Federal Court of Australia

Chen v Strata Plan 94402 (No 2) [2026] FCA 1636

ORDERS

THE COURT ORDERS THAT:

1.    The appellant’s interlocutory application filed on 17 August 2026 is dismissed.

2.    The appellant pay the first respondents’ costs of the application as agreed or assessed.

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

REASONS FOR JUDGMENT

KENNETT J:

1    The background to this appeal was briefly set out in an earlier interlocutory judgment published on 19 May 2026: Chen v Netstrata Pty Ltd [2026] FCA 621.

2    After that judgment was delivered, Mr Chen filed an amended notice of appeal on 2 June 2026. A case management hearing took place on 22 July 2026 at which counsel appeared pro bono for Mr Chen and informed the Court that a further amended notice of appeal was to be filed. Timetabling orders were made for the filing of this document and for the filing and determination of any applications for a stay of the sequestration order or security for costs. However, counsel ceased to act for Mr Chen after this hearing and Mr Chen has continued to conduct the proceeding without representation.

3    Mr Chen filed a further interlocutory application on 17 August 2026 (the 17 August application), seeking the following orders.

1.    r 30.01 the question determined separately from, and before, all other questions

(a)    Was the creditor’s petition filed in NSD974/2023 verified by an affidavit of a person who knew the relevant facts as mandated in s 47(1) Bankruptcy Act ? [See [27], [51] - [56] affidavit of Chen 15 Aug 2026]

2.    if above question is answered adversely to the First Respondent, the Court find the 28 Nov 2023 sequestration order ought not to have been made s 153B(1)

3.    if above question needs the Full Court, the sequestration order be stayed until the appeal is fully heard

(Emphasis in original.)

4    At a case management hearing on 3 September 2026, I made orders for the filing of evidence and written submissions on the 17 August application and for that application to be determined on the papers.

5    At that hearing, the first respondent foreshadowed the filing of an interlocutory application seeking summary judgment in respect of the amended notice of appeal or alternatively an extension of time to object to the competency of the appeal. Such an application was filed on 29 September 2026 (the dismissal application).

6    Initially I took the view that any questions as to the determination of a separate question or a stay should be addressed only if the appeal remains on foot after considering the dismissal application. However, on further reflection, I consider that it is appropriate to deal with the 17 August application first as the relief that it seeks involves a stay. These reasons explain why I have decided that that application should be dismissed.

7    Although there is no express provision in the Federal Court Rules 2011 (Cth) for the determination of separate questions in an appeal, procedures of this kind are sometimes adopted: see eg MJZP v Director-General of Security [2026] FCAFC 127. However, there is not a sufficient basis for taking this course in the present case for the following reasons.

8    First, Mr Chen’s submissions do not explain how resolution of the issue would determine the outcome of the appeal or determine any issues in a way that would make a substantive hearing unnecessary. The issue sought to be raised is whether the creditor’s petition in the present case was verified by an affidavit of a person “who knows the relevant facts” for the purposes of s 47(1) of the Bankruptcy Act 1966 (Cth). However, if that question were answered negatively, it is far from obvious that the result would be the setting aside of the sequestration order which was the subject of the proceeding below. Presentation of a creditor’s petition is merely the first step in a curial process that leads to the adducing of evidence and the making (or refusal to make) a sequestration order by this Court. Parliament is unlikely to have intended that the revelation, after the event, that the person verifying the petition did not “know” the relevant facts (or some of those facts) would set the entire process at nought.

9    Secondly, the issue now sought to be determined separately was not agitated at first instance and is not relevant to any of the grounds of appeal advanced in Mr Chen’s amended notice of appeal.

10    Thirdly, at least on the material to which I have been referred, the issue would have to be decided adversely to Mr Chen. The affidavit in question was sworn by Ms Samantha Antipas on 7 September 2023, who deposed that she was authorised to make the affidavit on behalf of the first respondent and that she had inspected its books and records in so far as they related to Mr Chen. He did not object to the affidavit or seek to cross-examine Ms Antipas as to the sources or extent of her knowledge. There is no application to adduce fresh evidence in the appeal. There is therefore no realistic prospect of the Full Court finding that s 47(1) was not complied with.

11    Fourthly, even assuming the issue to be arguable, it has not been shown that it would be more efficient for it to be argued and decided first than for the whole of the appeal to be dealt with in a single sitting.

12    Prayer 1 in the 17 August application must therefore be dismissed. Prayer 2 therefore falls away.

13    Prayer 3 in the 17 August application seeks a stay of the sequestration order “if [the] above question needs the Full Court”. That condition is necessarily satisfied in respect of a substantive issue sought to be agitated in an appeal from a judgment of a single judge of the Court.

14    Mr Chen’s submissions in support of a stay consist of a single sentence observing:

While the sequestration order stands, I cannot seek recovery.

15    The first respondent is equally brief. Its written submissions simply assert that there is “no basis to stay the sequestration order”.

16    The sequestration order was made on 28 November 2023 by a registrar and was not stayed (or sought to be stayed) during the proceeding below in which Mr Chen attempted to have the order set aside. Mr Chen is not seeking to stay the judgment under appeal (which would in any event make no sense, because that judgment merely dismissed Mr Chen’s applications), but to stay the order that was the subject of that judgment. Such an application should have been made promptly and in the original jurisdiction, rather than more than two years later and in the course of an appeal. Additionally, Mr Chen’s submissions do not explain why a stay is necessary: it is not submitted, for example, that further action pursuant to the sequestration order will cause him prejudice that could not be remedied in the event his appeal succeeds.

17    For these reasons, the application for a stay is refused. It is not necessary to go into what appears to be an unresolved issue as to whether the Court has power to stay a sequestration order made by a registrar as distinct from staying further proceedings pursuant to such an order (as to which see Ritson v Commissioner of Police (NSW) [2021] FCAFC 208 at [58]-[66] (Allsop CJ, Lee and Downes JJ)).

18    The 17 August application must therefore be dismissed. The first respondent seeks its costs of the application and there is no reason why such an order should not be made.

Associate:

Dated:    30 October 2026