Federal Court of Australia

Ogbonna v CTI Logistics Ltd (No 7) [2025] FCA 1125

ORDERS

THE COURT ORDERS THAT:

1.    The interlocutory application for review of the Registrar’s orders of 19 June 2024 taken to have been made on 12 September 2024 in accordance with paragraph 3 of the orders of 19 September 2024 be dismissed with costs reserved.

2.    The appellant have leave to amend his notice of appeal in terms of ground 1 of the amended notice of appeal filed 22 March 2024, the need to file and serve an amended notice of appeal be dispensed with and, otherwise, the remaining paragraphs of the interlocutory application for leave to amend the grounds of appeal filed 22 March 2024 be dismissed with costs reserved.

3.    The appeal be allowed.

4.    The question of what orders should be made in consequence of allowing the appeal including:

(a)    if an order should be made to set aside the sequestration order or if an order should be made annulling the bankruptcy;

(b)    any orders relating to the remuneration and expenses of the trustee in bankruptcy in the administration of the estate of the appellant; and

(c)    any orders relating to the costs of the appeal and the costs of the proceeding in the Federal Circuit and Family Court of Australia (Division 2),

be reserved.

5.    By 19 September 2025 the respondents serve a copy of these orders on the appellant’s trustee in bankruptcy.

6.    The appellant’s trustee in bankruptcy have leave to appear and make submissions on the questions reserved in paragraph 4 of these orders.

7.    By 3 October 2025, with respect to the costs and questions reserved in paragraphs 1, 2 and 4 of these orders:

(a)    the parties and trustee in bankruptcy file a minute of proposed consent orders; or

(b)    the appellant, the respondents and the trustee in bankruptcy each file and serve minutes of proposed orders and a written outline of submissions (limited to 3 pages) and any affidavit(s) in support.

8.    The appeal be listed on a date to be fixed for further hearing on the questions reserved in paragraphs 1, 2 and 4 of these orders.

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

REASONS FOR JUDGMENT

FEUTRILL J:

Introduction

1    The respondents obtained a sequestration order against the appellant under s 43 of the Bankruptcy Act 1966 (Cth) in the Federal Circuit and Family Court of Australia (Division 2). As a vexatious proceedings order has been made against the appellant, he had to apply for leave to commence an appeal from that order. I granted the appellant leave to file a notice of appeal restricted to one ground of appeal. The appellant was evidently dissatisfied with that limited leave and continued to agitate for the inclusion of an additional ground of appeal and vast amounts of irrelevant material in the appeal book. After expending significant effort to expand the issues and materials in the appeal, the appellant then failed to comply with various pre-hearing orders. Then, the appellant was absent when the appeal was called on for hearing. The respondents did not seek an order dismissing the appeal, but requested that the appeal be heard in the appellant’s absence. I acceded to that request on certain conditions. Opportunity was afforded to the appellant to make written and, if requested, oral submissions after the hearing and the hearing was adjourned to a date to be fixed. Notwithstanding those conditions, the appellant made no submissions to the Court and, in effect, disengaged with his appeal. Yet, in spite of the appellant’s absence, attempts at unnecessary expansion of the issues, and, ultimate disinterest, the appeal must succeed.

2    The principal issue raised in the appeal is whether the judgment debt upon which the bankruptcy notice and act of bankruptcy was founded was ‘owing’, ‘due’ and ‘payable immediately or at a certain time’ for the purposes of s 44(1) of the Bankruptcy Act at the time of presentation of the respondents’ petition and the hearing of that petition. The issue arises because at those times an action on the judgment debt was statute-barred under s 13(1) of the Limitation Act 2005 (WA) and, under the applicable procedure for enforcement of the judgment debt under s 13(1)(a) of the Civil Judgments Enforcement Act 2004 (WA), as applied by the relevant provisions of the Federal Circuit and Family Court of Australia Act 2021 (Cth) and Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth), leave was required before an application for an enforcement order could be made to the Federal Circuit and Family Court of Australia (Division 2). The respondents had not sought or been granted leave to apply for an enforcement order. Thus, at the time of presentation of the creditors’ petition the respondents had no then present right to apply for an enforcement order to extract payment for the judgment debt. For the reasons that follow, although the judgment debt was a ‘provable debt’, it was payable contingently. It was not a debt that was ‘payable immediately or at a certain future time’ and, therefore, the respondents were not entitled to present their creditors’ petition and obtain a sequestration order under s 43 of the Bankruptcy Act.

Background

3    The background to the appeal and interlocutory applications that were heard with the appeal require a degree of explanation.

4    On 28 August 2015 a judge of the then Federal Circuit Court made a final order dismissing the appellant’s unlawful discrimination claim in those proceedings against the respondents and ordering him to pay costs of $22,762.00: Ogbonna v CTI Logistics Ltd (No 2) [2015] FCCA 2318. On 11 March 2016 an application to extend the time within which the appellant had to appeal from that order was dismissed: Ogbonna v CTI Logistics Ltd [2016] FCA 239. On 20 July 2016 an application for special leave to appeal to the High Court was dismissed.

5    On 20 July 2016 the appellant commenced defamation proceedings against, amongst others, CTI Logistics in the District Court of Western Australia. On 20 January 2018 those defamation proceedings were dismissed for want of prosecution. On 28 February 2018 the appellant commenced a second suit for defamation against the same parties in the District Court.

6    On 10 May 2019 CTI Logistics requested payment of the judgment debt. It was not paid and on 6 June 2019 a bankruptcy notice was issued. At that time, the judgment debt, including interest, was in the sum of $29,050.63. The appellant applied to this Court to set aside the bankruptcy notice. Thereafter, by successive orders of this Court the time within which the appellant had to comply with that bankruptcy notice was extended. Those extensions were made pending the final resolution of the second defamation proceedings which were alleged, by the appellant, to comprise a counterclaim that exceeded the amount of the judgment debt. The appellant also commenced proceedings in this Court in which he sought orders setting aside the bankruptcy notice.

7    On 13 August 2019 the second defamation proceedings were summarily dismissed by a registrar of the District Court. On 16 August 2019 the appellant instituted an appeal from the registrar’s orders to a judge of the District Court. On 20 November 2019 that appeal was dismissed. On 5 December 2019 the appellant instituted an appeal to the Supreme Court of Western Australia. On 12 February 2021 that appeal was dismissed. On 12 March 2021 the appellant applied for special leave to appeal to the High Court. On 24 June 2021 that application was refused. On 29 November 2021 this Court dismissed the appellant’s application to set aside the bankruptcy notice: Ogbonna v CTI Logistics Limited [2021] FCA 1491.

8    In the meantime, after special leave to appeal was refused, on 8 October 2021, the appellant filed an originating process and statement of claim in this Court against CTI Logistics and others in which he alleged there were conspiracies and perversions of the course of justice in respect of the determination of the defamation proceedings. On 7 February 2022 those proceedings were summarily dismissed: Ogbonna v CTI Logistics Limited (No 2) [2022] FCA 75.

9    On 23 May 2022 the vexatious proceedings order was made against the appellant: Ogbonna v CTI Logistics Limited (No 6) [2022] FCA 615. After CTI Logistics (No 2) and before CTI Logistics (No 6), the appellant made a number of applications, all of which were dismissed: Ogbonna v CTI Logistics Limited (No 3) [2022] FCA 267, Ogbonna v CTI Logistics Limited (No 4) [2022] FCA 358 and Ogbonna v CTI Logistics Ltd (No 5) [2022] FCA 612.

10    On 20 September 2022 the primary judge made a sequestration order on presentation of a creditors’ petition of CTI Logistics Limited, Mark Vanderlist and Tim Barton (the respondents in the appeal). Their petition was grounded on the unpaid judgment debt and an act of bankruptcy for non-compliance with the bankruptcy notice of 6 June 2019.

11    On 10 October 2022 the appellant filed an originating process in the Court under s 37AR(2) of the Federal Court of Australia Act 1976 (Cth) for leave to commence an appeal from the sequestration order. I heard that application on notice to the respondents on 12 September 2023. On 2 November 2023 I granted the appellant leave to file a notice of appeal containing one specific ground of appeal and otherwise dismissed the application: Ogbonna, in the matter of Ogbonna [2023] FCA 1334.

12    At the time of granting the appellant leave to file a notice of appeal, he had already made applications in the proceeding without leave. As observed in Ogbonna (No 1) the appellant had been involved in 46 proceedings in this Court, the Circuit Court and Western Australian courts of which 21 involved CTI Logistics and one or more of its officers, employees or legal representatives. Also, the appellant was subject to a vexatious proceeding order. In these circumstances, on 2 November 2023, I also made an order that no further interlocutory applications or affidavits were to be filed in the appeal proceeding without leave of the Court.

13    On 15 November 2023 the appellant filed a notice of appeal. On 7 December 2023 orders were made granting the appellant leave to amend the ground of appeal and for the preparation of appeal books. The appeal was later listed for hearing on 28 March 2024.

14    On 22 March 2024 the appellant lodged an interlocutory application (without leave) for leave to amend the notice of appeal, minute of amended notice of appeal and an affidavit in support. The appellant also lodged an interlocutory application (without leave) for punishment for alleged contempt and other documents. By this time, no appeal books or submissions had been filed in the appeal.

15    When the appeal was called on for hearing on 28 March 2024, none of the parties were in a position to proceed with the hearing of the appeal. Orders were made to vacate the hearing and relist it on a date to be fixed and case management orders were made for preparation of an appeal book that involved the Registrar settling the index and the respondents preparing the appeal book. I also made orders granting the appellant leave to file the interlocutory application to amend the notice of appeal, and refusing the appellant leave to file an interlocutory application for punishment for alleged contempt of court.

16    On 19 June 2024 the Registrar made orders settling the appeal book index and for the appellant to prepare a supplementary appeal book containing certain documents. That order excited a number of applications on the part of the appellant for leave to file interlocutory applications. These were all refused except one: Ogbonna v CTI Logistics Ltd (No 3) [2024] FCA 872; Ogbonna v CTI Logistics Ltd (No 4) [2024] FCA 1035; Ogbonna v CTI Logistics Ltd (No 5) [2024] FCA 1101; and Ogbonna v CTI Logistics Ltd (No 6) [2024] FCA 1134. In Ogbonna (No 5) orders were made granting the appellant leave to apply for review of the Registrar’s orders of 19 June 2024 and requiring the appellant to file and serve certain documents to facilitate that review.

17    The appeal was relisted on 26 September 2024. As mentioned, when the appeal was called on for hearing the appellant was absent. Also called on for hearing were the applications for leave to amend the notice of appeal and for review of the Registrar’s orders. I indicated to the respondents that I was minded, if an application were made, to dismiss the interlocutory applications and the appeal under r 36.75(1)(a)(i) of the Federal Court Rules 2011 (Cth). Nonetheless, the respondents requested that the appeal proceed in the appellant’s absence under r 36.75(a)(iii). I acceded to that request and made orders at the conclusion of the hearing to facilitate the appellant’s further participation in the appeal and re-listing of the appeal for further oral argument if requested or necessary. The orders made were as follows:

1.    The hearing of the appeal, appellant’s interlocutory application for leave to amend the notice of appeal to include proposed ground 2 and the appellant’s application for review of the Registrar’s orders of 19 June 2024 proceed in the absence of the appellant on the following conditions:

(a)    copies of the transcript of the hearing of 26 September 2024; the documents marked ‘MFI-1’ and ‘MFI-2’; and these orders be provided to the appellant by the Court as soon as reasonably practicable;

(b)    the appellant have leave to file and serve an outline of written submissions (not exceeding 20 pages) addressing the ground of appeal, the proposed ground of appeal and his interlocutory applications by 4.30 pm (AWST) on 24 October 2024; and

(c)    the respondents have leave to file and serve any responsive submissions (not exceeding 20 pages) to the appellant’s submissions in accordance with paragraph 1(c) of these orders by 4.30pm (AWST) on 7 November 2024.

2.    The appeal be adjourned to a date to be fixed.

3.    Costs be reserved.

18    The significance of MFI-1 and MFI-2 is explained later in these reasons. The transcript and MFI-1 and MFI-2 were provided to the appellant by the Court via his nominated email address. No further written submissions were filed by the appellant or respondents.

19    Relevantly, with respect to any applicable limitation periods, what emerges from the background facts is the following.

(1)    The order creating the judgment debt had effect from 28 August 2015.

(2)    The bankruptcy notice was issued on 6 June 2019. The final date for compliance with that notice was 29 November 2021.

(3)    The appellant failed to comply with the bankruptcy notice and no court was satisfied that he had a counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt that the appellant could not have set up in the proceeding in which the order was obtained. That is, there was an act of bankruptcy on 29 November 2021.

(4)    On 17 May 2022 the respondents filed their creditors’ petition in the Circuit Court.

(5)    On 14 September 2022 the creditors’ petition was heard.

(6)    On 20 September 2022 a sequestration order was made.

Thus, the act of bankruptcy, filing of the creditors’ petition, hearing of the creditors’ petition and sequestration order all took place more than six years after the order creating the judgment debt took effect.

Bankruptcy Act

20    Relevantly, the Bankruptcy Act provides:

40.    Acts of bankruptcy

(1)    A debtor commits an act of bankruptcy in each of the following cases:

…

(g)    if a creditor who has obtained against the debtor a final judgment or final order, being a judgment or order the execution of which has not been stayed, has served on the debtor in Australia or, by leave of the Court, elsewhere, a bankruptcy notice under this Act and the debtor does not:

(i)    where the notice was served in Australia—within the time fixed for compliance with the notice; or

(ii)    where the notice was served elsewhere—within the time specified by the order giving leave to effect the service;

comply with the requirements of the notice or satisfy the Court that he or she has a counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt or sum payable under the final order, as the case may be, being a counter-claim, set-off or cross demand that he or she could not have set up in the action or proceeding in which the judgment or order was obtained;

…

43    Jurisdiction to make sequestration orders

(1)    Subject to this Act, where:

(a)    a debtor has committed an act of bankruptcy; and

(b)    at the time when the act of bankruptcy was committed, the debtor:

(i)    was personally present or ordinarily resident in Australia;

(ii)    had a dwelling-house or place of business in Australia;

(iii)    was carrying on business in Australia, either personally or by means of an agent or manager; or

(iv)    was a member of a firm or partnership carrying on business in Australia by means of a partner or partners or of an agent or manager;

the Court may, on a petition presented by a creditor, make a sequestration order against the estate of the debtor.

(2)    Upon the making of a sequestration order against the estate of a debtor, the debtor becomes a bankrupt, and continues to be a bankrupt until:

(a)    he or she is discharged by force of subsection 149(1); or

(b)    his or her bankruptcy is annulled by force of subsection 74(1) or 153A(1) or under section 153B.

44    Conditions on which creditor may petition

(1)    A creditor’s petition shall not be presented against a debtor unless:

(a)    there is owing by the debtor to the petitioning creditor a debt that amounts to the statutory minimum or 2 or more debts that amount in the aggregate to the statutory minimum, or, where 2 or more creditors join in the petition, there is owing by the debtor to the several petitioning creditors debts that amount in the aggregate to the statutory minimum;

(b)    that debt, or each of those debts, as the case may be:

(i)    is a liquidated sum due at law or in equity or partly at law and partly in equity; and

(ii)    is payable either immediately or at a certain future time; and

(c)    the act of bankruptcy on which the petition is founded was committed within 6 months before the presentation of the petition.

…

47    Requirements as to creditor’s petition

(1)    A creditor’s petition must be verified by an affidavit of a person who knows the relevant facts.

(1A)    If the rules of court prescribe a form for the purposes of this subsection, the petition must be in the form prescribed.

(2)    Except with the leave of the Court, a creditor’s petition shall not be withdrawn after presentation.

…

52    Proceedings and order on creditor’s petition

(1)    At the hearing of a creditor’s petition, the Court shall require proof of:

(a)    the matters stated in the petition (for which purpose the Court may accept the affidavit verifying the petition as sufficient);

(b)    service of the petition; and

(c)    the fact that the debt or debts on which the petitioning creditor relies is or are still owing;

and, if it is satisfied with the proof of those matters, may make a sequestration order against the estate of the debtor.

…

21    A bankruptcy court has no authority to make a sequestration order in circumstances in which at the time the creditor presents the petition there is no debt ‘owing’ to the petitioning creditor or the debt is not ‘due’ and the debt is not ‘payable either immediately or at a certain future time’: Udovenko v Mitchell [1997] FCA 1312; 79 FCR 418 at 420 (Davies J, Forster J agreeing).

Ground of appeal

22    The primary judge set out ss 43, 47 and 52 of the Bankruptcy Act at PJ [39]-[41]. The primary judge found that the respondents had satisfied the requirements of the applicable provisions and that the appellant had not made out any of his grounds for opposition at PJ [46]-[78]. It is not necessary to consider the primary judge’s reasons for decision any further because the ground of appeal raises a point of law that was not argued before him.

23    For the reasons given later, leave will be granted for the appellant to amend ground 1 of his notice of appeal to be in the following terms:

The judgement debt dated 28 August 2015 was statutorily barred on 28 August 2021, being 6 years old on that day pursuant to s 9 of the Bankruptcy Act 1966 (Cth) and s 13(1) of the Civil Judgments Enforcement Act 2004 (WA), the statutory precondition for leave was not granted before an order to enforce the judgment was made based on these legislative provisions thus the decision: CTI Logistics Ltd v Ogbonna [2022] FedCFamC2G 781 delivered on 20 September 2022, was invalid given the judgement debt dated 28 August 2015 was more than six years old and statute barred when the Creditor’s Petition was filed on 17 May 2022 without leave.

24    Although the appellant filed no written submission in support of the appeal, the issue raised in ground 1 was the subject of written and oral submissions on his application for leave to commence the appeal. These submissions were addressed in Ogbonna (No 1).

25    The applicant contends, in substance, that because an action on the judgment debt cannot be commenced more than six years after the cause of action accrued under s 13(1) of the Limitation Act (WA), at the time of presentation of the petition, there was no debt ‘owing’ or ‘payable immediately or at a certain future time’ for the purposes of s 44(1) of the Bankruptcy Act. Further, the judgment debt was not otherwise ‘payable’ because it was not enforceable at the time the petition was presented. It was not enforceable because the relevant rules of the Circuit Court adopted and applied s 13(1) of the Enforcements Act and that provision provided that an enforcement order could not be made six years after the order creating the judgment debt became effective without leave of the court. Here, the respondents had not obtained leave to apply for an enforcement order at the time they presented their creditors’ petition.

26    The respondents submit, in substance, that s 13(1) of the Limitation Act (WA) is not relevant to enforcement of judgments of the Circuit Court. Further, at all material times, the respondents were entitled to enforce the judgment debt by operation of the legislation and rules governing enforcement of judgments and orders of the Circuit Court. The respondents contend that the judgment debt was both ‘owing’ and ‘payable’ at the time of presentation of the petition because, although leave was required, the judgment debt remained enforceable subject to the grant of leave. The respondents contend that the requirement to obtain leave after six years is analogous to a stay of enforcement. Relying on Re Pollack; Ex parte Deputy Commissioner of Taxation [1991] FCA 651; 32 FCR 40, the respondents submit that a judgment debt remains ‘payable’ for the purposes of s 44(1) where enforcement is effectively stayed.

Interlocutory applications in the appeal

27    The appellant’s application for review of the Registrar’s orders of 19 June 2024 and his application for leave to amend the grounds of appeal were listed for hearing at the same time as the appeal.

28    As to the application to review the Registrar’s orders, the appellant had not complied with any of the pre-hearing orders intended to facilitate the review and identify the documents that the appellant wanted to include in the appeal book and the reasons he wanted them included. A draft appeal book index was included in the annexures to an affidavit that I directed the Registrar not to accept for filing by an order made on 25 September 2024: Ogbonna (No 6). A copy of that index was marked MFI-1 and provided to the respondents for review. The respondents marked on the index in blue the documents that were already in the appeal book, in black the documents that the Registrar had permitted Mr Ogbonna to file as a supplementary appeal book and in red documents that were in neither of those categories. The marked-up document was received as MFI-2. The effect of the respondents’ submission made through MFI-2 is that all the documents in the appellant’s index are either in the appeal book (but in certain cases with different descriptions to those in the appellant’s index) or are documents that have been filed in these proceedings.

29    The application for review of the Registrar’s orders will be dismissed. In reaching the view that there is no justification for making a different order to that of the Registrar I have taken into account the following matters.

(1)    The overarching purpose of the civil practice and procedure provisions described in s 37M and the parties’ obligation to conduct proceedings consistently with that purpose under s 37N of the Federal Court Act.

(2)    That the appellant was absent when the application for review of the Registrar’s orders was called on for hearing.

(3)    That the appellant made no written submissions on the matter.

(4)    I infer from (2) and (3) that the appellant does not want to prosecute the application for review of the Registrar’s orders.

(5)    That the appeal book and the supplementary appeal book (had it been prepared and filed) contained almost all the documents in the appellant’s index.

(6)    All documents in the appellant’s index that were not in the appeal book were filed in the appeal and available to the Court and the parties.

(7)    The Registrar’s orders would not have prevented the appellant, had he not been absent, from referring to any document in his index and attempting to persuade the Court on the hearing of his application for leave to amend the notice of appeal or on the hearing of the appeal that a particular document was relevant to the application or appeal.

(8)    If he had persuaded the Court of the relevance of a particular document, the document would have been added to the (supplementary) appeal book and would have formed part of the materials before the Court in the appeal.

30    As for Mr Ogbonna’s application for leave to amend his grounds of appeal, the proposed amendment to ground 1 is not opposed. Further, as ground 1 raises a pure point of law, the respondents, quite properly, do not oppose the appellant raising ground 1 as a new point in the appeal. It follows that leave to amend ground 1 of the appeal will be granted.

31    The respondents oppose leave to amend in terms of the proposed second ground of appeal. That ground is in the following terms:

There was a miscarriage of justice since the primary judge did not consider the ground of sufficient cause on the basis of appellant possessing a genuine and arguable claim against the creditors for an amount that monetarily exceeds the judgment debt. Besides the conditions creditors may petition were not enlivened pursuant to s 43 of the Bankruptcy Act 1966 (Cth) (thus no act of bankruptcy was committed under s 40(1)(g) of the Act).

32    On the appellant’s application for leave to file a notice of appeal leave was not granted (refused) for the appellant to raise the following proposed ground:

The debtor did not commit an the act of bankruptcy on 29 November 2021, relied on by the creditor, given the debtor had a bona fide counterclaim that monetarily exceeds the [judgment] debt pursuant to s 40(1)(g) and 41(7) of the Bankruptcy Act 1966 (Cth) in the sum of A$745,959.20 (excluding interest) in the originating matter: Ogbonna v CTI Logistics Ltd & Anor – CIV 744 of 2018 which still stands to be remedied now as a claim of fraud by unlawful means conspiracy.

33    As can be seen, the proposed new ground 2 and the previously proposed and refused ground 2 appear to raise substantially the same issues. Leave to raise those issues was refused for the reasons given in Ogbonna (No 1) at [70]-[76].

34    Before the primary judge the appellant had contended that he had a counter-claim, set-off or cross-claim that was equal to or exceeded the judgment debt that he could not have set up in the proceeding in which the order was made. The primary judge explained the grounds of opposition, the appellant’s contentions and arguments and the reasons the primary judge was not satisfied that the appellant had a counter-claim, set-off or cross-claim of the relevant kind at PJ [34], [54]-[63] and [74]-[77].

35    Amongst other reasons, leave to file a notice appeal including proposed ground 2 was refused because the proposed ground failed to identify any error of law or fact in the primary judge’s reasons for concluding that he was not satisfied that Mr Ogbonna had a counter-claim, set-off or cross-claim of the kind referred to in s 40(1)(g) of the Bankruptcy Act. The new proposed ground 2 has the same problem. In substance, the proposed new ground 2 merely expresses disagreement with the primary judge’s conclusions. That is not a proper ground of appeal.

36    The appellant’s application for leave to amend the notice of appeal to add proposed new ground 2 will be refused. In refusing leave I have taken into account the following matters.

(1)    The overarching purpose of the civil practice and procedure provisions described in s 37M and the parties’ obligation to conduct proceedings consistently with that purpose under s 37N of the Federal Court Act.

(2)    That the appellant was absent when the application for review of the Registrar’s orders was called on for hearing.

(3)    That the appellant made no written submissions on the matter.

(4)    I infer from (2) and (3) that the appellant does not want to prosecute his application for leave to amend.

(5)    Proposed new ground 2 does not identify a proper ground of appeal.

(6)    The Court has no means of identifying what, if any, of the supplementary documents (the additional documents referred to in the appellant’s index) upon which the appellant relies to support the application for leave or, if leave were granted, the ground of appeal.

(7)    There is nothing before the Court from which I have been able to identify any basis for an application to re-open the decision made to refuse leave or for admitting the supplementary documents as evidence or other materials in the appeal.

(8)    I have not been able to identify the substance of the appellant’s complaint to ascertain the extent to which:

(a)    it differs, if at all, from the earlier proposed ground 2;

(b)    there is merit in the proposed new ground; or

(c)    leave to re-open should be granted.

Applicable limitation periods

37    Section 9 of the Bankruptcy Act provides that the Act does not affect a law of a State relating to matters not dealt with expressly or by necessary implication in the Act. Section 13(1) of the Limitation Act (WA) provides that: ‘An action on any cause of action cannot be commenced if 6 years have elapsed since the cause of action accrued.’ The term ‘action’ is defined in s 3(1) of the Limitation Act (WA) to include, relevantly, ‘any civil proceeding in a court, whether the claim that is the subject of the proceeding or relief sought is under a written law, at common law, in equity or otherwise’.

38    As will be explained later, a judgment creditor has a cause of action in debt for a judgment debt. Therefore, a judgment creditor may bring an action in debt for a judgment debt within six years from the date the order creating the judgment debt became effective. After six years, the cause of action in debt is statute-barred by operation of s 13(1) of the Limitation Act (WA).

39    At the date of the order creating the judgment debt (28 August 2015) enforcement of the judgment debt was regulated by s 78 of the Federal Circuit Court of Australia Act 1999 (Cth) and Pt 29 of the Federal Circuit Court Rules 2001 (Cth). After the Federal Circuit and Family Court of Australia Act 2021 (Cth) came into force (1 September 2021) enforcement of the judgement debt was regulated by s 213 of that Act and Pt 25 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth). The effect of s 8(2) of the Federal Circuit and Family Court Act was that the Federal Circuit Court of Australia continued in existence and became the Federal Circuit and Family Court of Australia (Division2). Section 18 of Sch 5 of the Federal Circuit and Family Court of Australia (Consequential Amendments and Transitional Provisions) Act 2021 (Cth) provides that the amendments do not affect the validity of anything done before the amendments were made. Therefore, the Federal Circuit Court order creating the judgment debt continued after 1 September 2021, in effect, as an order of the Federal Circuit and Family Court of Australia (Div 2). (In these reasons I refer to the court whether named Federal Circuit Court of Australia or Federal Circuit and Family Court of Australia (Div 2) at the applicable time as the ‘Circuit Court’.)

40    Section 213 of the Circuit Court Act 2021 provides:

213    Enforcement of judgment

…

(2)    A person in whose favour a judgment of the Federal Circuit and Family Court of Australia (Division 2) is given is entitled to the same remedies for enforcement of the judgment in a State or Territory, by execution or otherwise, as are allowed in like cases by the laws of that State or Territory to persons in whose favour a judgment of the Supreme Court of that State or Territory is given.

(3)    Subsection (2) has effect subject to the Rules of Court.

…

Section 78 of the Circuit Court Act 1999 was in materially the same terms.

41    Rule 25.11 of the Circuit Court 2021 Rules provides:

25.11    Execution generally

(1)    A party may apply to the Court to issue a writ, order or any other means of enforcement of a judgment or order that can be issued or taken in the Supreme Court of the State or Territory in which the judgment or order was made, as if it were a judgment or order of that Supreme Court.

(2)    An order made under subrule (1) authorises the Sheriff, when executing the orders of the Court, to act in the same manner as a similar officer of the Supreme Court of the State or Territory in which the order is being executed is entitled to act.

(3)    A party who wants to enforce an order in more than one State or Territory may adopt the procedures and forms of process of the Supreme Court of the State or Territory in which the judgment or order was made.

(Notes excluded.)

Rule 29.11 of the Circuit Court 2001 Rules was in materially the same terms.

42    For the purposes of s 213 of the Circuit Court Act 2021, an entitlement ‘to the same remedies for enforcement of the judgment in [Western Australia], by execution or otherwise, as are allowed in like cases by the laws of [Western Australia]’ picks up within that entitlement any limitations on remedies for enforcement that are stipulated in the relevant laws of Western Australia. Likewise, for the purposes of r 25.11 of the Circuit Court Rules 2021 a person may only apply for and an order may only be made for a means of enforcement of a judgment or order that ‘can be issued’ in Western Australia. If a means of enforcement cannot be issued in Western Australia due to a limitation on the right of enforcement in that State it is not a means of enforcement that ‘can be issued’.

43    In Western Australia the remedies for enforcement of a judgment, by execution or otherwise, and the kinds of orders or other means of enforcement of a judgment that can be issued or taken in the Supreme Court are contained in the Enforcements Act. Section 12 of the Enforcements Act provides that an order under that Act to enforce a judgment must not be made if 12 years have elapsed since the judgment took effect. Section 13(1) of the Enforcements Act provides that leave of the court must be obtained before an order may be made under that Act to enforce a judgment if six years have elapsed since the judgment took effect. The interpretation of these provisions as they apply to orders and judgments of the Circuit Court is considered later in these reasons.

Debts payable immediately or at a certain future time

44    In O'Mara Constructions Pty Ltd v Avery [2006] FCAFC 55; 151 FCR 196 a Full Court (Heerey, Dowsett and Conti JJ) considered similar issues to those that arise in this appeal in the context of the interaction between s 17(1) of the Limitation Act 1969 (NSW) and s 43 and s 44 of the Bankruptcy Act. Relevantly, I take the following propositions from that authority.

(1)    An ‘action’ on a ‘cause of action’ for the purposes of s 13(1) of the Limitation Act (WA) includes an action in debt for recovery of a judgment debt: at [8] (citing s 17(1) of the Limitation Act (NSW)). See, also, WT Lamb & Sons v Rider [1948] 2 KB 331 at 335-339; Dennehy v Reasonable Endeavours Pty Ltd [2003] FCAFC 158; 130 FCR 494 at [8]-[10] (Finkelstein J, Madgwick and Dowsett JJ agreeing).

(2)    In general, where a creditor obtains judgment for a pre-existing debt (or liability), that debt is merged in the judgment. However, for bankruptcy purposes, the pre-existing debt continues to be available as the basis for a bankruptcy petition. The judgment creditor may rely on either the original debt or the judgment debt, subject to any applicable limitation periods: at [9] (citing Re King & Beesley [1895] 1 QB 189 at 191-192; Re Seckold; Ex parte Sargood Gardiner Ltd (1933) 5 ABC 195 at 197-199).

(3)    A debt that is statute-barred is not provable in bankruptcy and cannot ground the presentation of a petition of the creditor for the purposes of s 44(1) of the Bankruptcy Act. Also, a statute-barred debt is unenforceable against a trustee in bankruptcy. The date for determination of whether a debt is statute-barred is the date of presentation of the petition: at [19]-[25] (citing Motor Terms Co Pty Ltd v Liberty Insurance Ltd [1967] HCA 9; 116 CLR 177 at 180; Tanning Research Laboratories Inc v O'Brien [1990] HCA 8; 169 CLR 332).

(4)    Section 13(1) of the Limitation Act (WA) does not bar execution upon a judgment, at least, where execution is effectively an extension of the original proceedings in the court in which the judgment was obtained: at [11], [15]-[16] (citing WT Lamb & Sons v Rider at 337-338; Lowsley v Forbes [1999] 1 AC 329); see, also, Dennehy at [2], [18].

(5)    To the extent that a creditor is able to execute on a judgment at the date of presentation of a petition, that creditor remains a creditor able to prove in the bankruptcy and able to petition for a sequestration order for the purposes of s 43 and s 44 of the Bankruptcy Act: at [33]-[37], [58].

45    In O’Mara Constructions there was no examination of the judgment creditor’s right to execute. Relevantly, the Court said:

34    We have referred to the “extent” to which a judgment creditor may be able to enforce his or her judgment. In argument, there was no examination of the extent of the appellant’s right to execute. The parties appear to have proceeded on the basis that the appellant was at liberty to execute on the judgment without any relevant limitation. We will dispose of the case on that basis…

35    …

36    … The rights of any creditor are of value only to the extent that they facilitate recovery of the debt. Execution is a substantial aspect of a judgment creditor’s rights. Orderly administration of a bankrupt estate would be severely impeded if such right were not terminated by a sequestration order. A judgment creditor who is able to execute on his or her judgment may accurately be described as a “creditor” in the sense in which that term is used in ss 43 and 44.

37    Section 44 also requires that the creditor’s debt be payable, either immediately or at a certain future time. It may be argued that a creditor whose debt is not enforceable other than by way of execution on a judgment is not a creditor whose debt is so payable. However we consider that to be little more than a sematic quibble. In a practical sense, there is no way in which a judgment debt is payable other than by the voluntary act of the debtor or by some form of execution. A creditor who enforces his or her rights pursuant to a judgment by execution is, in effect, extracting payment. Given the clear intention to include such judgment creditors in the class of persons who are subject to the constraints of the Bankruptcy Act, and our conclusion that they are creditors, we have little difficulty in concluding that debts owing to them are also payable in the relevant sense. …

46    A cause of action in debt is a claim founded on detention of a liquidated sum of money that is presently ‘due and payable’ by the debtor to the creditor. A debt can be ‘owing’ in the sense that the debtor ‘owes’ the creditor a sum of money, but that debt is not presently ‘due’ or ‘payable’ in the sense that the creditor is not entitled to payment of the debt and, therefore, the debtor is not detaining a sum of money that is owed to the creditor. There is no cause of action in debt if the sum of money is not ‘due’ or ‘payable’.

47    In the context of loans, a debt may be repayable ‘on demand’ and be presently due and payable or a demand or some other event may be a condition precedent to the debt becoming due and payable: Central City Pty Ltd v Montevento Holdings Pty Ltd [2011] WASCA 5 at [36]-[37] (Murphy JA, Buss JA agreeing). That is, the debt may be ‘owing’ but not yet ‘due’ or ‘payable’. The debt becomes ‘due’ or ‘payable’ when a demand for repayment is made or some other event takes place: see, e.g., Re Elgar Heights Pty Ltd (No 1) [1985] VR 657 at 663-666, 668-669 (Ormiston J); Southern Cross Interiors Pty Ltd v Deputy Commissioner of Taxation [2001] NSWSC 621; 53 NSWLR 213 at [26]-[29] (Palmer J); Marriott Industries Pty Ltd v Mercantile Credits Limited; Maesbury Plumbers Pty Ltd (intervener) (1991) 160 LSJS 288 at 293 (King CJ); Main Camp Tea Tree Oil Ltd v Australian Rural Group Ltd [2002] NSWSC 219; 20 ACLC 726 at [17] (Barrett J). These general principles apply to other kinds of debts. So, for example, a judgment debt may be converted from a debt immediately due and payable to a debt due and payable by instalments by an order of a court: Re Agrillo; Ex parte Bankrupt [1977] FCA 16; 29 FLR 484 at 487-489 (Riley J); Re Padagas; Ex parte Carrier Air Conditioning Pty Ltd [1977] FCA 12; 30 FLR 170 at 173 (Riley J). In the case of instalments, the total debt is ‘owing’, but each instalment becomes ‘due and payable’ on the date for payment of the instalment.

48    The concepts of debts that are ‘owing’, ‘due’ and ‘payable’ are reflected in the structure and terms of s 44(1) of the Bankruptcy Act. Section 44(1)(a) provides that a debt must be ‘owing’. Section 44(1)(b)(i) provides that debt must be ‘due’. Section 44(1)(b)(ii) provides that the debt must be ‘payable’. Section 44(1)(b)(ii) also introduces the concept that the debt may be payable ‘immediately or at a certain future time’. A debt that is repayable on a date in the future or repayable by instalments is not payable ‘immediately’ but is payable ‘at a certain future time’. For the purposes of s 44(1) ‘debt’ includes a liability: s 5.

49    The concept of a debt ‘payable immediately or at a certain future time’ may be distinguished from debts that are provable in a bankruptcy. Section 82(1) describes a provable debt in the following terms:

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.

50    In Smith v Sandalwood Properties Ltd [2019] WASC 109; 344 FLR 278 Vaughan J considered the concepts of present, future and contingent debts or liabilities in the context of proving ‘debts or claims’ against a company in a winding up or in administration. His Honour observed that a future debt is to be contrasted with a present debt or claim and is to be distinguished from a contingent debt. A future debt is one which will become owing at a future time if the present state of affairs continues until that future time; at that future time, the debt or claim will be a present debt or claim. A contingent debt or claim is one in respect of which there is an existing obligation and out of that obligation a liability will arise on the occurrence of a future event, whether that future event be an event that must happen or only an event that may happen. ‘There is a distinction between a future claim and a contingent claim. Both are founded on a pre-existing legal obligation at the relevant date. However, a future claim will crystallise into a monetary liability at a future date whereas a contingent claim may or may not, depending on the contingency, crystallise into a monetary liability at a future date’: Sandalwood Properties at [118]-[121].

51    Debts or liabilities that are ‘owed’ or ‘due’, but are not ascertainable or depend upon a future event that may or may not take place are not ‘payable’ within the meaning of s 44(1)(b)(ii). Examples of debts or liabilities that are not ‘payable immediately or at a certain future time’ include the following.

(a)    Income tax owing but not yet assessed that will become payable on assessment: Re Mendonca; Ex parte Commissioner of Taxation (1969) 15 FLR 256 at 257-260 (Gibbs J).

(b)    A debt that is repayable subject to the condition that a demand is made and no demand has been made at the time of presentation of the petition: Re Donovan; Ex parte ANZ Banking Group Ltd (1972) 20 FLR 50 at 67-68 (Sweeney J).

(c)    A debt under a solicitor’s bill of costs that is ‘owing’, but the statutory pre-condition to render it payable (providing the client with a bill of costs) has not taken place: Re Devy; Ex parte BBC Hardware Ltd [1996] FCA 598; 67 FCR 355 at 360 (Hill J); Udovenko at 430 (Carr J), 419-420 (Davey J, agreeing), 422 (Forster J, agreeing).

52    Thus, a contingent debt in the sense described in Sandalwood Properties meets the description of a provable debt in bankruptcy, but it is not a debt that is ‘due’ or ‘payable … at a certain future time’ for the purposes of s 44(1)(b) of the Bankruptcy Act. On the other hand, a future debt, in the sense described in Sandalwood Properties, would be both a provable debt and a debt payable at a certain future time.

Is a judgment debt that is not enforceable without leave an obligation payable immediately or at a certain future time?

53    While the Full Court in O’Mara Constructions said it would be a ‘semantic quibble’ to consider that a judgment creditor whose debt is not enforceable other than by way of execution was not a debt ‘payable’, those comments were made in the context in which the judgment debt was otherwise ‘presently’ or ‘immediately’ enforceable. Part of the Full Court’s reasons for that conclusion was that, upon presentation of a petition, ss 118-119A of the Bankruptcy Act prevent further execution upon a judgment debt and compel disgorgement of moneys derived from any execution in the previous six months. Therefore, a judgment creditor who otherwise has a right to extract payment by execution at the time of presentation of a creditor’s petition falls within the class of creditors constrained from pursuing remedies against the bankrupt. A creditor in that class, in substance, has a present right to ‘payment’ and, therefore, must be included in the class of creditors whose debt is ‘payable’ for the purposes of s 44(1)(b)(ii): O’Mara Constructions at [30]-[33], [37].

54    The logic and reasoning of the Court in O’Mara Construction applies whether the right to execution is regarded as a ‘present’ right or a ‘certain future’ right. A right to execution may be regarded as a certain future right to payment in the sense that, subject only to engaging the applicable enforcement process, the right will crystallise into a right of execution in the future by which payment can be extracted. However, that logic and reasoning does not apply to a creditor with a mere contingent right to execution. That is, a right that may or may not crystallise into a right to extract payment in the future. Although a provable debt, there would be no present or certain future right to execution. A creditor with a contingent debt has no right to present a petition against a contingent debtor under s 44(1)(b)(ii). It follows that the principal question upon which the outcome of this appeal turns is whether the judgment debt was ‘payable presently or at a certain future time’ or was payable contingently in circumstances in which the cause of action on the judgment debt was statute-barred and leave to enforce the judgment debt was required but had not been obtained.

55    As already mentioned, the respondents contend, in substance, that the judgment debt was ‘payable’ until it was no longer capable of enforcement after 12 years. The respondents submit that the mechanism that requires leave after six years is analogous to a stay of execution and, where execution is stayed, the judgment debt remains payable: Re Pollack at 51 (Pincus J), 56-57 (Gummow J).

56    In Re Pollack the Commissioner of Taxation obtained judgment against the debtor in the District Court of New South Wales. The debtor applied to the registrar of that court for an order that the judgment debt be paid by instalments. Under the applicable court rules the application for payment by instalments operated as a stay of execution of the judgment debt. The debtor claimed that as a result of the stay the debt was not ‘payable immediately or at a certain future time’ for the purposes of s 44(1)(b)(ii) of the Bankruptcy Act. No question of expiry of the limitation period on an action on the judgment debt or for enforcement of the judgment debt arose on the facts of that case. Pincus J and Gummow J in separate reasons held that the stay did not, of itself, deprive the judgment debt of its character as an obligation payable immediately and, therefore, did not affect the creditor’s right to petition for and obtain a sequestration order based on the judgment debt.

57    Justice Gummow reasoned (at 56-57):

In Pt 31A [of the District Court Rules 1973 (NSW)], distinctions are drawn between giving judgment in an action, enforcement of the judgment, stays of enforcement of the judgment, and the character of the judgment debt both as an obligation payable forthwith and as an obligation payable by instalments. Enforcement is concerned with the means of compulsion, whether of the debtor or of third parties such as those to whom orders for a garnishee are directed, whereby the creditor receives satisfaction in whole or part of the outstanding obligation represented by the judgment debt. The debt may be payable by the debtor although the means of enforcement are denied to the creditor. An order for payment by instalments would not, of itself, necessarily operate as a stay of enforcement of the judgment in respect of which the order was made. Rule 2(9) was needed expressly to so provide. When, pursuant to r 2(8), there is an application which operates as “a stay of enforcement” (as in the present case) the judgment debt in question, in my view, still remains payable forthwith as specified in r 1(2).

In Re Padagas; Ex parte Carrier Air Conditioning Pty Ltd (1977) 30 FLR 170 at 172, Riley J dealt with a case where an instalment order had been made by the Registrar under s 88(4) of the District Court Act, as it then stood. By reason of s 88(8), the order, whilst it remained in force, operated as a stay of enforcement of the judgment: cf the present Pt 31A, r 2(9). Nevertheless, his Honour held that the debt was payable. It was payable only "at a certain future time", but this was sufficient for s 44(1) of the Bankruptcy Act. The existence of the stay would have been fatal to validity of a bankruptcy notice. But it was no obstacle to the presentation of a petition.

In my view, in the present case the existence of a stay of enforcement pursuant to r 2(8) does not, of itself, and without more, deprive the judgment debt of its character as an obligation that is payable immediately, as indicated in r 1(2).

58    Justice Pincus said (at 51):

Counsel for the Commissioner argued that the debt was payable immediately within the meaning of s 44(l)(b)(ii). He said that if there was a stay of enforcement of the judgment, the debt nevertheless remained payable. That appears to me to be correct. I have found no authority in support of the proposition that a stay of enforcement of a judgment produces the result that the debt ceases to be payable; surely the judgment creditor could, despite the stay of enforcement, plead the debt as a common law set off. Counsel for the Commissioner aptly, in my view, contrasted the wording of s 44(l)(b)(ii) with that of s 40(1)(g) of the Act, which has the effect that an act of bankruptcy is committed by failure to comply with the requirements of a bankruptcy notice; that provision uses the expression: "if a creditor who has obtained against the debtor a final judgment or final order, being a judgment or order the execution of which has not been stayed ... " A stay under r 2(8) has the effect that the obligation subsists but enforcement of the judgment cannot take place; I have read and express my respectful agreement with the analysis of this question in the reasons of Gummow J.

59    The respondents rely on these passages as authority for the proposition that a stay has the effect that the obligation of payment subsists but enforcement of the judgment cannot take place. They submit that the obligation of payment of the judgment debt subsists here until 12 years have lapsed and, in the period after six years but before 12 years, the obligation subsists subject to the grant of leave.

60    Part 4 of the Enforcements Act makes provision for a court to make a number of orders, described as ‘enforcement orders’ (s 17), for the purpose of enforcing monetary judgments. These are a time for payment order (s 32), instalment order (s 33), earnings appropriation order (s 35), debt appropriation order (s 49), a property (seizure and sale) order (s 59), and orders for the appointment of receivers and injunctions (s 86). Section 19 provides that a judgment creditor may apply to a court for an enforcement order for the purpose of satisfying a judgment debt owed to a judgment creditor.

61    Part 3 of the Enforcements Act contains general provisions including s 12 and s 13. Section 15 makes provision for a judgment debtor to apply for a suspension order. Section 16 provides that a suspension order has effect according to its contents and, while it has effect, the enforcement of the judgement is suspended to the extent stated in the order and any enforcement order that has been made is subject to the suspension order.

62    Relevantly, ss 11–13 of the Enforcements Act provide:

11.    When judgments have effect

(1)    A judgment has effect –

(a)    at the time it is given; or

(b)    if it provides, or the court giving it orders, that it has effect from an earlier or later time, at that time.

(2)    Subject to sections 12 and 13, an application for an order under this Act to enforce a judgment may be made at any time after it has effect.

…

12.    Limitation period for enforcement

An order under this Act to enforce a judgment that takes effect after the commencement of this Act must not be made if 12 years have elapsed since the judgment took effect.

13.    Court’s leave to enforce needed in some cases

(1)    Leave of the court must be obtained before an order may be made under this Act to enforce a judgment –

(a)    if 6 years have elapsed since the judgment took effect; or

…

(2)    On an application for leave under subsection (1), the court —

(a)    may give leave if it is satisfied that the person seeking to enforce the judgment is entitled to do so and that the person against whom the order is sought is liable to satisfy the judgment; and

(b)    may order the trial of any issue that needs to be decided in order to determine if the judgment may be enforced and, if it may be enforced, by whom and against whom; and

(c)    may do so on terms as to costs or otherwise.

…

63    The effect of Pt 3 and Pt 4 of the Enforcements Act is that an enforcement order cannot be made six years after the judgment took effect unless the court gives leave to make an application for enforcement under s 19. An enforcement order cannot be made at all more than 12 years after the judgment took effect. These provisions operate as limitation periods for an application for an enforcement order under s 19.

64    In the context of statutes of limitation, where the debt is statute-barred (the right remaining only, the remedy by action being barred) the creditor does not have a provable debt and is not entitled to present a petition: Motor Terms Co at 180-181 (Kitto J), 190-191 (Taylor J), 195-196 (Menzies J); Tanning Research Laboratories at 339, 344 (Brennan and Dawson JJ, Toohey J agreeing). Amongst other things, in Motor Terms Co Kitto J observed (at 359-360):

The fundamental notion that special modes of administering assets are for the benefit of those creditors only whose ordinary rights of recovery are withdrawn from them upon the initiation of the special administration was applied by the Court of Chancery in relation not only to bankruptcies and insolvencies but to trusts for creditors and administration decrees in respect of deceased estates. It is a necessary corollary that a person is not a creditor in the relevant sense if, at the time when a right to come in to receive payments under an official administration of the debtor's assets supersedes an existing right of action or suit, his right of enforcement by action or suit is barred by the Statute of Limitations (if the debt is legal), or would be denied by a Court of Equity on the analogy of the statute (if the debt is equitable). This was held to be so in bankruptcy in Re Coles; Ex parte Ross (1827) 2 GI & J 330 ...

65    These observations apply equally to the operation of s 12 and s 13(1) of the Enforcements Act. While it may be the case that the judgment debt has not been extinguished and the effect of s 12 is to bar the ‘remedy’, if the right to apply for an enforcement order is barred the judgment debtor is in the same position as a creditor whose debt is statute-barred. The position with respect to s 13(1) is more nuanced in that there is a bar to the ‘remedy’, but there is also a right to apply for leave to have the bar lifted. While that may render the judgment debt contingently payable, it would not meet the description of right to apply for enforcement that is immediate or certain at a future time. The remedy is barred unless leave is granted.

66    In my view, the respondents did not have a right to execute on the judgment debt at the time of presentation of the creditors’ petition. The payment obligation under the judgment debt was not relevantly in subsistence because, at that time, the respondents had a contingent not immediate or certain future means of extracting payment from the appellant and, otherwise, the cause of action on the judgment debt was barred under s 13(1) of the Limitation Act (WA).

67    In Re Pollack the reference of Pincus J to the ability of the judgment creditor to plead the judgment debt as a common law set off was made in a context in which the limitation period for an action on the judgment debt had not expired. Where a debt is statute-barred it cannot be pleaded as either common law or equitable set-off and, in that sense, it is not ‘payable’: McDonnell & East Ltd v McGregor [1936] HCA 28; 56 CLR 50 at 55-61 (Dixon J, McTiernan J agreeing); J & S Holdings Pty Ltd v NRMA Insurance Ltd (1982) 61 FLR 108 at 126-127 (Blackburn, Deane and Ellicott JJ). It is also of significance that the view of Gummow J in Re Pollack was qualified in that he said that a stay of enforcement did not of itself ‘without more’ deprive the judgment debt of its character as an obligation payable immediately. Here, there is ‘more’ in that an action on the judgment debt was statute-barred and the judgment debt was not enforceable by execution ‘presently or at a certain future time’.

Disposition

68    For the foregoing reasons the respondents were not creditors entitled to present the petition against the appellant under s 44 of the Bankruptcy Act. Therefore, the requirements of s 43 of the Act were not satisfied and the primary judge lacked authority to make a sequestration order.

69    No submission was made that if the appeal were successful the matter should be remitted to the Circuit Court for rehearing. For instance, no submissions was made to the effect that it was within the power of the Circuit Court to grant leave to enforce the judgment debt nunc pro tunc at the time of hearing the creditors’ petition and that, if it had done so, the judgment debt would have been regarded as enforceable at that time of presentation of the creditors’ petition and the judgment debt was thereby payable at that time. The respondents’ case in the appeal was that the judgment debt was payable at the time of presentation of the creditors’ petition and, therefore, the primary judge had not made the error asserted.

70    Further, no submissions were made regarding what other consequences should flow from allowing the appeal. As the sequestration order was made in September 2022 there has, no doubt, been significant work performed by the appellant’s trustee in bankruptcy. The trustee in bankruptcy may have an interest in what orders should be made as a consequence of allowing the appeal including the trustee’s remuneration and expenses of administration of the appellant’s estate. In this respect, there appears to be a potential choice between setting aside the sequestration order or ordering annulment of the bankruptcy under s 153B of the Bankruptcy Act. The Court has not had the benefit of any submission on these matters and the appropriate form of orders is not self-evident.

71    It follows that the appeal should be allowed, but I will reserve the question of what orders should be made in consequence of allowing the appeal and hear the parties and the trustee in bankruptcy on the appropriate form of those orders. I will also reserve the question of costs because the appellant has succeeded on a ground not argued below and the application for leave to file the notice of appeal was only successful in part.

Associate:

Dated:    12 September 2025