Federal Court of Australia

JABW Pty Ltd v Estate of the late Williams, in the matter of the late Williams [2026] FCA 626

ORDERS

THE COURT ORDERS THAT:

1.    Angus Alexander Forbes Williams, Jordan John Forbes Williams, and Michelle Kylie Williams as tutor for Billy Kenneth Forbes Williams be joined to this proceeding and named as second respondents.

2.    Kelvin Solari and Justin McCarthy be joined to this proceeding and named as third respondents.

3.    Henry Kazar, as Trustee of the Property of the Deceased Estate of the late Winifred Williams (trustee), be joined to this proceeding and named as fourth respondent.

4.    The determination of the application for an extension of time to file any application for review of the orders of Registrar Morgan made on 25 September 2025 (review application), be deferred until the hearing of the review application.

5.    The application for a stay of the order made by Registrar Morgan on 25 September 2025 that the estate of the late Winifred Williams be administered under Part XI of the Bankruptcy Act 1966 (Cth), be dismissed.

6.    The second respondents file any notice of opposition, in substantially the same form as that served on 17 February 2026 pursuant to order 2 of the Court’s orders made on 16 December 2025, no later than 3 days after the date of this order.

7.    The review application be listed for hearing on 1 July 2026 at 10:15am for 1 day.

Evidence

8.    By 4.00pm on 27 May 2026, JABW Pty Ltd (petitioning creditor) file and serve any affidavits in support of the creditor’s petition, other than the final search affidavit.

9.    By 4.00pm on 10 June 2026, the second respondents file and serve any affidavits in support of the review application, and notify the petitioning creditor of all the affidavits upon which they will rely.

10.    By 4.00pm on 15 June 2026, the trustee file and serve any affidavits in response.

Written submissions

11.    By 4.00pm on 17 June 2026, the petitioning creditor file and serve written submissions (not exceeding 10 pages with annexures, using at least 12-point font size and 1.5 line spacing) and any chronology, and a list of authorities.

12.    By 4.00pm on 22 June 2026, the second respondents file and serve written submissions (not exceeding 10 pages with annexures, using at least 12-point font size and 1.5 line spacing) and any chronology, and a list of authorities.

13.    By 4.00pm on 25 June 2026, the trustee file and serve any written submissions (not exceeding 10 pages with annexures, using at least 12-point font size and 1.5 line spacing) and any chronology, and a list of authorities.

14.    By 4.00pm on 26 June 2026, the petitioning creditor and second respondents file and serve:

(a)    a joint Court Book, including the creditor’s petition, the review application and the evidence filed by the parties; and

(b)    a joint bundle of those authorities contained in the lists filed by the parties in accordance with the previous orders.

15.    The Court Book and joint bundle of authorities be in electronic form, formatted in accordance with the Federal Court eBooks Practice Note (GPN-eBooks) (format two).

Objections to evidence

16.    By 4.00pm on 17 June 2026, any party intending to object to any evidence served upon it, serve a list of objections upon the party proposing to read or tender that evidence.

17.    By 4.00pm on 22 June 2026, any party proposing to read or tender evidence to which objection has been made, serve a response to the objection to that evidence.

18.    By 4.00pm on 26 June 2026, the parties are to co-operate in the preparation of a consolidated document listing all objections to evidence and all responses to each objection, and to file and serve the consolidated list of objections.

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

REASONS FOR JUDGMENT

YOUNAN J:

INTRODUCTION

1    On 6 August 2025, JABW Pty Ltd (petitioning creditor) filed a creditor’s petition against the estate of the late Winifred Williams (the Estate). Subsequently, on 25 September 2025, Registrar Morgan ordered that the Estate be administered under Part XI of the Bankruptcy Act 1966 (Cth) (the administration order). Mr Henry Kazar consented to act as trustee.

2    By interlocutory application filed on 18 November 2025, the interim applicants (Angus Alexander Forbes Williams, Jordan John Forbes Williams, and Michelle Kylie Williams as tutor for Billy Kenneth Forbes Williams) seek: (a) to be joined as parties to this proceeding; (b) an extension of time to file an application for review of the orders of Registrar Morgan made on 25 September 2025 (the 25 September Orders), and for those orders to be set aside; and (c) leave to file and serve a notice of opposition to the creditor’s petition (first interlocutory application).

3    On 2 March 2026, by consent of the parties, this Court granted leave to the interim applicants to file an interlocutory application for stay in relation to the administration order. That application was filed by the interim applicants on 2 March 2026 (second interlocutory application), and was the subject of the hearing on 7 April 2026.

Amendment of the second interlocutory application

4    The orders initially sought by the interim applicants, as articulated in the second interlocutory application, were as follows:

1.    Upon the application made by the Interim Applicants for review of the Registrar’s decision, and pursuant to section 35A (6) of the Federal Court of Australia Act 1976, there will be a stay of the sequestration order made by Registrar Morgan on 25 September 2025.

2.    Upon the application made by the Interim Applicants for review of the Registrar’s decision, and pursuant to section 35A (6) of the Federal Court of Australia Act 1976, there will be a stay of the order appointing Mr Henry Kazar to administer the estate of the late Winifred Williams made by Registrar Morgan on 25 September 2025.

3.    Further or in the alternative to Order 2, pursuant to Court’s inherent jurisdiction, Mr Henry Kazar is ordered to cease further administration of the Estate of the late Winifred Williams until the finalisation of the proceedings to review the decision of Registrar Morgan.

5    At the hearing on 7 April 2026, the interim applicants sought to correct the first order, to replace the reference to “sequestration order” with a reference to the administration order. The first proposed order, as amended, is therefore as follows:

1.    Upon the application made by the Interim Applicants for review of the Registrar’s decision, and pursuant to section 35A (6) of the Federal Court of Australia Act 1976, there will be a stay of the order for the administration of the deceased estate under Part XI of the Bankruptcy Act made by Registrar Morgan on 25 September 2025.

6    The interim applicants further proposed that the qualification in proposed order 3 – i.e., that the order be in place “until the finalisation of the proceedings to review the decision of Registrar Morgan” – apply also to proposed orders 1 and 2. The aforementioned amendments were not opposed by either the petitioning creditor or the trustee.

7    Consequently, the following matters arise for determination:

(1)    whether the interim applicants, the trustee and the executors of the Estate should be joined to this proceeding (application for joinder);

(2)    whether an extension of time should be granted to allow the interim applicants to apply for review of the registrar’s decision (application for an extension of time); and

(3)    whether the administration order should be stayed until the finalisation of the proceedings to review the registrar’s decision (application for stay).

FACTUAL BACKGROUND

8    The factual background to this matter spans a number of proceedings across various courts and tribunals, some of which are currently on foot. The summary below is limited to the salient points.

9    The interim applicants are the grandsons of the late Winifred Williams, and the beneficiaries of the Estate.

10    The director of the petitioning creditor, Mr Kelvin Solari, is also one of the executors of the Estate (alongside Mr Justin McCarthy). A search of the Australian Securities & Investments Commission database on 3 March 2025 shows that Mr McCarthy was appointed as a director of the petitioning creditor on 31 January 2022. However, it is not evident on the material before the Court whether he continues in that role.

11    The petitioning creditor is the trustee of the Win Williams Investment Trust. The interim applicants are beneficiaries of the Trust.

12    On 23 March 2026, the petitioning creditor received judicial advice in the Supreme Court of New South Wales in relation to the creditor’s petition: The application of JABW Pty Ltd atf the Win Williams Investment Trust [2026] NSWSC 266. In that proceeding, Kunc J ordered that the petitioning creditor would be justified in prosecuting the creditor’s petition in any review of the orders made by Registrar Morgan on 25 September 2025, and in resisting the notice of opposition proposed to be filed by the interim applicants (at [25]).

13    The parties informed the Court that a number of proceedings are currently on foot, involving the interim applicants, Messrs Solari and McCarthy, and/or the petitioning creditor. Relevantly:

(1)    On or around 11 March 2025, Messrs Solari and McCarthy made an application in the Supreme Court of New South Wales for grant of probate in the Estate. The interim applicants filed a caveat in those proceedings. As at the time of hearing, no grant of probate had been made.

(2)    On or around 8 August 2025, the interim applicants commenced proceedings in the Supreme Court of New South Wales against Messrs Solari and McCarthy (as executors of the Estate) seeking the appointment of an independent administrator to the Estate.\

(3)    On or around 1 September 2025, the interim applicants filed summonses in the Supreme Court of New South Wales against various entities, including the petitioning creditor, seeking inter alia production of documents relating to transactions set out in the financial statements of the Trust.

PARTIES’ SUBMISSIONS AND EVIDENCE

14    In support of the second interlocutory application, the interim applicants rely on:

(1)    amended written submissions filed on 31 March 2026;

(2)    the affidavit of Richard John Bain Allsop sworn on 2 March 2026, and the documents contained in exhibit RJBA-1;

(3)    the affidavit of Richard John Bain Allsop sworn on 17 February 2026; and

(4)    the affidavit of Richard John Bain Allsop sworn on 17 November 2025 (First Allsop Affidavit), and the documents contained in exhibits RJBA-1, RJBA-2, RJBA-3 and RJBA-4.

15    Upon objection by the petitioning creditor to exhibit RJBA-2 to the First Allsop Affidavit, the interim applicants did not rely upon: (a) the transcript of proceedings in the NSW Civil and Administrative Tribunal (NCAT) (matter no. 2021/0028655623); and (b) the transcript of the proceedings in the Guardianship division of NCAT, heard on 31 October 2024.

16    The petitioning creditor relies on written submissions filed on 31 March 2026, and the affidavit of Kelvin Solari sworn on 17 March 2026. The petitioning creditor tendered a letter, annexed to the written submissions, which was not subject to any objection.

17    The trustee relies on written submissions filed on 31 March 2026, and the affidavit of Henry Joseph Kazar sworn on 17 March 2026.

APPLICATION FOR JOINDER

18    At the hearing of the second interlocutory application, the petitioning creditor made an application to join the interim applicants and the trustee as parties to this proceeding pursuant to r 9.05 of the Federal Court Rules 2011 (Cth). This was not opposed by the trustee, or the interim applicants.

19    Rule 9.05 relevantly provides:

9.05     Joinder of parties by Court order

(1)    A party may apply to the Court for an order that a person be joined as a party to the proceeding if the person:

(a)    ought to have been joined as a party to the proceeding; or

(b)    is a person:

(i)    whose cooperation might be required to enforce a judgment; or

(ii)    whose joinder is necessary to ensure that each issue in dispute in the proceeding is able to be heard and finally determined; or

(iii)    who should be joined as a party in order to enable determination of a related dispute and, as a result, avoid multiplicity of proceedings.

(2)    A person must not be added as an applicant without the person’s consent.

…

20    The relevant test, for the purposes of r 9.05(1)(a), is whether the non-party’s rights against or liabilities to any party to the action in respect of the subject matter of the action may be directly affected by any order which may be made in the action:  News Ltd v Australian Rugby Football League Ltd [1996] FCA 870; 64 FCR 410 at 524, citing Pegang Mining Co Ltd v Choong Sam [1969] 2 MLJ 52 at 55-56. The test involves matters of degree, and ultimately judgment, having regard to the practical realities of the case, and the nature and value of the rights and liabilities of the non-party that might be directly affected: Australian Rugby Football League at 525.

Joinder of the interim applicants

21    Whilst not controversial between the parties, the interim applicants made written submissions as to why, pursuant to r 9.05(1)(a), the interim applicants “ought to have been joined as a party to the proceeding”.

22    The interim applicants’ central submission is that they have an interest in the Estate by virtue of their position as the beneficiaries. The interim applicants allege that they were only notified of the creditor’s petition seven days after the orders of 25 September 2025, and therefore were denied the opportunity to oppose the creditor’s petition and be heard on the merits of the petition.

23    The interim applicants also contend that the service of the creditor’s petition was “flawed” by reason of non-compliance with the service requirements of s 244 of the Bankruptcy Act, which relevantly requires the “legal personal representative” of the Estate to be served with the creditor’s petition. The interim applicants contend that there was no “legal personal representative” appointed to the Estate, in circumstances where there has been no grant of probate or administration, and that the interim applicants ought to have been served with the creditor’s petition. The petitioning creditor takes issue with the interim applicants’ proposed construction of “legal personal representative” (which is proposed, by the interim applicants, to be construed by reference to the Income Tax Assessment Act 1997 (Cth)), but submits that the issue falls away in circumstances where the petitioning creditor has made the application for joinder.

24    I accept that the rights of the interim applicants, as beneficiaries of the Estate and the Trust, may be directly affected by any order which may be made in relation to the creditor’s petition filed against the Estate. As such, I consider that the interim applicants ought to have been joined as parties to the proceeding: r 9.05(1)(a) of the Rules.

Joinder of the trustee

25    In proposed short minutes of order received from the parties on 10 April 2026, it was common ground that Mr Kazar ought to be joined to the proceeding. However, the parties were in dispute as to the capacity in which he should be joined.

26    The interim applicants propose that Mr Kazar be joined in his individual capacity. Mr Kazar contends that he ought to be joined in his capacity as trustee of the Property of the Deceased Estate of the late Winifred Williams, by reason of s 161 of the Bankruptcy Act, as modified by s 248. The petitioning creditor did not clearly indicate their position, but agreed with draft orders proposed by the interim applicants that Mr Kazar be joined in his individual capacity.

27    Section 161 of the Bankruptcy Act relevantly provides:

161    Trustee may act in official name

(1)    The trustee of the estate of a bankrupt may sue and be sued by the prescribed official name and may, by that name, hold, dispose of or acquire property of every description, make contracts, enter into engagements binding on the trustee and his or her successors in office and do all other acts and things necessary or expedient to be done in the execution of his or her office.

 (2)    For the purposes of subsection (1), the prescribed official name is “The Trustee (or Trustees) of the Property of (name of bankrupt), a Bankrupt”.

…

28    Section 248(1) of the Bankruptcy Act provides that s 161 applies in relation to proceedings, and the administration of estates, under Part XI of the Bankruptcy Act. Section 248(3) relevantly provides:

248    Application of Act in relation to administrations under this Part

…

(3)    Subject to the regulations, in the application of the provisions specified in subsection (1) in relation to proceedings under this Part and the administration of estates of deceased persons under this Part:

…

(e)    a reference to a bankrupt shall be read as a reference to a deceased person in respect of whose estate an order for administration under this Part has been made and as including a reference to the estate of that deceased person; and

(f)    a reference to the trustee of the estate of a bankrupt shall be read as a reference to the trustee of the estate of a deceased person in respect of whose estate an order for administration under this Part has been made.

29    The provisions relied upon by Mr Kazar make plain that the trustee may act in the prescribed official name. The interim applicants have not demonstrated why Mr Kazar should not be joined in this capacity, or why Mr Kazar should be joined in any other capacity that is relevant to this proceeding. Accordingly, it is appropriate that Mr Kazar be joined in his capacity as trustee of the Estate, as he contends.

Joinder of the executors

30    Messrs Solari and McCarthy filed a submitting notice on 11 December 2025 (although it is not apparent in what capacity they did so). On 15 May 2026, the Court received proposed consent orders from the parties, which proposed to join Messrs Solari and McCarthy as respondents to this proceeding. The parties have not provided any evidence or made submissions as to the basis for the proposed joinder. Nevertheless, as executors of the Estate with an interest in its administration, and in the absence of any objection, I consider that such an order is appropriate under r 9.05(1)(a) of the Rules.

APPLICATION FOR EXTENSION OF TIME

31    The interim applicants seek an extension of time to file the application for review of the 25 September Orders, pursuant to r 1.39 of the Rules. The application for an extension of time was not opposed by the petitioning creditor. The trustee did not take a position.

Legal principles

32    The interim applicants seek a review the 25 September Orders pursuant to r 3.11 of the Rules and s 35A(5) of the Federal Court of Australia Act 1976 (Cth) (FCA Act). Section 35A(5) of the FCA Act provides that such an application must be made “within the time prescribed by the Rules” or “within any further time allowed in accordance with the Rules of Court”.

33    Rule 3.11(2) imposes a 21-day time limit by which to apply under s 35A(5) for review of the exercise of a power of the Court by a registrar:

3.11     Application for review of a Registrar’s exercise of power

(1)    A party may apply to the Court under section 35A(5) of the Act for review of the exercise of a power of the Court by a Registrar.

(2)    The application must be made within 21 days after the day on which the power was exercised.

34    The interim applicants were therefore required, by reason of r 3.11(2) (and the operation of r 1.61), to file an application for review of the 25 September Orders within 21 days of 26 September 2025 (i.e., by 17 October 2025). The interim applicants filed the first interlocutory application on 18 November 2025 seeking an extension of time (i.e., 32 days late).

35    The Court has power, pursuant to r 1.39 of the Rules to extend or shorten a time fixed by the Rules. Rule 1.39 provides:

1.39    Extension and shortening of time

The Court may extend or shorten a time fixed by these Rules or by order of the Court:

(a)    before or after the time expires; and

(b)    whether or not an application for extension is made before the time expires.

36    The decision to grant an extension of time pursuant to r 1.39 of the Rules is a discretionary one: Skinner v Commonwealth [2012] FCA 1194 at [10]-[11].

37    The Court also has the (discretionary) power to dispense with compliance with the Rules, before or after the occasion for compliance arises: r 1.34. In both cases (of dispensation and extension), the considerations are the same.

38    The principles applicable to the exercise of the Court’s discretion were set out by Wilcox J in Hunter Valley Developments Pty Ltd v Cohen [1984] FCA 186; 3 FCR 344 at 348-9 (see also Lemmen v Porcu [2013] FCA 1056 at [2] in the context of an application for an extension of time to review an order for the winding up of a company). Those considerations are:

(1)    the length of and explanation for the delay;

(2)    any prejudice to any other party; and

(3)    the merits of the substantive application.

Delay

39    As noted above, the interim applicants filed the first interlocutory application 32 days late. Whilst not opposing the application for an extension of time, the petitioning creditor submits that the interim applicants have not provided any explanation for the delay. Whilst the interim applicants did not make submissions on this point, the interim applicants have emphasised throughout the proceeding that they were only notified of the creditor’s petition on 2 October 2025, seven days after the 25 September Orders were made.

40    While late notice explains some of the delay, it does not explain why the application was not filed within a period of 21 days after the interim applicants received notice of the orders, noting that the first interlocutory application was not filed until 18 November 2025. I note that the interim applicants are legally represented, and have otherwise commenced proceedings, in probate, to have Messrs Solari and McCarthy passed over as executors of the Estate. They are not strangers to litigation.

41    The Court must be positively satisfied that it is proper to grant the extension. It has been held that a precondition to the exercise of discretion in the applicant’s favour is that the applicant show an acceptable explanation of delay: Hunter Valley Developments at 348(1). None in this case was forthcoming. While the delay was relatively short, the interim applicants have not satisfied me that they have not “rested on [their] rights”: Hunter Valley Developments at 438-9(2).

Prejudice

42    The application for an extension of time is not contested. Consequently, the petitioning creditor and trustee have not contended that they will be subject to any prejudice by reason of the grant of an extension of time. However, the mere absence of prejudice is not enough to justify the grant of an extension: Hunter Valley Developments at 349(4).

Merits

43    The interim applicants must demonstrate that there is an arguable case that the administration order should not have been made: Lemmen at [2]. In that regard, the interim applicants rely on the notice of opposition annexed to the affidavit of Richard John Bain Allsop sworn on 17 February 2026.

44    The interim applicants allege inter alia that the creditor’s petition was not correctly served; the alleged debt (the subject of the creditor’s petition) was not owed by the deceased to the petitioning creditor; insufficient evidence was adduced as to the existence of the alleged debt; alternatively, if the debt was owed, that it was procured by unconscionable conduct; and that the hearing of the creditor’s petition was premature in circumstances where proceedings are on foot involving Messrs Solari and McCarthy as executors of the Estate.

45    The petitioning creditor submits that there are “low prospects” for resisting the creditor’s petition; that the petitioning creditor has been found to have a prima facie case that it is owed money by the Estate; and that the interim applicants’ claim otherwise does not rise above a “mere assertion”. The petitioning creditor addresses the merits of the proposed review in brief, but ultimately does not oppose the extension of time.

46    The lack of opposition does not avert the need to consider the merits of the application, as part of the ultimate consideration as to whether it is “fair and equitable in the circumstances” to extend time: cf. Hunter Valley Development at 348(1), 352.

Service

47    The legal basis of the claim of improper service is unclear in the notice of opposition (paras [2.1]-[2.3]). However, in their amended written submissions (dated 31 March 2026), the interim applicants claim that service of the petition was not effected on a “legal personal representative” of the deceased debtor (s 244(9) of the Bankruptcy Act). The interim applicants rely on the meaning of “legal personal representative” in taxation and other legislation (in the absence of a definition in the Bankruptcy Act) to argue that there was no such appointment to the deceased Estate.

48    The interim applicants do not rely on Schedule 4 of the Bankruptcy Regulations 2021 (Cth), which inserts a definition of “legal personal representative” of, or in relation to, a deceased debtor, in certain sections of the Bankruptcy Act (although not in s 244), to mean:

(a)    the executor under the deceased debtor’s will; or

(b)    the administrator under letters of administration or court order;

of the deceased debtor’s estate, or a part of that estate.

49    Paragraph (a) of the definition in Schedule 4 of the Bankruptcy Regulations is akin to paragraph (a) of s 995-1 of the Income Tax Assessment Act, on which the interim applicants rely. On the interim applicants’ case, it is not apparent why Messrs Solari and McCarthy, as executors of the Estate, do not qualify each as a “legal personal representative”.

50    The interim applicants rely on “the challenge to the appointment of the nominated legal personal representatives” to suggest that service on the executors of the Estate “should not have been sufficient to proceed to make the Order and the proceedings should have been adjourned until a grant of representation was made”. This appears to be the prejudice or injustice claimed by the interim applicants, as a consequence of what is alleged to be defective service such as to annul the administration order under s 252B of the Bankruptcy Act: Rafaraci v Pearce [2003] FCA 1307 at [24].

51    It is not apparent that service was defective, noting that the proposition is inchoate as it is predicated on an argument that is intended to be put at the review. Nevertheless, it may be accepted that, as interested parties contesting the appointment of the “legal personal representatives”, they “ought to have been joined as a party to the proceeding”, and afforded the opportunity to oppose the petition before the administration order was made.

Existence of a debt

52    There are two substantive issues in the application for review of the administration order: (a) whether the debt was owed by the deceased to the petitioning creditor; and (b) if so, whether the debt was annulled or extinguished by the conduct of the director(s) of the petitioning creditor.

53    In relation to the first issue, in the context of an ex parte proceeding, Kunc J found that there is “prima facie evidence” that the Estate owes a substantial debt to the Trust, and that the Estate is insolvent, for the purposes of concluding that there is a reasonable basis for the petitioning creditor, as trustee of the Trust, to prosecute the petition and resist the notice of opposition (at [25]). The absence of contest is an important qualification to the statement that the petitioning creditor has been found to have a prima facie case that it is owed money by the Estate. That statement, in any event, does not have precedential value. It serves a useful, but limited, purpose in relation to the substantive application in this Court.

54    The onus lies on the interim applicants to demonstrate an arguable case, which they seek to do by way of the affidavit of Mr Allsop sworn on 17 February 2026. This affidavit attaches the grounds of opposition that the interim applicants propose to propound at the hearing of any review of the decision of Registrar Morgan. However, it does not depose to any other substantive fact that underlies the proposed grounds of opposition.

55    The notice of opposition largely comprises submission and broad factual statements that are conclusory in nature. It is difficult to assess the merits of the substantive application, even on a preliminary basis, on this foundation, and without the benefit of submissions that substantially engage the points of opposition.

56    The notice of opposition raises a question as to whether the debt was owed, but it does not assert positively that it was not owed. It effectively shifts the burden onto the petitioning creditor: i.e., it states that no written loan agreement has been produced (para [2.6]), and that the affidavit of Mr Solari sworn on 6 August 2025 did not depose to facts evidencing a loan (para [2.7]). The notice, and the affidavit to which it is annexed, fails to articulate the factual premises for the asserted conclusion that the debt was not owed by the deceased to the petitioning creditor.

57    In relation to the second issue, the notice of opposition asserts that the assets of the Trust were acquired from the deceased without consideration (para [2.10]), and that the terms of four trusts (including the Trust) were contrary to the instruction and intentions of the deceased (para [2.14]). It is asserted that the petitioning creditor and its director(s) knew that the deceased was unable to repay any significant loan from her assets because she had transferred assets to the trusts without consideration, and had used most of the balance of her assets to acquire the rights to a unit in a retirement village (para [2.15]). The notice asserts that the alleged indebtedness by the deceased to the petitioning creditor was procured by unconscionable conduct (paras [2.17]-[2.18]), and that any payment to the deceased should have been made by way of distribution of income or capital from the Trust, which did not require any repayment by the deceased (para [2.16]).

58    However, there is no indication of the conduct of the director(s) of the petitioning creditor that might constitute unconscionable conduct; in particular, knowledge of the “special disadvantage” of the deceased debtor (Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; 151 CLR 447 at 462 (Mason J); Thorne v Kennedy [2017] HCA 49; 263 CLR 85 at [38] (Kiefel CJ, Bell, Gageler, Keane and Edelman JJ) and “unconscientious exploitation” of any such disadvantage (Thorne v Kennedy at [38]; Stubbings v Jams 2 Pty Ltd [2022] HCA 6; 276 CLR 1 at [39] (Kiefel CJ, Keane and Gleeson JJ)).

59    There are broad assertions regarding the failure of the petitioning creditor to demonstrate that the deceased: (a) knew she was borrowing from the petitioning creditor; (b) had obtained independent legal advice; or (c) had the capacity or competence at the time of the alleged loan to understand the liability alleged to have been incurred by her (paras [2.19]-[2.21]). However, there is no positive assertion or evidence that the deceased did not have capacity or competence at the relevant time.

60    At this stage of the proceeding, it is not for the Court to assess the strength of the evidence supporting these claims (which evidence is presently lacking), but to determine whether the claims form the basis of an arguable case that the administration order should not have been made (on the basis that there is no debt). The difficulty in reaching a conclusion in this regard, is that the Court is not apprised of the circumstances in which it is said that these claims arose. It is one thing to assert (the conclusion) that the director(s) knew that the deceased was unable to repay any debt. It is another thing to assert the factual circumstances that underlie the claim so as to enable the Court to assess the merits of the applicant’s case, as distinct from a case in theory, and yet another thing to demonstrate that this conduct is unconscionable such that it invalidates the debt otherwise owed to the petitioning creditor.

61    The difficulty is compounded by the failure of the petitioning creditor to substantively engage with the points of opposition, and therefore the merits of the claim. This is not a criticism of the petitioning creditor, who does not seek to oppose the application for an extension of time. However, it leaves the Court at a disadvantage in determining the application at this juncture. Therefore, I propose to determine the application for an extension of time after hearing argument on the substantive application; that is, coincident with the application for a review of Registrar Morgan’s decision. Noting the lack of opposition to the application for an extension of time, I do not consider that it is fair and equitable to deny the application at this point for want of an adequate explanation of delay, without an informed understanding of the merits of the substantive application, or to decide the matter as one of onus.

APPLICATION FOR STAY OF ADMINISTRATION ORDER

62    The interim applicants contend that the administration order should be stayed until the finalisation of the proceedings to review the decision of Registrar Morgan.

63    The petitioning creditor opposes the application on the basis that the balance of convenience does not favour a stay being granted. The trustee has adopted a neutral position, and does not support or oppose the grant of a stay.

64    Two issues arise for consideration: first, whether the Court has the power to stay the administration order; and, second, if so, whether a stay ought to be granted.

Power to stay an administration order

65    The power to make an order for the administration of an estate of a deceased person pursuant to a creditor’s petition is contained relevantly in s 244 of Part XI of the Bankruptcy Act (the power also lies in s 245, but is not presently relevant).

Application of s 37(2) of the Bankruptcy Act

66    The Court’s power to rescind, vary or discharge an order made by it under the Bankruptcy Act, or to suspend its operation, is found in s 37 of the Bankruptcy Act, which provides:

37     Power of Court to rescind orders etc.

(1)    Subject to subsection (2), the Court may rescind, vary or discharge an order made by it under this Act or may suspend the operation of such an order.

(2)    The Court does not have power to rescind or discharge, or to suspend the operation of:

(a)    a sequestration order; or

(b)    an order for the administration of the estate of a deceased person under Part XI.

67    The provision distinguishes between a sequestration order and an order for the administration of a deceased estate. As will be seen, that distinction is not always observed in the Bankruptcy Act.

68    The central issue is whether the proscription in s 37(2)(b) of the Bankruptcy Act curtails the Court’s power under s 35A(6) of the FCA Act, on review of the exercise of power by a registrar, to make “such order or orders as it thinks fit”, and, specifically, to order a stay of the administration order.

Legislative history of s 37(2) of the Bankruptcy Act

69    Section 37(2) was inserted into the Bankruptcy Act by s 22 of the Bankruptcy Amendment Act 1980 (Cth). The explanatory memorandum relevantly states (at [63]):

Once a sequestration order or an order for the administration of a deceased estate has been signed and sealed (see r. 124 and re Edgar (1973) 2 A.L.R. 649), the Court will not be able to rescind that order or to suspend its operation (Bill cl. 22). This amendment takes account of the particular consequences for status and property that flow from the making of a sequestration order or an order for administration. Rescission of a sequestration order otherwise than by way of annulment does not terminate the bankruptcy. Upon the making of a sequestration order the debtor becomes a bankrupt and remains one until he is discharged or the bankruptcy is annulled (see Re Deriu 16 F.L.R. 420 and present s-sec 43(2)).

70    Section 37(2) was amended to its current form (relevantly, removing a requirement that the orders be signed and sealed, and incorporating a proscription against the “discharge” of such orders) by s 8 of the Bankruptcy Amendment Act 1991 (Cth). The explanatory memorandum relevantly states (at 26):

Clause 8 provides for the repeal of section 37 and the insertion of a new section 37 which preserves the powers of courts to rescind, vary and discharge orders, and to suspend the operation of orders, but which specifically precludes the rescission of sequestration orders and orders for the administration of deceased estates in bankruptcy. After the commencement of the Bill, in relation to sequestration orders and administration orders under Part XI of the Act, in those cases where rescission orders might have been sought or made, the appropriate orders to be made will be orders under section 153B or section 252B for the annulment of the sequestration order or administration order.

Court’s inherent jurisdiction?

71    In the alternative, the interim applicants seek an order that the trustee cease further administration of the Estate until the finalisation of the proceeding to review the decision of Registrar Morgan pursuant to the Court’s inherent jurisdiction.

72    Aside from a note that the Court has “inherent jurisdiction to control its own processes and procedures”, the interim applicants do not make any submissions in support of the proposition that the Court may, pursuant to its inherent jurisdiction, overcome the statutory proscription in s 37(2) of the Bankruptcy Act. Nor do the interim applicants explain how the Court’s inherent jurisdiction intersects with the power under s 35A(6) of the FCA Act.

Power to stay an administration order pursuant to s 35A(6) of the FCA Act

73    To overcome the proscription in s 37(2)(b) of the Bankruptcy Act, the interim applicants rely on the Full Court decision of Trustees of the Franciscan Missionaries of Mary v Weir [2000] FCA 574; 98 FCR 447, for the proposition that the Court has the power under s 35A(6) of the FCA Act to order a stay of the administration order (at [23]). The Court in Weir observed that s 23 of the FCA Act was also adequate for that purpose.

74    Section 35A(6) relevantly provides:

35A     Powers of Registrars

…

(6)    The Court may, on application under subsection (5) or of its own motion, review an exercise of power by a Registrar pursuant to this section and may make such order or orders as it thinks fit with respect to the matter with respect to which the power was exercised.

75    The decision of Weir concerned a stay of a sequestration order, as distinct from an order for the administration of the estate of a deceased person under Part XI of the Bankruptcy Act. The petitioning creditor and trustee submit that Weir is therefore not determinative, unless it extends by analogy to an administration under Part XI of the Bankruptcy Act. The interim applicants contend that the regime under Part XI mirrors the regime for a sequestration order, such that Weir should be followed.

76    As a matter of principle, the point of distinction may not be apparent in circumstances where the proscription on recission or suspension in s 37(2) is applicable to both sequestration orders and orders for administration under Part IX, and the extrinsic material confirms the common regard for the “particular consequences for status and property” that flow from the making of both orders. Nevertheless, such a distinction is observed in s 37(2), and as a matter of precedent, the outcome in Weir pertains to a stay of a sequestration order.

77    Furthermore, the trustee drew the Court’s attention to authorities that have doubted the correctness of the decision in Weir. In The Owners - Strata Plan No. 20347 v Saha [2021] FCA 961, Stewart J followed Weir on the basis that it was Full Court authority and therefore binding, but noted the following (at [24]):

As the events of this case demonstrate, which I will come to, I now doubt whether Weir is correct and whether as a matter of legal power or practicality a sequestration order made by a registrar can or should be stayed by a court in the exercise of its review power. That is however the law on current authority, and I applied it.

78    I have the same doubt. The Court’s concern in Weir was to ensure the effectiveness of the review of a registrar’s decision by a judge, so as to satisfy the constitutional requirement of effective control and supervision of the Court over the exercise of delegated powers (at [20]-[21]; see also Ritson v Commissioner of Police (NSW) [2021] FCAFC 208 at [66]). In the Court’s view, the exercise of jurisdiction in bankruptcy by the Court through a delegation is a “special case” that is “governed by its own rules” (at [23]). The Court in Weir appears to have treated those rules as supervening the legal operation of sequestration orders.

Application of s 52(3) of the Bankruptcy Act

79    The interim applicants contend that the Court’s power to order a stay of the administration order is found in s 52(3) of the Bankruptcy Act.

80    Section 52(3) provides that the Court has power to order that proceedings under a sequestration order be stayed: Endresz v Australian Securities and Investments Commission [2014] FCA 1139 at [8]-[11]; Du Bray v ACW [2020] FCA 1142 at [9].

81    Section 52(3) relevantly states:

52    Proceedings and order on creditor’s petition

…

(3)    The Court may, if it thinks fit, upon such terms and conditions as it thinks proper, stay all proceedings under a sequestration order for a period not exceeding 21 days.

82    A “stay” of a sequestration order has been considered to have the same effect as the “suspension” of a sequestration order: Ritson at [63].

83    In Du Bray, Stewart J draws a distinction between the power of the Court to stay “the operation of” a sequestration order (which is proscribed under s 37(2)(a) of the Bankruptcy Act), and staying “all proceedings under a sequestration order” (which is permitted under s 52(3) of the Bankruptcy Act): Du Bray at [9]; see also Mehajer v Weston (Trustee), in the matter of Mehajer [2018] FCA 608 at [8]-[9].

84    In Endresz, it was considered that, for the purposes of s 52(3) of the Bankruptcy Act, specific “proceedings” or “actions” that are intended to be subject to the proposed stay must be identified (at [11]). Justice Beach observed that it is “conceptually incoherent” to contemplate a stay of a sequestration order, in circumstances where the “immediate and automatic” effect of such an order is the immediate vesting of property in the trustee in bankruptcy (at [8], [28]; see also ss 43(2) and 58(1) of the Bankruptcy Act).

85    Similarly, the Full Court in Ritson observed (at [64]) that:

… a sequestration order changes, by force of the statute, the status of a debtor, enlivens powers of a trustee and brings about changes to property. Such changes are drastic and immediate: see Bechara v Bates [2021] FCAFC 34; 388 ALR 414 at [176]; Robson as former trustee of the Estate of Samsakopoulos v Body Corporate for Sanderling at Kings Beach CTS 2942 [2021] FCAFC 143; 392 ALR 93 at [3] and [7] (per Allsop CJ with whom Markovic J and Derrington J agreed).

86    Similar to a sequestration order, once an order for administration of the estate of a deceased person is made under s 244 of the Bankruptcy Act, the divisible property and after-acquired property of the estate vest in the trustee of the estate of the deceased person (or if there is no trustee, the Official Trustee): s 249 of the Bankruptcy Act.

87    However, s 52(3) of the Bankruptcy Act is expressed to apply to proceedings under a sequestration order. It therefore is not clear that s 52(3) applies to an order for administration under Part XI of the Bankruptcy Act.

88    Relevantly, s 248(1) of the Bankruptcy Act identifies certain provisions that apply to: (a) proceedings under Part XI; and (b) the administration of estates under Part XI: s 248(1), (3)(a). Sub-paragraph (3) specifies that, in applying the provisions identified in sub-paragraph (1), a reference to “sequestration order” is to be read as a reference to “an order for administration of an estate” under Part XI:

248    Application of Act in relation to administrations under this Part

(1)    Subject to this section, subsection 47(2), sections 49 to 51 (inclusive), subsections 52(4) and (5), section 62, sections 73 to 76 (inclusive), section 79, sections 81 to 114 (inclusive), sections 117 to 130 (inclusive), sections 132 to 139H (inclusive), Subdivisions I and J of Division 4B of Part VI and sections 140 to 147 (inclusive) and sections 156A to 184 (inclusive) apply, with any modifications prescribed by the regulations, in relation to proceedings under this Part and the administration of estates under this Part.

(3)    Subject to the regulations, in the application of the provisions specified in subsection (1) in relation to proceedings under this Part and the administration of estates of deceased persons under this Part:

(a)    a reference to a sequestration order shall be read as a reference to an order for administration of an estate under this Part;

…

89    However, s 248(1) does not specify that s 52(3) is to apply to proceedings under Part XI or the administration of estates under Part XI. Nor do the Bankruptcy Regulations 2021 (Cth) so provide: reg 71, Schedule 4.

90    The failure to identify s 52(3) of the Bankruptcy Act amongst a catalogue of provisions suggests that s 52(3) observes a distinction between sequestration orders and orders for administration of an estate. This means that the interim applicants cannot rely on s 52(3) in relation to the administration order. In any event, the interim applicants do not identify any specific proceedings that are intended to be subject to the proposed stay. In that regard, also, they are unable to avail themselves of s 52(3).

91    Finally, I note that, in any event, the power under 52(3) has a temporal limitation: viz., the stay applies for a period not exceeding 21 days. It was confirmed in oral submissions that this would not serve the interim applicants’ purpose, which was a stay pending resolution of the review of the 25 September Orders.

Conclusion

92    I am not convinced that the interim applicants can overcome the proscription in s 37(2) of the Bankruptcy Act (by way of s 35A(6) of the FCA Act), or otherwise rely on s 52(3) of the Bankruptcy Act. For the following reasons, even if I were satisfied that I had power to do so, I would not grant the application. That is, I do not ‘think fit’ to make such an order under s 35A(6) (or s 23) of the FCA Act.

Stay of the administration order ought not be granted

93    On its terms, the discretion afforded by s 35A(6) of the FCA Act is broad.

94    Equally, though not directly applicable, the Court has a broad discretion in determining whether to grant a stay of proceedings under s 52(3) of the Bankruptcy Act: Quinn v O’Rourke (No 3) [2020] FCA 1160 at [10]. The relevant question is whether the party applying for the stay “has shown a reason or an appropriate case to warrant the exercise of discretion” in their favour: Quinn at [10]. I see no reason to apply a different (or narrower) approach in considering a stay of the administration order.

95    The test for a stay pursuant to s 52(3) has been observed to be “not materially different” to the test for a stay pursuant to r 36.08 of the Rules (in the context of an appeal of a sequestration order): Nolten v Groeneveld Australia Pty Ltd [2011] FCA 1494 at [24]; Quinn at [10]. In considering whether to grant a stay under r 36.08 of the Rules, the Court will generally have regard to whether there is an arguable point raised by the proposed appeal, and whether the balance of convenience favours granting the stay: Endresz at [16].

Merits of the application

96    As considered above in relation to the application for an extension of time, the interim applicants have not satisfied me, at this stage, that the merits of the substantive application are such that would be appropriate to stay the administration order.

Balance of convenience

97    I consider that the balance of convenience does not favour staying the administration order.

98    First, I am not satisfied that, as contended by the interim applicants, a stay should be granted to avoid further costs being incurred by the trustee.

99    The interim applicants submit that the trustee will not suffer any prejudice in circumstances where he has been indemnified by the petitioning creditor; and that any prejudice can be cured by the accumulation of interest on the alleged debt.

100    The question is what further costs are likely to be incurred by the trustee prior to resolution of the review of the registrar’s order.

101    The trustee indicated that he has not yet formally admitted (or rejected) any proofs of debt for the purposes of s 83 of the Bankruptcy Act, and that he will not be incurring any such expense until there is a fund available to be distributed to claimants. At this stage, the trustee has simply set out the estimated claims based upon the proofs that have been submitted to him. On that basis, there is no evidence that the trustee has incurred any undue expense, or that he is likely to do so prior to resolution of the review, such that the administration order should be stayed.

102    Second, as the petitioning creditor submits, there is no compelling reason why the costs assessment procedure should be stayed.

103    The petitioning creditor contends that the most significant asset of the Estate is a costs order made against Mr Alexander Williams, which is claimed in the bill of costs to be in the sum of $1,038,476.25. The main (if only) task before the trustee is to continue with the recovery of the costs order. Even if, as sought by the interim applicants, the administration order is set aside and/or an administrator/executor is appointed in the Supreme Court of New South Wales, the need to enforce the costs order through assessment is not obviated. Consequently, there is no prejudice to the Estate in continuing with recovery of the costs order.

104    Third, it is not evident how the recovery of assets, which the creditor’s petition seeks, is not in the interests of the interim applicants, who are beneficiaries of the Trust.

105    The petitioning creditor contends that there is a “real concern” as to whether Mr Williams, the father of the interim applicants, is driving the stay application. The concern arises from the fact that Mr Williams’ interest in reducing the costs order made against him is diametrically opposed to the interests of the beneficiaries of the Estate, to whom the costs are owed.

106    The petitioning creditor drew the Court’s attention to certain statements made by the interim applicants that they “intend to seek advice about the claim for costs made by the lawyers whose fees are set out in the bill of costs”. The petitioning creditor contends that it is not clear how a negotiated outcome in reducing the costs order would be advantageous to the beneficiaries (as distinct from Mr Williams), rather from having the bill of costs independently assessed via the costs assessment procedure. The petitioning creditor took the Court to the trust deed, which provided that Mr Williams (the son of the late Winifred Williams) would be denied access to records of the Trust, as would the beneficiaries (the interim applicants) until they all reach 30 years of age (cl 22.4). The petitioning creditor submits that this reflects the concern of the late Winifred Williams as to the influence of Mr Williams over the beneficiaries.

107    Fourth, as the petitioning creditor submits, any delay in recovery of the costs order should be avoided, in circumstances where there is a concern regarding the ability of Mr Williams to satisfy the costs order in full.

108    Fifth, the matter will be set down for hearing in the near future, which will reduce the likelihood of any distributions being made, and so mitigate the potential of any prejudice to the interim applicants.

Stay of order appointing Mr Kazar as trustee

109    The interim applicants seek that the order appointing Mr Kazar as trustee be stayed until the finalisation of the proceedings to review the decision of Registrar Morgan.

110    The orders made by Registrar Morgan do not appoint Mr Kazar as trustee of the Estate. Rather, the notation to the 25 September Orders states:

The Court notes that a consent to act as trustee has been signed by Henry Jospeh Kazar and has been lodged with the Official Receiver in Sydney.

111    The trustee and petitioning creditor submit that, once the administration order was made, the appointment of Mr Kazar as trustee occurred “automatically” pursuant to s 156A(3)(a) of the Bankruptcy Act.

112    Section 156A relevantly provides:

156A    Consent to act as trustee

(1)    A registered trustee may, by instrument signed by him or her and filed with the Official Receiver, consent to act:

(a)    as the trustee of the estate of the debtor specified in the instrument in the event that the debtor becomes a bankrupt; or

…

(3)    Where:

(a)    at the time when a debtor becomes a bankrupt, a registered trustee has, under subsection (1), consented to act as the trustee of the estate of the debtor and the consent has not been revoked, the registered trustee becomes, at that time, by force of this subsection, the trustee of the estate of the bankrupt; and

….

113    Section 248(1) provides that s 156A applies “with any modifications prescribed by the regulations, in relation to proceedings under this Part and the administration of estates under this Part”. The Bankruptcy Regulations prescribe the following modifications to s 156A (see s 71, items 130, 131, 132 of Schedule 4):

130     Paragraph 156A(1)(a)

Before “debtor” (first occurring), insert “deceased”.

131    Paragraphs 156A(1)(a) and (3)(a)

Omit “debtor becomes a bankrupt”, substitute “deceased debtor’s estate is administered under Part XI”.

132    Paragraph 156A(3)(a)

Omit “estate of the bankrupt”, substitute “estate”.

114    Consequently, as a result of the administration order, and by force of s 156A(3)(a) of the Bankruptcy Act, as modified by the Bankruptcy Regulations, Mr Kazar became trustee of the Estate. By order, Mr Kazar is joined, and appears in the proceeding, in that capacity. The stay sought (effectively, of the operation of s 156A(3)(a)) would leave the Estate without a trustee to administer it, and without a party to represent that interest. I see no cause to grant it in the present circumstances, even if I had the power to do so under s 35A(6) of the FCA Act (or otherwise).

CONCLUSION

115    The application for joinder of the interim applicants and the trustee of the Estate (in his capacity as such) will be granted. The executors of the Estate will also be joined as parties.

116    Noting that the application for an extension of time is unopposed, but that the interim applicants have not provided the Court with an adequate explanation of their delay in seeking to review the 25 September Orders, the application for an extension of time will be determined concurrently with the review.

117    The application for a stay of the administration order, including the appointment of Mr Kazar as trustee, until the finalisation of the proceeding to review the 25 September Orders, is rejected.

Associate:

Dated:    21 May 2026