Federal Court of Australia

Storey, in the matter of Britton v Britton (No 2) [2026] FCA 1592

ORDERS

THE COURT ORDERS THAT:

1.    The Applicants Creditors’ Petition be adjourned for hearing until 10.15am 22 October 2026 with a reserve day of 26 October 2026 (Hearing).

2.    By 4.30pm 12 October 2026, the First Respondent file and serve:

(a)    a Notice of Grounds of Opposition (rule 2.06(b) of the Federal Court (Bankruptcy) Rules 2016 (Cth) in Form B5);

(b)    any affidavits sought to be relied on at the Hearing;

(c)    an outline of submissions and List of Authorities; and

(d)    any other applications she wishes to be heard at the Hearing.

3.    The Second Respondent is granted leave to file the Notice of Grounds of Opposition dated 7 September 2026.

4.    By 4.30pm 12 October 2026, the Second Respondent file and serve:

(a)    any affidavits sought to be relied on at the Hearing;

(b)    an outline of submissions and List of Authorities; and

(c)    any other applications he wishes to be heard at the Hearing.

5.    By 4:30pm 16 October 2026, the Applicants file and serve:

(a)    any further affidavits; and

(b)    an outline of submissions and List of Authorities.

6.    By 4:30pm 20 October 2026, the First Respondent and the Second Respondent each file and serve, strictly in reply:

(a)    any affidavits; and

(b)    any further outline of submissions and List of Authorities.

7.    By 4:30pm 21 October 2026:

(a)    the Applicant Creditors file and serve:

(i)    any further affidavit of debt; and

(ii)    any affidavit of search;

(b)    the Supporting Creditors file and serve any further affidavits.

8.    Should any party not file and serve their material in accordance with these Orders, such material will not be available to that party without leave of the Court (and without a proper explanation and material to support that explanation).

9.    Costs reserved.

THE COURT NOTES THAT:

1.    The Respondents’ oral application for an adjournment of the hearing of the Creditors’ Petition was allowed. Several grounds for that adjournment were advanced, including that the Respondents were solvent.

2.    Further timetabling Orders are necessary to facilitate a proper and just hearing of the Creditors’ Petition. These Orders will also include (pursuant to r 39.04(1) of the Federal Court Rules 2011 (Cth)) the provision of a List of Authorities which should also include any judgments of any proceedings which are claimed to be related and/or relevant.

3.    Parties may appear in-person or via videolink at the hearing of the Creditors’ Petition on 22 and 26 October 2026. Each of the First Respondent and the Second Respondent have said they are available on 22 and 26 October 2026.

4.    Any party who wishes to rely on any material (including affidavits, submissions or orders) from any other Court must file and serve that material in this proceeding QUD233 of 2026. If such material is not filed and served in this proceeding, it will not be available to be relied on in this proceeding, without leave of the Court (such application for leave will need to be supported by proper evidence, including an explanation as to why there has not been compliance with the Court’s Orders).

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

REASONS FOR JUDGMENT

Delivered ex tempore, revised from transcript

WHEATLEY J:

1    The Creditors’ Petition is listed today for hearing. That is pursuant to Orders of the Court of 10 August 2026 (August Order). As well as setting the hearing, the August Order also timetabled matters to be filed and served by each of the First Respondent and Second Respondent, as well as the Applicant Creditors in response. The August Order also expressly provided that material that is not filed in accordance with those Orders would not be available at this hearing without the leave of the Court. The First and Second Respondents have each not complied with those orders. The Second Respondent did seek leave to file and rely on a document headed Orders Sought and submissions by him, a self-represented party, as well as a Form B5 Notice Stating Grounds of Opposition to the application. That is a document which is required by the Federal Court (Bankruptcy) Rules 2016 (Cth): see r 2.06.

2    A number of issues have been raised by each of the First Respondent, Ms Britton and the Second Respondent, Mr Britton in seeking an adjournment of the hearing of the Creditors’ Petition today. There is, in fairness, a paucity of evidence to support that adjournment application. However, it is appropriate to describe it in this way because I am minded to grant the adjournment for the following reasons.

3    Fundamental to this proceeding is that it is bankruptcy proceedings, and hence any sequestration order should not be made against the estate of a person who is solvent: see generally Culleton v Balwyn Nominees Pty Ltd (2017) 343 ALR 632; [2017] FCAFC 8 at [40]-[41] (Allsop CJ, Dowsett and Besanko JJ) and Francis v Eggleston Mitchell Lawyers Pty Ltd [2014] FCAFC 18 at [51] (Rares, Flick and Bromberg JJ). Proceedings under the Bankruptcy Act 1966 (Cth) should not be used as a mere form of debt collection. As Allsop CJ said in Hutchings v Australian Securities and Investments Commission [2017] FCA 858 at [4]:

…the jurisdiction is not about debt collection; it is about the change of status of insolvent persons. The question of solvency or insolvency is at the root of the jurisdiction.

4    The second observation made by Allsop CJ in emphasising the matters which are central to the bankruptcy jurisdiction was, that it is not just an economic consideration, but there are human consequences that attend the change of status and which changes lives of the people who are made bankrupt. Those observations have particular relevance in the circumstances of this case and on this particular adjournment application.

5    On the material that is before me, it is clear that there have been proceedings in the Supreme Court of Queensland BS 10922 of 2024 involving the Applicant Creditors and the First and Second Respondents. There have also been subsequent proceedings in the Court of Appeal, notably in matter number 3008 of 2025. The judgment debts which are relied upon for the act of bankruptcy and which were attached to the bankruptcy notice relied on in support of the Creditors’ Petition, each appear on the face of them to derive from the Supreme Court proceeding and the Court of Appeal proceeding, respectively. Each are costs orders, in those proceedings, which have been quantified.

6    Marked as MFI “A” is an affidavit of the First Respondent, Ms Britton, which does provide some material said to support the claim of solvency of the Respondents. That is also broadly consistent with ground 8 of the Notice Stating Grounds of Opposition of the Second Respondent, Mr Britton. Although neither Mr Britton nor Ms Britton has provided sworn evidence in these proceedings as to that solvency, they did offer to now enter the witness box and give evidence in relation to their claimed solvency.

7    On the basis of the material that is currently before me, I am unable and would be unable to reach a concluded view as to that claim of solvency. However, given the consequences of bankruptcy, again particularly noting the observations of Allsop CJ, I am minded to grant a short adjournment for the Respondents to put on material to support their claim that they are, in fact, solvent. Of course, such material would be relevant to the exercise of the discretion under s 52(2) of the Bankruptcy Act. Even if the statutory preconditions under s 43 and s 52 of the Bankruptcy Act were satisfied, there remains a residual discretion that the Creditors’ Petition could be dismissed under s 52(2) of the Bankruptcy Act.

8    Given the consequences of making the First and Second Respondents bankrupt, I am minded to grant a short adjournment so that proper material can be put before the Court. In these short reasons, I have not expressly dealt with all of the arguments that were put forward for the adjournment however, I have considered those matters. In my view, the strongest argument that was put forward was the one in relation to solvency and that bankruptcy proceedings are not to be used by way of debt collection. The Respondents will be given one more opportunity to file and serve proper material supporting their contentions, including that they are solvent.

9    As such, Orders will be made for the Creditors’ Petition to again be listed for hearing within a reasonably short period of time. Further timetabling orders for the parties to file and serve material in relation to the hearing of that application, will also be made and on that hearing (baring the unforeseen) the Creditors’ Petition will be determined one way or another.

Associate:    

Dated:    23 October 2026