Federal Court of Australia

Mansfield (Trustee), in the matter of Frugtniet v Frugtniet (Stay Applications) [2025] FCA 1308

ORDERS

THE COURT ORDERS THAT:

1.    The execution of the Writ of Possession for the possession of the land situated at and known as 8/22-24 Swete Street, Lidcombe in the state of New South Wales be stayed until 9:00am on Monday 27 October 2025.

2.    The execution of the Writ of Possession for the possession of the land situated at and known as 10/57-61 Penelope Lucas Lane, Rosehill in the state of New South Wales be stayed until 11:00am on Monday 10 November 2025.

3.    Costs with respect to the interlocutory applications concerning orders 1 and 2 above be reserved.

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

REASONS FOR JUDGMENT

PERRY J:

1.    INTRODUCTION

1    This matter concerns applications by two tenants, Aron Asfoura and David Wai Kwong Fu, of residential properties vested in the trustee in bankruptcy seeking a stay of execution of orders made on 15 July 2025 relevantly for vacant possession of the properties.

2    Mr Asfoura and Mr Fu were unrepresented. Both relied upon their respective affidavits affirmed on 20 October 2025. Mr Asfoura and Mr Fu also gave oral evidence in chief on additional matters not covered by their affidavits and were cross-examined.

3    The trustee relied on the affidavit of Mr Zaki affirmed on 21 October 2025 (the Zaki affidavit) filed in response to the Asfoura application. The trustee also relied upon paragraphs 6, 7, 8, 12, 13, 14 and 16 of that affidavit in response to Mr Fu’s application.

4    I heard the applications urgently in my capacity as the Duty Judge on 21 October 2025. At the conclusion of that hearing, I made orders granting the stays on both applications in the following terms:

1.    The execution of the Writ of Possession for the possession of the land situated at and known as 8/22-24 Swete Street, Lidcombe in the state of New South Wales be stayed until 9:00am on Monday 27 October 2025.

2.    The execution of the Writ of Possession for the possession of the land situated at and known as 10/57-61 Penelope Lucas Lane, Rosehill in the state of New South Wales be stayed until 11:00am on Monday 10 November 2025.

3.    Costs with respect to the interlocutory applications concerning orders 1 and 2 above be reserved.

5    I set out below my reasons for the grant of the stay on each of the interim applications.

2.    RELEVANT PRINCIPLES

6    The trustee submitted that the principles applying to the applications for a stay were set out by Kennett J in Frugtniet v Mansfield as trustee for the bankrupt estate of Frugtniet [2025] FCA 1137 (Frugtniet (FCA 1137)) at [10]-[11] as follows:

In Quach v MLC Limited [2022] FCAFC 202 at [81], the Full Court (Collier, Perry and Thomas JJ) adopted the following summary of relevant principles set out in National Retail Association v Fair Work Commission (No 2) [2014] FCA 664 at [11]:

Relevant principles to which the Court ought have regard in the present circumstances include the following:

•    An order granting a stay is an interlocutory order at the discretion of the primary judge, although the discretion must be exercised judicially…

•    Further, the discretion of the Court in granting a stay ought not be exercised lightly, and only in circumstances where there would be so adverse and serious a consequence that interlocutory intervention should take place notwithstanding that there has not been an opportunity for full consideration of the appeal…

•    To that extent the balance of convenience plays an important role in determining whether an order ought be made…

•    The Court may be minded to refuse a stay where it is satisfied that there are no serious questions for the determination in the appeal or review… Conversely, the Court may be minded to grant a stay where, on a preliminary assessment of the case, the Court is satisfied that grounds of appeal or review have merit…

•    The Court may be minded to grant a stay where it is satisfied that any subsequent appeal or review would be rendered nugatory should a stay be refused…

•    Decisions at first instance should not be treated as merely provisional. A successful party in litigation is entitled to the fruits of its judgment, and courts should not be disposed to delay the enforcement of orders. A sufficient basis must be shown to outweigh these considerations …

•    The Court will consider whether a stay is warranted in the interests of justice….

This statement directs particular attention, in the present case, to three issues (which must be addressed in the light of the overall consideration that, usually, the successful party should be allowed to enjoy the fruits of victory):

(a) whether the appeal has real prospects of success;

(b) the extent to which the appeal is likely to be rendered nugatory if a stay is not granted; and

(c) the nature of any prejudice that would befall the trustee (as trustee of the bankrupt estate) if the orders made in the court below are stayed.

(Citations omitted.)

7    I agree with the principles as set out above subject to the following important caveat. The decision in Frugtniet (FCA 1137) concerned an application for a stay of the orders made on 15 July 2025 by Brian and Suzanne Frugtniet pending the determination of their appeal from the decision in Frugtniet (FCA 803). As such, the merits of the appeal were a relevant consideration. However, neither Mr Asfoura nor Mr Fu were parties to the litigation prior to their interim applications; they are not seeking to appeal the 15 July 2025 orders; and each seek a short stay only to mitigate the personal hardship which they contend would be suffered by them if the writs were executed on 22 October 2025. They do not seek a stay pending the hearing and determination of the appeal by the respondents. As such, the merits of the respondents’ appeal are not in my view a relevant consideration to determining the stay applications by Mr Fu and Mr Asfoura.

3.    BACKGROUND

8    On 11 February 2021 (the Appointment Date), the trustee in bankruptcy, Mr David Mansfield of Deloitte, who is the applicant in these proceedings, was appointed trustee of the bankrupt estate of Mr Jerome Frugtniet.

9    Mr Asfoura and Mr Fu are tenants of residential properties held by the trustee in bankruptcy in the state of New South Wales, being, in the case of Mr Asfoura, a property on Swete Street Lidcombe (the Lidcombe property) and, in the case of Mr Fu, a unit on Penelope Lucas Lane, Rosehill (the Rosehill property).

10    By interim applications filed on 20 October 2025 and on 21 October 2025, Mr Asfoura and Mr Fu respectively seek a stay of execution of orders made by Stewart J on 15 July 2025 against the respondents who are the bankrupt’s separated parents, Brian Frugtniet and Suzanne Frugtniet: Mansfield (Trustee), in the matter of Frugtniet v Frugtniet [2025] FCA 803 (Frugtniet (FCA 803)). In the case of Mr Asfoura, the stay was sought only until Monday 27 September 2025 when Mr Asfoura intended to move into his new residential rental address. In the case of Mr Fu, the stay was sought only until 10 November 2025 when he intended to move into alternative rental accommodation with his daughter. The respondents played no part in the hearing of the interim applications.

11    The orders made on 15 July 2025 (the 15 July 2025 orders) provided, among other things, that:

(1)    the four properties the subject of these proceedings, including the Lidcombe and Rosehill properties, vested in the Trustee on and from the Appointment Date (together the Properties);

(2)    the respondents and any other occupants of the Properties, including Mr Asfoura and Mr Fu, deliver vacant possession within sixty days after the date of the orders;

(3)    the respondents and any other occupants of the Properties, including Mr Asfoura and Mr Fu, deliver to the trustee (or his legal representatives):

(a)    all keys for each of the Properties; and

(b)    all keys for all buildings or improvements within any of the Properties, within sixty days after the date of these orders; and

(4)    a warrant of possession be issued forthwith in the event that the respondents or any occupants of the Properties fail to provide vacant possession of the Properties in accordance with the orders.

12    In his reasons for making these orders, Stewart J rejected the contention by Brian and Suzanne Frugtniet that the Properties were held on trust for one or other of them and held instead that the trustee was entitled to the Properties: Frugtniet (FCA 803) at [4]-[5].

13    The sixty-day period for compliance with the 15 July 2025 orders expired on 16 September 2025 (Compliance Date).

14    On 26 August 2025, the respondents filed an interlocutory application in proceeding number NSD1388/2025, being an appeal from the orders made by Stewart J, seeking a stay of those orders. The Stay Application sought relief in respect of all the Properties. This application was dismissed by Kennett J on 11 September 2025: Frugtniet (FCA 1137).

15    On 15 October 2025, the NSW Sheriff’s Office wrote to the solicitors for the trustee confirming receipt of an authority from the Marshal of the Federal Court of Australia to execute the Writ of Possession on 22 October 2025 against the Properties, including the Lidcombe and Rosehill properties - some 36 days after the Compliance Date.

4.    MR FU’S APPLICATION FOR A STAY

4.1    Relevant findings

16    The bulk of Mr Fu’s evidence was unchallenged. Where it is challenged, I have indicated that below.

17    First, Mr Fu gave evidence that:

the court orders [of 15 July 2025] were never sent to me – never receive anything. I can’t remember I got it. And, also, on 15 October, the sheriff’s office send me a notice, was not delivered to me by hand, was just stuck into my letterbox, and I was surprised to see I have to vacate the property by 22 October, just about a week from that 15 October. And I was just finding it very stressful to find a place and accommodation in a rush, I thought really hard to do it in one week.

18    Following receipt of that notice, Mr Fu wrote to the Sheriff’s Office on 18 October 2025 requesting a postponement until 10 November 2025. On 19 October 2025, he received an email from an Enforcement Services Officer, advising that the Sheriff was unable to postpone the eviction without instructions from the trustee or the issuing court, and suggesting that he seek assistance from Link2home or the Tenant’s Advice and Advocacy Service. However, Mr Fu was unable to obtain emergency housing assistance despite repeated phone calls to the services recommended by the Sheriff’s Office.

19    Secondly, Mr Fu and his daughter had lived in the Rosehill property since 2008 and, while they had actively sought alternative accommodation, they had only just secured a residential lease of a unit in Parramatta to commence on 10 November 2025 when the current tenants at that property vacate (the Parramatta property). Mr Fu explained that he had signed the residential tenancy agreement for the Parramatta property on 20 October 2025 with the landlords, Great Western Developments Pty Ltd and Mr Saliba, director of Great Western, and had paid a cash deposit. He said that he and Mr Saliba had met in person to sign the agreement and that he had given the document to Mr Saliba to read, and witnessed Mr Saliba sign the document at Mr Saliba’s home. Mr Fu said that he could put his boxes and personal belongings in storage at the Parramatta property but could not move in to live there before 10 November 2025 when the existing tenant moved out. Mr Fu said that Mr Saliba was 80 years of age and as a result Mr Fu had completed the relevant information in the electronic version of the agreement, including the amount of rent payable, and that that information had been agreed between him and Mr Saliba. While Mr Fu’s daughter who lived with him was also identified as a tenant in the lease agreement for the Parramatta property, she had not signed the agreement because she was working full-time. Mr Fu also explained that he received a small amount of income from his consultant practice but was semi-retired and confirmed that he held a pensioner concession card issued by the Australian government.

20    The trustee submitted that the court should not accept that the rental agreement for the Parramatta property was a genuine document in circumstances where Mr Fu’s daughter had not signed the agreement and Mr Fu “seems to have, on his own evidence, completed the entire form without any real input from the landlord.” The trustee also submitted that, in circumstances where Mr Fu had only an oral representation made to him by Mr Saliba that Mr Fu would have full access to the alternative accommodation, the trustee would be placed in a precarious position with “nil to negligible, confidence that these dates will actually be abided by.” The trustee further submitted that the lease for the alternative accommodation was problematic in circumstances where Mr Fu had a diminished capacity to earn income being semi-retired, was in receipt of a government pension, and his daughter had not signed the lease.

21    I do not accept those submissions by the trustee. In my view, Mr Fu’s account of the circumstances in which the agreement was concluded, and as to the genuineness of the agreement and his intention to move into the Parramatta property by 10 November, should be believed. He was clear and emphatic in his evidence that he intended to move into the Parramatta property on 10 November 2025 and gave detailed and credible evidence as to the circumstances in which the rental agreement had been concluded. Furthermore, the trustee accepted (correctly) that the residential tenancy agreement would still be binding between Mr Fu and the landlords despite not having been signed by Mr Fu’s daughter as a second tenant. While Mr Fu cannot require his daughter to sign the lease, Mr Fu also gave evidence indicating that the only reason that his daughter had not signed the lease was because she was at work when the lease was concluded and that she would sign the lease if that was required. In those circumstances and in circumstances where there is no allegation that Mr Fu has had any difficulty with paying the rent on the Rosehill property despite his limited means, I do not consider that these matters render the move by Mr Fu into the Parramatta property problematic. In this regard, I have had regard to the fact that Mr Fu has paid rent up to 31 October 2025 with respect to the Rosehill property and that his evidence that he was prepared to continue payment to 10 November 2025 was not challenged.

22    Thirdly, Mr Fu’s evidence that he suffered from serious cardiac illness and had suffered two heart attacks in recent months and that immediate eviction posed “grave health risks” was not challenged by the trustee who accepted Mr Fu’s medical conditions. Mr Fu’s evidence was supported by a patient health summary dated 20 October 2025 which was provided by his treating doctor.

4.2    Reasons for granting Mr Fu’s stay application

23    I accept, notwithstanding my findings above, that there is some element of risk for the trustee as to whether or not Mr Fu and his daughter will in fact vacate the Rosehill property on 10 November 2025, even though I do not accept that the likelihood that they will do so is nil or negligible. Furthermore I accept that there is some prejudice which the creditors will likely incur by reason of the grant of the stay, as the trustee submitted. In this regard, I accept for present purposes the trustee’s submission that the prejudice identified by Kennett J in Frugtniet (FCA 1137) at [26(c)] in refusing the respondent’s application for a stay is equally relevant to Mr Fu’s application for a stay (as it is also to Mr Asfoura’s application) , namely:

As things stand, therefore, the estate’s equity in the properties is being steadily eroded. They do not earn enough income to pay the interest on the loans which they secure. It does not appear to be in dispute that the properties are the only substantial assets in the bankrupt estate. There are therefore no other sources of funds available to the trustee that might be used to pay down the NAB loans or meet the interest accruing on them.

24    I also accept that the timing of the year for the sale of the properties is a factor, with Christmas and the summer holidays not far away. I therefore accept, as did Kennett J in Frugtniet (FCA 1137) at [29], that an early sale of the properties may be in the best interests of the creditors and therefore that further delays are not in their best interests.

25    Nonetheless, having regard to the findings above I considered that Mr Fu had established that the balance of convenience was best served by granting the stay application by Mr Fu for the limited period sought.

26    First, I accept for the purposes of this application Mr Fu’s unchallenged evidence that he learnt of the need to vacate the Rosehill property only on or about 15 or 16 October 2025. However, I give this consideration little weight because the trustee had virtually no ability to respond to Mr Fu’s evidence in this respect, given the lateness of Mr Fu’s application.

27    Secondly, it was Mr Fu’s unchallenged evidence that he suffered from a heart condition and in particular suffered heart attacks in the last two months. It can be inferred from that evidence that he would be placed under very considerable stress and hardship were he to be required to move out of the Rosehill property without accommodation for himself and his daughter having been secured elsewhere for the period until 10 November 2025. In this regard I also accept his evidence that he made unsuccessful attempts to obtain emergency accommodation following receipt on 15 October 2025 of the notice from the Sheriff to vacate by 22 October.

28    Thirdly, the period for which Mr Fu sought a stay was short and explained by fact that there was a need for Mr Fu and his daughter to wait for the current tenant in the Parramatta property to vacate those premises before they could move in. In this regard, I have not overlooked the trustee’s submission that if granted, it was likely that the stay would result in delay extending beyond the period of the stay requested by Mr Fu because of what were described as cross jurisdictional issues as between the Marshal of the Federal Court and the NSW Sheriff’s Department. However, while it will be unfortunate if that additional delay eventuates, this submission assumes that Mr Fu and his daughter will not in fact vacate the Rosehill property by 10 November 2025 notwithstanding the alternative arrangements which Mr Fu has made.

5.    MR ASFOURA’S APPLICATION FOR A STAY

5.1    Relevant findings

29    First, Mr Asfoura gave unchallenged evidence that, as a result of conversations between him and the trustee, the trustee was aware that he had been severely injured in 2024 having received third-degree burns to 40% of his body and been in an induced coma, even though he had regained a capacity to work over the last 2 to 3 months.

30    Secondly, a notice to vacate the Lidcombe property and a copy of the Orders were sent by registered post to Mr Asfoura (the Asfoura Notice). Mr Asfoura received that notice, as he accepted in cross-examination, and subsequently communicated with the solicitor for the trustee, Mr Zaki, including via telephone communications.

31    Thirdly, on 29 July 2025, a letter of demand for allegedly outstanding rent payable in respect of the Lidcombe Property for the amount of $10,459 (Outstanding Rent) was sent to Mr Asfoura by way of email and registered post. However, the allegedly Outstanding Rent has not been received by the trustee and is disputed by Mr Asfoura. I note in this regard that Mr Asfoura has already paid in excess of $90,000 in unpaid rent.

32    Fourthly, Mr Asfoura accepted that as a result of receiving the Asfoura Notice he was aware of the requirement under the orders made on 15 July 2025 to vacate the Lidcombe property by 16 September 2025. However, Mr Asfoura gave evidence that once that date had lapsed and he was aware that an appeal had been lodged by the respondents which was ongoing (an impression he received from Brian Frugtniet), he assumed that he did not have to vacate the Lidcombe property because he received no further communication to that effect. In other words, he “was made to believe that the appeal process was going ahead and so I thought that meant we could stay.” Nor did he know about the decision of Kennett J dismissing the respondent’s application for a stay. It was only when he received the notice that he realised that he and his housemate had to vacate the Lidcombe property on 22 October 2025.

33    Fifthly, Mr Asfoura and his housemate entered into a residential tenancy agreement with L. J. Hooker for the lease of a new property in Granville (the Granville property) and are due to move into the Granville property on Saturday, 25 October 2025. It was for this reason that Mr Asfoura sought a stay only until Monday, 27 October 2025.

34    Finally, Mr Asfoura pointed to a number of difficulties were the stay not to be granted. He gave evidence that finding accommodation to cover the short period between 22-25 October 2025 and moving into it was not feasible given that his parents lived a long way away, he had two cats, and nothing was packed.

5.2    Reasons for granting Mr Asfoura’s stay

35    The trustee made submissions opposing the stay sought by Mr Asfoura which were similar to those made with respect to Mr Fu. Specifically, the trustee submitted that Mr Asfoura had been on notice since at least 15 July 2025 of the requirement to vacate and deliver vacant possession of the Lidcombe property by 16 September 2025 and therefore had had ample opportunity to find alternative accommodation and vacate the properties. The trustee also submitted that the Court should have no confidence that Mr Asfoura would abide by the dates on which he said that he would vacate the property, given his history to date in failing to give vacant possession.

36    In opposition to the applications for a stay, the trustee also emphasised the prolonged nature of the bankruptcy proceedings and the requirement in the 15 July 2025 orders for a writ of possession to be issued forthwith in the event of a failure, relevantly, by Mr Asfoura, to provide vacant possession.

37    Finally, the trustee submitted, and I accept, that the creditors will likely suffer some prejudice if the stay is granted, for the same reasons explained in relation to Mr Fu’s application.

38    Nonetheless, for the reasons set out below, I considered that Mr Asfoura had established that the balance of convenience ultimately fell in favour of granting the stay sought by him and that this therefore best serves the interests of justice.

39    First, I accept, as in the case of Mr Fu, that there is some element of risk for the trustee in terms of whether Mr Asfoura will in fact vacate the premises on 25 October 2025 although again I do not accept that the likelihood of that occurring is “nil to negligible”. To the contrary, I considered Mr Asfoura’s evidence that he had entered into the lease agreement was credible and persuasive given among other things the ready manner in which he was able to answer questions about the details of the lease such as the amount of the rent to be charged for the Granville property and the address of the Granville property. Further, while misguided, Mr Asfoura was able to explain the reasons why he thought that he was not required to vacate while the respondents’ appeal was on foot, and he had acted quickly to find alternative accommodation and enter into a new residential lease with respect to that accommodation once he received the Asfoura Notice. This evidence does not suggest a determination by Mr Asfoura not to vacate and move to the Granville property contrary to his stated intentions. In all of the circumstances therefore I accepted Mr Asfoura’s evidence as to his intention to vacate the premises and move into the Granville property by 27 October 2025 as credible and considered that it was likely that he would do so.

40    Secondly, it was clear that Mr Asfoura would likely suffer hardship in the event that the stay was not granted and that hardship may well have been aggravated by the injuries from which I understood him still to be recovering.

41    Thirdly, the stay was sought by Mr Asfoura only for a very brief period of time. While the cross jurisdictional issues may cause some further delay if Mr Asfoura fails to deliver up vacant possession by the designated date, it is to be hoped that the Marshal of the Federal Court and the NSW Sheriff’s Department are able to work efficiently to overcome any difficulties in a timely manner given in particular the prolonged nature of the bankruptcy proceedings.

42    In all of the circumstances, therefore, I reached the view that the balance of convenience ultimately fell in favour of allowing the application for the stay by Mr Asfoura.

6.    CONCLUSION

43    For these reasons I held that it was appropriate to grant the stays both on the application by Mr Fu and the application by Mr Asfoura. I also considered that costs should be reserved and it is possible that the question of whether or not Mr Fu and Mr Asfoura in fact vacate the premises on the dates which they have indicated may have a bearing on the ultimate costs order made with respect to their interim applications.

44    Finally, as at the hearing, it is important to reiterate the Court’s expectation that:

(1)    Mr Asfoura will vacate the Lidcombe property before 27 October 2025 and Mr Fu will vacate the Rosehill property before 10 November 2025 in line with their evidence to the Court; and

(2)    if it has not already occurred, Mr Fu will use his best endeavours to ensure that his daughter, who was also identified on the residential tenancy agreement for the Parramatta property as a tenant, signs the lease which names her as a second tenant so that she is also bound by its terms. In this regard, I accepted that there was force in the trustee’s submission that Mr Fu’s daughter’s failure to sign the lease as at the time of the hearing exposed the trustee to some risk given that Mr Fu is (on his own evidence) semi-retired and in receipt of a pension.

Associate:

Dated:    28 October 2025