FEDERAL COURT OF AUSTRALIA

Pieman Resources Pty Ltd v Johnston (Sequestration Orders) [2026] FCA 1010

ORDERS

THE COURT ORDERS THAT:

1.    The estate of RODGER STUART JOHNSTON be sequestrated under the Bankruptcy Act 1966 (Cth).

2.    David James Hambleton be appointed as the trustee of the bankrupt estate of Rodger Stuart Johnston.

3.    The applicants’ costs, including reserved costs, be taxed and paid from the estate of the respondent debtor in accordance with the Bankruptcy Act 1966 (Cth).

The Court notes that the date of the act of bankruptcy is 17 September 2025.

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

ORDERS

THE COURT ORDERS THAT:

1.    The estate of BRADLEY ROBERT MONKS be sequestrated under the Bankruptcy Act 1966 (Cth).

2.    David James Hambleton be appointed as the trustee of the bankrupt estate of Bradley Robert Monks.

3.    The applicants’ costs, including reserved costs, be taxed and paid from the estate of the respondent debtor in accordance with the Bankruptcy Act 1966 (Cth).

The Court notes that the date of the act of bankruptcy is 17 September 2025.

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

REASONS FOR JUDGMENT

DOWNES J:

SYNOPSIS

1    This judgment follows the hearing of two creditors’ petitions filed by the applicants including Hellyer Metals Pty Ltd (in liq) (HML) which is the third applicant. The two petitions were heard together, with evidence in one proceeding being evidence in the other.

2    The applicants seek sequestration orders against the estate of each of the respondents pursuant to s 43 of the Bankruptcy Act 1966 (Cth) on the basis that they have each committed an act of bankruptcy by failing to comply with a bankruptcy notice.

3    The bankruptcy notices sought payment of monies which were ordered to be paid by the respondents pursuant to the default judgment awarded by this Court on 30 January 2025. Whilst default judgment was not sought in relation to the claims brought by HML, judgment was awarded to the applicants jointly in the Order of 30 January 2025 without distinguishing between them.

4    By their written submissions, the respondents resist the making of a sequestration order including on the basis that the judgment debt in favour of HML was not due and owing to it because:

(1)    the allegations made by HML were not pressed on the application for default judgment; and

(2)    none of the monetary amounts ordered to be paid were referable to any claim or loss said to have been suffered by HML.

5    The matters in (1) and (2) are not challenged by the applicants. However, they submit (correctly) that the bankruptcy notices and petitions were issued by all joint judgment creditors, being the plaintiffs as recorded in the default judgment, and that the inclusion of HML was consistent with the terms of the default judgment, which awarded judgment to the plaintiffs without distinguishing between them. They submit that a bankruptcy notice issued in relation to a joint judgment debt “can be effective only when issued by or on behalf of all the judgment creditors”, and cite Australian Workers’ Union v Bowen (1946) 72 CLR 575 (Latham CJ) at 583. They also submit that the respondents are precluded from taking issue with the form of the bankruptcy notices because their applications to set those notices aside have been dismissed, with the consequence that the respondents cannot now contend that no act of bankruptcy has occurred. Notably, the issue concerning the judgment being entered in favour of HML was not raised on the respondents’ appeal from the default judgment, which appeal was dismissed. The respondents had no good answer to these submissions.

6    In these circumstances, as the status of the first and second applicants as petitioning creditors is not affected and as this point was not seriously pressed at the hearing, the challenge in the written submissions concerning HML does not prevent the sequestration orders being made.

7    For the reasons which follow, the estates of Rodger Stuart Johnston and Bradley Robert Monks will be sequestrated.

8    In anticipation of an application by the respondents to stay the sequestration orders pending any appeal, I observe that the Federal Court does not have that power: see Ritson v Commissioner of Police (NSW) [2021] FCAFC 208 at [63]–[64] (Allsop CJ, Lee and Downes JJ).

RELEVANT LEGESLATION AND PRINCIPLES

9    Section 41(1) of the Bankruptcy Act provides that an Official Receiver may issue a bankruptcy notice on the application of a creditor who has obtained against a debtor a final judgment or final order that is of the kind described in s 40(1)(g) and is for an amount of at least the statutory minimum.

10    Section 40(1)(g) of the Bankruptcy Act provides that a debtor commits an act of bankruptcy if:

…a creditor who has obtained against the debtor a final judgment or final order, being a judgment or order the execution of which has not been stayed, has served on the debtor in Australia or, by leave of the Court, elsewhere, a bankruptcy notice under this Act and the debtor does not … comply with the requirements of the notice or satisfy the Court that he or she has a counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt or sum payable under the final order…

11    Section 43(1) of the Bankruptcy Act relevantly provides that, subject to that Act, where a debtor has committed an act of bankruptcy and otherwise meets the territorial connection requirement, the Court may “on a petition presented by a creditor” make a sequestration order against the estate of the debtor.

12    Section 44(1) of the Bankruptcy Act sets out the conditions on which a creditor may present a petition, being (relevantly to the facts of this case):

(a)    there is owing by the debtor to the petitioning creditor a debt that amounts to the statutory minimum;

(b)    that debt is a liquidated sum due at law or in equity or partly at law and partly in equity and is payable either immediately or at a certain future time; and

(c)    the act of bankruptcy on which the petition is founded was committed within 6 months before the presentation of the petition.

13    Section 52 of the Bankruptcy Act relevantly provides:

52    Proceedings and order on creditor’s petition

(1)    At the hearing of a creditor’s petition, the Court shall require proof of:

(a)    the matters stated in the petition (for which purpose the Court may accept the affidavit verifying the petition as sufficient);

(b)    service of the petition; and

(c)    the fact that the debt or debts on which the petitioning creditor relies is or are still owing;

and, if it is satisfied with the proof of those matters, may make a sequestration order against the estate of the debtor.

…

(2)    If the Court is not satisfied with the proof of any of those matters, or is satisfied by the debtor:

(a)    that he or she is able to pay his or her debts; or

(b)    that for other sufficient cause a sequestration order ought not to be made;

it may dismiss the petition.

SATISFACTION OF S 52(1) BANKRUPTCY ACT

Matters stated in the creditors’ petitions

14    The matters to be proved are those requirements listed in s 43(1) of the Bankruptcy Act, being, in summary:

(1)    the debtor has committed an act of bankruptcy;

(2)    at the time when the act of bankruptcy was committed, the debtor was, among other things, personally present or ordinarily resident in Australia, or had a dwelling house or place of business in Australia; and

(3)    the creditor has presented a petition in respect of that act of bankruptcy.

15    For the reasons which follow, all of these requirements have been established.

Act of bankruptcy

16    The Official Receiver issued bankruptcy notices to each of the respondents pursuant to s 41 of the Bankruptcy Act.

17    The bankruptcy notice issued to Mr Johnston was for the total of $3,016,025.95 being $3,009,492.69 which was the subject of the order of Derrington J dated 30 January 2025 plus post-judgment interest in the amount of $6,533.26.

18    The bankruptcy notice issued to Mr Monks was for the total of $5,486,125.81 being $5,474,241.86 which was the subject of the order of Derrington J dated 30 January 2025 plus post-judgment interest in the amount of $11,883.95.

19    These amounts exceed the statutory minimum of $10,000 provided for in reg 10A of the Bankruptcy Regulations 2021 (Cth). In these reasons and for convenience, I will describe the amounts claimed in the bankruptcy notices which were served on each respondent as the judgment debts.

20    The bankruptcy notices were served by email on 3 March 2025 pursuant to reg 102 of the Regulations.

21    The respondents each filed an application in this Court to set aside their respective bankruptcy notices. On 22 May 2025, this Court made orders extending the time for compliance with each of the bankruptcy notices until 14 days after the determination of the respondents’ appeal from the decision of Derrington J.

22    On 3 September 2025, the applications for leave to appeal brought by the respondents were dismissed with costs.

23    The respondents did not comply with their respective bankruptcy notices within 14 days of the determination of the appeal.

24    As they failed to do this, the respondents each committed an act of bankruptcy pursuant to s 40(1)(g) of the Bankruptcy Act on 17 September 2025.

Territorial connection

25    As to s 43(1)(b) of the Bankruptcy Act, there is no dispute that the respondents were ordinarily resident in Australia at the time of the acts of bankruptcy.

26    The applicants have presented a petition in respect of each act of bankruptcy.

27    Sections 44(1)(a) and 44(1)(b) of the Bankruptcy Act relevantly require that there be owing by each respondent to the applicants, as petitioning creditors, a debt that amounts to the statutory minimum, which debt is a liquidated sum due at law and is payable immediately.

28    The debts required by ss 44(1)(a) and 44(1)(b) of the Bankruptcy Act are the judgment debts the subject of the bankruptcy notices and, as already observed, they exceed the statutory minimum.

29    As required by s 44(1)(c) of the Bankruptcy Act, the petitions were filed on 2 March 2026, within six months of the acts of bankruptcy. The applicants are not secured creditors.

Service of the petition

30    The respondents were each served with their respective petition. Each then filed a Notice of Appearance, lodging same for filing on 30 March 2026 through the same law firm which appeared at the hearing on 23 July 2026. By operation of r 10.11 of the Federal Court Rules 2011 (Cth), each creditor’s petition was taken to have been served personally on 30 March 2026.

Formal matters to be established by applicants

31    Section 43 of the Bankruptcy Act confers jurisdiction on the Court to make sequestration orders. For the reasons stated above, I am satisfied that each of the respondents committed an act of bankruptcy on the date alleged in the creditors’ petitions by failing to comply with the requirements of the bankruptcy notices.

32    For the reasons stated above, I am also satisfied that each creditor’s petition satisfies the requirements of s 44(1) of the Bankruptcy Act.

33    Furthermore, each of the creditors’ petitions is verified by an affidavit of Mr Karl Adolfsson lodged for filing on 27 February 2026. Mr Adolfsson is a person who knows the relevant facts in accordance with s 47 of the Bankruptcy Act.

34    A copy of each creditor’s petition is not attached to the verifying affidavits as contemplated by r 4.02(5) of the Federal Court (Bankruptcy) Rules 2016 (Cth). However, that is a formal defect only, and no substantial injustice has been caused by it, with the consequence that these proceeding are not invalidated: see s 306 Bankruptcy Act. See also Strata Plan 94402 v Chen, in the matter of Chen [2025] FCA 1071 at [83]–[84] (Stellios J); Winn v Boss Lawyers Pty Ltd [2022] FCAFC 156 (Charlesworth, Downes and Goodman JJ) at [88]–[92].

35    The requirements of s 52(1)(a) of the Bankruptcy Act are therefore satisfied.

36    For the reasons stated above, the creditors’ petitions were served on each of the respondents, and this was established by the evidence. This satisfies the requirements of s 52(1)(b) of the Bankruptcy Act.

37    There is no dispute that the respondents have not paid the judgment debts, and this was established by the evidence of Mr Adolfsson in his affidavits of 22 July 2026. This satisfies the requirements of s 52(1)(c) of the Bankruptcy Act.

38    The applicants filed affidavits of final search in satisfaction of r 4.06(3)(a)–(c) of the Federal Court (Bankruptcy) Rules). The applicants have also complied with rr 4.02 (noting the formal defect), 4.04, 4.05, 4.06(2) and 4.06(4) of the Federal Court (Bankruptcy) Rules.

39    It follows that the applicants have a prima facie right to a sequestration order.

WHETHER COURT OUGHT TO MAKE SEQUESTRATION ORDER

Grounds of opposition

40    The Court retains a discretion whether to make a sequestration order even when all of the jurisdictional requirements are established. This discretion is unfettered, and if the respondents seeks to satisfy the Court under s 52(2) of the Bankruptcy Act that there is some “other sufficient cause” to dismiss the creditor’s petition, they bear the onus of satisfying the Court of those matters: Bechara v Bates (2021) 286 FCR 166; [2021] FCAFC 34 at [27] (Allsop CJ, Markovic and Colvin JJ).

41    Of the grounds referred to in the Notices stating grounds of opposition, these appeared to remain pressed:

(1)    “The debt upon which the Applicants rely is founded entirely upon a default judgment obtained in the Federal Court of Australia on 30 January 2025 in proceeding QUD397/2024 (the Judgment). The Judgment was entered without any judicial determination of the merits of the underlying claim. There is a genuine and substantial dispute as to the existence and/or the quantum of the underlying debt”.

(2)    “The Court has jurisdiction and should exercise its discretion to ‘look behind’ the Judgment where that judgment was obtained without a hearing on the merits and there is a real and bona fide dispute as to the existence of the underlying debt, before making a sequestration order, pursuant to its powers under section 52 of the Bankruptcy Act 1966 (Cth)”.

(3)    “A sequestration order should not be made in the exercise of the Court’s discretion under section 52(2) of the Bankruptcy Act 1966 (Cth) because, in the circumstances where the merits of the underlying claim remain unresolved and are subject to a bona fide dispute, it would be unjust to proceed to a sequestration order”.

(Emphasis original.)

42    Before turning to those grounds, aspects of the procedural history of the proceedings in this Court will be addressed.

Manner in which respondents conducted themselves

43    The orders made on 30 January 2025 which gave rise to the judgment debts were made in proceeding QUD397/2024, which was commenced in July 2024 (first proceeding). In that case, the applicants claimed damages against the respondents for breaches of their statutory and fiduciary duties as directors in causing company funds to be misappropriated for their own benefit from a trust account of a law firm.

44    In addition to costs orders and interest, default judgment was awarded in respect of claims by:

(1)    the first applicant (Pieman) against both respondents, for their conduct in causing trust funds totalling $2,880,000 be paid to Mr Monks’ related entities (the Trust Account Transfers); and

(2)    the second applicant (HGM) against Mr Monks, for his conduct in misappropriating further sums totalling $2,358,695.75 by way of further payments to his related entities and unauthorised credit card expenses (the Other Monks Transfers).

45    The procedural history of the first proceeding is found at Pieman Resources Pty Ltd v Monks [2025] FCA 88 (Derrington J) at [4]–[38]. The respondents’ conduct was described by the judge in that proceeding as involving “contumelious or contumacious delay” and “bordering on bizarre”. His Honour also noted that “all this gives rise to an appearance that the defendants may be deliberately delaying the proceedings”: [37].

46    At [51]–[52], Derrington J stated:

In a similar vein, it should be observed that the conduct of the defendants in this case, if allowed to prevail by refusing to grant the relief sought, would seriously undermine ss 37M and 37N of the Federal Court Act. Those provisions exhort the parties and the courts to act as quickly, inexpensively and efficiently as possible, and that necessitates the efficient disposal of the Court’s process and proceedings in a timely manner: see Fraser-Kirk v David Jones Limited (2010) 190 FCR 325, 332–333 [26]. The conduct of the defendants in this case is the antithesis of those obligations, and, were it to be excused, the Court might as well put ss 37M and 37N to one side. That I do not propose to do. Part VB of the Federal Court Act does not, and should not be seen to, contain empty rhetoric: Kumova v Davison (No 2) [2023] FCA 1, [86].

…The delay is, as was said on 3 December, contumacious and contumelious. That was compounded by further delay and non-compliance, despite assurances of immediate compliance. The lack of any evidential foundation supporting a justification for the further non-compliance and delay is remarkable and significant. So too is the absence of evidence that the defendants made any real attempt to observe the timeframes imposed by this Court; timeframes that were, it should be noted, amended and extended for their benefit. The fact there has been some late minor attempt to comply is relevant; however, when considered in the broader context, it is not sufficient to dissuade the exercise of the discretion in r 5.23(2) of the Rules in this case.

47    On 11 February 2025, the respondents filed an application for leave to appeal.

48    On 3 March 2025, the applicants served separate bankruptcy notices upon the respondents in relation to their respective liabilities under the default judgment.

49    On 24 March 2025, the respondents each filed an application in this Court to set aside their respective bankruptcy notices. On 22 May 2025, this Court made orders extending the time for compliance with each of the bankruptcy notices until 14 days after the determination of the respondents’ appeal.

50    On 3 September 2025, the application for leave to appeal was dismissed: see Monks v Pieman Resources Pty Ltd [2025] FCAFC 121 (Halley, Meagher and Wheatley JJ). In that case, the Full Court referred to the procedural history at [5]–[19], and observed that:

(1)    “[t]he primary judge had earlier set out the background and the incidents of default at PJ [4]–[23]. His Honour’s description of the applicants’ default as contumacious and contumelious was a finding that was supported by the evidence of the history of the applicants’ disregard for the Court’s orders. That evidence provided a sufficient foundation for findings that the applicants’ conduct had been wilfully disobedient (that is, contumacious) and insolent (that is, contumelious)”: [49];

(2)    “[i]t is readily apparent that s 37M(1) [of the Federal Court of Australia Act 1976 (Cth)] provides that the two pillars necessary to facilitate a “just resolution of disputes” are that they be determined “according to law” and “as quickly, inexpensively and efficiently as possible”. In turn, s 37M(2) provides that one of five objectives that are included in the overarching purpose is “the just determination of all proceedings before the Court”. That specific objective necessarily must be evaluated against each of the other specific objectives identified in s 37M(2). The just resolution of disputes for the purposes of s 37M includes and encompasses the resolution of disputes as quickly, inexpensively and efficiently as possible”: [61];

(3)    “[d]elay inevitably leads to increased costs and a commensurate increase in both the emotional and financial strain of litigation. It imposes additional burdens not only on the parties to the proceeding but also on the limited and finite resources of the Court …”: [83];

(4)    “[t]he entry of default judgment in substantial sums against the applicants without a hearing on the merits does give rise to substantial injustice, but that injustice must be assessed against and tempered by the interests of justice in speed, efficiency and the minimisation of delay and expense, that are equally essential to the just resolution of proceeding, as explained in Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; [2009] HCA 27 at [98] and [114] (Gummow, Hayne, Crennan, Kiefel and Bell JJ), and as enshrined in the overarching principles, purposes and objectives enshrined in s 37M and s 37N of the [Federal Court of Australia Act] …”: [94].The respondents did not comply with their respective bankruptcy notices within 14 days of the determination of the appeal.

51    The respondents did not comply with their respective bankruptcy notices within 14 days of the determination of the appeal.

52    The creditors’ petitions were accepted for filing on 2 March 2026.

53    The creditors’ petitions were listed for hearing before a Judicial Registrar on 1 April 2026. By consent, the petitions were adjourned until 29 April 2026.

54    It was also ordered by consent that the respondent in each proceeding file and serve any Notice of grounds of opposition by 8 April 2026. That did not occur, with the respondents only filing such Notices on 17 April 2026.

55    The Registrar also ordered that the respondents each file and serve any affidavit in support by 27 April 2026. No affidavits were filed by the respondents before this date, even though it was stated that this would occur on the Notices themselves.

56    The creditors’ petitions were listed for hearing before a Judicial Registrar on 29 April 2026. By consent, the petitions were adjourned until 27 May 2026.

57    It was also ordered by consent that the respondents each file and serve any affidavit in support by 25 May 2026. No affidavits were filed by the respondents until 26 May 2026, being the day before the adjourned hearing date.

58    On 27 May 2026, orders were made by consent by a Judicial Registrar which included that the respondents file and serve submissions by 24 June 2026, with the matter being referred to the National Operations Registrar for allocation to a judge for hearing after 8 July 2026.

59    On 3 June 2026, the creditors’ petitions were listed by my chambers for hearing on 23 July 2026, and the parties were reminded by my chambers of the terms of the Order dated 27 May 2026, including that the respondents file and serve submissions by 24 June 2026.

60    No submissions were filed by the respondents by 24 June 2026.

61    Because of this failure, the matter was listed by my chambers for a case management hearing on 8 July 2026. At that hearing, the respondents sought these orders in each proceeding:

1.    Grant leave to the Respondent to file and serve by 8 July 2026 an interim application (the Interim Application) limited to the question of whether the Court should go behind the judgment on which the petitioning creditors relies.

2.    Extend the time to 8 July 2026 for the Respondent to file and serve submissions, including any submissions on the Interim Application.

3.    Extend the time to 17 July 2026 for the Applicant to file and serve submissions, including any submissions on the Interim Application.

4.    List the Interim Application for hearing before Downes J on 23 July 2026.

(Emphasis original.)

62    No explanation was offered by the respondents for their failure to comply with the Order of 27 May 2026. Because of this and because of their previous non-compliance with court orders in these proceedings, which was also not explained, I inferred that the respondents were seeking to delay the hearing of the creditors’ petitions for as long as possible, and I was not prepared to countenance a further delay in the hearing of the petitions. For these reasons, I declined to make the orders sought by the respondents, and indicated that the respondents could raise the issue of whether I should go behind the judgment debt at the hearing of the creditors’ petitions on 23 July 2026.

63    I also extended the date by which the respondents were required to file submissions to 10 July 2026 and indicated to the parties, including the respondents’ solicitor who was present for the entire hearing, that my chambers should be informed if any witness was required for cross-examination on 23 July 2026. My chambers received no such notification, and another matter was listed for hearing at 2pm on 23 July 2026 as a consequence.

64    In early July 2026, the respondents’ solicitors notified the applicants’ solicitors that no witness was required for cross-examination.

Application for separate hearing

65    The respondents filed joint written submissions on 10 July 2026, and submit that there are “sufficient special circumstances” such that this honourable Court should exercise its discretion to go behind the judgment upon which the applicants rely and that, once that discretion is engaged, either:

(1)    “given the applicants have advanced no evidence concerning the veracity of the debt, this honourable Court does not need to have a further evidentiary hearing to determine whether the petition debt is owing and it may dismiss the petitions with costs”;

(2)    “this honourable Court should fix an evidentiary hearing to go behind the judgment properly and determine the question of fact for itself, before proceeding to deal with the petition”.

66    The latter course was pressed by counsel at the hearing on 23 July 2026 who sought an adjournment of the hearing for the purposes of having that hearing.

67    Due to illness, new counsel was briefed to appear for the respondents on 23 July 2026; however, there was no suggestion that the counsel who appeared had insufficient time to prepare and present the respondents’ case. Rather, the reasons for seeking the adjournment were that, in the days immediately prior to the hearing, the replacement counsel had advised his instructing solicitor that Notices to Produce should be issued to the applicants, that he should “seek information as to the process used in the companies for the approval of payments” and that the respondents should require the applicants’ deponents to be made available for cross-examination.

68    As to the first matter, such a Notice was prepared and served in each proceeding, and the respondents sought that the documents in those Notices be provided and reviewed in preparation for the proposed “evidentiary hearing” to determine whether the debts were owing to the applicants. Those Notices were not served with the requisite five days’ notice, and were not complied with by the applicants. There was no explanation as to why the Notices had not been issued at an earlier time.

69    As to the second matter, an affidavit of Mr Hunt, who is the respondents’ solicitor, was filed in both proceedings on 22 July 2026. It related to the process used by the companies for the approval of payments, and it included evidence of a telephone discussion which Mr Hunt had at 12.30 pm that day with Mr Tony Tran who was the Chief Financial Officer of the applicants at the time of the transactions in paragraphs 28 and 29 of the Statement of Claim (that is, allegations relating to the Other Monks Transfers). That affidavit had not been filed by 27 April 2026 as required by the Order dated 1 April 2026, by 25 May 2026 as required by the Order dated 29 April 2026, or at least three days before the date fixed for the hearing of the petitions on 23 July 2026 as required by r 2.06 Federal Court (Bankruptcy) Rules. No leave was sought to rely upon it, and no affidavit material was filed to explain the non-compliance with the Orders of the Court and with r 2.06. There was no explanation as to why the step of gathering this evidence had not been taken at an earlier time. For these reasons, had leave been sought to rely upon the evidence of Mr Hunt, it would have been refused. In any event and as will be seen, it has not been necessary to have regard to its content.

70    As to the third matter, the applicants were only advised to have their witnesses available late on 22 July 2026, in circumstances where the applicants had been advised previously that their deponents were not required for cross-examination. I did not consider that this volte-face justified an adjournment in the circumstances, but indicated that, if I reached the stage of being satisfied that I should go behind the judgment debt, a second stage of the hearing (being the proposed “evidentiary hearing”) would take place at a later date. Any cross-examination could take place at that hearing.

71    The adjournment application was therefore declined. The hearing on 23 July 2026 was the third occasion on which the creditors’ petitions had been listed for hearing and an adjournment was not appropriate in circumstances where the petitions had been accepted for filing on 2 March 2026 (nearly five months earlier), the respondents had failed to comply with various Orders since that date (without any proper explanation or justification), and the respondents (who had been legally represented since at least March 2026) had been given ample opportunity to prepare for the hearing of the creditors’ petitions.

72    As for whether the petitions should be dismissed or there should be a separate hearing on the merits, that requires a determination of whether the circumstances are such that I should exercise my discretion to go behind the judgment upon which the applicants rely. It is to that issue that I now turn.

Whether other sufficient cause shown

73    By their submissions, the respondents submit there are “at least four special circumstances” in this case to justify going behind the judgment debt:

(1)    the entry of judgment by default, relatively early in the proceedings, without any hearing on the merits;

(2)    the making of orders and granting of monetary relief in favour of the third applicant, HML, where:

(a)    the basis for the allegations made by it was not pressed on the application for judgment; and

(b)    none of the monetary amounts ordered to be paid were referable to any claim or loss said to have been suffered by HML;

(3)    the subsequent issue of a bankruptcy notice and petition on the application of HML;

(4)    the very real question of fact concerning the applicants’ knowledge of, and possible assent to, the impugned transactions totalling more than $5 million.

74    It is convenient to deal with (1) and (4) together. The issues raised in (2) and (3) have already been addressed and would not, in any event, have prevented the orders being made as sought by Pieman and HGM.

Legal principles

75    In Kuksal v Victorian Legal Services Board (Appeal and Interlocutory Matters) [2026] FCAFC 65 (Beach, Shariff and Stellios JJ) at [79]–[82], the Full Court stated that:

Section 52(2)(b) provides for the Court to dismiss the creditor’s petition where there is “other sufficient cause” to not make the sequestration order. As Downes J explained at PJ [112], the Court:

…retains a discretion whether or not to make a sequestration order even when all of the jurisdictional requirements are established”. This discretion is unfettered, and if the respondents seeks to satisfy the Court under s 52(2) of the Bankruptcy Act that there is some “other sufficient cause” to dismiss the creditor’s petition, they bear the onus of satisfying the Court of those matters: Bechara v Bates (2021) 286 FCR 166; [2021] FCAFC 34 at [27] (Allsop CJ, Markovic and Colvin JJ).

As her Honour further explained at PJ [113]-[114], the scope of the discretion is a broad one and the Court may make a sequestration order even if the other sufficient cause is shown: relying on Toyota Finance Australia Limited v Berro [2022] FCA 497 at [33]–[34] and [37] (Burley J). In Toyota Finance, Burley J conveniently and correctly stated the applicable principles as follows at [33]–[37]:

The petitioning creditor has a prima facie right to a sequestration order once proof of the matters required by s 52(1) has been satisfied: Cain v Whyte [1933] HCA 6; 48 CLR 639 at 646 and 648 (Rich J, Starke, Dixon, Evatt and McTiernan JJ agreeing); Rozenbes v Kronhill [1956] HCA 65; 95 CLR 407 at 414 (Dixon CJ, Webb and [Fullagar] JJ).

Nevertheless, the Court retains a discretion to refuse such an order if the debtor is able to pay their debts (s 52(2)(a)) or for “other sufficient cause” (s 52(2)(b)). The onus is on the debtor, Mr Berro, to establish either or both of the preconditions. The circumstances which may constitute “other sufficient cause” are variable, and it is inappropriate to catalogue or circumscribe them: Clyne v DCT [1985] FCA 4; 5 FCR 1 at 5 (Fisher, Morling and Wilcox JJ); Liang v LV Property Investments Pty Ltd [2015] FCA 1057 at [52] (Beach J).

The requirement that the creditor prove that the debt relied upon is still owing will ordinarily be easier to fulfil in respect of a judgment debt, the judgment being prima facie evidence of the debt: Wolff v Donovan [1991] FCA 222; 29 FCR 480 at 487 (Davies J).

One relevant matter is that the Court has power to go “round the judgment”, to enquire into its subject matter, so as to satisfy itself that the creditor’s petition is founded on a “good debt”: Shaw v Yarranova Pty Ltd [2017] FCAFC 88; 252 FCR 267 at [16] (North, Perry and Charlesworth JJ). The scrutiny required by s 52, which includes consideration of “whether there is, in truth and reality, a debt owing to the petitioning creditor[,] serves to protect the interests of third parties, particularly other creditors of the debtor”: Ramsay Health Care Australia Pty Ltd v Compton [2017] HCA 28; 261 CLR 132 at [55] (Kiefel CJ, Keane and Nettle JJ).

Even if “other sufficient cause” has been shown, that merely enlivens the court’s discretion to refuse to make a sequestration order. “The power in s 52(2) is permissive, not mandatory. Even if a debtor can bring himself or herself within s 52(2)(b), that does not entitle him or her to have a sequestration order refused”: Endresz v Australian Securities and Investments Commission (No 2) [2015] FCAFC 33; 228 FCR 334 at [37] (Edmonds, Gordon and Beach JJ); Russell v Polites Investments Pty Ltd [2012] FCA 11 at [24] (Flick J); Liang at [53] (Beach J).

As pointed out in Toyota Finance at [34], it is inappropriate to catalogue or circumscribe the circumstances that may give rise to “other sufficient cause”. Those circumstances have said to include the Court, in appropriate circumstances, to “go behind” a judgment that gives rise to a debt: Liang v LV Property Investments Pty Ltd [2015] FCA 1057 at [52], [54]–[55] (Beach J). This may include, for example, circumstances where the judgment debt was obtained by default, procured or tainted with fraud or collusion or where there was an adjudication on the merits but where there are “substantial reasons” for questioning whether there is in substance a debt: Liang at [54].

Given the circumstances that may give rise to “other sufficient cause”, it is possible that in an appropriate case even where a bankruptcy notice has not been set aside on the basis that the relevant judgment debt is the subject of a pending appeal or the subject of some form of genuine dispute or counter-claim, the Court may be satisfied not to make a sequestration order.

(Emphasis omitted.)

76    In Lowbeer v De Varda (2018) 264 FCR 228; [2018] FCAFC 115, Reeves, Farrell and Colvin JJ set out the general principles at [53]–[58]:

On the hearing of a creditor’s petition, the court has a statutory duty to be satisfied for the purposes of s 52 of the Bankruptcy Act 1966 (Cth) as to the existence of the petitioning creditors’ debt. Therefore, on such an application, a judgment or order is never conclusive of the existence of a debt. Rather, the court must decide whether to accept the judgment or order as proof of the debt or to go behind the judgment or order (sometimes described as a discretion). Usually, a determination after a contested hearing will provide a practical guarantee of reliability that will mean that the court will not go behind the judgment or order. The court looks with suspicion on consent judgments and default judgments. However, all depends upon the circumstances. If the court is persuaded to go behind the judgment or order then it will investigate the debt upon which the creditor’s petition is based. For a creditor’s petition to be dismissed on the basis that in truth and reality there is no debt behind the judgment, there must first be a proper basis to exercise the discretion to go behind the judgment and then an assessment that, in truth and reality, there is no debt. These are separate questions that might be determined separately. As to these matters, see the judgment of Kiefel CJ, Keane and Nettle JJ in Ramsay Health Care Australia Pty Ltd v Compton (2017) 261 CLR 132 at [16], [37]-[38], [65]-[71].

The test or standard to be applied in deciding whether to accept a judgment order as proof of the debt for the purposes of a petition for sequestration orders has been variously expressed.

In Petrie v Redmond [1943] St R Qd 71 at 75-76, Latham CJ (with whom Rich and McTiernan JJ agreed) said that “special circumstances” must be established. In Corney v Brien (1951) 84 CLR 343 at 347, the plurality quoted with approval a passage in Re a Debtor [1929] 1 Ch 125 at 127 in which it was said that the court may, “upon a prima-facie case being shown, go behind a judgment for the purpose of satisfying itself” that there was a real debt (see also [Fullagar J] in Corney v Brien at 356-357). In Ramsay Health Care at [20], the plurality quoted with apparent approval a passage from Wren v Mahony (1972) 126 CLR 212 at 224-225 in which Barwick CJ said that the discretion to accept the judgment as proof is not well exercised where there are “substantial reasons” to go behind it, but in an earlier passage (also quoted in Ramsay Health Care at [42]), Barwick CJ referred to going behind a judgment “where reason is shown”.

The plurality in Ramsay Health Care accepted the argument for the respondent that the Court should go behind a judgment where “sufficient reason is shown for questioning whether behind the judgment there is in truth and reality a debt due to the petitioning creditor”: at [37]-[38]. Edelman J in a separate judgment supporting the result referred to authorities where courts exercising bankruptcy powers had been “extremely cautious” before going behind a common law judgment: at [108]-[109]. His Honour said that “in the absence of some evidence of fraud, collusion, or miscarriage of justice, a court exercising bankruptcy jurisdiction will rarely have substantial reasons to investigate whether the debt which merged in the judgment is truly owed”: at [111].

However, there appears to be no magic in any of these formulations. As [Fullagar J] said in Corney v Brien at 356, “[n]o precise rules exist as to what circumstances call for an exercise of the power”. That is because in each case there must be a contextual consideration as to whether, for the purposes of s 52 of the Bankruptcy Act, the debt has been proven…

(Emphasis added.)

77    In Doggett v Commonwealth Bank of Australia [2019] FCAFC 19, Kerr, Davies and Thawley JJ stated at [31]–[34]:

While the debtor carries the onus of proof in establishing that there is “other sufficient cause”, a narrow construction of that expression should not be applied. Thus in Ling v Enrobook [1997] FCA 226; 74 FCR 19 a Full Court of this Court (Davies, Wilcox and Branson JJ) reasoned, inter alia, that (at 24):

…[i]t is the duty of the Bankruptcy Judge to examine in each case, if the question is raised, whether there is other sufficient cause than the fact that the debtor is able to pay his debts in full, for refusing to make an order.

Any doubt regarding the breadth of that proposition was dispelled by the recent decision of the High Court of Australia in Ramsay Health Care Australia Pty Ltd v Compton [2017] HCA 28; 261 CLR 132 … where the plurality (Kiefel CJ and Keane and Nettle JJ) held:

68    For the purposes of s 52 of the Act, a judgment may usually be taken to be sufficient evidence of a debt in that a judgment against a debtor in favour of a creditor obtained after a trial is, generally speaking, a reliable indication of the true state of indebtedness as between creditor and debtor. Indeed, such a judgment can usually be expected to provide the most reliable statement of the debt humanly attainable because the ordinary processes of the adversarial system provide a practical guarantee of reliability. The testing of the relative merits of a claim and counterclaim under the rigours of adversarial litigation will usually establish the true state of accounts as between the parties to the proceedings. Accordingly, a Bankruptcy Court will usually have no occasion to investigate whether the judgment debt is a true reflection of the real debt. But where the merits of a claim and counterclaim have not been tested in adversarial litigation, a judgment debt will not have this practical guarantee of reliability.

69    In Petrie v Redmond, Latham CJ, with whom Rich and McTiernan JJ agreed, said that the Bankruptcy Court:

“is entitled to go behind the judgment and inquire into the validity of the debt where there has been fraud, collusion or miscarriage of justice. … Also the court looks with suspicion on consent judgments and default judgments. … The Bankruptcy Court does not examine every judgment debt. Special circumstances must be established before it will do so. It is impossible to lay down any general rule.”

70    The first two sentences of that passage were cited with evident approval by Dixon, Williams, Webb and Kitto JJ in Corney v Brien. The passage was explicitly concerned with consent judgments and default judgments. As a matter of practical experience, these are the sorts of cases in which third parties can be expected to be disadvantaged by the making of a sequestration order based on a judgment which was not the outcome of the rigorous processes of adversarial litigation. The same concern may also arise in a case where the judgment was obtained in circumstances which suggest a failure on the part of the judgment debtor to present his or her case on its merits in the litigation that led to the judgment.

71    In the present case, the unexplained failure by Medichoice and Mr Compton to present and rely upon evidence of the kind on which the “reconciliation” is based before the trial in the Supreme Court is consistent with the possibility that the present was such a case. To say this is not to say that a suspicion of inadequate representation is of itself sufficient to give rise to a question worthy of investigation by a Bankruptcy Court. But in this case, there was evidence before the primary judge which, while it remained uncontradicted, was apt to suggest that the debt was not truly owing; and as noted above, the primary judge did not consider that this evidence was not adduced in good faith. If it were the case that this evidence was not adduced by reason of a failure on the part of Mr Compton or those representing him and Medichoice in the Supreme Court to present their case on its merits that failure should not enure to the disadvantage of persons who were not parties to those proceedings. Third parties, such as Mr Compton’s creditors, should not have been prejudiced by the making of a sequestration order with that question unresolved.

(Footnotes omitted.)

The breadth of what might constitute “other sufficient cause” extends beyond fraud, collusion and miscarriage of justice. It must be accepted that a decision, for example made in per incuriam of a binding decision or a statutory rule which makes a debt unenforceable, there would be sufficient cause to do so. …

However the High Court’s reasoning is not a warrant for the automatic re-litigation of propositions not advanced in the principal proceedings. A merely colourable point that may have been taken in prior litigation but was not will not, in our opinion, suffice to put in issue whether there “is in truth or reality” a debt upon which a person’s sequestration has been sought.

78    It is relevant to have regard to the manner in which the respondent to a petition conducted the proceedings in which the default judgment was entered. For example, a respondent’s complaints of having been denied a hearing on the merits carries less weight when that outcome is a consequence of their own actions, and when, but for their conduct, the merits of the claim brought against them, and more significantly their defence of that claim, would long ago have been heard and determined: see Richardson v Leonard Cohen & Co [2008] FCA 1392 (Gilmour J) at [49].

Consideration

79    The improper conduct of the respondents in the first proceeding is inconsistent with the conduct of a party which has a genuine and bona fide defence to a claim, and was the reason that they were denied a hearing on the merits. That improper conduct continued in these proceedings. The respondents failed to comply with court Orders (without any cogent explanation) and, after the creditors’ petitions were set down for hearing, sought leave to file an interim application for a separate hearing, with such application to be determined and then, if successful, an “evidentiary hearing” held before the hearing of the creditors’ petitions. Such an interim application could have been brought on at any time from March onwards, but it was not — again, without proper explanation.

80    Leaving aside the conduct of the respondents, it is also relevant to have regard to the evidence relied upon by the respondents in these proceedings, when viewed in the context of the case they advanced in the first proceeding.

81    It is common ground, based on the pleadings in the first proceeding and the affidavits filed in these proceedings, that:

(1)    Mr Monks and Mr Johnston were appointed as directors of Pieman on 12 September 2022 and 20 September 2022 respectively and owed statutory and fiduciary duties to Pieman in that capacity;

(2)    at that time, Pieman held an interest in funds which were held in a McCullough Robertson Lawyers trust account totalling at least $2,880,000, which funds were sourced from Pieman’s sale of mining assets;

(3)    between 21 September 2022 and 15 November 2022, the Trust Account Transfers totalling $2,880,000 were paid from the McCullough Robertson Lawyers trust account by way of:

(a)    a payment of $100,000 to Corporate Hustle Pty Ltd (Corporate Hustle) on 21 September 2022; and

(b)    three payments totalling $2,780,000 to Wilson Street Capital Pty Ltd (Wilson Street Capital) between 21 September 2022 and 15 November 2022;

(4)    Mr Monks was the director and sole shareholder of Corporate Hustle, and director and a 34% shareholder of Wilson Street Capital;

(5)    the respondents in their capacity as directors of Pieman executed trust account authorities directing McCullough Robertson Lawyers to make the Trust Account Transfers;

(6)    the trust account authorities described the transfers as payments of “intercompany loans”, but they were not in fact repayments of any loans owed by Pieman to Corporate Hustle and Wilson Street Capital;

(7)    no repayment terms were ever entered into, and no attempt was made to recover any portion of the Trust Account Transfers from Mr Monks’ related entities;

(8)    on 17 April 2024, Pieman issued a demand to each of Corporate Hustle and Wilson Street Capital.

82    By their defence in the first proceeding, the respondents alleged that:

(1)    at the time the Trust Account Transfers were made, amounts were due and owing by a related entity of Pieman, being Ivy Resources Limited (Ivy), to Corporate Hustle and Wilson Street Capital [noting that Ivy was the sole shareholder of Pieman];

(2)    the Trust Account Transfers were consented to by the board of Pieman, HGM and HML by way of a circular resolution;

(3)    the respondents believed that the Trust Account Transfers were made by and on behalf of Ivy;

(4)    the Trust Account Transfers were payments of amounts owing to Corporate Hustle and Wilson Street Capital by Ivy;

(5)    the Trust Account Transfers were requested by the board of Ivy and approved by the board of Pieman;

(6)    the Trust Account Transfers were used for the benefit of the “Corporate Group” comprised of the applicants, Ivy, EV Equity Holdings Pty Ltd (EV) and Keen Pacific Ltd (Keen) at the “direction of the Board and Management at each level”.

83    In short, the respondents’ central contention in their defence is that Ivy (the holding company of Pieman) owed money to Corporate Hustle and Wilson Street Capital, that the Trust Account Transfers were made in payment of the amounts owing by Ivy, and that the board of Pieman consented to the Trust Account Transfers. However, these contentions are not supported by any affidavit evidence relied upon by the respondents in these proceedings in circumstances where they were not the only directors of Pieman at the time of the transfers.

84    Instead, Mr Monks’ affidavit in these proceedings gives a different narrative of the events concerning the parameters of the transaction which involved the $2.88 million payments. He deposed to the effect that:

(1)    NQ Minerals NL (NQM) was the holding company of a group of companies which owned the Hellyer gold mine in Tasmania;

(2)    NQM was in administration;

(3)    NQM owned all of the shares in a company registered in the British Virgin Islands called Keen;

(4)    Keen owned all of the shares in Ivy which in turn owned all of the shares in Pieman and HGM;

(5)    from about May 2022, Mr Johnston caused the Hellyer Gold Mines Trust No 1 (HGMT1) to be established to acquire either the Hellyer Mine or shares in the entities that owned it. EV (which was established by Mr Johnston and of which he was a director) was trustee of HGMT1;

(6)    on 4 July 2022, EV as trustee of HGMT1 entered a share purchase agreement to purchase all of the shares in Keen thereby acquiring the group of companies consisting of Keen, Ivy, Pieman and HGM (Keen Purchase Agreement). The Keen Purchase Agreement was not in evidence although one would expect that Mr Johnston would have it in his control as it was his company as trustee for the trust which entered it. It is also referred to as being varied;

(7)    “WSC” (which I assume is intended to be a reference to Wilson Street Capital), a company of which Mr Monks was a director, was engaged under a “mandate agreement” to raise funds from investors and manage those funds, including for the purpose of purchasing the shares under the Keen Purchase Agreement. The person or entity who “engaged” Wilson Street Capital is not identified by Mr Monks and nor is it explained what a “mandate agreement” is intended to be, or what its terms were. No copy of any written agreement is in evidence;

(8)    Mr Johnston and Mr Monks met with Mr Karl Adolfsson, and they came to an “Overall Agreement” on an unidentified date, which is said to be an oral agreement, with various agreed terms which affected entities described as the “Hellyer Entities” which included Pieman. No file notes, emails or documents are provided by the respondents to support any aspect of the “Overall Agreement”, and Mr Monks does not depose that they were directors of Pieman at the time that this agreement was entered, or that any other directors of Pieman were party to or knew about this “Overall Agreement”;

(9)    on 4 August 2022, NQM transferred all of the shares in Keen to EV as trustee of HGMT1, which meant that it became the holding company of entities described as the “Hellyer Entities” which included Pieman;

(10)    prior to payment of the purchase price under the Keen Purchase Agreement, the administrator of NQM handed over management control of the “Hellyer Entities” to the nominee of EV. Mr Monks states that his company, Corporate Hustle, and he were “engaged to manage the Hellyer Mine [but not the Hellyer Entities] and incurred costs and expenses in doing so pursuant to a management agreement”. The entity or person which “engaged” them and the terms of the “management agreement” are not identified;

(11)    Mr Monks then deposes that “[i]n partial compliance with the Overall Agreement”, various things happened including that HML was incorporated and that he and Mr Johnston became board members of the Hellyer Entities. How they became board members is not explained, and nor is the role of the existing directors of those companies addressed.

85    As to the circumstances around the payments out of the trust account, Mr Monks’ affidavit states that (using the words taken from Mr Monks’ affidavit):

(1)    “Prior to the Keen Purchase Agreement, [Pieman] had sold its interest in the Beaconsfield mine, and part of the proceeds from that sale was [$2.88 million] that was in the solicitor’s trust account of McCullough Robertson”.

(2)    “As the assets of [Pieman] were now part of the wholly owned group under the control of EV, those assets were held by [Pieman] for the benefit of the then beneficiaries of HGMT1. I considered the [$2.88 million in the solicitor’s trust account] could be used to provide to [Wilson Street Capital] as the manager of the Transactions, but on behalf of EV, to pay to NQM part of the instalments of the purchase price under the Keen Purchase Agreement. At the time there were also payments due to [Corporate Hustle] for management of the Hellyer Entities”.

(3)    “On or about 14 November 2022 the directors of [Pieman] directed McCullough Robertson to pay $100,000 to [Corporate Hustle] for management fees of the Hellyer Entities [not the Hellyer Mine] and $2,780,000 held for [Pieman] as a wholly owned subsidiary of EV to [Wilson Street Capital] for the purpose of paying those funds to NQM as part of the purchase price under the Keen Purchase Agreement. At this time Mr Adolfsson was a director of EV and was aware of and approved [these] payments”.

86    As to the circumstances around the payment out of the trust account, Mr Johnston’s affidavit gives similar evidence, although instead of (2) above, he deposes:

As the assets of [Pieman] were now part of the wholly owned group under the control of EV, these assets were held by [Pieman] for the benefit of the then beneficiaries of HGMT1. I considered the provisions of section 260A of the Corporations Act 2001 and determined that the [$2.88 million in the solicitor’s trust account] could be used to provide to [Wilson Street Capital] as the manager of the Transactions, but on behalf of EV, to pay to NQM part of the instalments of the purchase price under the Keen Purchase Agreement. At the time there were also payments due to [Corporate Hustle] for management of [the] Hellyer Entities.

(Emphasis added.)

87    Both Mr Monks and Mr Johnston refer in their affidavits to the defence being filed on their behalf by their then solicitor, but make no attempt to reconcile the pleaded case to the events described in their affidavits, or to explain how it came to be that the defence was filed in terms which differ so markedly from their evidence in this proceeding.

88    Rather, the respondents appear to contend by their written submissions that their evidence is consistent with their defence, and submit that “[t]he principal factual matter that it appears would have been in dispute, had the matter progressed to trial, was the nature and extent of Mr Adolfsson [sic] involvement in EV and HGM and more particularly, whether he know [sic] about and consented to the impugned payments in the statement of claim”.

89    However, Mr Adolfsson is not referred to in the defence filed in the first proceeding, and (contrary to the written submissions of the respondents that Mr Adolfsson was at all times a director of all relevant entities) he was not a director of Pieman or HGM at the time of the Trust Account Transfers. The respondents have therefore failed to identify how, even if Mr Adolfsson consented to the payments out of the trust account, this could have any legal relevance to the issue of whether Pieman knew of, and assented to, those payments at the time that they occurred.

90    There are other serious defects with the respondents’ (new) posited case, namely:

(1)    the lack of sufficient detail in the affidavits of Mr Monks and Mr Johnston. In circumstances where they were sued in July 2024 (two years ago) and the creditors’ petitions were accepted for filing on 2 March 2026 (nearly five months ago), one would have expected to see more detail around the events described by them as opposed to the vague chronology of events which has been provided in the affidavits (in almost identical terms);

(2)    the failure of Mr Monks and Mr Johnston to identify and annex to their affidavits the two documents which were tendered and which became “MFI-1” and “MFI-2”, as objection was taken to their tender by the applicants. The authenticity of these documents was not established. They are not admitted into evidence for that reason. Even if they had been admitted, I would not have placed any weight on them for the same reasons;

(3)    the lack of any admissible documentary evidence which supports the existence of any of the factual events referred to in their affidavits. Such lack cannot be attributed solely to documents being in the possession of liquidators or of the applicants as was submitted by the respondents who, in any event, do not explain in their affidavits that they do not have access to documents which relate to their version of events or any attempts made, or difficulties faced, by them in obtaining such documents prior to the late attempt to obtain documents through the service of the Notices to Produce on the applicants.

91    The respondents complain that no evidence was adduced by the applicants to contradict the evidence of Mr Monks and Mr Johnston other than evidence which was a bare assertion of the debts being owing, and that it would have been a simple matter for the applicants to adduce evidence, including documentary evidence, to establish that the debts were, in truth and substance, due and owing.

92    However, in circumstances where the evidence adduced by the respondents is so deficient, and contradicts the pleaded defence in the first proceeding; where the applicants had been advised that no witness was required for cross-examination; and where the position pressed by the applicants is that I should decline to go behind the judgment, the applicants cannot be criticised for failing to engage in a dispute on the merits.

93    For these reasons, I am not persuaded that the evidence raises a “very real question of fact concerning the applicants’ knowledge of, and possible assent to, the impugned transactions” (being one of the “special circumstances” which the respondents contend justify going behind the judgment debt). Rather, at best for the respondents, the evidence raises a merely colourable point that may have been taken in prior litigation but was not, which is insufficient.

94    It follows that I am not persuaded that sufficient reason has been shown by the respondents for questioning whether behind the judgment there is in truth and reality a debt due by each of the respondents to Pieman and HGM. As each debt exceeds the statutory minimum, it is unnecessary to consider the judgment entered against Mr Monks relating to the Other Monks Transfers.

95    Thus, the respondents have failed to demonstrate that for other sufficient cause a sequestration order ought not to be made.

CONCLUSION

96    For these reasons, the estates of Rodger Stuart Johnston and Bradley Robert Monks will be sequestrated with the act of bankruptcy noted as being 17 September 2025. Mr David James Hambleton has consented to being appointed as the trustee of both estates, and he will be so appointed. Costs should follow the event and be treated as costs of the administration of the bankrupt estate.

Associate:

Dated:    3 August 2026