Federal Court of Australia

Vines (Trustee), in the matter of the Bankrupt Estate of Mitchell v The Edge TC Pty Ltd (No 7) [2026] FCA 65

ORDERS

THE COURT NOTES THAT:

A. The following orders relate to:

(a) the applicants' amended interim application filed on 31 July 2025 (Applicants' IA); and

(b) the interlocutory application filed on 15 September 2025 (Interested Respondents' IA) on behalf of Ms Andrea Miller (fourteenth respondent), Mr Robin Mitchell (seventeenth respondent); and Mrs Wendy Mitchell (twentieth respondent) (the Interested Respondents),

listed for hearing on 10, 11 and 12 February 2026.

B. The Interested Respondents have sought to be heard in relation to the Applicants' IA.

THE COURT ORDERS THAT:

1. The applicants must immediately withdraw in its entirety the "Notice of Objection to Discharge From Bankruptcy" dated 3 February 2026 (Notice) concerning the bankruptcy of Sam Alexander Mitchell lodged with the Australian Financial Security Authority (AFSA) by his bankruptcy trustee John Gervase Shanahan.

2. The applicants must not lodge with AFSA any notice of objection to discharge from bankruptcy objecting to Mr Mitchell being discharged from bankruptcy relying on:

(a) the information set out in the section of the Notice on page 2 thereof under the heading "Evidence"; or

(b) Mr Mitchell's non-return to Australia to give evidence in this proceeding.

3. The applicants must pay the Interested Respondents' costs of and incidental to this hearing and orders sought and obtained at the hearing on an indemnity basis.

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

REASONS FOR JUDGMENT

(edited from the transcript)

JACKSON J:

1 This matter came back before me this afternoon on an urgent basis at the request of the Interested Respondents.  The meaning of that term and the general background to the present issue will appear from reasons that I will publish shortly for orders that I made last Wednesday, 28 January 2026 [Note:  since published as Vines (Trustee), in the matter of the Bankrupt Estate of Mitchell v The Edge TC Pty Ltd (No 6) [2026] FCA 63], but the essential facts are as follows.

Background

2 The applicants, the Trustees in bankruptcy of Sam Mitchell, seek orders for the winding up of several companies said to have been associated with Mr Mitchell.  That application is listed for hearing next week.  Also listed for hearing next week is an application by the Interested Respondents for various orders concerning the directorship of the companies and orders in respect of trusts said to be connected with them.

3 The Interested Respondents wish to rely on affidavits affirmed by Mr Mitchell which, they say, go to the merits of the applications.  A commonplace direction has been made to the effect that if a party notifies another party that the first party requires a person giving an affidavit to attend for cross-examination then, save with the leave of the Court, that affidavit evidence will not be received unless the person makes themselves available for cross-examination at the hearing.

4 Mr Mitchell lives in the United States.  He has said that he is not willing to return to Australia to give evidence because he fears being arrested or otherwise being prevented from leaving Australia after he has given the evidence.  On 22 January 2026, the Interested Respondents applied for an order under s 47A(1) of the Federal Court of Australia Act 1976 (Cth) for Mr Mitchell to give evidence by video link. That application was heard on 27 January 2026.  The next day I gave leave for Mr Mitchell to give his oral evidence by video link, subject to certain conditions designed to ensure the quality of the link and the integrity of the process.  Those are the orders of 28 January 2026 which I have already mentioned.

The notice of objection to discharge of bankruptcy

5 On 3 February 2026 one of the Trustees, John Shanahan, lodged with the Official Receiver and served on Mr Mitchell a notice of objection to discharge from bankruptcy purporting to be issued under s 149B of the Bankruptcy Act 1966 (Cth). In broad terms, the effect of such a notice (unless withdrawn or cancelled) is that the period for the automatic discharge of the bankruptcy is increased from three years to either five or eight years.

6 Section 149D of the Bankruptcy Act lists a number of grounds of objection that may be set out in a notice of objection.  This notice relies on two:  the ground in s 149D(1)(a), being that 'the bankrupt has, whether or not before the date of the bankruptcy, left Australia and has not returned to Australia'; and the ground in s 149D(1)(h), which is that 'while the bankrupt was absent from Australia he or she was requested by the trustee to return to Australia by a particular date or within a particular period but the bankrupt failed to return by that date or within that period'.

7 A notice that relies on s 149D(1)(h) extends the bankruptcy to eight years:  s 149A(2).  The relevant part of this notice provides 'evidence' and 'reasons' for the two grounds as follows (all errors in original):

Grounds for filing:

Paragraph 149D(1)a of the Act:

The bankrupt has, whether before, on or after the date of the bankruptcy, left Australia and has not returned to Australia

Evidence

The Bankrupt in his email dated 17 September 2024, advised that he is overseas, however, his residence is in Australia located at 1136 Upper MacDonald Road, Upper MacDonald, NSW 2775.  He also indicated that stated that he intended to return to Australia soon, citing ongoing business interests and to assist his elderly parents.  A copy of this email was filed with AFSA along with his completed Bankruptcy Form.  At the time the Bankrupt filed for his Bankruptcy, the Joint and Several Trustee, Matthew Vines was aware that the Bankrupt was residing in United States of America.

Reasons

Notwithstanding the representations made in his email dated 17 September 2024, the Bankrupt has remained in the United States of America.

Accordingly, the Trustees object to the Bankrupt's discharge pursuant to Section 149D(1)(a) of the Bankruptcy Act 1966.

Paragraph 149D(1)h of the Act:

While the bankrupt was absent from Australia he or she was requested by the trustee to return to Australia by a particular date or within a particular period but the bankrupt failed to return by that date or within that period

Evidence

' On 19 December 2025, the Trustees' solicitor informed the Interested Respondents' solicitor that the Bankrupt is required to attend the hearing in person on 10, 11 and 12 February 2026 for the cross examination in the proceedings in the Federal Court of Australia (WAD316/2024), between the Trustees and The Edge TC Pty Ltd and Others.  This office has been provided with a copy of the sworn Affidavit of the Bankrupt dated 23 January 2026 in support of an Interlocutory Application filed seeking orders allowing the Bankrupt to give evidence by audio visual link wherein the Bankrupt has indicated that he will not travel to Australia to give evidence as a result of the fear of being arrested, charged and detained for offences under Section 265 and 272 of the Bankruptcy Act 1966 and a potential Departure Prohibition Order.

Notwithstanding the representations made in his email dated 17 September 2024, the Bankrupt has remained in the United States of America and has refused to return to Australia when directed.  Accordingly, the Trustees object to the Bankrupt's discharge pursuant to Section 149D(1)(h) of the Bankruptcy Act 1966.

Mr John Gervase Shanahan

Further evidence concerning the consequences and status of the notice

8 An affidavit affirmed by a solicitor for the Interested Respondents, Mitchell Tolcon, deposes to a telephone conversation that he had with Mr Mitchell yesterday to the effect that he would not give evidence at the hearing next week.  Mr Mitchell directed Mr Tolcon's attention to a part of the notice which says that a trustee in bankruptcy has power to 'remove' a notice of objection to discharge of bankruptcy and that this is usually appropriate where the basis for the objection no longer exists.  Mr Mitchell told Mr Tolcon that since the requirement referred to as the basis for objecting under s 149D(1)(h) concerned the evidence Mr Mitchell was to give at the final hearing, he believed that if he no longer gave that evidence, the basis for the objection would no longer exist and the Trustees should withdraw the objection.

9 On that basis, the Interested Respondents then sought an order for the notice of objection to be withdrawn (in its entirety) and an order restraining the Trustees from serving another such notice relying on the matters set out under the heading 'Evidence' where it appears the second time above, in connection with the s 149D(1)(h) ground.

10 Today an affidavit was filed that has been sworn by one of the solicitors for the Trustees, Simon Tribble.  It is to the effect that they, the solicitors, were not aware of the notice of objection to bankruptcy before it was issued.  Having been made aware of it after the Interested Respondents set their application for those orders in motion, they determined that the s 149D(1)(h) ground was 'premature'.  From correspondence annexed to Mr Tribble's affidavit, it appears that this is because the Trustees now acknowledge that Mr Mitchell has not failed to return to Australia when requested.  But the Trustees 'maintain' the objection under s 149D(1)(a).

The parties' submissions

11 Senior counsel for the Interested Respondents submits that the notice 'cuts across' the orders that the Court made on 28 January 2026 giving leave for Mr Mitchell's oral evidence to be taken by video link. He submits that this amounts to an abuse of the process of the Court.  He says that the notice is intimidating in nature, and could only have been served for two purposes, namely to 'suborn' the orders of 28 February or to intimidate the witness.

12 Senior counsel further submits that, while the objection relying on s 149D(1)(h) has been withdrawn, it can be inferred from the correspondence from the Trustees indicating that it was 'premature' that they will 'do it again', that is, they will subsequently serve another notice that relies on that ground.

13 In reply, counsel for the Trustees denies any wrongdoing on the part of his clients. He denies any intent to intimidate Mr Mitchell, and submits that by the present application the Interested Respondents are seeking to subvert the Bankruptcy Act. I will address certain specific submissions that he has made later in these reasons, but his overarching submission was that the application brought by the Interested Respondents 'conflates' the power granted to the Trustees to issue a notice of this kind under the Bankruptcy Act with the outcome of the AVL application.  Counsel submits that his clients had power to issue the notice and that they retain the power to make, at least, the objection that they maintain which relies on s 149D(1)(a) of the Bankruptcy Act. Thus the orders sought for the withdrawal of the notice in its entirety, and the injunction restraining the Trustees from relying on the matters that had been relied on in respect of s 149D(1)(h), are opposed.

The effect of the notice

14 I am conscious that I have no evidence from Mr Shanahan as to the subjective reasons why he issued the notice at the time that he did, and that there has been little time for any such evidence to be prepared.  But I do not consider that the subjective reasons are relevant for the purposes of resolving the current issue.  What is relevant is that, viewed objectively, it appears that the Trustees wished Mr Mitchell to travel to Australia to give evidence in person; he refused to do so; the Interested Respondents obtained orders from the Court which indicated that the Court was content for Mr Mitchell's oral evidence to be received in a way that did not require him to travel to Australia; and then and only then did Mr Shanahan issue the notice with the purported effect of extending the bankruptcy by five years.  Further, the notice referred specifically to the witness's refusal to give evidence in person as a ground for the objection, after the Court had made the orders to which I have referred.

15 A person in the witness's position would reasonably infer that the notice was intended to put pressure on him either to travel to Australia to give evidence, or to withdraw his evidence.  As to the first possibility, it is not for the Trustees to seek to influence how the evidence will be taken.  That is a matter for the Court, and the Court has spoken.  As to the latter, this gives rise to the grave possibility that, as a result of actions of a party to the litigation, a witness for an opposing party who was willing to give evidence is no longer willing to do so.  I do not need to rely upon any evidence as to Mr Mitchell's subjective state of mind in that regard in order to conclude that this has in fact transpired.  It is an inference which follows, in my view, irresistibly from the timing of the events I have outlined above.

16 It does not matter to these conclusions that one ground of the objection has since been withdrawn, for it was in the notice when it was issued, and it explains that the purpose of the notice was connected with Mr Mitchell's refusal to give evidence in person, even though the court had indicated that it did not require him to do so.

17 In any event, the timing of the notice provides ample support for an inference, drawn objectively, that the notice conveys that the objection was motivated by that refusal.  After all, Mr Mitchell has been overseas, as a bankrupt, since September 2024 and yet, only after leave was given for him to give evidence from that location was an objection, putatively based on his absence from Australia, notified to him under s 149F.

Some further submissions by the Trustees

18 The Trustees rely upon evidence in an affidavit affirmed by one of them, Mr Vines, on 23 October 2024, which attaches an email dated 17 September 2024 from Mr Mitchell to Mr Vines.  In that email Mr Mitchell says:  that at that point in time, his address was an address in New South Wales;  that he was overseas for work reasons; that he was trying to resolve a certain issue with a large creditor of his; and that he intended to return to Australia soon.  But in as much as that may have explained why, in September 2024, the Trustees were not troubled by Mr Mitchell's absence from Australia, that was some 17 months ago.  To the knowledge of the Court, a great deal of correspondence, some of it quite adversarial, has passed between the Trustees, Mr Mitchell, and their respective solicitors. I do not consider that Mr Mitchell's email sent early in his bankruptcy provides any reason to depart from the inference made above, namely, that the timing of this particular notice of objection, viewed objectively, was motivated by the recent events in this proceeding that I have outlined.

19 It therefore does not matter that the Trustees might otherwise have had power to lodge a notice of objection pursuant to the ground set out in s 149D(1)(a).  In the circumstances I have described, the objective appearance of their conduct is that, in this particular case, they were motivated to exercise that power because Mr Mitchell is refusing to travel to Australia to give evidence, in circumstances where the Court has indicated that it is content to receive evidence from him while he is overseas by video link.  It therefore does not matter that, if the notice had been issued in different circumstances, the power to issue it may have been present and properly exercised.

20 For the same reason, it does not matter that only the ground expressed under s 149D(1)(h), since withdrawn, is stated in Mr Tolcon's affidavit to be the source of Mr Mitchell's concern.  Viewed objectively, the entire notice appears to interfere with the process of the Court.

21 Another thing that does not matter in the present circumstances is that, as the Trustees submit,  the bankrupt may have other avenues of redress, that is, other ways under the Bankruptcy Act by which he could seek to set aside the notice of objection to bankruptcy.  The Court's concern at present is about protecting the integrity of its processes.

22 A related point is that I do not accept, as submitted by counsel for the Trustees, that the Bankruptcy Act provides anything like an exhaustive code governing when a notice of objection to the discharge of a bankruptcy may be set aside.  Counsel relied on Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia [1998] HCA 30; (1998) 195 CLR 1 at [27]-[28] in that regard.  There is certainly one avenue for challenge to such a notice set out in the Bankruptcy Act, namely, an application to the Inspector General for a direction that the notice be cancelled, and if the bankrupt remains aggrieved by the decision of the Inspector General, an application to the Administrative Appeals Tribunal.  But that does not appear to be an exhaustive code, and it does not indicate any legislative intention to limit what would otherwise be the broad power of the Court to preserve the integrity of its own processes.

23 In any event, as the decision of the High Court in Minister for Immigration and Multicultural Affairs v MZAPC [2025] HCA 5 indicates (in particular at [4], [25], [29]-[31]) the court has incidental and statutory power to protect the integrity of its own processes and to ensure the effective exercise of the jurisdiction invoked.  Although the context of that decision was obviously different to the present context, the High Court confirmed that this Court could exercise that power even in the face of the possibility that the relevant statute there (the Migration Act 1958 (Cth)) required the removal of an unlawful non-citizen who was seeking to invoke the power of the court.  By analogy, I consider that even if I am wrong in determining that the Bankruptcy Act does not present any exhaustive code, the Court would nevertheless retain the power to protect the integrity of its own processes.

24 Along similar lines, and although, with respect, this submission did not seem to be fully developed, I note that counsel for the Trustees referred to s 149B(2) of the Bankruptcy Act, which requires the trustee of a bankrupt's estate to file a notice of objection to the discharge if the trustee believes certain things.  There is no evidence that Mr Shanahan had formed those beliefs but, in any event, for the reasons based on MZAPC just outlined, I do not accept that that would limit the court's power in this particular case.

Conclusion

25 For the reasons set out above, viewed objectively, the notice of objection to discharge from bankruptcy has materially impeded the proper administration of justice in this case in a manner that cannot be countenanced.  Section 23 of the Federal Court Act, and the incidental and statutory power to safeguard the integrity of its own processes to which I have already referred, give the court ample power to remove that impediment.  It is appropriate to do so by ordering the Trustees to withdraw the objections set out in the notice, in their entirety, immediately.  It is further appropriate to restrain them from relying, henceforth, on the matters set out in the notice in connection with the ground of objection afforded by s 149D(1)(h).

26 Whether or not any subsequent notice of objection to the discharge of Mr Mitchell's bankruptcy is valid or, as is hopefully unlikely, interferes with the proper administration of justice is, of course, a matter that would need to be determined in the circumstances that obtain at the relevant time.  But for the reasons that I have given there will be orders as sought by the Interested Respondents, requiring the Trustees to withdraw the notice of objection to discharge of 3 February 2026 and restraining them from lodging any notice that relies on the fact that Mr Mitchell will not attend for cross examination in person in this proceeding.

Costs

27 The Interested Respondents sought indemnity costs in relation to this hearing.  They did so on the basis that Mr Tribble's evidence was that his firm was unaware of the notice of objection to discharge of bankruptcy until the Interested Respondents' solicitors drew it to the attention of the Court.  This suggests that the Trustees did not seek legal advice before issuing the notice (there was no evidence that they had retained any other firm).  Senior counsel for the Interested Respondents submitted that one of the tests for indemnity costs is whether a party, properly advised, would have performed the act that has led to costs being incurred.  Here, senior counsel implicitly submitted, a properly advised trustee in bankruptcy would not have issued the notice of objection at the time that this one did.  The Interested Respondents also relied on my findings that the notice had materially impeded the proper administration of justice.

28 The Trustees opposed the order that the costs be paid on an indemnity basis, and went so far as to submit that there should be no orders as to costs.  They relied on the lack of conferral before the matter was brought on and submitted that the Interested Respondents should not be 'rewarded for launching pre-emptive applications without following the procedures in relation to conferral'.

29 I ordered indemnity costs in favour of the Interested Respondents, essentially for the reasons given by their senior counsel.  The Court disapproves in strong terms of the conduct of the Trustees in issuing the notice of objection to discharge in the circumstances set out above.  It is not a step that properly advised trustees in bankruptcy would have taken at the time that they did, and upon receiving legal advice, they should have withdrawn the notice without reservation.

30 In circumstances where this matter is coming up for hearing on next Tuesday, I do not accept that a lack of conferral is material;  the issue needed to be sorted out quickly.  Nor do I accept the characterisation that this is somehow a reward to the Interested Respondents.  It is simply an indemnity for the costs that they have incurred that they should not have incurred.

Associate:

Dated:    6 February 2026

SCHEDULE OF PARTIES