021.

21    On 15 October 2021, the Federal Circuit and Family Court of Australia (Division 2) ordered that, pursuant to s 58(3)(b) of the Bankruptcy Act, ABM and Suretek have leave to take further steps as they may be entitled to take against the applicant in the Supreme Court proceeding.

22    However, on 15 December 2022, ABM and Suretek filed a motion seeking leave to discontinue the Supreme Court proceeding on the basis that ABM and Suretek would pursue their claims against the applicant’s estate. The motion for discontinuation was granted on 8 February 2023.

23    ABM and Suretek then lodged the following Proofs of Debt on 12 March 2023:

(1)    ABM claimed an amount of $209,194.06 comprising:

(a)    Amounts corresponding to the payments identified in Schedule A in the Supreme Court proceeding: $49,039.84;

(b)    Amounts corresponding to the payments identified in Schedule B in the Supreme Court proceeding: $82,096.28;

(c)    Amounts corresponding to the payments identified in Schedule D in the Supreme Court proceeding: $78,057.94.

(2)    Suretek claimed an amount of $166,283.90 comprising:

(a)    Amounts corresponding to the payments identified in Schedule C in the Supreme Court proceeding: $11,722.16; and

(b)    Amounts corresponding to the payments identified in Schedule E in the Supreme Court proceeding: $154,561.74.

24    On 7 August 2023, the respondent wrote to ABM and Suretek, and separately to the applicant, proposing that the adjudication of the Proofs of Debt would be conducted in the following way:

(1)    ABM, Suretek and the applicant would be given an opportunity to provide evidence and submissions;

(2)    Those materials would be provided to independent counsel for advice on the adjudication of the proofs; and

(3)    The respondent would then adjudicate the Proofs of Debt in accordance with that advice.

25    These letters were documents 5 and 6 in the index to the Tender Bundle.

26    The respondent received:

(1)    evidence and submissions from ABM and Suretek in support of the Proofs of Debt (these were documents numbered 7 to 13 in the index to the Tender Bundle);

(2)    materials from the applicant opposing the Proofs of Debt (these were documents numbered 14 to 199 in the index to the Tender Bundle); and

(3)    evidence and submissions from ABM and Suretek in reply, including a document entitled “Submissions in Support of Proof of Debt Claims by Australian Bureau Monitoring Pty Ltd and Suretek Pty Ltd” (these were documents numbered 200–208 in the index to the Tender Bundle).

27    The Submissions in Support, dated 10 October 2023, identified the claimed amounts by reference to numbered and itemised lists in the Schedules to the SCFASOC (ie, A1–A44; B1‍–‍B61; C1–C2; D1–D46 and E1–E46).

28    The respondent also sought and obtained from the applicant and members of his family information about their tax affairs (these were documents numbered 209 to 220 in the index to the Tender Bundle).

29    Together, these documents were the briefing materials for counsel’s advice.

30    Counsel was briefed with the briefing materials on 16 October 2023. His written advice was given on 30 January 2024 to the respondent who then provided a copy to ABM, Suretek and the applicant. These were documents numbered 221 to 225 in the index to the Tender Bundle. The respondent has waived a claim for legal professional privilege in relation to the advice.

31    The remaining documents in the Tender Bundle, numbers 3 and 4, are the Supreme Court’s orders permitting ABM and Suretek to use documents, which they had obtained by way of subpoenas issued in the Supreme Court proceeding, for the purposes of advancing their claims against the applicant by lodging their Proofs of Debt.

Counsel’s advice

32    Mr James Roder of counsel was briefed to provide advice to the respondent. He concluded that the respondent would have good reason to admit the following debts in full:

(1)    ABM’s claim in respect of the Endeavour Fleet Payments;

(2)    ABM’s claim in respect of the personal expenses of the applicant and his family and related entity;

(3)    Suretek’s claim in respect of the payment of the insurance premiums; and

(4)    Suretek’s claim in respect of the alleged consultancy fees paid to Ruffcom.

33    In relation to ABM’s claim in respect of the consultancy fees, counsel advised that the claim should be reduced from $78,057.94 to $58,557.94 to account for goods and services tax (GST).

The respondent’s adjudication

34    All the documents in the Tender Bundle were before the respondent when adjudicating upon the Proofs of Debt.

35    The respondent made the followings decisions under s 102 of the Bankruptcy Act:

(1)    ABM’s Proof of Debt was partially rejected to the extent of $19,500, and admitted in the amount of $189,694; and

(2)    Suretek’s Proof of Debt was admitted in full, in the amount of $166,283.

36    The respondent communicated the decision, along with a copy of counsel’s advice, to ABM, Suretek and the applicant by letter dated 30 January 2024.

TENDER BUNDLES

37    On 19 July 2024, pursuant to an order made by a Registrar of the Court on 21 June 2024, the respondent’s solicitors wrote to the Court enclosing a USB drive containing an electronic copy of a Tender Bundle for use in the proceeding.

38    The Tender Bundle contains the documents referred to at [8] and [25]‍–‍[31] above and [39] below. The documents were voluminous. The evidence and submissions provided to the respondent for the purposes of adjudicating the Proofs of Debt included a number of affidavits sworn or affirmed for the purposes of the Supreme Court proceeding, the Supreme Court pleadings and a number of other documents and materials. The relevance and provenance of these documents were not always clear.

39    At the hearing, the respondent tendered:

(1)    The Proofs of Debt (documents 1 and 2 in the index to the Tender Bundle);

(2)    Letters dated 7 August 2023 from the respondent to ABM, Suretek and the applicant explaining the proposed approach to the adjudication of the Proofs of Debt (documents 5 and 6 in the index to the Tender Bundle);

(3)    The SCFASOC (document 142 in the index to the Tender Bundle);

(4)    The Submissions in Support made by ABM and Suretek to the respondent (document 200 in the index to the Tender Bundle);

(5)    The advice of Mr Roder (document 222 in the index to the Tender Bundle); and

(6)    Letters of adjudication of the Proofs of Debt dated 30 January 2024 (documents 223 to 225 in the index to the Tender Bundle).

40    There was also a Supplementary Tender Bundle filed by the respondent pursuant to an order of the Court made on 16 April 2025 and tendered by the respondent during the hearing. That comprised:

(1)    The Court’s sequestration order dated 28 January 2020;

(2)    The certificate of appointment of John Sheahan and Ian Russell Lock as joint and several trustees dated 18 June 2020;

(3)    The certificate of appointment of John Sheahan as sole trustee dated 11 June 2021;

(4)    The orders of the Federal Circuit and Family Court of Australia (Division 2) dated 15 October 2021 giving leave to ABM and Suretek to take further steps in the Supreme Court proceeding;

(5)    The transcript of proceeding before a Registrar of the Court on 21 June 2024;

(6)    An email exchange between Mark Wang (Lighthouse Law Group) and Sam de Cure (DMAW Lawyers). In an email dated 19 August 2024, Mr Wang stated that Lighthouse Law Group no longer acted for ABM which was in liquidation and that Suretek did not propose to take any steps in this proceeding. It was also stated that ABM’s name has been changed to Rufford’s Mess Pty Ltd. For convenience, I will continue to refer to that corporation as ABM; and

(7)    An email exchange between Tony Nguyen (Hogan Sprowles) and Sam de Cure (DMAW Lawyers). In an email dated 13 September 2024, Mr Nguyen stated that the liquidator for ABM had reviewed the documents and the respondent’s adjudication of ABM’s Proof of Debt, was content with the amended Proof of Debt, and would not take part in the proceeding.

41    At the hearing, the applicant sought to rely on two affidavits affirmed by him for the purposes of this proceeding. The first of those affidavits is the 2024 affidavit referred to at [6] above. It refers by cross-reference to the 2022 affidavit also referred to at [6] above. The 2024 affidavit also contained unparticularised complaints against the respondent. However, those matters were not pressed in this proceeding. The second of those affidavits filed in this proceeding was affirmed on 20 February 2024 and annexes the Originating Application and the letter from the respondent dated 30 January 2024.

42    The applicant also sought to rely on the following affidavits that were sworn or affirmed for the purposes of the Supreme Court proceeding (all referred to at [6] above):

(1)    The 2022 affidavit which relevantly had folders of annexures, A to D;

(2)    His affidavit of 8 February 2021; and

(3)    The Smith affidavit.

43    The affidavit of 8 February 2021 contains largely irrelevant material for the purposes of this proceeding. It was primarily directed to the alleged behaviour of Mr Smith towards the applicant after the relevant period and its impact on the applicant and his family.

44    The 2022 affidavit and the Smith affidavit were before the respondent when adjudicating the Proofs of Debt, and there is no question about their authenticity or provenance.

45    In response to a request from the Court for a further note on the onus of proof, the applicant again reiterated the centrality of the 2022 affidavit and the Smith affidavit to the claims made against him. The Court was urged to:

read the entire affidavit of Glenn Gary Smith dated 6th November 2020 along with the exhibit bundle GGS-1 [and] the entire Affidavit of Glenn John Rufford dated 12/1/2022 referencing the exhibit bundles disproving the allegations and outright fabrication of any truth by Mr Smith acting for the companies in the claim.

46    The respondent relied upon paragraphs [1]–[12] of his affidavit affirmed on 28 October 2024. In those passages, the respondent deposed to two matters:

(1)    The information and documents that were before him when he made his decision to admit the ABM and Suretek Proofs of Debt (these were all the documents in the index to the Tender Bundle save for the letters of adjudication of the Proofs of Debt); and

(2)    The decision that he made in relation to the Proofs of Debt.

47    As indicated, ABM and Suretek did not participate in this proceeding and there is no affidavit by Mr Smith filed in this proceeding.

SUBMISSIONS

Applicant’s submissions

48    Relevantly to the question to be determined in this proceeding, in written submissions the applicant contended that he did not owe the amounts set out in the Proofs of Debt, the supporting documentation was “fabricated, false, or otherwise misleading”, and that ABM and Suretek “had no reasonable basis to assert the claim nor grounds to prove the claim as the [Supreme Court proceeding] was discontinued”.

49    The applicant submitted that “it seems this matter sets its own precedent, where one individual with money and a vendetta against a long-time friend, can use and abuse the legal system for financial gain and on the other hand, the assassination of another person both financially and socially”. In written submissions, the applicant did not address the disputed debts in any particularised way. He referred only to Tuscan Capital Partners Pty Ltd v Trading Australia Pty Ltd (In Liq) (2021) 156 ACSR 553; [2021] FCA 1061.

50    In oral submissions at the hearing, the applicant repeated some of the factual claims that will be outlined below in more detail:

(1)    Mr Smith offered the applicant take-home pay of $2,000 per week; there was a spreadsheet detailing this, but it remained in Mr Smith’s possession; and the employee whom the applicant replaced was previously being paid $2,000, however those amounts were not declared, and were hidden in balance sheets as “Loan. Peter Fraser”.

(2)    The applicant and Mr Smith agreed to $5,000 per month while the applicant was working part-time. That amount grew to $6,000 per month after Mr Smith had a heart attack and the applicant took on a greater role in the management of the companies. It was agreed in April 2016 that the pay would increase to $6,000. The applicant indicated that it was agreed that he would use $2,000 for his “health insurance, life insurance and things like that”.

(3)    Mr Smith “signed invoices and approved payments using his phone”.

51    At the hearing, the applicant was asked to indicate, by reference to the Schedules lodged in the Supreme Court proceeding, which of the claims were disputed. He confirmed that he disputed the amounts itemised in Schedules A and C to E. In Schedule B, the applicant identified five amounts which he agreed had been owing, to a total of $20,579.86. He further submitted that those amounts were no longer owing because they had been part of a settlement agreement between ABM/Suretek and Lynette Rufford. However, the applicant had no evidence of the terms of that settlement.

Respondent’s submissions

52    Relying on what Emmett J said in Re Wilson; Wilson v Official Trustee in Bankruptcy [2000] FCA 1251 at [64], the respondent did not seek to actively defend the proceeding, but proposed instead in written submissions to summarise the factual background, legal principles, and relevant factual material. The respondent noted that ABM and Suretek were given the opportunity to participate and make submissions in this proceeding; however, neither company wished to do so.

53    The respondent contended that the onus was on the applicant to displace the trustee’s decision to accept a proof of debt: Daevys v Official Trustee in Bankruptcy [2011] FCA 398 at [14] and [19] (Flick J), quoting Toohey J in Re Masters; Ex parte Gerovich (unreported, Federal Court of Australia, 30 July 1985).

54    Following questions from the Court about the application of Daevys in the context of this case, the respondent undertook to provide a short note on any additional authorities on the question of onus. The respondent provided the additional cases of Pekar v Jess [2022] FCA 1367 and Shaw v Official Trustee in Bankruptcy Vic 1697/14/1 of Australian Financial Security Authority (No 2) [2019] FCA 1574. In response, the applicant accepted that he had the onus to establish that the debts are not owing.

THE COMPETING CLAIMS IN RELATION TO THE CLAIMED DEBTS

55    The competing claims about the debts are to be found in three affidavits:

(1)    The 2022 affidavit;

(2)    The Smith affidavit; and

(3)    The 2024 affidavit.

The applicant’s claims

56    The applicant’s affidavits outline his time at ABM/Suretek. I will set the claimed background out here in broad terms and refer later in these reasons to more particular claims. To the extent that the affidavits were relevant and material, the applicant claims the following:

(1)    Mr Smith offered the applicant an opportunity to have shares in ABM and to take over its management. He started working in October 2015.

(2)    The remuneration was agreed, initially, to be “take home $2,000 per week”. This arrangement was documented at the bottom of a spreadsheet provided by Mr Smith to the applicant. However, the spreadsheet is not in evidence. It was left behind at the workplace when the applicant ceased working for ABM and the applicant accepts that it “will never be seen again”.

(3)    Despite the agreement for $2,000 per week, he initially only drew wages of $5,000 per month whilst he worked three days a week. His intention was to draw the full wages of $2,000 per week once he became a full-time employee, which occurred in April 2016. He claims that he communicated that position to Mr Smith who responded that he should draw the full amount as agreed.

(4)    The applicant claims that, on 9 November 2015, his son, Luke Rufford, joined ABM as an operator on a part-time basis whilst studying. He was remunerated for his work in that role. In about December 2015, although the date is unclear, Mr Smith asked if Luke Rufford would become a director of ABM, in name only, for the purposes of transferring a master licence from a previous director. Based on an understanding that he would not have control or management of the daily operations, Luke Rufford agreed to become a director.

(5)    The applicant claims that a loan account was set up for him in the ABM balance sheet to assist him to get back on his feet. The loan account was to be reconciled against $2,000 per month of his salary. An ABM balance sheet annexed to the 2022 affidavit, as at June 2017, shows an entry of $39,302.23 for “Glenn Rufford”. The applicant claimed that this was similar to an arrangement that was in place for his predecessor, Peter Fraser.

(6)    By April 2016, the applicant was attending ABM full-time and drawing the equivalent of $2,000 per week. He was working in the offices of Suretek, and said to Mr Smith that, since he was at Suretek the majority of the time, he would tell the accounts manager at Suretek “where [the applicant] wanted the equivalent of two grand a week to go”. The applicant would “keep a separate record of them for tying back to the accounts for [Mr Smith]”. The applicant claims that Mr Smith responded with words to the effect “no worries”.

(7)    By the end of September 2016 (in the 2022 affidavit) or in December 2016 (in the 2024 affidavit), Mr Smith indicated that the applicant should be remunerated for extra work he was doing. There is some inconsistency between the 2022 and 2024 affidavits as to when this arrangement was approved. In the 2022 affidavit, it is said that the applicant and Mr Smith agreed to a payment of $5,000 plus GST for the work that the applicant had done on the 2015 year-end accounts, and that the applicant’s consultancy company, Ruffcom, would invoice for that amount. The applicant claims that they agreed that Ruffcom would be paid $5,000 per month from October 2016 until such time the applicant finished doing work relating to the Smith group of companies and trusts. There is an invoice dated 14 October 2016 in the amount of $5,500 from Ruffcom to Suretek which is marked for payment into Lynette Rufford’s account. The applicant claims that Mr Smith signed and wrote the word “APPROVED” on it, and that this amount was in addition to the $2,000 per week from ABM.

(8)    However, in the 2024 affidavit, it is said that, in light of the extra work, Mr Smith told the applicant that an invoice should be sent for the previous three months. There is an invoice from Ruffcom to Suretek dated 20 December 2016 and marked paid on the same date. The amount is $16,500, with a description cell referring to two months of October and November 2016 (the applicant explained that the description cell does not show the third month of December 2016). Given that there is evidence of both invoices, any discrepancy in the applicant’s evidence as to the time at which the arrangement was approved is of no consequence.

(9)    By July 2017, the applicant was still doing the books for ABM, Suretek and all other Smith family related companies and trusts. The applicant was invoicing Suretek $5,000 per month plus GST and doing all duties relating to ABM at $2,000 per week. There are invoices from Ruffcom to Suretek in the amount of $5,500 dated 31 January 2017, 28 February 2017, 31 March 2017, 30 April 2017, 31 May 2017, 30 June 2017, 31 July 2017, 31 August 2017 and 30 September 2017.

(10)    In around October 2017, and in circumstances where the accounts manager’s employment had been terminated, Mr Smith agreed to increase Ruffcom’s consulting fee payable by Suretek to $6,000 per month plus GST until a new accounts manager was found. This was to be in addition to the $2,000 per week the applicant was being paid from ABM. There are invoices including “Consulting Fees” of $6,600 dated 31 January 2018, 28 February 2018, 31 March 2018, 30 April 2018, 31 May 2018, 30 June 2018, 31 July 2018, 31 August 2018 and 30 September 2018.

(11)    On 31 October 2018, the applicant met with Mr Smith and Bob Sterling. Following that meeting, he left the building and did not return.

Mr Smith’s claims

57    To the extent that they are relevant and material to provide context for the Proofs of Debt, Mr Smith made the following claims in his affidavit:

(1)    In about May 2015, Mr Smith raised with the applicant the opportunity to assist in running the business at ABM.

(2)    Mr Smith indicated to the applicant that, if the growth of the business met its milestones, he would start giving the applicant a shareholding in ABM with a view to him becoming the majority shareholder and perhaps buying the business.

(3)    In about July 2015, the applicant assumed the role at ABM. Shortly thereafter, Mr Smith and the applicant had a conversation about remuneration. Mr Smith claims that the applicant stated that “[a]s long as I can bring home and give Lyn $5,000.00 a month, she would be happy”. Mr Smith claims that he indicated that the business was still modest and that he could not afford to pay a huge salary.

(4)    In early November 2015, Mr Smith asked the applicant whether he would be a company director for ABM. The applicant indicated that he preferred not to be a director, but suggested that his son, Luke Rufford, could be a director. They agreed that Luke would be a director in name only, and would not draw a salary.

(5)    At no stage during those discussions did he offer or discuss any other terms beyond ABM remuneration. Specifically, he claims, there was no discussion of:

(a)    a company car or payment for the use of one;

(b)    paying for the personal expenses of the applicant, Luke Rufford of Lynette Rufford; or

(c)    making loans of money to the applicant, Luke Rufford, Lynette Rufford or anybody else.

(6)    While Luke Rufford did not draw a salary as a director of ABM, he was paid award wages for the hours of shifts that he covered working for ABM as an operator.

(7)    The applicant parted ways with ABM on or about 31 October 2018.

(8)    During his time at ABM, the applicant had access to and authority to operate the company’s bank account.

(9)    During the period from May 2015 to 31 October 2018, Mr Smith did not have any discussions with the applicant or Luke Rufford about, and did not authorise or agree to, any of the following:

(a)    leasing a car or lawnmower or any equipment for use by them at ABM’s expense;

(b)    paying for personal expenses of, or making loans to, the applicant, Luke Rufford or Lynette Rufford; or

(c)    making any changes to the terms of remuneration for the applicant or Luke Rufford.

(10)    Mr Smith denies having knowledge of, approving or authorising any of the payments that form part of the Proofs of Debt. He further claims that, having reviewed the books and records of ABM, there are no minutes of any directors’ meetings or meetings of shareholders authorising any of the relevant payments.

LEGISLATION AND LEGAL PRINCIPLES

58    Subsection 82(1) of the Bankruptcy Act provides:

Subject to this Division, all debts and liabilities, present or future, certain or contingent, to which a bankrupt was subject at the date of the bankruptcy, or to which he or she may become subject before his or her discharge by reason of an obligation incurred before the date of the bankruptcy, are provable in his or her bankruptcy.

59    Section 84 of the Bankruptcy Act provides:

Manner of proving debts

(1)    Subject to this Division, a creditor who desires to prove a debt in a bankruptcy shall lodge, or cause to be lodged, with the trustee a proof of debt in accordance with this section.

 (2)    A proof of debt:

(a)    shall set out particulars of the debt;

(b)    shall be in accordance with the approved form;

(c)    shall specify the vouchers, if any, by which the debt can be substantiated; and

(d)    shall state whether or not the creditor is a secured creditor.

(3)     Where the trustee is of the opinion that it is desirable that all the matters, or some of the matters, contained in a proof of debt lodged with him or her by a creditor should be verified by statutory declaration, the trustee may serve on the creditor a written notice informing the creditor that he or she is of that opinion and that, unless the creditor lodges with the trustee a statutory declaration verifying the matters contained in the proof of the debt or such of those matters as the trustee specifies in the notice, the trustee will administer the estate as if the proof of debt had not been lodged.

60    Section 102 of the Bankruptcy Act provides:

Admission or rejection of proofs

(1)    The trustee shall examine each proof of debt and the grounds of the debt sought to be proved and, subject to the power of the Court to extend the time, shall, not later than 14 days after the expiration of the period specified in the notice of intention to declare a dividend as the period within which creditors may lodge their proofs of debt, either:

(a)    admit the proof of debt in whole;

(b)    admit it in part and reject it in part;

(c)    reject it in whole; or

(d)     require further evidence in support of it.

61    Section 104 of the Bankruptcy Act provides:

Appeal against decision of trustee in respect of proof

(1)    A creditor, or the bankrupt, may apply to the Court for review of a decision of the trustee under subsection 102(1), (3) or (4) in respect of a proof of debt.

(2)    The Court may, upon the application, confirm, reverse or vary the decision of the trustee.

(3)    Subject to the power of the Court to extend the time, an application under this section to review a decision shall not be heard by the Court unless it was made within 21 days from the date on which the decision was made.

62    In Daevys, Flick J outlined that “the decision to accept or reject a proof of debt is a decision entrusted to the discretion of the trustee" (at [10]). A “review” pursuant to s 104 is “not confined to the correctness of the trustee's decision”, but a “re-hearing” (at [13]). As such, as summarised by Rares J in BDT Holdings Pty Ltd v Piscopo [2009] FCA 151 at [4]:

the function of the Court on s 104 is not to consider the correctness or otherwise of the trustee’s decision in the light of the material before the trustee, but to determine in light of the material before the Court whether the applicant for review has a debt that should be admitted to proof. The Court can take into account inconsistencies in the material provided to the trustee and the evidence before the Court.

See also Re D K Rogers; Ex parte CMV Parts Distributors Pty Ltd (1989) 20 FCR 561 at 562‍–‍3, citing with approval Payne; Ex parte Levi (unreported, Federal Court of Australia, Toohey J, 23 September 1986).

63    The parties accepted that the onus is on the applicant to establish that the claimed debts should not be admitted. As Hespe J said in Pekar at [37]:

The underlying application is one for review of the Respondents’ decision to admit the proofs of the debt. The onus is on the party seeking the review of the trustee’s decision to satisfy the Court that the proofs of debt should not be admitted, based on the material that is before the Court: Re Masters; Ex parte Gerovich at 3 (unreported, Toohey J, 30 July 1985); Daevys … at [13]–[14] (Flick J); Coshott v Burke [2012] FCA 517 at [56] (Rares J); Williamson v Michell (Trustee) [2019] FCA 481 at [21] (Moshinsky J); Shaw … at [30] (Snaden J).

64    Similarly, in Shaw, Snaden J said at [30]‍–‍[31]:

As the applicant, Mr Shaw bears the onus of establishing that the Trustee’s decision to admit the YN Proof should be reversed: Daevys … [14] (Flick J). Failure to discharge that onus requires that the decision be confirmed: Re Robert Henry Masters Ex parte: Elizabeth Gerovich and Hazel Henley v Bernard Putnin [1985] FCA 354, [9] (Toohey J).

If, ultimately, the court is satisfied that the debt to which the YN Proof relates is owed, then the Trustee’s decision to admit it under s 102(1) of the Act should be confirmed.

65    Accordingly, the applicant has the onus of establishing that the claimed amounts constituting the Proofs of Debt are not owing to ABM and Suretek. In other words, he has to establish that there are no debts or, if there are debts, that they are less than what has been claimed. Because the applicant accepts that the payments were made, in order to discharge the onus he must establish that Mr Smith consented to the payments.

CONSIDERATION

66    Before considering whether the applicant has established that the claimed debts are not owing, I will start with five preliminary observations about the difficulties of ascertaining the facts in this proceeding.

67    First, there is very little by way of documentary evidence as to the terms and conditions of the applicant’s arrangements with ABM and Suretek. The initial agreement of engagement was not in writing. There are competing claims as to what was agreed for initial remuneration from ABM. The claimed increase in ABM remuneration was not documented. Neither was the claimed arrangement between Suretek and Ruffcom. While there are copies of Ruffcom invoices in evidence, only a few of them purportedly bear Mr Smith’s signature. There is sparse documentary evidence of Mr Smith’s agreement to the contested payments.

68    Secondly, while the Proofs of Debt find their foundations in the Bishop Collins report, it is clear that that report was qualified. It was a limited financial review that relied on assumptions that were set by ABM and Suretek. It stated that the disputed transactions must be investigated for validity. Accordingly, while the report was the starting point, the overall circumstances must be assessed to determine whether the applicant has discharged his onus to establish that the debts are not owing by him to ABM and Suretek.

69    Thirdly, an assessment of the circumstances is complicated by the personal relationship between the applicant and Mr Smith. The evidence demonstrates that, for much of the relevant period, they enjoyed a very close personal friendship. Particularly in the absence of documentation evidencing the professional relationship between the applicant, the personal friendship between the two tends to obscure the intention of certain communications. What might have been intended by one party as a passing comment between friends, might have been understood by the other party as going to the terms and conditions of engagement, or vice versa.

70    Fourthly, the applicant sought to rely on three affidavits, two of which were prepared for the Supreme Court proceeding. No objection was taken by the respondent to reliance on these affidavits. There is no difficulty with the applicant’s reliance on his 2024 affidavit that was filed in this proceeding. The applicant’s 2022 affidavit (filed in the Supreme Court proceeding), which was referred to in the applicant’s 2024 affidavit by cross-reference, can be considered to have been adopted by the applicant for the purpose of this proceeding: see Singh v Singh [2007] NSWSC 1357 at [8]‍–‍[9] (Barrett J); Stephen Odgers, Uniform Evidence Law (20th ed, 2025) 129.

71    By contrast, the Smith affidavit, prepared for the Supreme Court proceeding, might be seen as an attempt by the applicant to rely on a previous representation and, thereby, be subject to the hearsay rule in s 59 of the Evidence Act 1995 (Cth): Singh at [11]. However, that issue does not arise in this case. The applicant accepts that the payments were made. His argument that the debts are not owing is on the basis that the payments were approved by Mr Smith. As will be explained, for the most part, the applicant has failed to discharge his onus to establish that approval was given. The Smith affidavit is not relied upon by the applicant, or deployed in these reasons, to prove the existence of a fact being asserted. Additionally, as will be further explained, I have found that there are two circumstances where the debts are not owing. However, my findings in those respects depend on evidence of invoices referred to in the applicant’s affidavit and/or evidence from business records. Accordingly, no impermissible hearsay use arises.

72    In any event, given the circumstances of this case, where the applicant was a litigant in person, the respondent did not take an active role in opposition, and ABM and Suretek decided not to participate in the proceeding, I would have been minded to waive the hearsay rule under s 190(3)(b) of the Evidence Act.

73    Fifthly, the determination of facts was complicated by the decision of ABM and Suretek not to participate in the proceeding. Consequently, there was no affidavit filed by Mr Smith in this proceeding. ABM and Suretek were denied the opportunity to challenge the applicant’s evidence and, likewise, the applicant was denied the opportunity to challenge Mr Smith’s claims. I have been mindful of the applicant’s forensic position when assessing the claims.

Claimed debts owing to ABM

Endeavour Fleet lease payments

74    ABM’s Submissions in Support to the respondent relied upon Schedule A to the SCFASOC which in turn relied upon the Bishop Collins report. ABM identified a series of payments to Endeavour Fleet in relation to two motor vehicles and a ride-on mower. One of the motor vehicles belonged to Luke Rufford. The total amount paid to Endeavour Fleet from ABM’s Westpac account was $49,039.84.

75    The applicant claims that Mr Smith had agreed to the payments. Mr Smith denies that he did. There is no documentary evidence to substantiate the claim that there was agreement.

76    The following matters arise from the applicant’s evidence:

(1)    On 18 March 2017, there was a text message exchange between the applicant and Mr Smith during which the applicant’s son, Luke Rufford, was discussed. Mr Smith said, “I have to do something for Luke”. The applicant replied, “No mate Luke is good at this stage – he’s happy he is a part of SURETEK/ABM”. The applicant then claims that “[i]t was during these conversations I said can we help him with his car or something like that? Remember he has his name as director so we can operate”. There appears to be a suggestion that Mr Smith was offering to help Luke Rufford with his car, or at least an indication of a conversation that precipitated such an offer. However, the context of the text messaging on that day does not support any suggestion that there was an offer by Mr Smith or, indeed, any suggestion of a future offer. The applicant had forwarded Mr Smith an image and video apparently related to Luke Rufford’s go-kart. The nature of the subsequent text exchange, indicating what Mr Smith was in fact suggesting, provides no support for the applicant’s contention.

(2)    The applicant claims that, in October 2017, Mr Smith and the applicant were sitting in the applicant’s office discussing “the effort the boys had put in”; a reference to Luke Rufford and another employee. It is claimed that, at this time, Mr Smith authorised the applicant to “reward the boys by doing a salary sacrifice arrangement on their salary” for their motor vehicles. Luke Rufford had purchased a Ford Falcon, and the applicant claims that Mr Smith agreed “to novate their lease and pay for the cars pre-tax and have fortnightly payments deducted from their salary this giving them more disposable income as a reward for their efforts”. There is no other evidence to support this conversation or Mr Smith’s approval of that arrangement.

(3)    The applicant also claimed that the lease payments for the motor vehicles did not contain a full reconciliation of the applicant’s earnings and did not reflect that deductions were made from wages to offset the payments for the motor vehicles. A copy of a page from a payroll reconciliation purportedly completed by the applicant in April 2018 for Luke Rufford showed a deduction for “Salary Sacrifice – Novated Lease”. There are a number of difficulties with accepting that this evidence is sufficient to discharge the applicant’s onus. First, it does not square entirely with the applicant’s other explanation that Mr Smith agreed to salary sacrifice the vehicle to give Luke Rufford more disposable income. Secondly, there is no other evidence to substantiate approval of the leasing arrangement. Thirdly, the copy of the payroll reconciliation relates only to Luke Rufford’s vehicle. Fourthly, the provenance of that document is unclear.

(4)    In relation to the lease for the ride-on lawn mower, the applicant claims that the contract was an error, that Endeavour Fleet had mistakenly taken payments, and that the payments were reimbursed by the applicant. There is no other evidence supporting these claims.

77    On the evidence before me, I am not satisfied that the applicant has established that the payments were approved or reimbursed through deductions from take-home pay. Accordingly, I am not satisfied that the applicant has discharged his onus to establish that this debt is not owing.

78    The amount of $49,039.84 should be admitted in full under s 102 of the Bankruptcy Act.

ABM payments for personal expenses

79    In its Submissions in Support to the respondent, ABM relied upon Schedule B to the SCFASOC which, in turn, was based on the Bishop Collins report. In this category, ABM identified claims in the amount of $82,096.28.

80    In relation to the Schedule B payments, the applicant put forward the following submissions:

(1)    The applicant’s take-home pay was to be $2,000 per week, but of that amount, $2,000 per month was to be set aside as a loan account to be reconciled against his personal expenses to assist the applicant and his family get back on their feet, including:

(a)    Payments for home renovations which were discussed with Mr Smith;

(b)    Payments to AIA insurance totalling $33,151.89 which were discussed on numerous occasions with Mr Smith; and

(c)    Other miscellaneous payments, including payments of $1,337.00 to Amber Tiles, $1701.48 to Origin Energy and $5,544.00 to Michael Hegarty & Associates.

(2)    Two of the items were for ABM business cards for the applicant and Luke Rufford.

(3)    Payments to LinkedIn totalling $1,292.88 were approved by Mr Smith through monthly reimbursements to Ruffcom. The monthly invoices from 31 January 2018 to 30 September 2018 have LinkedIn as a reimbursement item.

(4)    Just Add Kids Pty Ltd was the applicant’s previous employer, and the two amounts totalling $630.19 were reimbursements with Mr Smith’s approval for the cost of the applicant’s phone until it was transferred to Ruffcom.

(5)    A payment of $138.27 was for the applicant’s mobile phone account that Mr Smith agreed to pay.

(6)    Payments totalling $5,218.90 were for family phone accounts. Mr Smith had agreed to cover the phone charges for the applicant and Luke Rufford, and no reconciliation had been undertaken to separate those charges from the others and to request payment of the remainder.

(7)    A total of $1,170.00 was for sponsorship of a golf day and yearly advertising with a football association of which Mr Smith was aware.

81    As indicated above, the applicant at the hearing identified five amounts in Schedule B which he agreed had been owing, to a total of $20,579.86. However, he further submitted that those amounts were no longer owing because they had been part of a settlement agreement between ABM/Suretek and Lynette Rufford. However, the applicant had no evidence of the terms of that settlement. Consequently, they cannot be discounted as debts owing on that basis.

82    The applicant faces a number of obstacles in discharging his onus to establish that these Schedule B payments are not owing as debts. First, there is no clear documentary evidence that any of these payments were authorised. I note that the applicant often sought approval of expenses from Mr Smith by text message. One such example will be referred to at [113(1)] below. However, the applicant did not point to any independent evidence of that kind in relation to Schedule B payments. To the contrary, Mr Smith had expressed concern to the applicant in text messages about ABM paying for the personal motor vehicle expenses of employees.

83    Secondly, to the extent that the amounts were to form part of a loan account in the applicant’s favour, those amounts are owed by the applicant to ABM as debts. Thirdly, there is no clear evidence (other than what the applicant has said) that the loan account was intended to be reconciled with net earnings; nor that such a reconciliation actually occurred. That reconciliation would had to have been against ABM remuneration ($2,000) that was said by the applicant to be set aside for the purpose of reconciling against the loan amounts. However, as will be explained further below, there is no evidence (other than what the applicant has said) that there was any such remuneration set aside.

84    Fourthly, the applicant refers to approval of LinkedIn expenses through Ruffcom invoices. However, as will be explained later in these reasons, there is no evidence of that approval other than what the applicant has said. Fifthly, to the extent that family phone charges were to be separated and reimbursed after reconciliation, those amounts remain owing.

85    Accordingly, I am not satisfied that the applicant has discharged his onus to establish that these amounts are not owing as debts to ABM. The amount of $82,096.28 should be admitted in full under s 102 of the Bankruptcy Act.

86    I note for completeness that one item within Schedule B does not accord with the corresponding entry in the relevant bank statement. Item B50, a payment to AIA insurance on 2 June 2017 in the amount of $1,159.45, was in fact recorded in the NAB account as $1,159.87. The difference is negligible and, since it has not been sought by ABM, it can be put to one side.

ABM remuneration

87    In its Submissions in Support to the respondent, ABM relied upon Schedule D to the SCFASOC in the Supreme Court proceeding. That Schedule in turn was based on the Bishop Collins report.

88    In this category, ABM identified claims in the amount of $78,057.94 that are said to be payments made by the applicant in excess of his agreed remuneration. With one exception to which I will return below, the payments were evidenced by Westpac bank statements.

89    The Westpac statements contain the following payments:

(1)    Monthly payments of $5,000 from May 2016 to March 2017, and then $6,000 per month from April 2017 to October 2018; and

(2)    Multiple irregular payments ranging from $300 to $6,600.

90    The amounts claimed by ABM consist of (a) the monthly payments referred to in (1) in excess of $5,000 (ie, in excess of the amount claimed by ABM to be the agreed monthly remuneration) and (b) all the irregular payments mentioned in (2).

91    The respondent reduced the claimed amount by $19,500.00 to adjust for GST following counsel’s advice and, therefore, admitted only $58,557.94.

92    In order to determine whether the applicant has established that this debt is not owing, it is necessary to identify what remuneration was agreed between the applicant and Mr Smith. As, indicated, Mr Smith claims that he only agreed to pay $5,000 per month in take-home pay. By contrast, the applicant claims that the initial remuneration was to be $2,000 per week in take-home pay, but that he agreed to only take $5,000 per month whilst he worked part-time. The applicant has the onus of establishing his position.

93    The available evidence does not establish with clarity what was to be the agreed remuneration. On 20 November 2015, Mr Smith emailed the Suretek accounts manager requesting that she transfer $10,000 to the ABM account that the applicant managed. The accounts manager confirmed on 2 December 2015 that the action had been completed. Shortly thereafter on the same day, the applicant emailed the accounts manager, with Mr Smith copied in, requesting the creation of a file for the applicant “as a monthly paid employee on MYOB under ABM”. Additionally, the applicant made the following requests:

2.     Prepare a pay slip for October 2015 with a net payable of $10,000 and forward to me.

3.     Prepare a pay slip for November 2015 with a net payable of $10,000 and forward to me.

4.     Transfer this $10,000 to NAB BSB … ACC …. from the ABM Account.

94    The payment of $10,000 net per month does not sit comfortably with either account of the agreed salary. The reference in the fourth request to “[t]ransfer this $10,000” sits uncomfortably with the second and third requests, but consistently with Mr Smith’s request to transfer $10,000 to ABM and with the payment of two months remuneration at the rate of $5,000 per month of take-home pay. There is no further evidence of the payslips to confirm the amounts of pay.

95    The transactional history from the Westpac account does not sit comfortably with the applicant’s claim that he would start to take the full $2,000 per week once he commenced full-time with ABM/Suretek. By his own account, the applicant commenced full-time in April 2016, but did not receive payments of $6,000 until April 2017.

96    On 3 December 2015, there is a text message from the applicant to Mr Smith stating: “[y]ou may get a confirmation call from the NAB to say I work at ABM and have done since September and take home $10k per month”. Again, that does not sit comfortably with what the applicant claims to be the agreed remuneration; nor with what he was actually being paid at that time.

97    In further support of his position, the applicant claimed in evidence and in oral submissions at the hearing that his predecessor at ABM, Peter Fraser, was being paid $2,000 per week. It was said that the amounts paid to Mr Fraser were recorded in ABM accounts as a loan in the amount of $98,000. The difficulty with this submission is that there are text message exchanges between the applicant and Mr Smith during which Mr Smith complained that Mr Fraser had not repaid the loan and expressed the intention that it be recovered. That is incompatible with the proposition that Mr Fraser’s loan was seen by Mr Smith, and understood by the applicant, as being reconciled against part of Mr Fraser’s remuneration.

98    The applicant reiterated in oral submissions at the hearing that $2,000 of his monthly pay was to be applied to his personal expenses, leaving $6,000 in take-home pay per month. That would be consistent with his claim of $2,000 per week take-home pay (at least from April 2017) and might provide an explanation for the numerous irregular payments. However, there is no evidence of any agreement that $2,000 per month of his pay would be applied to his personal expenses.

99    The applicant further claimed that, on 16 February 2018, he and Mr Smith had a conversation about cashflow forecasts, and Mr Smith asked for details of the ABM payroll. After the applicant sent an excel spreadsheet, the email exchange was to the following effect:

Mr Smith:    Incomplete - Where are you in this Glenn ?

Applicant:    Sorry – im [sic] in the July – September one – haven’t actually processed the October to December one in the system for ABM – doing that now as the BAS/GST returns are due…..

My ABM for October – December is $18,000 ie - $6,000 per month Net

I’ll add it to the report now and re send – sorry

Mr Smith:    Can I get this please.

100    The applicant claims the two then “spoke and [the applicant] advised [Mr Smith] this was the payroll portion only and that the other expenses made up the equivalent of $2,000 per week per our original agreement”. There is no documentary evidence to support what was said in the conversation about $2,000 per month being used to cover personal expenses. Further, it is unclear what period the applicant’s email message refers to. The email followed a conversation about cashflow forecasts, and the request was said to be “for the details of the ABM payroll”. It is possible that this refers to the period from October to December 2017. However, in the context of cashflow forecasts, it might equally be forward-looking to the period from October to December 2018.

101    On the basis of the evidence before me, I am not satisfied that the applicant has established that his take-home pay was to be any higher than $5,000 per month. Accordingly, subject to what follows in the next paragraph, I am not satisfied that the applicant has discharged his onus of establishing that he does not owe a debt to ABM for the excess payments.

102    I return to the exception foreshadowed at [88] above. As ABM conceded in the Submissions in Support to the respondent, no bank statement was available to substantiate the payment made on 3 December 2015. In the Submissions in Support to the respondent, the amount of the payment on that date was stated to be $1,000. However, it is clear from the SCFASOC and the Bishop Collins report that the amount was in fact supposed to be $5,000.

103    It is not clear from the Bishop Collins report that the transaction on 3 December 2015 was verified against a bank statement. The scope of the review was limited to sampling transactions and agreeing the sample to the supporting documentation. Given the limited scope of the review, I am not prepared to infer that this transaction was substantiated. Consequently, there was no foundation for this debt to be claimed against the applicant, and I am not prepared to allow it to be admitted under s 102 of the Bankruptcy Act.

104    Accordingly, only the amount of $53,557.94 should be admitted under s 102 of the Bankruptcy Act.

The claimed debts owed to Suretek

Payments to Ruffcom

105    In its Submissions in Support to the respondent, ABM relied upon Schedule E to the SCFASOC which in turn was based on the Bishop Collins report. That schedule included claims for 21 payments made to Ruffcom from about October 2016 to October 2018 purportedly for consulting services and miscellaneous reimbursements. The total amount claimed as a debt owing to Suretek is $154,561.74.

Ruffcom consulting fees

106    Until November 2017, the invoiced consulting fee was $5,500 (incl GST). From December 2017 to October 2018, the fee increased to $6,600 (incl GST). From December 2017, the invoices included additional amounts described as “Expense Reimbursements/Disbursements”. One of those reimbursements, which will be referred to further, was described in the invoice dated 31 December 2017 as “Hampers for Christmas” in the amount of $1,429 (incl GST). Ruffcom was deregistered on 5 February 2018.

107    The first of the 21 invoices was dated 17 October 2016. It is marked “Approved” with what is claimed to be Mr Smith’s signature. Five other invoices bear what appears to be the same signature. The six invoices together (identified in the Submissions in Support to the respondent as E14 (invoice dated 30 June 2017), E17 (invoice dated 31 March 2017), E18 (invoice dated 28 February 2017), E19 (invoice dated 31 January 2017), E20 (invoice dated 20 December 2016) and E21 (invoice dated 14 October 2016)) are in the total amount of $44,041.90.

108    Under s 149 of the Evidence Act, Mr Rufford is not required to adduce evidence to establish that these documents were signed as they purport to have been signed. In the Smith affidavit, Mr Smith provided a blanket denial that he was aware of, authorised or agreed to the payment of the invoices. However, he did not address the signature that appears on the six invoices identified in the previous paragraph and, of course, there is no evidence from Mr Smith filed in this proceeding. I am prepared to accept that the applicant has discharged his onus to establish that these payments were approved.

109    In relation to the remainder of the (unsigned) invoices, the applicant adduced the following evidence:

(1)    In an email dated 24 August 2017, a NAB manager queried “abnormal items” in the amount of $380,000 apparently relating to a budget and cashflow provided by the applicant for the purposes of a trade finance application. The applicant replied that the amount relates “to the legal action ongoing. The increases in Consulting Fees to myself, Bob Sterling for additional work relating to the case for ongoing management and forensic accounting. Once the action has been finalised I expect these to revert to pre action values which are less than $50k per annum combined”. The applicant claims that the consulting fees were to be paid by Suretek on 5 September 2017. Mr Smith is not copied into that email. On 5 September 2017, the applicant sent an email to Mr Smith regarding the final NAB application along with the cashflow forecast. A document purporting to be the forecast statement identified “Ruffcom Consulting” as an expenditure item in the amount of $5,500. The email stated that the cashflow was given to Mr Smith in hardcopy on the same day. The difficulty, however, is that this is evidence of a forecasted expenditure — it does not evidence approval of that amount. It also is evidence that the arrangement was not at that time intended to be an ongoing one. Thus, the fact that some invoices were signed does not lead by inference to the conclusion that there was a blanket approval for an ongoing arrangement.

(2)    On 4 September 2018, the applicant sent a text message to Mr Smith requesting approval of payments, including $7,259 to Ruffcom. The applicant claims that Mr Smith did not query that payment. This appears to be a reference to an invoice from Ruffcom to Suretek in the amount of $7,259.59 dated 31 August 2018 (item E10 in the Submissions in Support to the respondent) which included “Consulting Fees” in the amount of $6,600. The difficulty with this claim is that it was purportedly approved after Ruffcom had been deregistered.

110    The applicant also provided a list of NAB approvals that purport to show approvals by Mr Smith using his login to NAB Connect. The highlighted approval dates are 5 December 2018, 4 September 2018, 16 August 2018 and 6 July 2018. The difficulties are that (a) on the evidence before the Court, there is no way of validating those highlighted entries against invoices in the same period; (b) the final approval date is well after the applicant’s engagement ceased; and (c) in any event, these payments were made after Ruffcom was deregistered.

111    Accordingly, I am not prepared to accept that Mr Smith had approved the remainder of the invoices. The evidence does not establish that Mr Smith approved the invoices when they were paid or as part of an ongoing arrangement with monthly payments.

Reimbursements on Ruffcom invoices

112    As indicated, in addition to the consulting fees, many of the invoices included items for reimbursement. The applicant claims that, from a date in June 2018, as a result of a staff termination/resignation, the applicant started purchasing staff amenities using his own money and would claim them as reimbursements in the monthly invoices. However, it is clear that the invoices included reimbursement items from as early as December 2017.

113    Two reimbursement items require close attention:

(1)    As foreshadowed at [106] above, the invoice dated 31 December 2017 included a “Consultancy Fee” of $6,600 and an “Expense Reimbursement for Christmas Hampers” in the amount of $1,429. The purchase and reimbursement of the hampers was approved by Mr Smith by text message on 21 December 2017. In my view, two things follow from that evidence. First, on that basis, I am prepared to accept that the reimbursement of the hampers is not a debt owing by the applicant. Secondly, the text tends to confirm that the applicant sought approval from Mr Smith when expenses were to be reimbursed. It reinforces the conclusion that the applicant has not discharged his onus to establish that the reimbursements, other than the hampers, were approved by Mr Smith.

(2)    In October 2017, an employee was terminated. The applicant claims that the employee “was short of cash to get his car serviced and registered”. The applicant claims that he lent him $592 and then told Mr Smith that he would seek reimbursement from the employee’s termination pay. In an invoice dated 30 November 2017 from Ruffcom to Suretek, one of the reimbursement items in the amount of $492 was identified next to the terminated employee’s name with the description “Loan for Rego/CTP before Termination”. While the amounts are different, they appear to relate to the same payment. There are difficulties in the way of the applicant establishing that Mr Smith approved this reimbursement. Even if Mr Smith approved the reimbursement from the employee’s termination pay (which is not proven), that does not constitute approval for the money to be reimbursed from Suretek.

114    Other than the reimbursement for Christmas hampers, the applicant has been unable to point to any evidence substantiating that the reimbursement items are what they purport to be or that Mr Smith provided general or specific approval for those reimbursements.

115    In conclusion, once the signed Ruffcom invoices and the Christmas hamper reimbursement are taken into account, only the amount of $109,090.84 should be admitted under s 102 of the Bankruptcy Act.

Payments for personal expenses

116    In its Submissions in Support to the respondent, Suretek relied upon Schedule C to the SCFASOC which, in turn, was based on the Bishop Collins report. In this category, Suretek identifies claims in the amount of $11,770.16 consisting of the following payments:

(1)    Insurance premiums in the amount of $9,662.36 to Attest Finance Pty Ltd to cover the applicant’s motor vehicles, motorbikes, and home and contents insurance for his residential property; and

(2)    Meridian Legal in the amount of $2,109.00.

Meridian Legal

117    There does not appear to be documentary evidence supporting the Meridian Legal claim. The Bishop Collins report identified it as having been incurred on 4 September 2018. However, no bank account is identified for the payment. The SCFASOC provides no further detail. The Submissions in Support to the respondent and Mr Smith’s affidavit suggest that the amount was paid from Suretek’s NAB account. However, there is no evidence in Suretek’s NAB statements annexed to the Smith affidavit that that amount was paid on the identified date.

118    Nonetheless, the applicant has accepted that the payments were made. The applicant claims that, in April 2018, he informed Mr Smith of legal action against the applicant. The applicant sent a text message to Mr Smith asking, “Can I speak to Peter Webb”. The applicant claims that, in conversation afterwards in the office, Mr Smith said “you can use Peter Webb”. The applicant also claims that from this time, until his termination, a number of interim accounts were paid and approved by Mr Smith to assist the applicant. In my view, two things follow from the applicant’s evidence. First, he accepts that the payments were made. Secondly, there are difficulties in accepting the applicant’s claim that Mr Smith approved the payment. There is no documentation to support the subsequent conversation in the office. And, even if it took place, what is claimed by the applicant does not imply that Suretek would pay for those services.

Attest Finance

119    The applicant claims that, in about July 2017, he and Mr Smith had a conversation about insurance for Mr Smith’s companies. The applicant was also arranging his personal insurances at the time and, upon seeing the personal insurance forms, Mr Smith offered to pay for the applicant’s personal insurances. Mr Smith is claimed to have said “I can’t do enough for what you’ve done, I’ll pay for this year, put it through with Suretek”.

120    In support, the applicant points to an email exchange on 20 September 2018 between the applicant and the insurance broker for Mr Smith and the Suretek group. The applicant claims that the email trail “shows that this particular year [the applicant] wanted [his] personal insurances separate”. The broker stated in an email that she was providing the applicant “with a separate funding for [his] personal insurances”. That evidence might support an inference that the applicant intended to pay for his own insurance for the following year. However, that exchange has no bearing on the relevant question of whether the earlier payment of premiums was approved.

121    I am not satisfied on the evidence before the Court that the applicant has discharged his onus of establishing that he does not owe these amounts to Suretek. Accordingly, the amount of $11,772.16 should be admitted under s 102 of the Bankruptcy Act.

ORDERS

122    For the foregoing reasons, I will make orders pursuant to s 104(2) of the Bankruptcy Act that the respondent’s decisions be varied so that:

(1)    ABM’s Proof of Debt is to be partially rejected to the extent of $24,500 and admitted in the amount of $184,694.06; and

(2)    Suretek’s Proof of Debt is to be partially rejected to the extent of $45,420.90 and admitted in the amount of $120,863.00.

123    The parties will be given an opportunity to make submissions on the appropriate costs order.

Associate:

Dated:    4 September 2025