Federal Court of Australia

Fortrend Securities Pty Ltd v Wollermann [2026] FCA 290

ORDERS

THE COURT ORDERS THAT:

1.    The applicant’s interlocutory application dated 17 December 2025 be dismissed.

2.    Orders 1, 2 and 3 of the orders of Judicial Registrar Gronow dated 26 November 2025 (as amended pursuant to r 39.05(h) of the Federal Court Rules 2011 (Cth)) (26 November 2025 Orders) be varied by replacing the date 12 January 2026 with the date 30 March 2026.

3.    The applicant has liberty to apply by 4.00 pm on 24 March 2026 to vary order 1 of the 26 November 2025 Orders for the purpose of substituting an alternative form of payment or security for payment the subject of that order.

4.    The applicant pay the respondent’s costs of the interlocutory application, to be assessed on a lump sum basis.

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

ORDERS

THE COURT ORDERS THAT:

1.    The applicant’s interlocutory application dated 17 December 2025 be dismissed.

2.    Orders 1, 2 and 3 of the orders of Judicial Registrar Gronow dated 26 November 2025 (as amended pursuant to r 39.05(h) of the Federal Court Rules 2011 (Cth)) (26 November 2025 Orders) be varied by replacing the date 12 January 2026 with the date 30 March 2026.

3.    The applicant has liberty to apply by 4.00 pm on 24 March 2026 to vary order 1 of the 26 November 2025 Orders for the purpose of substituting an alternative form of payment or security for payment the subject of that order.

4.    The applicant pay the respondent’s costs of the interlocutory application, to be assessed on a lump sum basis.

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

ORDERS

THE COURT ORDERS THAT:

1.    The applicant’s interlocutory application dated 17 December 2025 be dismissed.

2.    Orders 1, 2 and 3 of the orders of Judicial Registrar Gronow dated 26 November 2025 (as amended pursuant to r 39.05(h) of the Federal Court Rules 2011 (Cth)) (26 November 2025 Orders) be varied by replacing the date 12 January 2026 with the date 30 March 2026.

3.    The applicant has liberty to apply by 4.00 pm on 24 March 2026 to vary order 1 of the 26 November 2025 Orders for the purpose of substituting an alternative form of payment or security for payment the subject of that order.

4.    The applicant pay the respondent’s costs of the interlocutory application, to be assessed on a lump sum basis.

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

REASONS FOR JUDGMENT

O’Bryan J:

Introduction

1    By interlocutory applications dated 17 December 2025, the applicant (Fortrend) seeks a review under s 35A(5) of the Federal Court of Australia Act 1976 (Cth) (FCA Act) of the orders made by a Judicial Registrar on 26 November 2025 (the Registrar’s orders) in relation to three statutory demands issued to Fortrend on 6 October 2025 by the respondents, being Christopher Wollermann, Shaw and Partners Limited (Shaw and Partners) and Stephen Lyle, respectively. The Registrar’s orders set aside the statutory demands pursuant to s 459J(1)(b) of the Corporations Act 2001 (Cth) (Corporations Act) conditional upon Fortrend paying the amount claimed by the statutory demands (with a minor deduction in respect of the amounts claimed by Messrs Wollermann and Lyle, explained below) into Court to abide the outcome of the application for leave to appeal in Federal Court of Australia Proceeding No VID701/2025 and, if leave to appeal is granted, to abide the outcome of any appeal brought by such leave.

2    A review of a Registrar's decision is a hearing de novo: the matter is heard afresh and a decision is given on the evidence presented at the hearing: Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at [13]. Section 35A(6) of the FCA Act provides that the Court “may make such order or orders as it thinks fit with respect to the matter with respect to which the [Registrar’s] power was exercised”.

3    Each of the statutory demands seeks payment of amounts that this Court has ordered Fortrend to pay to the respondents.

4    By its interlocutory applications, Fortrend seeks the following relief:

(a)    the setting aside of the Registrar’s orders, pursuant to s 35A(6) of the FCA Act; and

(b)    the setting aside of the statutory demands without condition pursuant to s 459J(1)(b) of the Corporations Act.

5    In support of its interlocutory applications, Fortrend relied on written submissions dated 6 February 2026, an affidavit of Matthew Clayton Kennett dated 17 December 2026 and an affidavit of Joseph Burke Forster dated 6 February 2026. Mr Kennett is a partner of Cornwalls, the solicitors for Fortrend. Mr Forster is the managing director of Fortrend. The affidavits of Mr Kennett and Mr Forster were read into evidence without objection.

6    The affidavit of Mr Kennett annexed the affidavits that had been read in evidence in the hearing before the Registrar on behalf of Fortrend and the respondents. The effect of annexing the affidavits to Mr Kennett’s affidavit was equivalent to tendering the annexed affidavits as documentary evidence. As explained in Impiombato v BHP Group Limited [2025] FCAFC 9 at [139], there are evidentiary differences between tendering an affidavit as documentary evidence and reading the affidavit into evidence. At the hearing, the parties confirmed that they wished to read those affidavits on the review and I therefore treated those affidavits as read. Those affidavits were as follows:

(a)    an earlier affidavit of Mr Forster dated 27 October 2025;

(b)    an affidavit of Henry Richard Skene, a partner of Seyfarth Shaw Australia, the solicitors for each of the respondents, dated 13 November 2025; and

(c)    an earlier affidavit of Mr Kennett dated 14 November 2025.

7    In opposing the interlocutory applications, the respondents relied on written submissions dated 13 February 2026 and the affidavit of Mr Skene which had been annexed to Mr Kennett’s affidavit (referred to in the preceding paragraph).

8    At the conclusion of the hearing on 16 March 2026, I made orders dismissing the interlocutory applications with costs. I also varied the Registrar’s orders in recognition that the date for compliance with the payment into court condition had elapsed. These are my reasons for making those orders.

Relevant facts

The judgment debts

9    The statutory demands relate to judgment debts owing by Fortrend to the respondents arising out of two proceedings in this Court.

10    The background to the two proceedings is that, in November 2022, each of Mr Wollermann and Mr Lyle ceased their employment with Fortrend and joined Shaw and Partners. In January 2023, Fortrend commenced a proceeding (Principal Proceeding) against the respondents seeking relief against the alleged misuse of its confidential information by Mr Wollermann and Mr Lyle. Subsequently, Mr Wollermann and Mr Lyle commenced a proceeding (Fair Work Proceeding) against Fortrend in the Federal Circuit and Family Court of Australia, which was then transferred to this Court, alleging contraventions of the Fair Work Act 2009 (Cth) (Fair Work Act) by Fortrend. The two proceedings were heard together.

11    On 21 February 2025, the Principal Proceeding was dismissed with costs ordered against Fortrend: Fortrend Securities Pty Ltd v Wollermann (No 2) [2025] FCA 96. On the same day, the Court also delivered judgment in the Fair Work Proceeding, finding in favour of Messrs Wollermann and Lyle in respect of alleged contraventions of the Fair Work Act by Fortrend: Wollermann v Fortrend Securities Pty Ltd [2025] FCA 103.

12    On 21 March 2025, Fortrend filed an appeal from the dismissal of the Principal Proceeding.

13    On 6 May 2025, the Court ordered that Fortrend pay the respondents’ costs of the Principal Proceeding jointly and severally, including on an indemnity basis from 3 October 2023: Fortrend Securities Pty Ltd v Wollermann (No 3) [2025] FCA 444. On the same day, the Court made orders in respect of amounts payable by Fortrend to Messrs Wollermann and Lyle in the Fair Work Proceeding: Wollermann v Fortrend Securities Pty Ltd (No 2) [2025] FCA 443.

14    On 3 June 2025, Fortrend filed an appeal in respect of the Fair Work Proceeding (Fair Work Appeal). However, it did not appeal the orders requiring payment of amounts totalling $307,590.22 (relating to unpaid long service leave entitlements and deductions from Mr Wollermann’s salary).

15    On 27 August 2025, a Judicial Registrar made orders that the amount of the respondents’ costs in the Principal Proceeding be fixed in the sum of $2,023,140.76.

16    The applicant has not sought a stay of any of the orders of the Court made against it.

The June 2025 statutory demands

17    On 6 June 2025, Mr Wollermann and Mr Lyle served statutory demands on Fortrend for the payment of their respective parts of $307,590.22, being the amount of the judgment debt in the Fair Work Proceeding involving issues not pursued on the appeal.

18    On 27 June 2025, Fortrend commenced proceedings to set aside those statutory demands under s 459J(1)(b) of the Corporations Act.

19    On 21 August 2025, a Judicial Registrar made orders setting aside those statutory demands conditional on the claimed amounts plus interest being paid into Court.

20    The present proceedings do not concern those statutory demands.

The October 2025 statutory demands

21    On 6 October 2025, Mr Wollermann, Mr Lyle and Shaw and Partners issued statutory demands to Fortrend in respect of the outstanding amounts of the judgment debts (that is, the amounts ordered to be paid on account of costs in the Principal Proceeding and the amounts ordered to be paid in the Fair Work Proceeding less the amounts that had been included in the June 2025 statutory demands). The amounts of the statutory demands are as follows:

(a)    in respect of Mr Wollermann, the amount of $599,752.88, being the balance of the amounts Fortrend was ordered to pay him in the Fair Work Proceeding and his share of the costs ordered to be paid in the Principal Proceeding;

(b)    in respect of Mr Lyle, the amount of $466,552.88, being the balance of the amounts Fortrend was ordered to pay him in the Fair Work Proceeding and his share of the costs ordered to be paid in the Principal Proceeding;

(c)    in respect of Shaw and Partners, the amount of $1,262,622.16, being its share of the costs ordered to be paid in the Principal Proceeding.

22    On 10 October 2025, the respondents wrote to Fortrend and, noting the Registrar’s orders in respect of the June 2025 statutory demands, offered that the amounts demanded be paid into Court pending the appeals.

The pending appeals

23    The appeals in both the Principal Proceeding and the Fair Work Proceeding were heard together on 6 and 7 November 2025. Judgment in both appeals is reserved.

The present proceedings

24    On 27 October 2025, Fortrend commenced these proceedings, applying to set aside the statutory demands pursuant to s 459J(1)(b) of the Corporations Act on the basis that there is “some other reason” why the demand should be set aside.

25    The application was heard by a Judicial Registrar of the Court. As noted above, on 26 November 2025 the Registrar made orders setting aside the statutory demands conditional upon Fortrend paying the amount claimed by the statutory demands (with a minor deduction in respect of the amounts claimed by Messrs Wollermann and Lyle) into Court to abide the outcome of the appeals.

26    The deduction was an amount of $22,000 and was made by the Registrar to take account of a concession made by Messrs Wollermann and Lyle during the hearing of the Fair Work Appeal. In the Fair Work Appeal hearing, Mr Wollermann and Mr Lyle accepted that the primary judge had erred in treating the Bonus Payment Contraventions and Pay Slip Contraventions as four courses of conduct rather than two for the purposes of fixing penalties. However, the total penalty imposed was modest ($44,000) and the primary judge stated (at [28]) that, had he approached the matter as two courses of conduct rather than four, he would have fixed the same penalty. Despite that, the Registrar considered that it was appropriate, as a condition of setting aside the statutory demands of Messrs Wollermann and Lyle, to require Fortrend to pay into Court the amount of each demand less an amount of $22,000.

27    In ex tempore reasons, the Registrar concluded that, as Fortrend had brought an appeal from the judgment in the Principal Proceeding which was based on reasonable and arguable grounds and which, if successful, would result in an offsetting claim, it was appropriate to set aside the statutory demands on a condition, imposed under s 459M of the Corporations Act, that Fortrend pay the amounts of the statutory demands into Court pending the outcome of the appeal. In making that order, the Registrar relied on the decision of Emmett J in Eumina Investments Pty Ltd v Westpac Banking Corporation (1998) 84 FCR 454.

28    On 17 December 2025, Fortrend filed its interlocutory applications seeking review of the Registrar’s orders pursuant to s 35A(5) of the FCA Act.

Applicable principles

29    An application to set aside a statutory demand served under s 459G of the Corporations Act is a procedural safeguard within the statutory framework concerning the making of a winding up order by the Court in insolvency contained in Pt 5.4 of the Corporations Act. It allows a company to dispute a debt within a prescribed period, avoiding a presumption of insolvency that would otherwise allow a creditor to apply for a winding up order.

30    Under s 459H, the Court must set aside the demand, or vary the amount of the demand, if the Court is satisfied that there is a genuine dispute in relation to the whole or part of the amount claimed, or that the company (that received the demand) has an offsetting claim for the whole or part of the amount claimed.

31    Under s 459J(1), the Court may by order set aside the demand if it is satisfied that:

(a)    because of a defect in the demand, substantial injustice will be caused unless the demand is set aside; or

(b)    there is some other reason why the demand should be set aside.

32    Section 459L stipulates that, unless the Court makes an order under ss 459H or 459J, the Court is to dismiss the application to set aside the demand.

33    Section 459M stipulates that an order under ss 459H or 459J may be made subject to conditions.

34    As observed by Lundberg J in Rectangular Pty Ltd v Mae Cardaci ATF the Marco Cardaci Testamentary Trust [2023] WASC 13 at [44], the operation and application of s 459J(1)(b) in the context of a pending appeal against a judgment debt has been addressed in numerous decisions. It can be added that the operation and application of s 459J(1)(b) has also been addressed in the context of a pending appeal against a judgment dismissing a claim that, if successful, would have constituted an offsetting claim in respect of a statutory demand. In both circumstances, the judgment is final and operates as a res judicata between the parties (unless and until overturned on appeal) and, accordingly, prevents the debtor company from applying to set aside a statutory demand under s 459H on the basis that there is a genuine dispute in relation to the judgment debt or that there is an offsetting claim: see Eumina at 458.

35    The potential application of s 459J(1)(b) to such circumstances was considered in Eumina by Emmett J where his Honour observed (at 459):

One circumstance where it may be unjust for a demand to stand is where there is a judgment or order which precludes a contention that there is a genuine dispute or an offsetting claim, but there is on foot a bona fide appeal from that judgment or order. In those circumstances, the Court may, if justice requires, and subject to the possibility of imposing conditions as contemplated by s 459M, set aside a demand which is based on the judgment or order which is subject to appeal or in respect of which, if an appeal succeeds, there would be an offsetting claim.

36    His Honour distinguished the situation of a pending appeal that would result in an offsetting claim, and a pending appeal in respect of a judgment debt. In respect of the former, his Honour expressed the view (at 459):

It is, in my opinion, appropriate for a Court to exercise the discretion conferred by s 459j(l)(b) where the Court is satisfied that there is an appeal based on reasonable and arguable grounds which, if successful, would result in the existence of an offsetting claim.

37    In respect of a pending appeal against a judgment debt, his Honour observed (at 460E):

However, in an application under s 459J(1)(b), it may be appropriate to draw a distinction between the relevance of an appeal to a genuine dispute and the relevance of an appeal to an offsetting claim. Where there is an appeal against a judgment debt which gives rise to the statutory demand and there is no stay, whether or not the stay has been sought, there may be some substance in the conclusion that setting aside the statutory demand is a de facto stay. The appropriate course, in such a case, may be for the company to apply for a stay to the court which entered judgment.

38    The facts of Eumina involved a pending appeal that would result in an offsetting claim. Justice Emmett made orders setting aside the statutory demand, but on the condition that the debtor company pay the amount of the statutory demand into court or otherwise secure that amount: Eumina at 462.

39    The principles stated in Eumina have been applied in many subsequent decisions. Recently, in Rectangular, Lundberg J undertook a comprehensive survey of the relevant authorities. Rectangular involved an application to set aside a statutory demand under s 459J(1)(b) on the basis of a pending appeal against a judgment debt. His Honour dismissed the application. In the course of the reasons, his Honour observed:

(a)    where an application is made to set aside a statutory demand under s 459J(1)(b) in the context of a pending appeal against a judgment debt, the courts have been alive to the possibility that the application may operate as a de facto stay of the judgment debt and the appropriate course may be for the debtor company to apply for a stay of the judgment pending appeal (at [44]);

(b)    where there is a pending appeal against a judgment debt which is reasonably arguable, it is not inconsistent with the structure of Pt 5.4 of the Corporations Act for a party, which has the benefit of the underlying judgment debt (which has not been either stayed or set aside), to rely upon it for the presumption of insolvency that follows when a statutory demand is served and payment is not made (at [45]);

(c)    a failure to comply with a statutory demand does not automatically lead to the winding up of a company, and there remains a discretion whether, if a winding up application is ultimately filed, to proceed with the application or adjourn the matter while the underlying judgment is challenged (at [46]); and

(d)    in the absence of a stay, the mere existence of a reasonably arguable appeal in respect of a judgment debt will therefore not constitute “some other reason” for the purposes of s 459J(1)(b) of the Corporations Act (at [47]).

40    The authorities make clear that all relevant circumstances must be considered by the Court in exercising the power conferred by s 459J(1)(b) to set aside a statutory demand: Meehan v Glazier Holdings Pty Ltd [2005] NSWCA 24; (2005) 53 ACSR 229 at [52] (Santow JA, with Tobias JA and Young CJ in Eq agreeing).

Consideration

41    The question to be determined is whether there is “some other reason” as to why the statutory demands should be set aside under s 459J(1)(b) of the Corporations Act.

42    Fortrend submitted that there are special circumstances in the present matters which, together with the pending appeals, justify setting aside the statutory demands:

(a)    the appeals have been heard but not yet determined, and are therefore not pending in the traditional sense of merely having been filed;

(b)    a substantial portion of the judgment sums has already been paid into Court following the service of the June 2025 statutory demands, and Fortrend has paid a further amount into Court as security for the costs of the appeals;

(c)    the sums sought by the statutory demands are small relative to the sum Fortrend may be awarded upon the appeals and any retrial succeeding;

(d)    the respondents to the Fair Work Appeal conceded that the primary judge had approached the issue of penalties incorrectly, and it will likely follow that the quantum of penalties imposed will be reduced, therefore the statutory demands were overstated;

(e)    the statutory demands were issued for the ulterior purpose of stifling the appeals and/or depriving Fortrend of the benefit of a successful appeal;

(f)    Fortrend is not in a position to pay the amounts demanded; and

(g)    there will likely be detriment to Fortrend’s employees and clients if the statutory demands are not set aside.

43    I do not accept that these proceedings involve any special circumstances as submitted by Fortrend. I will address each of the points raised by Fortrend in turn.

44    First, the fact that the appeals have been heard but not yet determined does not bear upon the relevant considerations of justice. The position remains that the respondents have the benefit of judgment debts and the potential offsetting claim (through the Principal Proceeding) has been dismissed. There is a possibility that the appeals will reverse these outcomes.

45    Second, the fact that a portion of the judgment sums has already been paid into Court following the service of the June 2025 statutory demands is irrelevant. In the absence of a stay, the respondents are entitled to be paid the balance of the judgments sums, which is the subject of the statutory demands in issue in these proceeding. The payment of security for the costs of the appeal is equally irrelevant.

46    Third, I place little weight on the fact that the sums sought by the statutory demands are small relative to the sum claimed by Fortrend in the Principal Proceeding. As matters stand, Fortrend’s claim has been dismissed. Nevertheless, as discussed below, the circumstance of the appeal is a factor I take into account.

47    Fourth, I also place little weight on the submission that the respondents conceded in the Fair Work Appeal that the primary judge had approached the issue of penalties incorrectly, and I reject the submission that it will likely follow that the quantum of penalties imposed will be reduced (and therefore the statutory demands were overstated). The transcript of the hearing of the Fair Work Appeal shows that, whilst Messrs Wollermann and Lyle conceded that the primary judge had erred in treating the Bonus Payment Contraventions and Pay Slip Contraventions as four courses of conduct rather than two for the purposes of fixing penalties, they submitted that that error would not alter the outcome. That is because the primary judge stated that, had he approached the matter as two courses of conduct rather than four, he would have fixed the same penalty. Messrs Wollermann and Lyle submitted that it was open to the Full Court to reach the same conclusion.

48    Fifth, I reject the submission the statutory demands were issued by the respondents for the ulterior purpose of stifling the appeals and/or depriving Fortrend of the benefit of a successful appeal. There is no evidence that supports that submission.

49    Sixth, I am not satisfied on the evidence that Fortrend is not in a position to pay the amounts demanded. Mr Forster’s affidavits addressed the financial position of Fortrend. His evidence disclosed very little. In his first affidavit, Mr Forster stated that, as at 30 September 2025, Fortrend had total assets of $1,043,816.99 and total liabilities of $772,280.91, and asserted that “Fortrend does not have sufficient assets so as to pay the amounts sought by the October Statutory Demands”. In his second affidavit, Mr Forster revealed that Fortrend was wholly owned by an American company called Windsor Holdings Inc. No financial information was provided with respect to that company, or any aspect of its financial relationship with Fortrend. Mr Forster provided no information with respect to the current financial position of Fortrend, and merely stated that Fortrend “does not at present have finance facilities that would allow it to draw down the amounts” the subject of the Registrar’s orders. The statement is wholly uninformative as to the ability of Fortrend to satisfy with the condition imposed by the Registrar’s orders. I consider that Fortrend has chosen not to disclose its true financial position to the Court. As a result, I place no weight on its submissions with respect to its ability to satisfy the condition imposed by the Registrar’s orders.

50    Seventh, and for the same reasons, I am not satisfied on the evidence that there will likely be detriment to Fortrend’s employees and clients if the statutory demands are not set aside.

51    I accept, however, that Fortrend has a pending appeal (in the Principal Proceeding) that, if successful, may give it an offsetting claim against the judgment debts and that may also overturn the order for costs made in favour of the respondents, which forms part of the statutory demands. It also has a pending appeal (in the Fair Work Proceeding) that may overturn the penalties made in favour of the respondents. The respondents did not contend that the appeals were not brought bona fides or lacked a reasonable basis. In my view, those circumstances (and particularly the appeal in the Principal Proceeding) provides an “other reason” to set aside the statutory demands within the meaning of s 459J(1)(b) of the Corporations Act, but only on the condition that Fortrend pay the amounts of the statutory demands into Court pending determination of the appeals. It follows that I agree with the conclusion reached by the Registrar.

52    As noted earlier, the Registrar’s orders set aside the statutory demands subject to a condition that the amount of the demands, less the amount of $22,000 in respect of Messrs Wollermann and Lyle, be paid into Court by 12 January 2026. A question arises whether it is necessary to make the deduction of $22,000. At the hearing, Messrs Wollermann and Lyle informed the Court that, in effect, they consented to the deduction being made. In those circumstances, it is not appropriate to vary that aspect of the Registrar’s orders. However, it is necessary to vary the date of 12 January 2026 as it has already elapsed. Fortrend sought the date of 30 March 2026 and the respondents did not oppose that variation.

53    Fortrend also sought liberty to apply to vary the orders to propose a form of security for payment of the statutory demands other than by way of payment into court. Liberty to apply was granted for that purpose.

54    In my view, costs of the review applications should follow the event.

Associate:

Dated:    19 March 2026