Federal Court of Australia

Warren v Sijabat, in the matter of Warren (Bankrupt) [2025] FCA 1410

ORDERS

THE COURT ORDERS THAT:

1.    The amended originating application is dismissed.

2.    On or before 4pm on Monday 24 November 2025, if so advised the respondent is to file and serve a submission (limited to three (3) pages in length) in support of any orders sought with respect to costs.

3.    In the event that the respondent files submissions pursuant to order 2 above, the applicant is to file and serve any submissions in response (limited to three (3) pages in length) on or before 4pm on Monday 1 December 2025.

4.    Any application as to costs will be decided on the papers.

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    The applicant, Mr Piers John Warren, was made bankrupt on 6 April 2023 pursuant to a sequestration order made in the Federal Circuit and Family Court (Division 2). The respondent, Ms Louisa Sijabat, is the trustee of the bankrupt’s estate.

2    By his amended originating application Mr Warren seeks an order that the trustee do all such things necessary to annul the bankruptcy. Specifically, Mr Warren contends that his bankruptcy was annulled on 20 December 2024 by operation of s 153A of the Bankruptcy Act 1966 (Cth) upon what is described as the first and final dividend being paid together with the trustee’s fees after the bankrupt estate received a distribution of monies from his late father’s estate.

3    Mr Warren’s written submissions did not address his alternative claim that the Court order the annulment under s 153B of the Bankruptcy Act and the trustee therefore understandably assumed that it was not pressed. However, Mr Warren was permitted to address this issue at the hearing on the basis that the trustee was allowed the opportunity to respond in writing to the oral submissions, with Mr Warren having a right of reply. In essence, Mr Warren contended that the sequestration order ought not to have been made because he had sufficient monies at the time that the order was made to pay the outstanding debt in full.

4    In the event that the bankrupt succeeds on his primary claim under s 153A of the Bankruptcy Act or his alternative claim under s 153B, Mr Warren also claims consequential orders to the following effect:

(1)    an order for the return of the sum of $377,379.98 to the bankrupt’s solicitor’s trust account;

(2)    an order that the trustee is not entitled to remuneration or indemnification from the bankrupt estate after 20 December 2024;

(3)    an order that the trustee pay the bankrupt’s costs of the proceedings personally on an indemnity basis;

(4)    a declaration that the costs incurred by the trustee with ERA Legal after 20 December 2024 were incurred by the trustee in her personal capacity and that she is not entitled to pay those costs from the bankrupt estate; and

(5)    an order that the trustee “account to the Applicant for the $28,000.00 she needlessly paid on 31 July 2025 to the Australian Financial Security Authority despite section 6A of the Bankruptcy Estate Charges Act 1997.”

5    For the reasons set out below, the application to annul the bankruptcy under ss 153A and 153B must be dismissed. As such, the question of whether the consequential orders sought should be made does not arise.

2.    EVIDENCE

6    The applicant relied upon his affidavit sworn on 18 June 2025 and the affidavit of Phillip James Beazley, solicitor, sworn on 1 September 2025. The trustee relied upon her affidavits affirmed on 31 July 2025 (with paragraph 35 read only as evidence of her state of mind) and 23 October 2025. The exhibit to the trustee’s affidavit of 31 July 2025 was also tendered save for page 1357. The trustee was also cross-examined. The trustee gave her evidence in a straightforward, unemotional and clear manner without embellishment, explaining where she could not precisely recall matters. I have no reason to doubt her credibility or the reliability of her evidence.

3.    BACKGROUND

3.1    Conduct of the bankruptcy

7    On 6 November 2023, the bankrupt estate received a distribution of $241,700.00 from the deceased estate of Mr Warren’s father, Mr Peter Warren. On 16 September 2024, the bankrupt estate received a further distribution of $400,000.00 from Mr Warren’s father’s deceased estate.

8    Following receipt of the second distribution, the trustee issued a report to creditors on 27 November 2024 (the Report). This report is the most recent of five reports provided to creditors by the trustee. The Report explained that the trustee had adjudicated upon a number of proof of debt forms some of which had been admitted in full, while others had been withdrawn. Those withdrawn included proofs of debt from Mr Warren’s mother and his spouse, and associated entities of his family.

9    Significantly, the Report stated in a passage relied upon by Mr Warren (as I shortly explain) that:

Update to Creditors

I have recovered sufficient funds to likely annul this bankruptcy and pay in full all of the bankrupt’s debts which include the costs of the administration of the bankruptcy, subject to resolving allegations and potential claims by the bankrupt, his wife and their associated entities against me as Trustee of the bankrupt estate. Please refer to sections 2.4.1 and 2.9 for further information in this regard. In the event that this occurs, the bankruptcy will be annulled pursuant to section 153A of the Bankruptcy Act 1966 (Cth) (the Act) and the bankrupt will be permitted to retain remaining funds and his assets.

10    Part 2.9 of the Report headed “Correspondences from Bankrupt” further stated that:

During the administration of the bankrupt estate, the bankrupt has sent an extensive volume of correspondences to my office, often with multiple correspondences being sent on a single day. The correspondences have often been repetitive. I have responded as appropriate.

During the administration of the bankrupt estate, the bankrupt has engaged three (3) different solicitors’ firms and a separate advisory firm. I have also responded to their correspondences as appropriate. The bankrupt has also been unrepresented for a significant portion of his bankruptcy.

Due to the contents of some of the bankrupt’s own correspondences, shortly after my appointment, I determined it inappropriate for my employed staff to respond, and I have responded personally.

Due to the contents of some of the bankrupt’s own correspondences, on 11 October 2024, the Downing Centre Local Court has pursuant to the Crimes (Domestic and Personal Violence) Act 2007, amongst other matters, made a provisional order that the bankrupt is required to only make contact through a lawyer. Time spent in corresponding with NSW Police in this regard has not been charged to the matter.

11    Of particular importance, the Report stated under the heading “2.10 Allegations and potential claims by the bankrupt, his wife and their associated entities against the Trustee in Bankruptcy”:

During the administration of the bankrupt estate, the bankrupt, his wife and their associated entities have made a number of civil allegations and potential claims against me as Trustee in Bankruptcy, for which I may be indemnified from the assets of the bankrupt estate. These are required to be resolved prior to any annulment of the bankrupt’s bankruptcy pursuant to section 153A of the Act.

This issue is not expected to delay the dividend distribution to creditors of the bankrupt estate whose proofs of debt have been admitted, but may delay the bankrupt’s annulment of bankruptcy.

I have advised the bankrupt’s current solicitors of this and I expect communications with the bankrupt’s current solicitors may continue in this regard. I advise that I am also likely to be required to seek legal advice in this regard.

12    As explained in the Report, during the course of the bankruptcy Mr Warren and entities associated with him (family entities) made numerous claims or demands for compensation against the trustee for alleged breaches of her obligations in the administration of the bankrupt estate. The family entities included Solar Projects Australia Pty Ltd and Green Box Energy Pty Ltd. An example is contained in the letter dated 31 July 2023 from Mr Warren to the trustee, purportedly on behalf of Solar Projects, demanding compensation of $2,800,845.44. The compensation was said to have been calculated by reference to alleged lost rent over 10 years which Solar Projects would have obtained from Green Box Energy, and is said to have lost because Solar Projects was unable to purchase land due to the alleged inaction of the trustee in changing the directorship of Solar Projects.

13    At the hearing, the trustee tendered current and historical searches of the records maintained by ASIC in respect of the family entities. These records showed the following:

(1)    Mr Warren was the sole director and secretary of Solar Projects from 20 July 2020 (when it was incorporated) until his bankruptcy on 6 April 2023. Solar Projects was deregistered by ASIC on 16 June 2024 pursuant to section 601AB of the Corporations Act 2001 (Cth). At the time of its deregistration, 90% of the issued share capital of Solar Projects was held by PW Holdco Pty Ltd. In turn, 90% of the issued share capital of PW Holdco was held by Mr Warren and 10% was held by the Warren Family Trust.

(2)    Mr Warren was the sole director of Green Box Energy from 13 April 2021 (when it was incorporated) until his bankruptcy on 6 April 2023. Green Box Energy was deregistered by ASIC on 30 March 2024 pursuant to section 601AB of the Corporations Act. At the time of its deregistration, Green Box Energy was a wholly owned subsidiary of Solar Projects.

14    Subsequently on 11 November 2024 the trustee wrote to the then solicitors for Mr Warren asking whether a settlement offer in relation to the allegations made by him against the trustee extended to include all allegations made by his wife and his and his wife’s associated and related entities. In the letter the trustee further wrote (apparently on the assumption that the answer to that question was yes):

Is your client, Nicole Warren, and each of your client’s and Nicole Warren’s associated and related entities willing to sign a brief deed withdrawing all allegations and advising they have no claims against the bankrupt estate and me as Trustee of the bankrupt estate? Receipt of such a deed would significantly expedite any annulment of your client’s bankrupt estate and return of the presently expected surplus of funds to him.

15    I accept the trustee’s evidence that the proposal to conclude a deed was initially proposed to her by Mr Roser, who was then acting for Mr Warren, by a letter from Mr Roser which was redacted on the ground that it contained without prejudice material, as well as Mr Roser mentioning it on a telephone call and in SMS messages to the trustee.

16    These claims remained unresolved at the time of the hearing in these proceedings. It was the trustee’s evidence that as a result she could not be satisfied that all of the debts of Mr Warren had been paid in full given her understanding that she had a right to indemnify herself against any such claims or demands on the basis that they are a cost, charge and expense of the administration of the bankruptcy.

17    On 19 December 2024, the trustee’s solicitors received an email from Mr Warren stating that three proofs of debt would be resubmitted. Shortly thereafter, the trustee’s solicitors received emails from the bankrupt attaching further proof of debt forms from Ms Warren and Ms Critchley.

18    On 20 December 2024, the trustee declared and paid a first and final dividend to creditors whose proofs of debt had been admitted.

19    These proceedings were instituted on 18 June 2025 and on 19 June 2025, the trustee received emails from Ms Warren and Ms Critchley withdrawing their proofs of debt.

3.2    The current proceedings

20    On 18 June 2025, the applicant filed an application before the duty judge for interim relief for the immediate release of $30,000 and leave for the bankrupt to manage a corporation.

21    On 22 July 2025, the duty judge referred the matter for allocation to a docket judge because the matter had exceeded the scope of the duty judge’s remit.

22    On 21 August 2025, the solicitors for the trustee wrote to Mr Warren’s solicitors advising, among other things, that:

In order to finalise the Estate, as our client is currently aware, the following matters need to be addressed:

1.    Provision of an indemnity or release from, or otherwise resolve, demands made by third parties (which appear to be associated with Mr Warren and his wife) during the course of administering the Estate; and

2.    Completion of these proceedings – the time frame for completion and further fees and costs of the current proceedings is unknown.

The cost of these steps and time frame for completion is unknown, as completion of them is outside of our client’s control.

23    The letter of 21 August 2025 attaches a detailed listing of the receipts and payments of the bankrupt estate showing $644,910.24 in receipts and $267,430.26 in payments, leaving a balance of $377,379.98 as at the date of the letter.

24    On 12 September 2025, I granted leave for the applicant to file an amended originating application, which included additional claims against the respondent but no longer sought the interim relief.

4.    DISPOSITION OF THE APPLICATION

4.1    The applicant’s claim based on s 153A of the Bankruptcy Act

25    Mr Warren’s primary argument focused upon the alleged operation of s 153A of the Bankruptcy Act. Section 153A of the Bankruptcy Act relevantly provides:

Annulment on payment of debts

(1)    If the trustee is satisfied that all the bankrupt's debts have been paid in full, the bankruptcy is annulled, by force of this subsection, on the date on which the last such payment was made.

…

(2)    The trustee must, before the end of the period of 2 days beginning on that date, give to the Official Receiver a written certificate setting out the former bankrupt's name and bankruptcy number and the date of the annulment.

Penalty: 5 penalty units.

26    In turn, the term “bankrupt’s debts” for the purposes of s 153A is defined in s 153A(6) to mean:

all debts that have been proved in the bankruptcy and includes interest payable on such of those debts as bear interest, and the costs, charges and expenses of the administration of the bankruptcy, including the remuneration and expenses of the trustee.

(Emphasis added.)

27    First, Mr Warren’s primary case is that his bankruptcy was annulled on 20 December 2024 upon the payment of the first and final dividend to the creditors by force of s 153A(1) of the Bankruptcy Act. Thus, Mr Warren submits that “[i]t is the payment which triggers the annulment, not any other act of the trustee”. Mr Warren further submits that “[t]here is no proper excuse for the trustee failing to comply with section 153A(2)”, pointing to the fact that no proceedings have in fact been commenced by Mr Warren seeking damages from the trustee for breach of duty and that, even if he had, there is no basis for the trustee’s actions since 20 December 2024 given that (it may fairly be assumed) the trustee has professional indemnity insurance. As a consequence, the bankrupt submits that:

(1)    the trustee has an undischarged obligation pursuant to s 153A(2) of the Bankruptcy Act to give a written certificate to the Official Receiver by 22 December 2024 and, in failing to do so, the trustee is committing a strict liability offence;

(2)    pursuant to s 154(1)(c) of the Bankruptcy Act, the remainder of the bankrupt’s property which had vested in the trustee upon his appointment has reverted to the bankrupt notwithstanding that the trustee is presently in possession of that property; and

(3)    any money of the bankrupt held by the trustee is therefore held on trust for the bankrupt.

28    These submissions must be rejected.

29    The premise of Mr Warren’s primary contention is that his bankruptcy was annulled on 20 December 2024 by force of s 153A because the trustee paid the dividend to the creditors on that date. That premise is wrong because s 153A(1) is engaged only upon the trustee being satisfied that all the bankrupt’s debts, as defined in s 153A(6), have been paid in full. Thus, the Full Court (Spender, Lander and Flick JJ) in Singh v Secretary, Department of Employment and Workplace Relations [2009] FCAFC 59 at [30] explained (in apparent agreement with the primary judge) that:

Section 153A does not empower the Court to make an order for annulment. The section depends for its operation upon the satisfaction of the trustee that the applicant’s debts have been paid in full. If the Official Trustee is so satisfied, then the bankruptcy is annulled by force of the section itself. There is no need to obtain an order from the Court.

(Emphasis added; see also ibid at [59].)

30    Similarly, as I held in Ferella v Official Trustee in Bankruptcy (No 2) [2018] FCA 18 at [56]:

As is apparent from s 153A(1), the condition precedent to an annulment under that provision is the formation by the trustee of a state of satisfaction that all of the bankrupt’s debts have been paid in full. Manifestly, this Court cannot order a trustee to reach a state of mind …

(Emphasis added.)

31    However, the trustee’s evidence was that she had not formed the state of satisfaction which operates as the statutory precondition to annulment under s 153A as at 20 December 2024 or subsequently. In this regard, I do not accept the submission for Mr Warren that the trustee had “add[ed] on to that state of mind [that] ‘But until I get an indemnity and a release, I don’t have to fill out the paperwork to have the annulment registered with it.’” Rather, I accept the trustee’s evidence that she was not asserting any such entitlement but rather mentioning these “as a potential path to resolution” while leaving other such paths open. That evidence is consistent with the reference in her letter of 21 August 2025 to the solicitors for Mr Warren to the possibility that there may be means which might “otherwise resolve” the third-party demands.

32    Secondly, in determining whether she is satisfied that a bankrupt’s debts have been fully paid out, the trustee was entitled to take into account the proofs of debt lodged by Ms Warren and Ms Critchley on 19 December 2024 notwithstanding that they had not yet been fully determined. As Sackville J held in Re Wong; Ex parte Wong v Donnelly (1995) 63 FCR 426 at 441-442:

In my opinion, it is implicit in s 153A(1) that the trustee, in determining whether he or she is satisfied of the matter specified in the subsection, can take into account not only proofs of debt likely to be lodged, but those that have been lodged but that have not yet finally been determined in accordance with the procedures laid down by the Act itself. Accordingly, whether the trustee can or should be satisfied that all the bankrupt’s debts have been paid for the purposes of s 153A(1) depends on the circumstances the trustee is required to assess. The trustee is entitled, at the least, to consider whether a creditor’s proof of debt will be admitted through the processes provided for in the Act. A trustee is also entitled not to be satisfied that all of the bankrupt’s debts have been paid if, for example, he or she is aware that a proof of debt has been lodged but not yet determined as required by s 102(1). Indeed, it is difficult to see how the trustee could be so satisfied when it is known that a proof of debt is awaiting determination which, if accepted, will constitute one of the “debts that have been proved in the bankruptcy”.

33    Thirdly and in any event, in determining whether she had reached the state of satisfaction prescribed by s 153A(1), the trustee was entitled to, and did, take into account the existence of these proceedings, given her entitlement to be reimbursed from the trust estate for costs and expenses properly incurred in defending the proceedings. In addition, the trustee was entitled to take into account the other proceedings threatened by Mr Warren against her, as she in fact did in reaching the view that his debts had not yet been fully paid out.

34    Both of these points are illustrated by the decision of Kenny J in Beryl Bellin v Paul Pattison (as trustee of the bankrupt estate of Beryl Bellin) [1999] FCA 51. In that case, upon being notified of the bankrupt’s intention to take legal action against him for an alleged breach of his duties as trustee in bankruptcy in the sale of property realised in the bankruptcy, the trustee advised that he would be unable to give the certificate of annulment until he had been advised that he was released by the bankrupt from any proposed legal action. Kenny J accepted that:

the issue in relation to the certificate of annulment is not really whether the applicant should be required to release the respondent from any liability arising from any breach by him of his duty to the applicant, but whether, the applicant having challenged the respondent's administration of her estate in the course of that administration, that challenge falls to be dealt with within the administration.

35    Kenny J held that the challenge did fall to be dealt with within the administration of the bankruptcy because a trustee is entitled to be indemnified out of the bankrupt estate for costs and expenses incurred by the trustee in defending her or his conduct as part of the administration of the bankrupt estate, as explained in the following passage at [22]:

This conclusion is supported by the terms of s 153A(1) read with s 153A(6), the effect of which is that the applicant's bankruptcy is annulled only when the respondent is satisfied that all the costs, etc. of the administration of the bankruptcy, including the remuneration and expenses of the trustee, have been paid in full. As the respondent pointed out, the powers of a trustee include selling the bankrupt's property, obtaining advice or assistance in relation to the administration of the estate and bringing or defending any legal proceeding "relating to the administration of the estate": see s 134(1)(a), (i) and (j) of the Act… As a rule, a trustee is entitled to reimburse himself out of trust property in respect of all expenses incurred in or about the execution of the trust in his capacity as trustee: see National Trustees Executors and Agency Co of Australasia Ltd v Barnes (1941) 64 CLR 268 at 274 and 277. In relation to legal proceedings, the question is whether the costs and expenses incurred by a trustee were properly incurred in or about the administration of the trust. If a trustee is sued by beneficiaries complaining of some act or omission on the trustee's part, the trustee is entitled to defend his conduct as part of his administration of the trust estate and to be indemnified out of trust property in respect of costs and expenses properly incurred in so defending himself: cf R.W.G. Management Ltd v Commissioner for Corporate Affairs [1985] VR 385 at 394-5. Unless there is some contrary statutory provision, the same principles apply in the case of a trustee of a bankrupt's estate called upon to defend himself in a legal proceeding brought by the bankrupt relating to the trustee's administration of the bankrupt's estate: see Adsett v Berlouis (1992) 109 ALR 100 at 109-110.

36    Her Honour also rejected the bankrupt’s submission that because there was no proceeding against the trustee yet on foot, there were no outstanding costs or expenses of the administration of the bankruptcy and, as a consequence, the trustee must be taken to have reached the satisfaction referred to in s 153A(1), having regard to both the proceedings before her Honour and to the threatened proceedings against the trustee. As Kenny J explained at [24]:

There is the present proceeding which, so the applicant says, has been brought as a means of clearing the path to the institution, in the Supreme Court, of a further proceeding against the respondent. In this circumstance, I do not think it can be said by the applicant that the costs and expenses of the administration of the bankruptcy are yet at an end. I agree with the view expressed by Sackville J in Re Wong; Ex parte Wong v Donnelly (1995) 131 ALR 180 at 194 that "whether the trustee can or should be satisfied that all the bankrupt's debts have been paid for the purposes of s 153A(1) depends on the circumstances the trustee is required to assess". In this case, the respondent, as trustee of the bankrupt's estate, was entitled to consider whether the costs and expenses of the administration of the bankruptcy could properly be regarded as at an end and, in so doing, to have regard both to the fact that it was the bankrupt's stated intention to institute a proceeding relating to his administration of the estate, namely a proceeding contesting the propriety of the sale of the Sneydes Road property, and to the fact that he might reasonably choose to defend any such proceeding and properly incur costs and expenses in so doing.

37    The present case is analogous. As in Beryl Bellin, the question is not whether the trustee had an entitlement to require Mr Warren (and his wife and associated entities) to give a release or indemnity. Rather, the question is whether the trustee was entitled to take into account costs and expenses being incurred by the trustee in defending the present proceedings and which might properly be incurred in defending future proceedings foreshadowed by Mr Warren for alleged breaches of duty in administering the estate, in reaching a view on whether the bankrupt’s debts had been paid in full. That question, as in Beryl Bellin, must be answered “yes” notwithstanding the withdrawal by Ms Warren and Ms Critchley of their proofs of debt on 19 June 2025. The trustee’s remuneration and expenses incurred in the administration of the bankruptcy, including legal costs properly incurred by the trustee, clearly fall within the definition of “bankrupt’s debts” in s 153A(6) of the Bankruptcy Act.

38    Fourthly, in oral submissions for Mr Warren, reference was made to ss 90-15 and 90-20 of Sch 2 to the Bankruptcy Act (Insolvency Practice Schedule (Bankruptcy)) apparently in support of orders annulling the bankruptcy. Sections 90-15 and 90-20 of Sch 2 provide relevantly for review by the Court of the administration of a bankrupt estate. Thus, in Willoughby v Official Trustee in Bankruptcy (WA) [2000] FCA 757; (2000) 102 FCR 261 the appellants contended (in common with Mr Warren) that all of their debts had been paid in full so that they were entitled to a declaration that their bankruptcies were annulled by force of s 153A of the Bankruptcy Act. The Full Court (Burchett, Lee and Hely JJ) at [36] agreed with the primary judge that the Court did not have power to annul the appellants’ bankruptcy under s 153A but only under s 153B. However, their Honours also explained with respect to s 178 of the Bankruptcy Act (which was relevantly to the same effect as ss 90-15 and 90-20) that:

However, a lack of satisfaction on the part of the Trustee as to the payment of the appellants' debts of the first bankruptcy could itself be the subject of an application to the Court under s 178, which could give appropriate directions to the Trustee, if a case that the Trustee should have been so satisfied is made out, including a direction that the Trustee give the certificate under s 153A(2). Where the Trustee is satisfied that the bankrupt's debts have been paid in full, the annulment has retrospective operation inasmuch as it relates back to the date on which the last payment was made.

39    In Willoughby the Full Court held that this did not assist the appellants because prima facie there were fees and expenses still owing to the trustee (at [41]).

40    However, no directions are sought under ss 90-15 and 90-20 of the kind to which the Full Court adverted in Willoughby. Rather, as clarified by Mr Warren’s solicitor at the hearing, the only orders sought under these provisions were the consequential orders sought in the event that the Court held that s 153A operated to annul the bankruptcy. As such, as ultimately put by Mr Warren, ss 90-15 and 90-20 of Sch 2 were not relied upon in the alternative to the case based on s 153A.

4.2    The applicant’s claim based on s 153B of the Bankruptcy Act

41    As finally put, Mr Warren submitted that he had sufficient money at the time that the sequestration order was made to establish that he was solvent and the Court ought to hold as a consequence that the sequestration order ought not to have been made and the bankruptcy should be annulled under s 153B of the Bankruptcy Act.

42    The Court’s discretion under s 153B to annul a bankruptcy requires the Court to address two questions, namely:

(1)    whether the sequestration order ought not to have been made; and

(2)    if so, whether in the exercise of discretion, the bankruptcy should be annulled.

(Rigg v Baker [2006] FCAFC 179; (2006) 155 FCR 531 at [59] (French J, with whom Spender J agreed at [2]); see also e.g. Boles v Official Trustee in Bankruptcy [2001] FCA 639; (2001) 183 ALR 239 at [16] (Emmett J, Katz and Conti JJ agreeing); and the recent decision in Maclean v Brylewski, in the matter of Maclean [2025] FCAFC 133 at [124] (Stellios J).)

43    As to the first question, Tracey J in Bulic v Commonwealth Bank of Australia Limited [2007] FCA 307 at [12] (in a passage approved by the Full Court (Rares, Flick and Bromberg JJ) in Francis v Eggleston Mitchell Lawyers [2014] FCAFC 18 at [16]) explained that:

(2)    An applicant who seeks an annulment of his or her bankruptcy “carries a heavy burden”. It is incumbent on an applicant “to place before the Court all relevant material with respect to his or her financial affairs so that the Court may be properly informed and may make a judgment that is based on the actual circumstances of the applicant”: Re Papps; Ex parte Tapp (1997) 78 FCR 524 at 531.

(3)    In determining whether or not a sequestration order “ought not to have been made” the Court is not confined to a consideration of whether the order should have been made on the facts known to the Court at the time at which it was made. The Court must take account of facts, known at the time at which the sequestration order was made and at which it determines an annulment application, even if those facts were not before the Court at the time at which the sequestration order was made: Boles v Official Trustee in Bankruptcy (2001) 183 ALR 239 at 243; Re Raymond; ex parte Raymond (1992) 36 FCR 424 at 426.

(4)    A sequestration order “ought not to have been made” if, on the facts known at the time of the annulment application, the Court would have been bound not to make the sequestration order: Re Frank; ex parte Piliszky (1987) 16 FCR 396.

44    As to the second question posed by s 153B, Tracey J held that, if so satisfied, the Court “is not precluded from annulling the bankruptcy because the bankrupt had not sought to have the default judgment set aside or failed to oppose the creditor’s petition or failed to seek a review of the sequestration order”. His Honour then helpfully identified some of the considerations which may bear on the exercise of discretion under s 153B(1) as follows:

(8)    Considerations which may have a bearing on the exercise of discretion include unexplained delay in the making of the application, whether or not the applicant is solvent, whether or not the applicant has made full disclosure of his or her financial affairs and a failure by the bankrupt to oppose the creditor’s petition and attend the hearing at which the sequestration order was made: Re Williams (1968) 13 FLR 10 at 24–5; Boles at 247; Re Papps; ex parte Tapp (1997) 78 FCR 524 at 531; Rigg v Baker (2006) 155 FCR 531 at 548 [79] (per French J); Cottrell v Wilcox [2002] FCA 1115 at [7]. Additional considerations are collected in D. A. Hassall, “Annulment of Bankruptcy and Review of Sequestration Orders” (1993) 67 ALJ 761 at 766.

45    Applying these principles, it is evident that Mr Warren’s submissions on this alternative ground cannot succeed.

46    First, the sequestration order was made on 6 April 2023 in respect of a debt in the amount of $25.519,90. However, the payments of monies to Mr Warren on which he relies to establish that he had sufficient funds available to pay out the petitioning creditor were not made until several weeks later, namely, $25,000.00 on 28 April 2023 and $12,720.00 on 1 May 2023. In addition, as the respondent submits, the screenshots of bank statements on which Mr Warren relies contain descriptions referring to “Green Box” and there is no documentary evidence before me to indicate whether those payments were made to bank accounts held by Mr Warren personally, or held by one of the family entities. As such, the evidence does not establish that the sequestration order ought not to have been made.

47    Secondly, Mr Warren submits he “had an inheritance to which he was presently entitled at the date of his bankruptcy and which amount exceeded his debts tenfold or more”. This submission was only faintly raised orally, and was not developed by reference to any case law. In any event, it is without merit. The probate for Mr Warren’s father’s deceased estate, which was granted on 22 October 2021, confirms a will naming Mr Warren as a beneficiary. However, the first interim distribution of $241,700.00 from the deceased estate was not paid to the bankrupt estate until 6 November 2023. Unless an interim distribution was actually paid to him, Mr Warren did not have any present entitlement to the property of the deceased estate until the administration of the deceased estate was complete. Kennett J recently summarised the authorities in this regard in Kinloch v Manzione [2022] ACTSC 76 at [16]:

First, analysed strictly, the right that a beneficiary has during the administration of an estate is a right to insist on that administration being properly carried out. He or she does not have a legal or equitable interest in any specific property that forms part of the estate, if only because any such property may be subject to being sold in order to meet expenses of administration: see Livingston v Commissioner of Stamp Duties (Qld) (1960) 107 CLR 411 (Livingston) at 438 per Fullagar J, 458–459 per Menzies J (reasoning upheld by the Privy Council on appeal: Commissioner of Stamp Duties (Qld) v Livingston (1964) 112 CLR 12); Official Receiver in Bankruptcy v Schultz (1990) 170 CLR 306 at 313–314. Thus, while a chose in action might be said to vest in a beneficiary as soon as the conditions of a gift to him or her are satisfied, that is of a somewhat different character to the interest in specific property or the right to receive proceeds of property that arises when the administration of the estate is complete. It is only in an attenuated sense that an interest in part of the actual estate can be said to have “vested” in a beneficiary at the earlier stage.

48    Accordingly, the fact that as at 6 April 2023 Mr Warren might in future receive a distribution from the deceased estate does not provide a basis on which the Court could find that the sequestration order ought not to have been made on that date.

49    Thirdly, Mr Warren has not placed all relevant financial information before the Court so as to enable the Court to be properly informed. While Mr Warren relies on the affidavit evidence in these proceedings and the reports of the trustee which describe the bankrupt estate’s financial position during the conduct of the bankruptcy, he has not provided information (such as bank statements) showing his assets and liabilities as at 6 April 2023. As such, the Court is not in a position to make findings about Mr Warren’s precise financial position as at the date on which the sequestration order was made.

50    Finally, as to the exercise of discretion, there is no evidence explaining the delay in making the application under s 153B of the Bankruptcy Act and why the petition was not opposed by Mr Warren.

5.    CONCLUSION

51    For the reasons set out above, the amended originating application is dismissed. I have also made orders affording the trustee the opportunity to seek any orders with respect to costs, should she be so advised, and for the parties to file and serve submissions in that event.

Associate:

Dated:    18 November 2025