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Lavan Legal v Kenyon [2017] FCCA 2529 (20 October 2017)

Last Updated: 23 October 2017

FEDERAL CIRCUIT COURT OF AUSTRALIA

Cases cited: Bulic v Commonwealth Bank of Australia Ltd [2007] FCA 307; (2007) 5 ABC(NS) 122 C2C Investments Pty Ltd, in the matter of C2C Investments Pty Ltd v Leigh (No 3) [2012] FCA 680 Cassimatis & Anor v Australian Securities and Investments Commission [2016] FCA 131; (2016) 334 ALR 350 Cavill Business Solutions Pty Ltd v Jackson [2005] WASC 138 Civic Video Pty Ltd v Warburton [2013] FCA 934; (2013) 216 FCR 61; (2013) 11 ABC(NS) 568 Clyne v Deputy Commissioner of Taxation (NSW) (No 4) [1982] FCA 162; (1982) 13 ATR 302; (1982) 66 FLR 301; (1982) 42 ALR 703 Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194; (2000) 74 ALJR 1348; (2000) 99 IR 309; (2000) 174 ALR 585 Commonwealth Bank of Australia v Jeans (No 3) [2006] FCA 693; (2006) 4 ABC(NS) 288 Communications, Electrical, Electronic, Information, Postal, Plumbing & Allied Service Union of Australia (Western Australia Division) v Fortescue Metals Group Ltd  [2016] FCCA 1227 ; (2016) 310 FLR 1 Deputy Commissioner of Taxation v Barnes [2008] FMCA 7; (2008) 70 ATR 776 Deputy Commissioner of Taxation v Webb [2017] FCCA 1137; (2017) 320 FLR 371 de Robillard v Carver [2007] FCAFC 73; (2007) 159 FCR 38; (2007) 240 ALR 675; (2007) 5 ABC(NS) 92 Francis v Eggleston Mitchell Lawyers Pty Ltd [2014] FCAFC 18; (2014) 12 ABC(NS) 25 Franks v Warringah Council [2003] FCA 1047; (2003) 131 FCR 287 Golden West Resources Ltd v Maxim Litigation Consultants [2016] WASC 384 Kenyon v Lavan Legal (unreported, Supreme Court of Western Australia, Registrar Dixon, 26 September 2014) Kerr in his Capacity as Trustee of the Bankrupt Estate of Cross & Anor v Akcan [2017] FCCA 1128 Ling v Enrobook Pty Ltd [1997] FCA 226; (1997) 74 FCR 19; (1997) 143 ALR 396 LM v K Lawyers (No 3) [2016] WASC 204 Mbuzi v Favell (No 2) [2012] FCA 311 Mineo v Etna [2009] FCA 337; (2009) 176 FCR 74; (2009) 7 ABC(NS) 115 Minister for Immigration & Multicultural & Indigenous Affairs v SZANS [2005] FCAFC 41; (2005) 141 FCR 586; (2005) 215 ALR 733; (2005) 86 ALD 583 Nash v Thomas [2012] FCA 693; (2012) 204 FCR 415; (2012) 128 ALD 347 Nathan v Burness (No 2) [2011] FCA 289 Pattison v Hadjimouratis [2006] FCAFC 153; (2006) 155 FCR 226; (2006) 236 ALR 1; (2006) 4 ABC(NS) 367 Perpetual Trustee Company Ltd v Sanna [2013] FCCA 2107; (2013) 11 ABC(NS) 639 Ramsay Health Care Australia Pty Ltd v Compton (No 2) [2017] FCA 629 Rankilor v Circuit Travel Pty Ltd [2012] WASCA 155 Re Ditford; Ex parte Deputy Commissioner of Taxation (1988) 19 FCR 347; (1988) 83 ALR 265 Re Ferrarese; Ex parte Aloisio (1995) 60 FCR 586 Re Vincent; Ex Parte State Bank of New South Wales Ltd (1996) 71 FCR 58 Sanders v Snell (No 2) (2000) 174 ALR 53 Seller v Deputy Commissioner of Taxation [2011] FCA 865; (2011) 84 ATR 501; (2011) 282 ALR 80; (2011) 9 ABC(NS) 195 Sims v Jooste & Ors (No 3) [2016] FCCA 1751 Skalkos v T & S Recoveries Pty Ltd [2004] FCAFC 321; (2004) 141 FCR 107; (2004) 213 ALR 311; (2004) 3 ABC(NS) 51 Stec v Orfanos [1999] FCA 457 Suh & Ors v Minister for Immigration & Citizenship & Anor [2009] FCAFC 42; (2009) 175 FCR 515; (2009) 108 ALD 470 Totev v Sfar [2006] FCA 470; (2006) 230 ALR 236; (2006) 4 ABC(NS) 325 Totev v Sfar & Anor [2008] FCAFC 35; (2008) 167 FCR 193; (2008) 247 ALR 180; (2008) 5 ABC(NS) 691 University of Southern Queensland v Luck [2017] FCCA 639; (2017) 318 FLR 147 Vogwell v Vogwell (1939) 11 ABC 83 Zdrilic & Anor v Hickie & Anor [2016] FCAFC 101; (2016) 246 FCR 532; (2016) 14 ABC(NS) 232 Zhang v Ehrenfeld [2015] FCCA 877; (2015) 295 FLR 74 Macquarie Dictionary (7th Edn) (Sydney: Macquarie Dictionary Publishers, 2017)

REPRESENTATION

ORDERS

(1) That orders 2 and 3 of the orders of a Registrar of this Court made on 16 January 2017 sequestrating the estate of the Respondent and ordering that costs be paid from the estate of the Respondent be set aside.
(2) That the Creditor’s Petition filed by the Applicant on 26 July 2016 be dismissed.

PEG 330 of 2016

Applicant

And

Respondent

REASONS FOR JUDGMENT

Introduction

1. This is an application by the respondent Terence Gilbert Kenyon (“Kenyon”) to review the exercise of power by a Registrar of this Court (“Review Application”) in making a sequestration order under s.52 of the Bankruptcy Act 1966 (Cth) (“Bankruptcy Act”) against Kenyon on 16 January 2017 (“Sequestration Order”) based on a creditor’s petition on 26 July 2016 (“Creditor’s Petition”) filed by the applicant, Lavan Legal (“Lavan”).
2. The Review Application is made pursuant to s.104(2) of the Federal Circuit Court of Australia Act 1999 (Cth) (“FCCA Act”).
3. On the face of the Review Application, Kenyon seeks:
   1. that the Creditor’s Petition be dismissed;
   2. the costs of the matter, including any reserved costs, be paid by Lavan.
4. Lavan submits that the Review Application must fail because, in summary, Kenyon:
   1. owes a debt of over $5,000 to Lavan; and
   2. has failed to put before the Court any material or substantiated evidence as to his purported solvency; and
   100. has failed to put before the Court any material or substantiated other sufficient reason for the Sequestration Order not to be confirmed against him.

Evidence

Lavan’s evidence

5. Lavan relied upon on the following affidavit evidence:
   1. affidavit of Blair Llewellyn Strickland (“Strickland”) regarding service of the Bankruptcy Notice sworn 25 July 2016 (“Strickland Service Affidavit”);
   2. affidavit of Strickland regarding search of the National Personal Insolvency Index (“NPI Index”) sworn 25 July 2016 (“Strickland Search Affidavit”);
   100. affidavit of Daniel Paul Butler (“Butler”) regarding verification of the Creditor’s Petition sworn 25 July 2016 (“Butler Verifying Affidavit”);
   4. affidavit of Melissa Marydale Ferreira (“Ferreira”) supporting the application for substituted service sworn 15 November 2016 (“Ferreira Substituted Service Affidavit”);
   5. affidavit of Cheryl Lorraine Harrison (“Harrison”) regarding service attempts sworn 15 November 2016 (“Harrison Service Affidavit”);
   6. affidavit of Ferreira regarding service and the consent to act as trustee sworn 12 January 2017 (“Ferreira Service Affidavit”);
   7. affidavit of Harrison regarding substituted service attempts sworn 13 January 2017 (“Harrison Substituted Service Affidavit”);
   8. affidavit of Jemma Leigh Hunstman (“Hunstman”) regarding search of the NPI Index sworn 13 January 2017 (“Huntsman Search Affidavit”);
   9. affidavit of Alison Jane Robertson (“Robertson”) regarding debt owed sworn 13 January 2017 (“Robertson Affidavit of Debt”);
   10. subject to the objections dealt with at [10]-[56] below, the affidavit of Kenyon supporting application for stay of sequestration order and referring to solvency sworn 20 January 2017 (“First Kenyon Affidavit”);
   11. affidavit of Kenyon supporting the application for review and referring to dispute regarding debt owed and non-receipt of bankruptcy notice and creditor’s petition sworn 20 January 2017 (“Second Kenyon Affidavit”);
   50. affidavit of Ferreira regarding debts owed by Kenyon sworn 10 April 2017 (“Ferreira Affidavit of Debt”);
   13. affidavit of Ferreira regarding search filed 17 May 2017 (“Ferreira Search Affidavit”); and
   14. affidavit of Robertson regarding debt owed, sworn 17 May 2017 (“Second Robertson Affidavit of Debt”).
6. There was no cross-examination of any of the deponents to the affidavits relied on by Lavan.

Kenyon’s evidence (and the objections thereto)

7. Kenyon relied upon the following affidavit evidence:
   1. the First Kenyon Affidavit;
   2. the Second Kenyon Affidavit;
   100. the affidavit of Kenyon sworn 23 January 2017 (“Third Kenyon Affidavit”), which the Court notes is identical in its terms to the Second Kenyon Affidavit;
   4. the affidavit of Kenyon sworn 16 May 2017 (“Fourth Kenyon Affidavit”); and
   5. the affidavit of Kenyon (regarding his medical condition) sworn 16 May 2017 (“Fifth Kenyon Affidavit”).
8. Kenyon was not cross-examined on any of his affidavits.
9. Lavan objected to various paragraphs and parts of the First Kenyon Affidavit, which elicited a response from Kenyon, and a reply from Lavan. The objections which are maintained are dealt with hereunder.

Paragraph 12

10. Paragraph 12 is as follows:
    • 12. It is my understanding that Lavan were not entitled to unilaterally decide to cease to act for me in circumstances were [where] there was no costs agreement in place, and that the additional expenses that I incurred due to their conduct, I should be able to recover from Lavan.
11. Lavan submits that paragraph 12 is argumentative, submission and expressing matters of legal conclusion. Kenyon says that although expressed as an understanding by Kenyon, paragraph 12 is a truthful statement that Lavan had no right to unilaterally terminate their retainer with Kenyon over a dispute related to charges, when there was no retainer that allowed that.
12. Paragraph 12 is not a statement of fact, but rather a conclusion or submission by Kenyon based upon his understanding of an agreement. It is therefore argumentative, a submission, and the expression of a legal conclusion as to the effect of that agreement. Paragraph 12 will therefore be struck out.

Paragraph 17

13. Paragraph 17 is as follows:
    • 17. It is my understanding that I have a strong case against Lavan for recovery of the legal fees that I have paid in defending the District Court Writ and for the damage that the issue of the writ caused to me in destroying my credit rating, as without a costs agreement, Lavan had no right to issue the invoices that they did and no right to issue the District Court Writ.
14. Lavan submits that paragraph 17 is argumentative, submission and expressing matters of legal conclusion.
15. Kenyon submits that:
    1. paragraph 17 is an expression of fact;
    2. Registrar Dixon of the Supreme Court of Western Australia (“WASC Registrar’s Orders”) determined that there was no costs agreement entered into: see Kenyon v Lavan Legal (unreported, Supreme Court of Western Australia, Registrar Dixon, 26 September 2014) [“WASC Registrar’s Costs Determination”] (“Lavan Legal”), which means that the invoices that were issued by Lavan totalling $335,163.45 should not have been issued and the District Court Writ issued by Lavan for the recovery of those invoices should not have been issued either; and
    100. it is a matter of fact that Kenyon can recover the costs of the District Court Writ, and the Fourth Kenyon Affidavit at Annexure TK-B includes a copy of the Consent Order where Lavan agrees to pay the costs of the District Court Action incurred after 11 January 2013.
16. As with paragraph 12, paragraph 17 is argumentative, makes submissions and expresses matters of legal conclusion in relation to the effect of various documents and the WASC Registrar’s Orders. Paragraph 17 will therefore be struck out.

Paragraph 21

17. Paragraph 21 provides as follows:
    • 21. Registrar Dixon made a finding that there was no costs agreement that had been entered into. Annexed hereto and marked Annexure TK1 is a true copy of the decision of Registrar Dixon that was delivered on 26 September 2014, along with a true copy of the Orders that he made on 26 November 2014. Those Orders stipulate that Lavan are to pay the costs of the determination, to be taxed. It is my estimation based on advice from my then solicitor Harold Paiker that taxed costs for the determination would be about $15,000. I had instructed my then solicitor Harold Paiker to recover those costs, but I am not aware that he has done anything to progress that and he is currently overseas.
18. Lavan says that paragraph 21 is argumentative, submission and expresses matters of legal conclusion, but only from the words “Those Orders” to the end of the paragraph. Kenyon submits that paragraph 21 confirms the WASC Registrar’s Orders, and that the reference to an estimate of costs is clarified in the Fourth Kenyon Affidavit at Annexure TK-A, which is a draft Bill of Costs prepared by a lawyer pursuant to the WASC Registrar’s Orders.
19. In relation to paragraph 21:
    1. the sentence commencing “Those Orders” is a statement of fact as to the terms of the WASC Registrar’s Orders, and is unobjectionable. The sentence does not express any conclusion or make any argument with respect to the terms of the WASC Registrar’s Orders which are straightforward and reflected in that sentence, and although the WASC Registrar’s Orders largely speak for themselves, the objection to that sentence will be dismissed;
    2. the sentence commencing “It is my estimation” is objectionable, as it expresses a conclusion with respect to the amount of taxed costs based on advice which is not before the Court, and in relation to a matter upon which Kenyon is not qualified to give an opinion, and it will therefore be struck out; and
    100. the sentence commencing “I had instructed” reflects an instruction that Kenyon says that he gave to his solicitor, and Kenyon’s understanding of the progress in relation thereto. The sentence is not argumentative, does not make submissions, and does not express a legal conclusion, and the objection to it is dismissed.

Paragraph 22

20. Paragraph 22 provides as follows:
    • 22. After that hearing, during which I was extensively cross-examined by Tim Coyle from Lavan, Mr Coyle spoke to me privately and said to me words to the effect of: “you have made a mistake taking us on and you will regret ever having tried. We will destroy you.” I regarded those comments as a threat, but to also be indicative of the attitude that Lavan had shown to me throughout the dispute.
21. Lavan argues that paragraph 22 is irrelevant and scandalous. Kenyon says that it is a statement of fact, and is neither irrelevant nor scandalous, and that it provides the Court with relevant context in relation to the proceedings and is highly relevant to the issue of whether the proceedings are an abuse of process and there is other sufficient cause to set aside the Creditors Petition. Kenyon further says that Lavan has not filed anything to refute or deny the alleged statement by Mr Tim Coyle (“Coyle”), despite having had ample opportunity to do so.
22. The content of paragraph 22 is relevant to the issue of abuse of process in relation to the issue of a bankruptcy notice, BN 189704, issued by the Official Receiver on 18 April 2016 (“Second Bankruptcy Notice”), which may go to whether or not there is other sufficient cause to refuse to make a sequestration order against Kenyon’s estate: Bankruptcy Act, s.52(2)(b). As the foundation for such an argument paragraph 22 is not scandalous within the meaning of the relevant authorities: C2C Investments Pty Ltd, in the matter of C2C Investments Pty Ltd v Leigh (No 3) [2012] FCA 680 at [5]- [6] per Yates J; Cavill Business Solutions Pty Ltd v Jackson [2005] WASC 138 at [25] per Hasluck J; Sims v Jooste & Ors (No 3) [2016] FCCA 1751 at [24]- [30] per Judge Lucev. For the above reasons, the objection to paragraph 22 will be dismissed.

Paragraphs 25 to 27

23. Paragraphs 25 to 27 provide as follows:
    • 25. I note that s.304(1) of the Legal Profession Act 2008 (WA) states that “A taxing officer must determine the costs of a costs assessment” . There is no such determination on the bill of costs.
    • 26. I note that s.305(1) of the Legal Profession Act 2008 (WA) states that “The taxing officer must certify in writing - (a) the amount of disputed costs allowed; and (b) the costs of the costs assessment”. There is no such certification on the bill of costs.
    • 27. I note that s.305(3) of the Legal Profession Act 2008 (WA) states that “A certificate under subsection (1) bears interest, and may be enforced against any person liable to pay, as if it were a judgment of the Supreme Court for the payment of the amount mentioned in the certificate.”
24. Lavan submits that paragraphs 25 to 27 are argumentative, submission and express matters of legal conclusion.
25. Kenyon submits that paragraphs 25 to 27:
    1. have been repeated in Kenyon’s submissions and pose no prejudice to Lavan;
    2. serve to make Lavan aware of what Kenyon is asserting;
    100. are statements of fact as the bill of costs does not contain either a determination of the costs of the costs assessment, or a certification of the costs of the costs assessment, and that if the bill of costs did contain either a determination or a certification, then Lavan would have pointed to that fact, but they have not been able to do so; and
    4. that reference to the relevant legislative provision merely places the statement of fact in context.
26. Paragraphs 25 to 27 are argumentative and make submissions on one of the issues in dispute which is for the Court to determine in these proceedings, that is, whether or not a taxing officer has made a determination of costs, and certified a bill of costs, giving rise to a debt of more than $5,000 owed by Kenyon to Lavan, in litigation between Lavan and Kenyon. As such, the paragraphs are objectionable, and will be struck out.

Paragraph 28

27. Paragraph 28 is as follows:
    • 28. Based on the signed bill of costs, if it is accepted as an assessment of costs for the purposes of s.305(3) of the Legal Profession Act 2008 (WA) with the necessary certifications, which I do not accept that it is, then the total costs that I was required to pay to Lavan for the matter is $95,000.
28. Lavan submits that paragraph 28 is argumentative, submission and expresses matters of legal conclusion.
29. Kenyon submits that paragraph 28 states that even though Kenyon does not believe there has been an assessment of costs undertaken, if there has been, the assessed amount is $95,000, and that that is not an issue in contention as it is what Lavan positively asserts.
30. Paragraph 28 is effectively a submission in that it argues as to the effect of the signed bill of costs, and expresses a conclusion derived from that argument. As such, paragraph 28 is objectionable, and will be struck out.

Paragraph 38

31. Paragraph 38 is as follows:
    • 38. In addition, there is the outstanding costs order of Registrar Dixon, referred to in paragraph 19 herein that is owed by Lavan to me, the matter of additional legal costs incurred in the Supreme Court matter as a result of the conduct of Lavan, the legal costs incurred by me in the District Court Writ that Lavan were not entitled to issue and the simple realty that I have not been able to obtain from Lavan trust statements to determine exactly what money was paid to them for this matter that they have applied to different matter codes.
32. Lavan submits that paragraph 38 is irrelevant. Kenyon submits that it is highly relevant. Kenyon says that the issue in dispute between he and Lavan relates to, amongst other things, Lavan’s alleged failure to account for money received into its trust account, and in particular a sum of $40,000, plus other sums owing for legal costs (although the Court notes that none of those have yet been assessed) and the possible effect of those matters on the amount owing to Lavan.
33. In the Court’s view the content of paragraph 38, whilst not well particularised, and therefore not necessarily particularly helpful in determining the facts, can nevertheless be said to be arguably relevant to Kenyon’s solvency, or whether there is other sufficient cause to dismiss the Creditor’s Petition: Bankruptcy Act, s.52(2). The objection to paragraph 38 will therefore be dismissed.

Paragraph 43

34. Paragraph 43 is as follows:
    • 43. I also note that the Bankruptcy Notice relies upon the taxed bill of costs as being a final judgment or final order as per s.40(1)(g) of the Bankruptcy Act 1966 (Cth), presumably pursuant to s.305(3) of the Legal Profession Act 2008 (WA), and I would repeat my comments in paragraphs 24-27 herein, refer to annexure TK2 herein and state that the signed bill of costs is not a certificate under subsection 305(1) of the Legal Profession Act 2008 (WA).
35. Lavan submits that paragraph 43 is argumentative, submission and expresses matters of legal conclusion.
36. Kenyon submits that paragraph 43 has been repeated in Kenyon’s submissions and poses no prejudice to Lavan and merely serves to make Lavan aware of what Kenyon is asserting.
37. Paragraph 43 is argument and submission and posits a legal conclusion as to the nature of the signed bill of costs which is an issue which is before the Court for determination. As such, paragraph 43 is objectionable, and will be struck out.

Paragraph 44

38. Paragraph 44 is as follows:
    • 44. Annexed hereto and marked TK9 is a true copy of the letter dated 15 June 2016 that was sent with the Bankruptcy Notice dated 18 April 2016. I note that the letter does not state the date on which the letter was posted, it merely has a date on the letter, so that if I had received the letter and the Bankruptcy Notice dated 18 April 2016, I would not have known when the 21 day period for compliance would have commenced.
39. Kenyon submits that paragraph 44 is a statement of fact, and that the letter does not state the date on which it was posted.
40. The first sentence of paragraph 44 is not objectionable as it merely annexes a copy of a letter. The second sentence is not objectionable insofar as it states that the letter does not state a date on which it was posted but merely has a date on the letter, those being observable facts. The remainder of paragraph 44 from the words “so that if” to the end of the second sentence is however an argued submission, and is objectionable, and those words will be struck out.

Paragraph 50

41. Paragraph 50 is as follows:
    • 50. Paragraph 4 of the affidavit of Mr Cutler [Butler] does not verify all of what is said in paragraph 4 of the Creditors Petition and in particular, it does not verify the date of service of the bankruptcy notice.
42. Lavan submits that paragraph 50 is argumentative, submission and expressing matters of legal conclusion.
43. Kenyon submits that paragraph 50 is a statement of fact, and that the Butler Verifying Affidavit does not verify the date of service of the Bankruptcy Notice that is stated in the Creditor's Petition.
44. Paragraph 50 is effectively a submission as to the effect of the Butler Verifying Affidavit, and is therefore objectionable, and will be struck out.

Paragraphs 52 and 53

45. Paragraphs 52 and 53 provide as follows:
    • 52. The affidavit of Blair Llewellyn Strickland does not state where the ordinary post letter of 15 June 2016 (containing the Bankruptcy Notice copy) was posted from, but on the assumption that it was posted from the 6000 post code area, for a letter to arrive at the 6053 post code area, the Australia Post delivery time is between 2 - 6 business days for regular mail and 1 - 4 business days for priority mail, which means that the earliest the letter could have arrived was Friday 16 June 2016 and the latest was Thursday 23 June 2016. Annexed hereto and marked TK12 is a true copy of a search of the Australia Post website showing the delivery times for a letter posted on 15 June 2016, which would be I submit the ordinary course of postal delivery times.
    • 53. Based on the method of service of the bankruptcy notice, it is not possible for Lavan to state in the Creditors Petition that the bankruptcy notice was served on 17 June 2016, which may be the reason why no-one has verified that part of the Creditors Petition.
46. Lavan submits that paragraphs 52 and 53 are argumentative, submission and express matters of legal conclusion.
47. Kenyon submits that paragraphs 52 and 53 are also statements of fact, and says that:
    1. if a party relies upon the delivery of a letter in the usual course of business, then they must state what the usual course of business is and Lavan has not done so; and
    2. Australia Post, as the official carrier of post in Australia, sets out on their website what the delivery time for post is, in the usual course of business, based on the fact that Australia Post has now changed the manner in which they deliver post in Australia, to a two-tiered delivery system with different delivery costs and delivery times, which directly impacts upon how time is calculated pursuant to the Acts Interpretation Act 1901 (Cth), which is an issue of fact.
48. Paragraph 52 is argumentative, taking the content of the Strickland Service Affidavit, making assumptions in relation to the content thereof, and making submissions based on hearsay evidence (the search of the Australia Post website showing delivery times) about the ordinary course of postal delivery times. That is then extrapolated in paragraph 53 into a submission as to why Lavan cannot (in Kenyon’s submission) verify the date of service of the Creditor’s Petition. The whole of paragraphs 52 and 53 are argument and submission and are therefore objectionable, and will be struck out.

Paragraph 62

49. Paragraph 62 is as follows:
    • 62. It is my understanding that Lavan was a partnership trading name and that the partnership has now changed its trading name to Lavan, but that a partnership entity with the same ABN has registered both trading names. Annexed hereto and marked TKI 3 is a true copy of a current and historical Australian Securities & Investments Commission search that I had undertaken of the trading name Lavan.
50. Lavan submits that paragraph 62 is irrelevant.
51. Kenyon submits that paragraph 62 is relevant and that:
    1. the identity of Lavan is relevant to whether Lavan is a creditor or not;
    2. the ASIC search sets out the identity of Lavan and the ownership changes that Lavan has gone through over the course of the matter;
    100. it is a fact that Lavan is a partnership, which the ASIC search shows and the paragraph states (which has not been denied by Lavan) and that it can therefore issue a bankruptcy notice in the name of the firm;
    4. the membership of the firm has changed numerous times during the course of, and after, the conclusion of the matter, which directly impacts upon the identity of the partners that sit behind the firm name; and
    5. Lavan does not deny that there have been changes to the partners of the firm as set out in the ASIC search, such that the partners have changed 21 times up until the issue of, presumably, the Second Bankruptcy Notice.
52. There is no doubt that a partnership which is a creditor of an individual can issue a bankruptcy notice, and no dispute in this case that the Second Bankruptcy Notice and Creditor’s Petition were issued by Lavan (the question of proper service of the Second Bankruptcy Notice is dealt with separately: see [100]-[117] below). Changes in the composition of the partnership are irrelevant to the fact that the partnership is said to be the creditor of the alleged debtor and which has issued the Creditor’s Petition. As such, paragraph 62 is irrelevant and will be struck out.

Paragraph 65

53. Paragraph 65 is as follows:
    • 65. I have never received any notices from Lavan pursuant to s.20(1) of the Property Law Act 1969 (WA).
54. Lavan argues that paragraph 65 is argumentative, submission and expresses matters of legal conclusion.
55. Kenyon submits that paragraph 65 is a statement of fact.
56. Paragraph 65 is a statement by Kenyon that he has not been served with the notices therein referred to. Whether that be right or wrong is another matter, but for evidentiary purposes it is a statement of asserted fact, and not argument, submission or the expression of a legal conclusion. As such, paragraph 65 is unobjectionable, and will not be struck out.

The Review Application

Nature of the review of the Registrar's decision

57. A hearing under s.104(2) of the FCCA Act is a hearing de novo and the relevant matter is considered afresh: Pattison v Hadjimouratis [2006] FCAFC 153; (2006) 155 FCR 226; (2006) 236 ALR 1; (2006) 4 ABC(NS) 367 at [3]-[20] per Nicholson J and [39] per Jacobson J; Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194; (2000) 74 ALJR 1348; (2000) 99 IR 309; (2000) 174 ALR 585 at [13] per Gleeson CJ, Gaudron and Hayne JJ; Cassimatis & Anor v Australian Securities and Investments Commission [2016] FCA 131; (2016) 334 ALR 350 at [12] per Edelman J (“Cassimatis”); University of Southern Queensland v Luck [2017] FCCA 639; (2017) 318 FLR 147 at [94] per Judge A Kelly.
58. Upon the hearing of an application under s.104(2) of the FCCA Act to review a sequestration order the party seeking a sequestration order must still satisfy the Court that the necessary conditions required to be proved by s.52(1) of the Bankruptcy Act for a sequestration order have been met: Totev v Sfar & Anor [2008] FCAFC 35; (2008) 167 FCR 193; (2008) 247 ALR 180; (2008) 5 ABC(NS) 691 at [27]-[29] per Emmett J (“Sfar-Full Court”); Zdrilic & Anor v Hickie & Anor [2016] FCAFC 101; (2016) 246 FCR 532; (2016) 14 ABC(NS) 232 at [66] and [72] per Katzmann, Farrell and Markovic JJ; Kerr in his Capacity as Trustee of the Bankrupt Estate of Cross & Anor v Akcan [2017] FCCA 1128 at [29] per Judge Driver; Deputy Commissioner of Taxation v Webb [2017] FCCA 1137; (2017) 320 FLR 371 at [17] per Judge Joshua Wilson.
59. A fresh hearing does not require the exclusion of the relevant record of the proceedings including the conclusion reached by the Registrar. In Cassimatis at [16] per Edelman J the Federal Court observed that in Sanders v Snell (No 2) (2000) 174 ALR 53 at 56 per Kirby J it was suggested that by not using the label "de novo" (that description is not used in s.104(2) of the FCCA Act) there is an inference that the review may take into account, and place weight upon, the discretion of the Registrar particularly where the discretion is exercised with some frequency and skill.

Formal requirements for a sequestration order

60. Pursuant to s.52(1) of the Bankruptcy Act, at the hearing of the Creditor’s Petition the Court requires proof of:
    1. the matters stated in the Creditor’s Petition (for which purpose the Court may accept the affidavit verifying the Creditor’s Petition as sufficient);
    2. service of the Creditor’s Petition; and
    100. the fact that the debt or debts on which Lavan relies is or are still owing.
61. The Court notes that at the time a sequestration order issues:
    1. section 43 of the Bankruptcy Act requires presence of the debtor or his estate within Australia; and
    2. section 44(1)(a) requires that "there is owing by the debtor to the petitioning creditor a debt that amounts to $5,000" (this flows on from s.41 of the Bankruptcy Act which requires the bankruptcy notice to refer to a final judgment or order for an amount “of at least $5,000”).
62. Part 4 of the Federal Circuit Court (Bankruptcy) Rules 2016 (Cth) (“FCC Bankruptcy Rules”) requires that Lavan file affidavits:
    1. verifying the Creditor’s Petition;
    2. of search of court records;
    100. of service of the Bankruptcy Notice;
    4. of search of the NPI Index; and
    5. of debt still owed by Kenyon,

those affidavits going to the fulfilment of the requirements of s.52(1) of the Bankruptcy Act.

63. On proof of the matters in s.52(1) of the Bankruptcy Act "the Court will generally proceed to make an order for sequestration": Totev v Sfar [2006] FCA 470; (2006) 230 ALR 236; (2006) 4 ABC(NS) 325 at [37] per Allsop J (“Sfar”).

Onus on respondent to establish a sufficient cause

64. Section 52(2) of the Bankruptcy Act imposes on Kenyon the obligation of satisfying the Court that he is able to pay debts or that a sequestration order ought not be made for "other sufficient cause": Ling v Enrobook Pty Ltd [1997] FCA 226; (1997) 74 FCR 19; (1997) 143 ALR 396; FCR at 24 per Davies, Wilcox and Branson JJ (“Enrobook”). To constitute other sufficient cause to decline to make a sequestration order a matter must be of significant weight to displace the public interest in avoiding insolvent trading: Ramsay Health Care Australia Pty Ltd v Compton (No 2) [2017] FCA 629 at [26]- [37] per Flick J (“Compton No 2”). The Court observes that in Compton (No 2) the Federal Court said as follows, relevant to the circumstances of this case, at [36]-[37] per Flick J:
    • 36 “Other sufficient cause” may also be found in, for example, a cross-claim a debtor may have against a creditor: Ling v Enrobook [1997] FCA 226; (1997) 74 FCR 19 at 25. The Court there observed:
      • A review of the authorities discloses that in certain circumstances, but not in all circumstances, the fact that the debtor has pending before a court a legitimate claim to funds sufficient to satisfy the petitioning creditor’s debt will amount to “other sufficient cause” not to make a sequestration order ...
    • The Court thereafter went on to further observe (at 26):
      • The above authorities do not, in our view, support the appellant’s contention that the courts recognise a public interest in allowing a debtor to prosecute litigation commenced by the debtor...
      • The authorities also show that satisfaction that the debtor is well advanced with litigation likely to result in the debtor being in a position to pay his or her debts may well provide a basis for a finding that there is a “sufficient cause” for a sequestration order not to be made (see, for example, Maddestra v Penfolds Wines Pty Ltd [(1993) [1993] FCA 406; 44 FCR 303]). But the authorities do not suggest that it is in the public interest to allow insolvent debtors to prosecute litigation generally. They only recognise that it is not in the public interest for a debtor to be forced into bankruptcy by reason of a state of insolvency likely to be of only short duration.
    • See also: Commonwealth Bank of Australia v Jeans (No 3) [2006] FCA 693 at [11], (2006) 4 ABC(NS) 288 at 291 per Rares J.
    • 37 A further basis upon which a debtor may establish “other sufficient cause” could also potentially be found where there is reason to question the judgment debt upon which a creditor’s petition otherwise proceeds. Even in the absence of an appeal from the judgment, a debtor may be able to make out a case that the judgment was procured in circumstances which give rise to questions as to whether a sequestration order ought to be made. Even cases falling short of fraud in procuring a judgment or abuse of process may suffice.

Issues raised by Kenyon

65. The issues raised by Kenyon which may require determination by the Court include:
    1. whether there is a final judgment or final order for a debt of more than $5,000;
    2. whether there was proper service of the Second Bankruptcy Notice;
    100. whether the issue of the Second Bankruptcy Notice was an abuse of process;
    4. whether there was proper service of the Creditor’s Petition;
    5. whether the Creditor’s Petition is accurate and correctly verified; and
    6. whether Kenyon is solvent (this also being an issue of significance in Lavan’s submissions).

Whether there is a final judgment or final order for a debt of more than $5,000

66. Kenyon submits that:
    1. the Bankruptcy Act sets out at s.44 that an applicant shall not present a creditor's petition against a respondent unless an applicant can show:
       1. there is a debt of no less than $5,000 owing to the applicant by the respondent;
       2. the debt is for a liquidated sum due at law or equity;
       3. the liquidated sum is payable either immediately or at a certain future time; and
       4. the respondent has committed an act of bankruptcy within 6 months before the presentation of the creditor's petition.
    2. one of the essential aspects of the requirements set out in s.44 of the Bankruptcy Act is for the debt of $5,000 or above to be a liquidated sum, which means the amount to be paid must be certain;
    100. the Bankruptcy Act also sets out at s.41 the requirements for a valid bankruptcy notice, which includes that if an applicant has obtained a final judgment or order that is of a kind described in s.40(1)(g) of the Bankruptcy Act, an applicant may issue a Bankruptcy Notice;
    4. if Lavan was not able to comply with ss.41 and 40(1)(g) of the Bankruptcy Act, they were not able to present a valid bankruptcy notice, as there would not be a liquidated sum presently payable that would form the basis of a Bankruptcy Notice. Issuing a Bankruptcy Notice that was not in compliance with ss.41 and 40(1)(g) of the Bankruptcy Act would be an abuse of process of the bankruptcy proceedings and of the Court’s processes;
    5. the dispute between Kenyon and Lavan arises from the quantum of legal fees that Lavan has charged Kenyon and the amount of money that Kenyon has already paid Lavan towards those legal costs;
    6. Lavan and Kenyon were unable to agree on the quantum of legal fees, which resulted in Lavan commencing legal proceedings against Kenyon in the District Court of Western Australia at Perth for the sum of $324,767.13;
    7. subsequently Kenyon requested an assessment of Lavan’s legal fees pursuant to s.295(2) of the Legal Profession Act 2008 (WA) ("LP Act").
    8. the LP Act provides at s.305 that:
       • (1) The taxing officer must certify in writing -
       • (a) the amount of the disputed costs allowed; and
       • (b) the costs of the costs assessment.
       • (2) Subject to sections 299(2)(c) and 308, a certificate under subsection (1) is binding on the parties to the costs assessment.
       • (3) A certificate under subsection (1) bears interest, and may be enforced against any person liable to pay, as if it were a judgment of the Supreme Court for the payment of the amount mentioned in the certificate.
    1. section 305(1) of the LP Act has mandatory obligations for the taxing officer, which are clearly expressed in terms of what the taxing officer "must" do. Likewise, s.304(1) of the LP Act states that “A taxing officer must determine the costs of a costs assessment.”;
    10. the costs assessment provisions of the LP Act require that the taxing officer must do certain things, as the purpose of those provisions is to allocate costs between the solicitor and client and to determine if any reduction in disputed costs has been so significant that it warrants referral to the Complaints Committee for disciplinary action: s.307 of the LP Act. For those reasons, a costs assessment certificate must comply with the provisions of the LP Act;
    11. no such certificate as referred to in s.305(1) of the LP Act was issued by the taxing officer;
    50. in relation to the Bill of Costs prepared by Lavan for assessment by the taxing officer: First Kenyon Affidavit, Annexure TK3, it is not certified in terms of s.305(1) of the LP Act and the taxing officer merely states:
        • I certify I have this 27th day of January 2016 allowed by consent the within Bill of Costs and allows the same at $95,000.
    • (“Certificate of Taxation”).

13. the Certificate of Taxation does not satisfy the requirements of the LP Act for the assessment of costs to have been done pursuant to the LP Act and the statement by the taxing officer is no more than a recording of the agreement reached between the parties as to the quantum of costs between solicitor and client for the matter - the quantum was agreed without there being a costs assessment;
14. the Certificate of Taxation is not the same as a Supreme Court judgment, it can merely be enforced as if it was a judgment, but for that to be the case, the Certificate of Taxation must be issued pursuant to s.305(1) of the LP Act, which was not the case here;
15. consistent with the view that the Certificate of Taxation was no more than a recording of the agreement reached between Lavan and Kenyon in relation to the quantum of costs, is the ongoing dispute in relation to the treatment of the money that Kenyon has paid to Lavan;
16. at Annexure TK5 of the First Kenyon Affidavit (page 38) is a bankruptcy notice that Lavan issued dated 17 March 2016 for $95,000 (“First Bankruptcy Notice”). When Kenyon received the First Bankruptcy Notice, he sent a letter to Lavan advising them that he disputed the amount as he had made payments to them of $25,854.50 based on their own records and that he had also paid at least a further $40,000 to them;
17. nothing further was done with the First Bankruptcy Notice;
18. the Second Bankruptcy Notice (Annexure TK8 of the First Kenyon Affidavit at page 45) was for an amount of $69,145.50 based on payments having been made by Kenyon of $25,854.50;
19. the Ferreira Affidavit of Debt attaches various trust statements as Annexures MMF1 to MMF5 and at page 8 of that affidavit Ferreira states that she verily believes Kenyon is indebted to Lavan for an amount exceeding $5,000, but does not specify what that amount may be;
20. Annexure MMF2 of the Ferreira Affidavit of Debt shows that payments were made by Kenyon of $60,284.50 and Annexure MMF3 of the Ferreira Affidavit of Debt shows a further $6,705.00 was paid. Payments have been made by Kenyon totalling $66,989.50. None of the amounts in the trust statements have any relevance to the amount that Lavan says has been paid by Kenyon in the Second Bankruptcy Notice;
21. the inconsistency of the treatment of Kenyon's payments that appear in the trust accounts show that there is still a dispute in relation to the amount claimed as owed by Kenyon, and Lavan has not yet committed to an amount that they claim is due to Lavan;

5. the Ferreira Affidavit of Debt which was filed in response to the First Kenyon Affidavit, still does not state a liquidated sum that is supposedly owed to Lavan by Kenyon; and

23. the Ferreira Affidavit of Debt deliberately does not state a liquidated sum, but merely refers to an unliquidated sum that is more than $5,000.

67. Kenyon also submits that:
    1. the Second Bankruptcy Notice does not comply with s.41 of the Bankruptcy Act in that it has not been issued based on a final judgment or order that is of a kind described in s.40(1)(g) of the Bankruptcy Act;
    2. the Second Bankruptcy Notice does not comply with Schedule 1 of the Bankruptcy Regulations 1996 (Cth) (“Bankruptcy Regulations”) in that it does not have attached to it a final judgment or final order in terms of s.40(1)(g) of the Bankruptcy Act; and
    100. the Second Bankruptcy Notice has been issued contrary to the requirements of s.41(3) of the Bankruptcy Act because it has been issued without a final judgment or final order in terms of s.40(1)(g) of the Bankruptcy Act.
68. Lavan submits that:
    1. the Second Bankruptcy Notice attached the Certificate of Taxation. Pursuant to s.305 of the LP Act the Certificate of Taxation may be enforced against any person liable to pay, as if it were a judgment of the Supreme Court for the payment of the amount mentioned in the Certificate of Taxation. The Certificate of Taxation is a final judgment not more than 6 years old;
    2. the debt owed by Kenyon is an amount of more than $5,000; and
    100. even if the Court is minded to accept Kenyon’s assertions in relation to the quantum of the debt, it is not disputed that Lavan remains owed an amount significantly in excess of $5,000 by Kenyon.

Consideration as to whether final judgment or final order for debt of more than $5,000

69. Section 305(3) of the LP Act is set out at [66(h)] above.
70. The Certificate of Taxation is handwritten at the end of the bill of costs submitted for assessment by Lavan. The Court assumes, for immediately present purposes, that the Certificate of Taxation is a proper assessment of costs and determination of the costs of that assessment (as to which see [83]-[94] below).
71. In Franks v Warringah Council [2003] FCA 1047; (2003) 131 FCR 287 (“Franks”) the Federal Court dealt with an assertion that a bankruptcy notice was defective because it was not founded upon a final judgment or final order of a court. The importance of the particular regime in force in the relevant jurisdiction for the assessment and recovery of legal costs was highlighted in Franks at [17] per Branson J. Having reviewed the authorities, the Federal Court at [24] per Branson J observed that:
    • 24. The above authorities illustrate that the status of an order or certificate of an officer of a court, or other person, authorised to assess the amount payable under an order of a court which requires the payment of unquantified legal costs is dependent on the terms of the statutory instrument governing the relevant order or certificate. Unlike the allocatur considered by the Full Court in Stec v Orfanos, neither a determination made by a costs assessor nor a certificate that sets out a determination made by a costs assessor is itself expressly made enforceable by either the Legal Profession Act or the Supreme Court Rules (NSW).
72. In Franks the Federal Court went on to observe that a certificate issued by a costs assessor under s.208J of the Legal Profession Act 1987 (NSW) (“LP Act (NSW)”) was upon its filing enforceable as a judgment of the relevant court. That was based upon s.208J(3) of the LP Act (NSW) which provided that the amount of costs not having been paid, a certificate of costs was, once filed, taken to be a judgment of the relevant court for the amount of any unpaid costs.
73. Section 208J(3) of the LP Act (NSW) imposed a requirement additional to that in s.305(3) of the LP Act, namely that the relevant certificate be filed, and then it was able to be taken to be a judgment of the relevant court. It followed that the determination of a costs assessor under s.208J of the LP Act (NSW) could not found a bankruptcy notice without being filed in a court of competent jurisdiction: Franks at [17] per Branson J.
74. One of the cases referred to in Franks was Stec v Orfanos [1999] FCA 457 (“Stec”), in relation to which the Federal Court in Franks observed as follows at [18]-[19] per Branson J:
    • 18 Stec v Orfanos concerned an order for costs made by the Supreme Court of South Australia. Attached to the bankruptcy notice in that case was an order of a Judge of the Court, which reinstated an order for costs made by a Master of the Supreme Court which had earlier been set aside, and a signed and sealed allocatur issued by the Registrar of the Supreme Court. As in the case of each of the bankruptcy notices before me, the judgment or order relied upon in Stec v Orfanos was itself an order for the payment of costs. The Rules of the Supreme Court of South Australia at the relevant time provided that, when duly signed and sealed, an allocatur has the effect of, and is enforceable in the same manner as, a judgment of the Court for the amount of the allocatur. At [18] the Full Court said:
      • “ ... The allocatur determined in a final manner Mr Stec's liability for costs. It is thus a final judgment or final order for the purposes of s 41(3) of the Act.”
    • 19 The reference in [15] of the judgment in Stec v Orfanos to the order of the Judge of the Supreme Court being “ ... the source of the obligation to pay those costs ... ” was not, in my view, intended to derogate from what was said by the Court at [18]. The order of the judge was the ultimate source of the obligation on the debtor to pay the costs, but that obligation having become reflected in the allocatur, it was the allocatur itself which determined finally the debt due to the creditor. The allocatur itself was enforceable as a judgment of the Supreme Court.
75. Franks and Stec demonstrate that there is a distinction between a statutory provision which requires that the costs assessment or determination be filed with a court before it is enforceable, and a costs assessment or determination which is said to be enforceable as a judgment of a court.
76. The issue has recently been considered in Francis v Eggleston Mitchell Lawyers Pty Ltd [2014] FCAFC 18; (2014) 12 ABC(NS) 25 (“Eggleston Mitchell”) where the Full Court of the Federal Court dealt with the question of whether an order by a Master of the Supreme Court of Victoria was a final order capable of being the subject of a bankruptcy notice relied upon in the creditor’s petition presented upon which a sequestration order was made: Eggleston Mitchell at [23] per Rares, Flick and Bromberg JJ.
77. The relevant statutory provision under consideration appears in Eggleston Mitchell at [24] per Rares, Flick and Bromberg JJ. That statutory provision was r.63.11(1) of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) which provided that:
    • If costs are taxed otherwise than under a judgment or order for costs, an order of the Taxing Master for payment of any amount found to be due may be enforced in the same manner as a judgment for the payment of money.
78. For practical purposes, there is no difference between the above rule and s.305(3) of the LP Act.
79. In Eggleston Mitchell the Full Court of the Federal Court went on to observe at [27]-[31] per Rares, Flick and Bromberg JJ as follows:
    • 27 It is not necessary to examine the source under which the Master's order was made for the purposes of this appeal. Critically, the Master's order was an order for the payment of money made by a superior court of record, namely the Supreme Court of Victoria. An order of a superior court of record, even if made in excess of jurisdiction, is, at the worst, voidable, and is valid and binding unless and until it is set aside: Cameron v Cole [1944] HCA 5; (1944) 68 CLR 571 at 590 per Rich J with whom Latham CJ agreed at 585, see too at 598, 599 per McTiernan J and 607 per Williams J; Re Macks; Ex parte Saint (2000) 204 CLR 158 at [20]-[21] per Gleeson CJ, 184 [49], 187 [57] per Gaudron J, 215-217 [152]-[156] per McHugh J and 235-236 [216] per Gummow J; see too DMW v CGW [1982] HCA 73; (1982) 151 CLR 491 at 507 per Mason, Murphy, Wilson, Brennan and Deane JJ.
    • 28 The Master's order was an order made for the purpose of resolving a dispute between the parties as to the quantification of the amount owing by Ms Francis on the firm's contested bill of costs. The Master's order brought finality to that aspect of the dispute. It required that Ms Francis pay the sum of $11,847.40 to the firm. It was an order of the Supreme Court that was valid and binding. The order was expressed as being made by consent, but it came to be made after a contested hearing before the Master.
    • 29 A judgment or order for the payment of an amount of money is “final” within the meaning of the Act if it ascertains or establishes a pre-existing right of the party in whose favour it is given. In Clyne v Deputy Commissioner of Taxation (NSW) (1983) 48 ALR 545 at 547-548, Gibbs CJ, with whom Murphy, Wilson, Brennan and Deane JJ agreed, said of the phrase “final judgment” as used in ss 40(1)(g), (3)(d) and 41(3)(a) of the Act:
      • “A final judgment within the meaning of the provisions of the Bankruptcy Act has been held to mean a judgment obtained in an action by which the question whether there was a pre-existing right of the plaintiff against the defendant is ascertained or established: ... In other words it is a judgment which finally disposes of the rights of the parties: ... The fact that a judgment is subject to appeal or that it may later be set aside or become inoperative does not mean that it is not final: ... ”
    • (Emphasis added).
    • 30 The word “final” in the expression “final judgment or final order” in s 40(1)(g) is used in this sense: Autron Pty Ltd v Benk [2011] FCAFC 93; (2011) 195 FCR 404 at [26] per Lander, Tracey and Yates JJ. An order for costs that are subsequently quantified in a sum certain by a taxation and, pursuant to rules of court, then inserted into an order that the amount be paid, is a final order for the purposes of s 40(1)(g) of the Act: Worchild v The Drink Nightclub (Qld) Pty Ltd [2005] FCAFC 240; (2005) 224 ALR 339 at [10] per Kiefel, Jacobson and Greenwood JJ.
    • 31 The Master's order was a final order for the payment of money. That is because the order itself resolved a pre-existing dispute. It was made by a court for the payment of money by Ms Francis and had the effect of ascertaining the firm's and her rights in respect of that dispute: Clyne at 547-548. It follows that the Master's order was a final order for the purposes of ss 40(1)(g), (3)(d) and 41(3)(a). Therefore, the second ground of appeal fails.
80. Two cases in the WASC, Golden West Resources Ltd v Maxim Litigation Consultants [2016] WASC 384 (“Golden West”) and LM v K Lawyers (No 3) [2016] WASC 204 (“LM Case”), considered the predecessor of s.305 of the LP Act, that being s.240 of the Legal Practice Act 2003 (WA). In both cases reference was made to a certificate of taxation having effect ‘as if it were’ a judgment in respect of seeking enforcement. Registrar Boyle in the LM Case at [22] stated the plain meaning of the words is to apply.
81. In Rankilor v Circuit Travel Pty Ltd [2012] WASCA 155 at [65] per Murphy JA (with whom McLure P and Newnes JA agreed) (“Rankilor”) the Supreme Court of Western Australia, Court of Appeal stated:
    • By O 66 r 57, the costs allowed by the taxing officer on an interim or final certificate of taxation is deemed to be a judgment of the court and recoverable accordingly. The certificate, sometimes referred to as the allocatur, signed by the registrar at the foot of the bill which has been taxed, is the certificate referred to in the rules. Although the court can and will, if asked, sign and seal under O 43 a separate document as a certificate: Civil Procedure Western Australia [66.57.2].
82. The Certificate of Taxation was a final order for the payment of money which resolved a pre-existing dispute and had the effect of ascertaining the rights of Kenyon and Lavan in respect of that dispute, and was therefore a final order for the purposes of ss.40(1)(g) and(3)(d) and 41(3)(a) of the Bankruptcy Act.
83. The question to which the Court now turns is whether or not the Certificate of Taxation did in fact “certify in writing” the amount of disputed costs allowed and the costs of the costs assessment for the purposes of s.305(1) of the LP Act.
84. To “certify” relevantly means “to testify to or vouch for in writing”: Macquarie Dictionary (7^th Edn) (Sydney: Macquarie Dictionary Publishers, 2017), page 255 (“Macquarie Dictionary”).
85. The words “certify” and “certificate” are not defined in the LP Act or the Interpretation Act. There is only one other use of the word “certify”, in s.169 of the LP Act, which provides no assistance in interpreting or ascertaining what is meant by “certify in writing” in s.305(1) of the LP Act.
86. The meaning of the phrase “certify in writing” may however be affected by s.3 of the Interpretation Act 1984 (WA) (“Interpretation Act”) which provides the following definition of “writing”:
    • Writing and expressions referring to writing include printing, photography, photocopying, lithography, typewriting and any other modes of representing or reproducing words in visible form.
87. The definition of “writing” set out above is very broad, and is an inclusive definition, not an exclusive one. Relevantly, the word “writing” means:
    • That which is written; characters or matter written with a pen or the like
    • handwriting
    • any written or printed paper, document, or the like.

Macquarie Dictionary, page 1737.

88. In tracing the historical background of the LP Act, s.240 of the Legal Practice Act 2003 (WA) and s.70 of the Legal Practitioners Act 1893 (WA) contained provisions identical to the current s.305 of the LP Act. A similar provision is found in the Legal Profession Act 2004 (NSW) s.368 and the Solicitors Act 1974 (UK) s.70(7). Both of these provisions provide no definition of “certify’ or “certify in writing”. Other jurisdictions often prescribe a specific form for the certificate of taxation to be issued: High Court Rules 2004 (Cth), rr.57.04.1-57.04.3, Form 2; Federal Court Rules 2011 (Cth), r.40.32, Form 132; Court Procedures Rules 2006 (ACT), Form 2.46; Supreme Court Rules (NT), r.63.54; Supreme Court (General Civil Procedure) Rules 2015 (Vic), r.63.56.
89. In accordance with s.19 of the Interpretation Act the Court may have regard to extrinsic materials to assist with the interpretation of a provision. The Explanatory Memorandum in reference to what became s.305 of the LP Act states:

The outcome of a costs assessment is to be certified by the taxing officer and is binding on the parties to the costs assessment. The certification is to state the amount of the disputed costs allowed and the costs of the assessment. Interest is payable on the costs included in the certificate.

90. The explanation in the Explanatory Memorandum adds little to the terms of s.305 of the LP Act itself, but it can be inferred that the Parliament focused upon the substance and content of the certificate, thus implying that the validity of a certificate under s.305 of the LP Act is not necessarily affected by its actual form, or the form of any written certification.
91. The Court considers that the Certificate of Taxation in this case conforms with the requirements of s.305(1) of the LP Act in that it is a certification in writing, and that the handwritten form of the Certificate of Taxation is sufficient to comply with the requirements of s.305(1) of the LP Act (and to the relevant extent s.304(1) of the LP Act which requires a determination), and that no formal or separate certificate, or any form of typewritten certificate, is required to comply with the phrase “certify in writing”, although such forms would necessarily so comply, and may indeed be asked for: Rankilor at [65] per Murphy JA; Rules of the Supreme Court, 1971 (WA), O 43.
92. Kenyon also took issue with the fact that there had not been a formal determination of the costs of the costs assessment: LP Act, s.304(1), and argued that the Certificate of Taxation did not therefore comply with the requirement in s.305(1)(b) of the LP Act that the costs of the costs assessment be certified in writing by the taxing officer. There are two answers to this submission. The first answer is that there were no costs of the costs assessment to be certified in writing because the parties consented to an order that an amount of costs be allowed, and, on the face of the record, do not appear to have required that the taxing officer deal with the issue of costs. That is confirmed by Kenyon’s submission that “before” the assessment of costs could be done the parties had agreed to consent to the amount of $95,000. There were therefore no costs of the costs assessment to certify in writing, and the Court considers that the determination of the costs of a costs assessment for the purposes of s.304(1) of the LP Act can only be required where such a determination is actually required, and likewise the certification in writing of the costs of the costs assessment can only be required where there are such actual costs. The second answer is that, in any event, the Certificate of Taxation is not rendered invalid until it is set aside by a court of competent jurisdiction: Eggleston Mitchell at [27] per Rares, Flick and Bromberg JJ, here the WASC, and there is no evidence that there was an application to set aside the Certificate of Taxation, let alone any order setting aside the Certificate of Taxation.
93. Kenyon also argued that there was not a final judgment or final order for more than $5,000 because he had made certain payments and had certain off-setting claims. The fact that Kenyon has made certain payments to Lavan by reason of the Certificate of Taxation issuing, and that he has certain off-setting claims (if that be the case), do not alter the fact that the Certificate of Taxation has the effect of being a final order for the purposes of the Bankruptcy Act as explained above: see [69]-[71] above.
94. Kenyon also argued, and this argument went further than the fact that the Certificate of Taxation was not a final judgment or final order, that the amount in which he was indebted to Lavan was less than $5,000. It is convenient to deal with this issue at this juncture. Put shortly, Kenyon argues that he has paid a sum of $25,854.54 to Lavan in relation to the $95,000 owed pursuant to the Certificate of Taxation. That much is not in dispute. Kenyon also argues that there is a sum of $40,000 which he has paid, and which it appears that Lavan argues is a disbursement for Counsel fees, and which Kenyon therefore says reduces the amount of his indebtedness by a further $40,000. Kenyon also says that there have been various other payments made and that the amount outstanding is a maximum of $23,890.50: First Kenyon Affidavit at [36]. There is also a suggestion that a further amount of $8,525 ought to be treated as a payment of the amount due under the Certificate of Taxation: First Kenyon Affidavit at [37]. That leaves a remainder of more than $15,000 unpaid in relation to the Certificate of Taxation, on Kenyon’s own account of the relevant payments.
95. Kenyon then also argues that other costs orders in his favour reduce the debt of approximately $15,000 to a debt of less than $5,000, and that there is therefore no debt upon which a bankruptcy notice could have been founded, such debt being required to be in an amount of at least $5,000: Bankruptcy Act, ss.41 and 44(1)(a). Kenyon points to draft bills of costs prepared by solicitors acting on his behalf in matters in which there are costs orders in his favour, and says that that is evidence that the debt owed by him to Lavan is less than $5,000. Even if such evidence were admissible (and to the extent that objection was taken to Kenyon’s evidence of one of those draft bills of costs it is not admissible: see [19(b)] above) it does not establish any quantum payable by Lavan to Kenyon, and it is simply not possible to determine either at all, or with sufficient certainty, whether those bills of costs when assessed, and if off-set against the debt currently owed by Kenyon to Lavan, would result in a debt owing by Kenyon to Lavan of less than $5,000. In the circumstances, the Court finds that there is still a debt owing by Kenyon to Lavan under the Certificate of Taxation which exceeds $5,000.
96. Kenyon also argued that because of the disputes concerning the payments made by him to Lavan, and in particular the $40,000, there was not a fixed or identifiable sum which he was required to pay to Lavan. Ultimately, this is immaterial because, for reasons set out immediately above, the Court is of the view that there is a debt owing of more than $5,000 by Kenyon to Lavan, and that is sufficient to found the making of a sequestration order, even where the precise amount over $5,000 is not identifiable and was not challenged in the manner contemplated by s.41(5) of the Bankruptcy Act.
97. Having regard to all of the above matters, the Court is satisfied that there is a final judgment or final order for a debt in excess of $5,000 payable by Kenyon to Lavan in this matter.

Whether proper service of Second Bankruptcy Notice

98. Kenyon submits that:
    1. the Strickland Service Affidavit deposes that:
       1. an official copy of the Second Bankruptcy Notice was attached to a covering letter that was dated 15 June 2016: Annexure BLS 1;
       2. the covering letter was marked as "BY ORDINARY POST"; and
       3. the official copy of the Second Bankruptcy Notice, the covering letter, a second letter and a copy of the signed Bill of Costs were all placed into a standard DL sized envelope and the envelope was posted by Strickland to Kenyon at his home address, which Strickland believed to be so based on Lavan having previously been Kenyon's solicitors: Annexure BLS 1;
    2. service of a Bankruptcy Notice by post pursuant to reg.16.01 of the Bankruptcy Regulations is accepted as good service, but it is also clear that the onus lies on Lavan as creditor to establish proof of service in accordance with the Bankruptcy Regulations and that there is a requirement for strict proof of service to be adduced by Lavan as creditor: de Robillard v Carver [2007] FCAFC 73; (2007) 159 FCR 38; (2007) 240 ALR 675; (2007) 5 ABC(NS) 92 at [67] per Buchanan J (“de Robillard”); Mbuzi v Favell (No 2) [2012] FCA 311 at [28] per Collier J (“Mbuzi (No 2)”);
    100. by reason of Clyne v Deputy Commissioner of Taxation (NSW) (No 4) [1982] FCA 162; (1982) 13 ATR 302; (1982) 66 FLR 301; (1982) 42 ALR 703 per Lockhart J (“Clyne (No 4)”) an alleged debtor needs also to be able to determine when posting had in fact occurred, in order to be able to calculate the time for compliance, based on delivery in the ordinary course of business practice;
    4. the covering letter does not state on what date the 'documents' were posted, so Kenyon would not be able to reliably calculate the time for compliance;
    5. Strickland does not state how he posted the 'documents'. There is no extract from a mail register attached, no statement that Strickland placed the 'documents' into a mail box or delivered them to Australia Post. There is nothing at all in evidence to show that the documents were actually delivered to Australia Post at all to begin the process of 'delivery' to Kenyon;
    6. Strickland states that he posted "an official copy of bankruptcy notice BN189704 dated 18 April" and does not state that he posted the actual Second Bankruptcy Notice: Strickland Service Affidavit at [4];
    7. Strickland states that he verily believes 147 Goode Street Bayswater to be Kenyon's home address: Strickland Service Affidavit at [5]. Regulation 16.01 of the Bankruptcy Regulations provides for service at the debtors last-known address;
    8. the Strickland Service Affidavit does not state whether the believed home address is also Kenyon's last-known address and makes no reference to that aspect of the Bankruptcy Regulations;
    9. Lavan has not set out what steps it took to determine that the address used was the last-known address of Kenyon, apart from a reference to previously acting for Kenyon and Lavan has not set out what evidentiary basis that there was for determining that the address used was the last-known address of Kenyon;
    10. there is nothing before the Court from Lavan as to whether there was a last-known address determined to exist, or on what basis that determination was made, and therefore proper service of the Second Bankruptcy Notice has not been effected: Zhang v Ehrenfeld [2015] FCCA 877; (2015) 295 FLR 74;
    11. as there is no evidence as to how the 'documents' were posted or on what day they were posted, it is not possible to reliably determine when the 'documents' would have been delivered and at the very best, Kenyon can only make an assumption about when the 'documents' were delivered to Australia Post and from there make an assumption about the likely delivery dates. By leaving Kenyon to make assumptions about delivery based on best guesses, Lavan is not satisfying the strict burden of proof in relation to service of the Second Bankruptcy Notice; and
    50. the Second Bankruptcy Notice also referred to payments made or credits allowed of $25,854.50 that had been made since the date of the judgment or order, which is not accurate and does not represent the truth. The Ferreira Affidavit of Debt shows that payments made by Kenyon were made in 2010 and 2012 and there were no payments made after January 2016 when the Certificate of Taxation was signed by the taxing officer. The sum of $25,854.50 also bears no relevance to the actual payments that were made and is not only misleading in terms of what it says, but misleading in terms of what payments were actually made - which the Ferreira Affidavit of Debt shows were in fact $66,989.50.
99. Lavan submits that:
    1. in relation to the Second Bankruptcy Notice, and the requirements under r.4.04(1)(b) of the FCC Bankruptcy Rules, Lavan relies on the Strickland Service Affidavit;
    2. any submission that the Court ought to exercise its discretion to dismiss the Creditor’s Petition due to the circumstances surrounding the Second Bankruptcy Notice ought to be dismissed due to Kenyon’s inability to overcome the presumption of service and inability to negate the validity of the Bankruptcy Notice;
    100. the allegations raised by Kenyon in the Second Kenyon Affidavit at [41], that alleged non-receipt does not rebut the presumption of service provided for in reg.16.01 of the Bankruptcy Regulations: Skalkos v T & S Recoveries Pty Ltd [2004] FCAFC 321; (2004) 141 FCR 107; (2004) 213 ALR 311; (2004) 3 ABC(NS) 51 (“Skalkos”);
    4. in relation to Kenyon’s assertions made in the Second Kenyon Affidavit at [42], which are not accepted by Lavan, s.41(5) of the Bankruptcy Act provides that:
       • A bankruptcy notice is not invalidated by reason only that the sum specified in the notice as the amount due to the creditor exceeds the amount in fact due, unless the debtor, within the time allowed for payment, gives notice to the creditor that he or she disputes the validity of the notice on the ground of the misstatement.
    5. Kenyon has not, and is unable to, put before the Court any substantive evidence of payments made to Lavan in excess of $25,854.50 (being the amount recorded as paid by Kenyon in the Second Bankruptcy Notice); and
    6. rather, the Court in exercising its discretion must consider that Kenyon has failed to put before the Court any material and substantiated evidence of payments made by Kenyon, or his solvency.

Consideration as to whether proper service of Second Bankruptcy Notice

100. As to the proper service of a bankruptcy notice the relevant law was summarised by the Federal Court in Mbuzi (No 2) at [24]-[31] per Collier J, and although a lengthy extract it is worth setting out in its entirety:
     • 24 It is self-evident that a sequestration order against an estate is an event of the utmost seriousness for a putative debtor (cf comments of Burchett J in Re Anthony Edward Millar; Ex parte Commonwealth Development Bank of Australia at 7 (unreported, Burchett J, 27 April 1993)). The jurisdiction of the Court to make a sequestration order is conferred by s 43 of the Bankruptcy Act 1966 (Cth) (“Bankruptcy Act”), which provides that the Court may, on a petition presented by a creditor, make a sequestration order against the estate of the debtor where (inter alia) the debtor has committed an act of bankruptcy.
     • 25 Section 52 of the Bankruptcy Act requires the Court at the hearing of a creditor’s petition to require proof of, inter alia, the matters stated in the creditor’s petition. The creditor’s petition is required to state the act of bankruptcy upon which the petition is founded (s 44(1)(c)). Where the act of bankruptcy upon which the creditor relies is failure of the debtor to comply with a bankruptcy notice, it is beyond contention that effective service of a bankruptcy notice is essential. As Lehane J observed in Re Ferrarese; Ex parte Aloisio (1995) 60 FCR 586 at [6]:
       • Proper service of process is of fundamental importance, and it is perhaps particularly so in the context of bankruptcy proceedings given their potentially penal consequences. It is of great importance that those whose task it is to effect service perform the task meticulously. It is equally important that the evidence given of service be meticulously accurate. Because it is essential that the Court be able to rely on evidence of service, it must be expected that the Court will regard very seriously any departure from that standard.
     • 26 Under the Bankruptcy Act service of a bankruptcy notice may be effected in one of a number of ways. Traditionally bankruptcy notices required personal service, however the Bankruptcy Act also contemplates substituted service where permitted by order of the Court (s 309(2)) or service in one of the methods prescribed in reg 16.01 of the Bankruptcy Regulations. In this case Mr Favell relies upon reg 16.01(1)(a). Regulation 16.01 provides as follows:
       • Service of documents
       • 16.01. (1) Unless the contrary intention appears, where a document is required or permitted by the Act or these Regulations to be given or sent to, or served on, a person (other than a person mentioned in regulation 16.02), the document may be:
         • (a) sent by post, or by a courier service, to the person at his or her last-known address; or
         • (b) left, in an envelope or similar packaging marked with the person’s name and any relevant document exchange number, at a document exchange where the person maintains a document exchange facility; or
         • (c) left, in an envelope or similar packaging marked with the person’s name, at the last-known address of the person; or
         • (d) personally delivered to the person; or
         • (e) sent by facsimile transmission or another mode of electronic transmission:
           • (i) to a facility maintained by the person for receipt of electronically transmitted documents; or
           • (ii) in such a manner (for example, by electronic mail) that the document should, in the ordinary course of events, be received by the person.
       • (2) A document given or sent to, or served on, a person in accordance with subregulation (1) is taken, in the absence of proof to the contrary, to have been received by, or served on, the person:
         • (a) in the case of service in accordance with paragraph (1) (a) or (b) - when the document would, in the due course of post or business practice, as the case requires, be delivered to the person's address or document exchange facility; and
         • (b) in the case of service in accordance with paragraph (1) (c), (d) or (e) - when the document is left, delivered or transmitted, as the case requires.
     • 27 That a bankruptcy notice may be served in accordance with methods prescribed by reg 16.01(1)(a) is clear from the decision of the Full Court in Skalkos. However, it is equally clear that the onus lies with the creditor to establish proof of service in accordance with the methods permitted by reg 16.01(1): de Robillard v Carver [2007] FCAFC 73; (2007) 159 FCR 38 at [46], [68]. Further, strict proof of service on the debtor is required. If the creditor is unable to demonstrate strict proof of delivery, the chain of delivery breaks down: de Robillard at [68].
     • 28 These principles were explained by Buchanan J in de Robillard in relation to reg 16.01(1)(b) of the Bankruptcy Regulations, which allows a document to be served by being left in an envelope or similar packaging marked with the person’s name and any relevant document exchange number, at a document exchange where the person maintains a document exchange facility. His Honour, with whom Moore and Conti JJ agreed, said as follows:
       • [67] First, it is appropriate in principle to require strict proof. Before the introduction of reg 16.01 bankruptcy notices were required to be served personally unless an order for substituted service was made. The requirements for service were strictly enforced (Re Ditfort; Ex parte Deputy Commissioner of Taxation (1988) 19 FCR 347 per Gummow J at 358). For example, in Clyne v Deputy Commissioner of Taxation (No 4) [1982] FCA 162; (1982) 13 ATR 302; 42 ALR 703, Lockhart J set aside a bankruptcy notice served by post because, although by order of the Court service was deemed effective 14 days after posting and compliance was required 28 days after due service, the alleged debtor could not know when posting had in fact occurred and therefore could not reliably calculate the time for compliance. Although the introduction of reg 16.01 has removed the need for personal or substituted service, a strict approach to satisfaction of the elements of service remains appropriate.
       • (Emphasis added.)
     • 29 His Honour also referred with approval to In re Long; Ex parte Fraser Confirming Pty Ltd (1975) 12 SASR 130 where Walters J also endorsed the need for strict compliance with the formalities of service of a bankruptcy notice. At 133-134 his Honour said:
       • In taking the view that strict compliance with rules prescribing the method of service of a bankruptcy notice must be insisted upon, I draw support from the rule laid down by the Divisional Court in Re Collier; Ex parte Dan Rylands Ltd [(1891) 64 LT 742 at p 743], where Cave J observed:
         • Due service of a bankruptcy notice is necessary in order to constitute an act of bankruptcy, and it is more important that the rules and regulations should be properly complied with in the case of a bankruptcy notice than in the case of a petition for adjudication. When an act of bankruptcy has been committed, then the petition is a less formal matter, and one as to which it is not necessary to take exactly the same view. Very soon after the Act of 1883 came into operation several cases were brought before the Courts with reference to a bankruptcy notice, and on more than one occasion the Court of Appeal have expressed the opinion that, since the commission of an act of bankruptcy was a serious matter, and involved consequences of what have been called a penal nature, it was important to see that the necessary preliminaries have been complied with.
       • This dictum of Cave J was expressly approved by Vaughan Williams LJ in In re O.C.S. (A Debtor) [[1904] 2 KB 161 at p 162] and by Harman J in Bowmaker’s case [[1951] Ch 313 at p 318]...
     • 30 Later in the judgment Walters J continued (at 134):
     • Reference may also be made to the decision of the Court of Appeal In re A Debtor [[1939] 1 Ch 251]. There it was held that the handling [handing] of a bankruptcy petition to the debtor in a sealed envelope was not good service, for the reason that, as the petition was in a sealed envelope which bore no reference, and called no attention, to its contents, the debtor could have had no knowledge of what was contained in the envelope. In delivering his judgment (in which other members of the Court concurred), Sir Wilfred Greene MR stressed the necessity for “great strictness” in observing the directions prescribed by the relevant English Bankruptcy Rules for service of a bankruptcy petition. His Lordship said:
       • It is no exaggeration to say that the practice in to writs and the requirements of the law in regard to the service of writs are, and have always been, regarded as matters strictissimu juris. In the case of the service of a bankruptcy petition, I can see nothing in the section and Rules which can fairly be construed as relaxing the strict requirements which are to be found in the case of service of writs and other documents under the Rules of the Supreme Court.
     • 31 The importance of proper proof in respect of service of a bankruptcy notice was also recognised by Gummow J in Re Ditfort; ex parte Deputy Commissioner of Taxation (1988) 19 FCR 347 at 359.
101. The Court notes that reg.16.01 of the Bankruptcy Regulations as set out in Mbuzi (No 2) remains relevantly unchanged.
102. In Clyne (No 4) the Federal Court at FLR at 306-307 per Lockhart J discussed the issue of service in that case, and made the following observations about, and conclusions concerning, the service of the bankruptcy notice in that case:
     • However, on the evidence before me the applicant could not have known with any certainty the date on which the notice and court order were posted to him. They were in fact posted on 27th May and were received by the debtor on 1st June; but there was nothing received by the applicant which would have reliably informed him of the date of posting.
     • It is the practice in the office of the Deputy Crown Solicitor of the Commonwealth at Sydney, which had the carriage of the service of the bankruptcy notice on the applicant, “for all mail to be franked with the appropriate postage by a franking machine (which also records the date upon which the franking occurs) prior to the said mail being delivered to the General Post Office, Martin Place, Sydney”. There is no clear evidence that the date franked on the envelope sent to the debtor was 27th May although probably that was the case.
     • The envelope is not in evidence. It was received by the applicant but there is no evidence of its ultimate fate. The applicant was entitled to know clearly and unambiguously the date of posting of the notice. On no view of the facts could he have known this. It goes too far to say that because the envelope probably bore the franked imprint of a date, which more likely than not was the date of posting, the applicant should be assumed to know what that date was. People frequently either do not look at such matters on envelopes or throw them away. Also, printing from franking machines may become obscured in the course of transit of the envelope, and it is possible that the date was not clearly shown on the envelope at relevant times.
     • This is too thin a branch, or perhaps I should say a twig, on which to set in train the machinery of bankruptcy which may ultimately result in the commission of an act of bankruptcy.
     • These matters lead me to conclude that the notice should be set aside.
103. In de Robillard the Full Court of the Federal Court at [68] per Buchanan J (with whom Moore and Conti JJ agreed) said as follows:
     • Secondly, although reg 16.01(2) casts upon the appellant the burden of displacing a presumption as to time of service, as I earlier pointed out that onus does not arise until, first, proof of delivery in the due course of business practice is available. If there is no proof of that fact then proof of the chain of delivery simply breaks down inconclusively.

(See also de Robillard at [58]-[59] per Buchanan J).

104. The evidence of service relied upon by Lavan is contained in the Strickland Service Affidavit, and is relevantly in the following terms at paragraphs 4 and 5:
     • 4 On 15 June 2016, I caused an official copy of bankruptcy notice BN 189704 dated 18 April (Bankruptcy Notice) and the judgment of the Supreme Court of Western Australia signed 27 January 2016 in proceedings LPA 5 of 2013 between the Applicant and the Respondent (Documents) to be served on the Respondent by:
       • 4.1 posting by ordinary post an envelope addressed to Mr Terence Kenyon at 147 Coode Street, Bayswater WA 6053 containing:
         • 4.1.1 the Documents; and
         • 4.1.2 a covering letter addressed to Terence Kenyon. “BLS1” is a copy of the envelope addressed to the Respondent, the covering letter and the Documents.
     • 5 I verily believe 147 Coode Street, Bayswater WA 6053 to be the Respondent's home address on the basis of Applicant previously acting as the solicitors for the Respondent.
105. The envelope annexed as Annexure BLS1 is a plain envelope on which is pre-printed a stylised logo which can be read as “Lavan Legal Leaders in Law” and upon which also appears their Perth GPO Box address. Typewritten on the envelope is the following name and address:
     • Mr Terence Kenyon
       147 Coode Street
       BAYSWATER WA 6053
106. The envelope bears no other marks or notations.
107. The Strickland Service Affidavit also has as part of Annexure BLS1 two letters from Lavan to Kenyon dated 15 June 2016 (“15 June 2016 Letter”) and 6 May 2016 (“6 May 2016 Letter”) respectively.
108. The 15 June 2016 Letter is addressed to Kenyon at 147 Coode Street, Bayswater, and is relevantly in the following terms:
     • Bankruptcy Notice 189704 (Bankruptcy Notice)
     • 1 On 6 May 2016, we sent you the attached letter and a copy of the Bankruptcy Notice by registered post.
     • 2 It has come to our attention in the past week or so that the registered post was returned to our office.
     • 3 In those circumstances we assume you did not receive the Bankruptcy Notice and we do not consider we are entitled to rely on that correspondence for the purpose of complying with our service obligations in the Bankruptcy Regulations 1996 (Cth).
     • 4 Please now find enclosed, a further copy of the Bankruptcy Notice which is being sent solely by ordinary post to your home address.
109. The 6 May 2016 Letter is also addressed to Kenyon at 147 Coode Street, Bayswater and is in the following terms:
     • Bankruptcy Notice
     • 1 We refer to the bankruptcy notice which was served on 22 March 2016 (Notice).
     • 2 Please discard and disregard that Notice.
     • 3 We enclose a substituted bankruptcy notice issued by the Australian Financial Security Authority on 18 April 2016.
110. Both the 15 June 2016 Letter and the 6 May 2016 Letter appear to be signed either by, or on behalf of, Alison Robertson, a partner at Lavan.
111. Kenyon’s evidence in relation to the Second Bankruptcy Notice is as follows at paragraph 41 of the First Kenyon Affidavit:
     • 41. I have never received a second Bankruptcy Notice from Lavan Legal, but I am now aware that there was a second Bankruptcy Notice prepared on 18 April 2016. If I had received the second Bankruptcy Notice I would have sent a further letter in terms of the one that I sent on 6 April 2016 (TK6), as the exact same issues were still in play. I would refer again to the comment I made at the last line of paragraph 22 herein. Annexed hereto and marked TK8 is a true copy of the Bankruptcy Notice of 18 April 2016.
112. In the case of postal service under reg.16.01(1)(a) of the Bankruptcy Regulations the evidence must include evidence that the Bankruptcy Notice was actually placed in the envelope, and that the envelope containing the notice was posted to the debtor at the relevant address, and the evidence of a recollection of leaving the envelope containing the Bankruptcy Notice to be put in the mail by an unnamed receptionist in the ordinary course of the creditor’s business practices is insufficient: Mbuzi (No 2) at [33]-[34] per Collier J.
113. Kenyon was entitled to know clearly and unambiguously the date of posting of the Bankruptcy Notice: Clyne (No 4) FLR at 306-307 per Lockhart J. There is nothing in the Strickland Service Affidavit which indicates how it is that Kenyon might have known the date of posting of the Bankruptcy Notice. It is not sufficient to assume that the date of the 15 June 2016 Letter was also the date of the posting of the Second Bankruptcy Notice. That is particularly so where the 15 June 2016 Letter does not say that it is being posted on that date, and there is no mark (such as that of a franking machine) or notation (be it by hand or otherwise) on the envelope which indicates a date of posting. Nor is there any particular evidence as to how it is that Strickland “caused” the envelope containing the Second Bankruptcy Notice to be posted, or as to how Lavan might ordinarily cause such a letter to be posted, or as to when it was actually posted (there is for example no record of outgoing mail from Lavan on any relevant date in evidence). Further, there is nothing in the form of the envelope in evidence at BLS1 which would call to the attention of Kenyon, in any way, the fact that there were important documents contained therein: Mbuzi (No 2) at [30] per Collier J; Clyne (No 4) FLR at 307 per Lockhart J, assuming (contrary to Kenyon’s evidence) that the envelope was received.
114. The evidence in relation to the service of the Second Bankruptcy Notice does not evidence a meticulous approach by Lavan, and does not meet the required strict proof of service necessary: Re Ferrarese; Ex parte Aloisio (1995) 60 FCR 586 at [6] per Lehane J (cited in Mbuzi (No 2) at [25] per Collier J); de Robillard at [67]-[68] per Buchanan J. The evidence of service in the Strickland Service Affidavit simply does not rise to the required standard of proof of service of the Second Bankruptcy Notice (and there was therefore no need for Kenyon to cross-examine on it).
115. The Court also notes that there is evidence from Kenyon that he did not receive the Second Bankruptcy Notice. That evidence was not challenged, and were it necessary to make a finding in that regard, the Court would be inclined to take the view that the presumption in reg.16.01(2) of the Bankruptcy Regulations was rebutted by Kenyon’s unchallenged evidence, noting that Kenyon’s evidence about the non-receipt of the Second Bankruptcy Notice is consistent with, and fortified by, the fact that the 6 May 2016 Letter said to have been sent by registered post was returned to Lavan un-opened.
116. The matters as set out above lead the Court to conclude that the Creditor’s Petition, even if properly served on Kenyon “was poisoned at its source”: Mbuzi (No 2) at [41] per Collier J, because the Second Bankruptcy Notice was not properly served in accordance with reg.16.01(1)(a) of the Bankruptcy Regulations.
117. In the circumstances, there was no proof that an act of bankruptcy based on a failure to comply with the Second Bankruptcy Notice by Kenyon has actually occurred. Lavan is unable to demonstrate that the service referred to in the Strickland Service Affidavit was effected, and in those circumstances there is no valid affidavit of service of the relevant Bankruptcy Notice accompanying the petition for the purposes of r.4.04(1)(b) of the FCC Bankruptcy Rules, and therefore the strict requirements of s.52(1) of the Bankruptcy Act are not met by Lavan.
118. Kenyon’s argument that 147 Coode Street, Bayswater was not his last known address cannot be sustained. Whilst the Strickland Service Affidavit puts the belief as to that being Kenyon’s home address on the basis of Lavan having previously acted for Kenyon as his solicitors, a more immediate source of knowledge of Kenyon’s home address (or his last known address) is his letter of 6 April 2016 (“6 April 2016 Letter”) to Lavan in relation to the First Bankruptcy Notice: First Kenyon Affidavit at Annexure TK6. The 6 April 2016 Letter is headed:
     • Terence G Kenyon
       147 Coode Street
       BAYSWATER WA 6053
119. The “last known address” for the purposes of reg.16.01(1)(a) of the Bankruptcy Regulations is the most recent address supplied to the creditor by the debtor, in this case supplied to Lavan by Kenyon: Civic Video Pty Ltd v Warburton [2013] FCA 934; (2013) 216 FCR 61; (2013) 11 ABC(NS) 568 at [76] per Jacobson J (“Civic Video”), and the last known address can still be effective even if the person to be served does not actually reside or occupy the address at the relevant time: Perpetual Trustee Company Ltd v Sanna [2013] FCCA 2107; (2013) 11 ABC(NS) 639 at [17] per Judge Raphael; Civic Video at [80] per Jacobson J.
120. In all of the above circumstances the Court is satisfied that 147 Coode Street, Bayswater was Kenyon’s last known address at the time that Lavan sent the 16 April 2016 Letter.
121. In relation to the issue of payments made to Lavan by Kenyon and the amount of those payments, that matter is addressed above see [94]-[96] above. In relation to the fact that an official copy of the Second Bankruptcy Notice was said to be served, service of a copy is either permitted or is a remedial defect: Mineo v Etna [2009] FCA 337; (2009) 176 FCR 74; (2009) 7 ABC(NS) 115 at [22]-[32] per Gordon J; Nash v Thomas [2012] FCA 693; (2012) 204 FCR 415; (2012) 128 ALD 347 at [24] and [27] per Finn J.

Whether issue of the Second Bankruptcy Notice an abuse of process

122. Kenyon submits that:
     1. bankruptcy notices are not intended to be used as method of debt recovery for disputed debts. They are intended to be used to recover the payment of claims that are liquidated and certain, as between the parties. Using bankruptcy notices as a coercive tool to force someone to pay a properly disputed debt is an abuse of process;
     2. Lavan is fully aware that there is a valid dispute between Lavan and Kenyon over the amount, if any, that is payable by Kenyon to Lavan;
     100. Lavan issued to Kenyon invoices for legal work that totalled $335,163.45 that were the subject of an Assessment of Costs application by Kenyon. That Assessment of Costs was to be conducted on the basis of the prescribed scale of fees and not on a costs agreement, after Lavan's litigated claim to an Assessment based on a costs agreement was dismissed in Lavan Legal;
     4. Lavan subsequently filed an amended bill of costs for the sum of $154,092.48 which was to be the subject of the Assessment of Costs. The Bill of Costs included, at listed items number 27 and 28, the maximum scale allowance for Counsel fees;
     5. before there was an assessment of costs undertaken by the taxing officer, Lavan and Kenyon agreed to an amount of costs in the sum of $95,000;
     6. Kenyon has paid to Lavan the sum of $69,145.50 as is evidenced by Lavan’s trust account statements and Kenyon believes that that amount should be credited towards the $95,000. Lavan asserts that only the sum of $25,854.50 which was paid by Kenyon to Lavan should be credited, albeit the composition of the amount of $25,854.50 is not evident from the trust account statements produced by Lavan;
     7. Kenyon has a costs order against Lavan in the Supreme Court, for the costs of the determination as to whether there was a written costs agreement or not. Kenyon’s former solicitor has prepared a draft bill for those costs of $23,247.00. There is also a costs order against Lavan in favour of Kenyon, relating to the District Court writ that Lavan issued against Kenyon, that was discontinued by Lavan;
     8. Kenyon's view is that after allowing for the costs payable to Kenyon by Lavan in the Supreme Court and the District Court, and applying the full credit of money paid to Lavan by Kenyon, towards the agreed amount of the Certificate of Taxation, the amount due to Lavan by Kenyon will be either less than $5,000 or Lavan will in fact be indebted to Kenyon; and
     9. at all times Lavan has been aware of the dispute between the parties and that was clearly articulated to when Kenyon issued them with a letter disputing the amount of the First Bankruptcy Notice, that was subsequently never acted upon.
123. Kenyon also relies upon what is said at paragraph 22 of the First Kenyon Affidavit concerning his discussion with Coyle which he perceived to be a threat, and which he now characterises as an abuse of process: see [22] above.
124. Lavan submits that:
     1. Kenyon owes Lavan more than $5,000;
     2. the costs orders that Kenyon has against Lavan are not assessed costs, and their quantum is not determined; and
     100. although not the subject of any evidence in response to that of Kenyon, Coyle did not make what Kenyon perceives to have been a threat because those words were not said.

Consideration of whether issue of Bankruptcy Notice an abuse of process

125. In order to make an out abuse of process a party must establish more than:
     1. the mere obtaining of a judgment;
     2. the issue of a bankruptcy notice; and
     100. the existence of a proceeding in this Court for a sequestration order to issue: Seller v Deputy Commissioner of Taxation [2011] FCA 865; (2011) 84 ATR 501; (2011) 282 ALR 80; (2011) 9 ABC(NS) 195 at [25] per Flick J.
126. The asserted abuse of process on the basis that the debt owed by Kenyon to Lavan is less than $5,000 cannot be made out because the debt is presently more than $5,000, for reasons set out at [94]-[96] above.
127. The suggestion that the quantum of costs originally invoiced by Lavan ($335,000), its reduction to a sum slightly in excess of $150,000, and ultimate agreement on a sum of costs of $95,000, as being evidence of abuse, seemingly, it is to be inferred, by way of undue pressure to pay excessive costs, cannot be made out. There is simply no evidence to support it, and the reductions in the amounts of costs claimed do not of themselves support this assertion by Kenyon. Further, the Court observes that it is not unusual for there to be significant reductions in costs payable when costs are assessed by a court, and the Court is of the view that there is nothing unusual in the circumstances of this case where the assessment of costs is between a quarter and a third of the originally invoiced sums of costs.
128. Kenyon was not cross-examined as to his assertion that Coyle said to him words to the effect that Kenyon had made a mistake in taking Lavan on and that Kenyon would regret ever having tried, and that Lavan “will destroy you”: First Kenyon Affidavit at [22]. In the absence of cross-examination, or an alternative version of the conversation from Coyle, the Court must accept, for present purposes, that those comments, or words to that effect, were uttered by Coyle. Those words do not necessarily evince an intention to engage in an abuse of the bankruptcy process of this Court. Those words might equally reflect Coyle’s view as to the wisdom of Kenyon engaging in the litigation, and a prediction as to the ultimate outcome both for Lavan and Kenyon, in proceedings in another court. The Court further notes that whenever it was that the Second Bankruptcy Notice came to Kenyon’s attention there was no application at the time to set it aside on the basis of abuse of process. Overall, the Court is not satisfied that the comments evince any intention to abuse the bankruptcy process of this Court.
129. For all of the above reasons, the Court is not satisfied that the issue of the Second Bankruptcy Notice was an abuse of the process of this Court.

Whether proper service of Creditor’s Petition

130. Kenyon submits that:
     1. the Creditors Petition is required to be served personally or if an application is made, it can be served pursuant to orders for substituted service. On 20 December 2016 a Registrar of the Court made orders for substituted service which set out a specific regime for service of the Creditors Petition (“Registrar’s Substituted Service Orders”);
     2. the Registrar’s Substituted Service Orders were not permissive in nature, in that they set out an alternative method of service to personal service, but they were prescriptive in that they set out the prescribed manner of service, which effectively removed personal service;
     100. while not so expressed, it is presumed that the Registrar’s Substituted Service Orders were made pursuant to s.309(2) of the Bankruptcy Act;
     4. at a hearing before a Registrar of the Court on 16 January 2017, the Registrar, amongst other orders, ordered as order 1 that “sub-paragraph (a) of paragraph 2 of the orders of Registrar Stanley made on 20 December 2016 be set aside.” (“Registrar’s Varied Substituted Service Orders”);
     5. while there are provisions for the making of orders to set aside or vary previous orders of the Court, the issue is, did the Registrar have the power under s.309(2) of the Bankruptcy Act, to vary an order in a way that would authorise a mode of service, which at the time of the order, had already been effected. On the authority of Re Vincent; Ex Parte State Bank of New South Wales Ltd (1996) 71 FCR 58 at 67 per Hill J (“Vincent”), there is no such power and in order to have effectively served the Creditor’s Petition Lavan was required to comply with the Registrar’s Substituted Service Orders in their entirety;
     6. paragraph 16 of the Ferreira Service Affidavit states that “as a result of the information contained in paragraphs 13, 14 and 15, I verily believe that it is not reasonably practicable for Ms Harrison to effect personal service at 147 Goode Street, Bayswater Way (sic) 6053 in accordance with order 2(a) of the Orders,” but there is nothing contained in the said paragraphs that even relates to 147 Coode Street, Bayswater, apart from a statement of belief that 'Kath Kenyon' resides at the address;
     7. at paragraphs 17, 18 and 19 of the Ferreira Service Affidavit, Ms Ferreira deposes that the documents served pursuant to order 2(b) and (c) of the Registrar’s Substituted Service Orders were returned to Lavan in their sealed state and that a reply was received from the email address referred to in order 2(d) of the Registrar’s Substituted Service Orders, stating that it was a discontinued email address;
     8. Annexure MMF 3 of the Ferreira Service Affidavit at page 244 shows that a SMS message was sent mostly in accordance with order 2(e) of the Registrar’s Substituted Service Orders, but with a SMS message being a Short Message Service which has a 160 character count, the effectiveness of sending a SMS message with 708 characters is unknown;
     9. paragraph 5 of the Strickland Service Affidavit states that Strickland posted the Bankruptcy Notice to 147 Coode Street, Bayswater because he verily believed that that was the home address for Kenyon, but in the Ferreira Service Affidavit it says that there is no benefit in personal service on any person over the age of 16 years at that same address; and
     10. substituted service of a creditor's petition should only be ordered when “there is a reasonable probability that the respondents will be informed of the petition as a result of the form of service identified”: Deputy Commissioner of Taxation v Barnes [2008] FMCA 7; (2008) 70 ATR 776 at [71] per Lucev FM (“Barnes”).
131. Lavan submits that:
     1. on 20 December 2016 the Registrar’s Substituted Service Orders were made in relation to the service of the Creditor’s Petition on Kenyon;
     2. Lavan attempted service pursuant to the Registrar’s Substituted Service Orders, and satisfied all but order 2(a) thereof: Ferreira Service Affidavit and Harrison Substituted Service Affidavit;
     100. the Registrar’s Varied Substituted Service Orders were made on 16 January 2017; and
     4. as a result substituted service of the Creditor’s Petition was effected by Lavan on Kenyon.

Consideration as to whether proper service of Creditor’s Petition

132. The Registrar’s Substituted Service Orders made on 20 December 2016 provided as follows:
     • 1. Personal service of the Petition in proceeding PEG 330 of 2016 on Terence Gilbert Kenyon (‘the Respondent’) be dispensed with.
     • 2. An official copy of the Petition and copies of the affidavits of Blair Llewellyn Strickland sworn 25 July 2016, a copy of the affidavit of Cheryl Lorraine Harrison sworn 15 November 2016, a copy of the affidavit of Melissa Marydale Ferreira sworn 25 November 2016 together with a sealed copy of this order (‘the Documents’) be served on or before 30 December 2016 as follows:
     • (a) by personal service of the Documents on a person who appears to have attained the age of 18 years at 147 Coode Street, Bayswater, WA, 6053 of the following:
       • (i) a sealed envelope addressed to the Respondent containing the Documents.
       • (ii) A written request to the person served with the sealed envelope that the sealed envelope be given or forwarded to the Respondent forthwith.
     • (b) by personal service of the Documents on a person who appears to have attained the age of 18 years at 23 Faulkner Avenue, Belmont, WA 6104 of the following:
       • (i) a sealed envelope addressed to the Respondent containing the Documents.
       • (ii) A written request to the person served with the sealed envelope that the sealed envelope be given or forwarded to the Respondent forthwith.
     • (c) by personal service of the Documents on a person who appears to have attained the age of 18 years at the City of Bayswater, Civic Centre and Council Chambers, 61 Broun Avenue, Morley, WA, 6062 of the following:
       • (i) a sealed envelope addressed to the Respondent containing the Documents.
       • (ii) A written request to the person served with the sealed envelope that the sealed envelope be given or forwarded to the Respondent forthwith.
     • (d) by sending an email to mdsusp@highway1.com.au with an electronic copy of the Documents.
     • (e) by sending a text (sms) message to the Respondent on mobile number 0417 933 191 stating:
       • “Dear Mr Kenyon
       • Proceeding PEG330/2016 has been commenced against you in the Federal Circuit Court of Australia by Lavan Legal for substituted service of the Creditor’s Petition. It has been ordered by the Federal Circuit Court of Australia that service of the Creditor’s Petition be effected on you by personal service of that document to a person at 147 Coode Street, Bayswater, WA, 6053, personal service of that document to a person at 23 Faulkner Avenue, Belmont, WA 6104, personal service of that document to a person at at the City of Bayswater, Civic Centre and Council Chambers, 61 Broun Avenue, Morley, WA, 6062, by emailing a copy of that document to you at the email address ‘mdsusp@highway1.com.au’ and by this notice. You are advised that the Creditor’s Petition will be heard by the Federal Circuit Court of Australia on 16 January 2017”.
     • 3. Service in accordance with order 2 shall be deemed good and sufficient service of the Petition on the Respondent.
     • 4. Subject to compliance with order 2 above, the Petition shall be deemed to be served on the Respondent on 6 January 2017.
     • 5. PLEASE NOTE that the Creditor’s Petition has been listed for hearing on 16 January 2017, Hearing Room 6.1, Level 6, Commonwealth Law Courts, 1 Victoria Avenue, Perth, WA.
     • 7. Costs of and incidental to this application be reserved.
133. The Registrar’s Varied Substituted Service Orders made on 16 January were as follows:
     • 1. Sub-paragraph (a) of paragraph 2 of the orders of Registrar Stanley made on 20 December 2016 be set aside.
     • 2. The estate of Terence Gilbert Kenyon be sequestrated under the Bankruptcy Act 1966.
     • 3. The Applicant’s costs be fixed in the sum of $7,703.00 and be paid from the estate of the Respondent in accordance with the Bankruptcy Act 1966.
     • The Court notes that the date of the act of bankruptcy is 8 July 2016.
134. Kenyon’s reference to Barnes is unavailing in circumstances where there was no application for review of the Registrar’s Substituted Service Orders, and the Court must presume that the Registrar concerned was satisfied that there was a reasonable probability that Kenyon would be informed of the Creditor’s Petition as a result of the form of substituted service set out in the Registrar’s Substituted Service Orders.
135. With respect to the proper service of the Creditor’s Petition nothing turns on the issue of Kenyon’s home address in relation to the purported service of the Second Bankruptcy Notice and the service of the Creditor’s Petition, both for the reasons set out above: see [118]-[120] above, and because those events were separated by many months.
136. Having regard to the evidence in the Ferreira Service Affidavit and the Harrison Substituted Service Affidavit the Court is satisfied that Lavan attempted service pursuant to the Registrar’s Substituted Service Orders and satisfied all but order 2(a) of the Registrar’s Substituted Service Orders.
137. In Vincent a creditor obtained an order from a Registrar of the Federal Court for substituted service of a bankruptcy notice. The creditor was able to effect only two of the three modes of substituted service prior to the date deemed to be the date of service expiring. Thereafter, the creditor applied to the Federal Court to vary the Registrar’s order by deleting the requirement that service be effected by the third mode specified. The matter was then referred to a Judge of the Federal Court who granted the order sought, and specifically ordered both that service by the two modes employed constituted sufficient compliance with the original order, and that the bankruptcy notice should be deemed to have been served 14 days after the deemed date of service. An application by the debtor for leave to appeal was refused. When the creditor’s petition presented following non-compliance with the bankruptcy notice was heard the debtor argued that service of the bankruptcy notice had not been validly effected because the Federal Court had no power to make a retrospective order relating to service of the bankruptcy notice.
138. The Federal Court held that:
     1. in circumstances where it was not suggested that there had been any question of substantial injustice, it was appropriate to treat the failure to serve in the third alternative way as a formal defect not invalidating the proceeding: Vincent at [68] per Hill J; and
     2. section 309 of the Bankruptcy Act does not permit varying an order in a way which would authorise a mode of service which, at the time of the order, had already been effected: Vincent at [67] per Hill J.
139. In the circumstances, Vincent is authority for the proposition that the failure to serve in only one mode of service set out in the Registrar’s Substituted Service Orders does not mean that the Creditor’s Petition has otherwise not come to Kenyon’s attention, and the Court finds that the Creditor’s Petition was therefore served on Kenyon in accordance with the Registrar’s Substituted Service Orders.
140. In relation to whether there was power to make the Registrar’s Varied Substituted Service Orders, Vincent is authority for the proposition that there was no such power once the time for compliance with the Registrar’s Substituted Service Orders had passed. Although it appears that Vincent has not been applied, followed or even cited subsequently in relation to this aspect of the judgment, it is nevertheless authoritative, and binding on this Court: Minister for Immigration & Multicultural & Indigenous Affairs v SZANS [2005] FCAFC 41; (2005) 141 FCR 586; (2005) 215 ALR 733; (2005) 86 ALD 583 at [38] per Weinberg, Jacobson and Lander JJ; Suh & Ors v Minister for Immigration & Citizenship & Anor [2009] FCAFC 42; (2009) 175 FCR 515; (2009) 108 ALD 470 at [29] per Spender, Buchanan and Perram JJ. Judgments of the Federal Court which are on point, not distinguishable and not plainly wrong are binding on this Court, which is also bound by authoritative obiter of the Federal Court irrespective of the capacity in which it is pronounced by the Federal Court: Communications, Electrical, Electronic, Information, Postal, Plumbing & Allied Service Union of Australia (Western Australia Division) v Fortescue Metals Group Ltd [ 2016] FCCA 1227 ; (2016) 310 FLR 1 at  [51] -  [54]  per Judge Lucev.
141. In those circumstances, the Court finds that there was no power in a Registrar to make the Registrar’s Varied Substituted Service Orders pursuant to s.309(2) of the Bankruptcy Act. For present purposes, however, that is immaterial, because for reasons otherwise set out above, and on the basis of Vincent, substituted service had already been otherwise properly effected notwithstanding that order 2(a) of the Registrar’s Substituted Service Orders had not been complied with, or had not been able to be complied with.
142. In the above circumstances, there was proper service of the Creditor’s Petition on Kenyon by Lavan.

Whether Creditor’s Petition accurate and correctly verified

143. Kenyon submits that:
     1. the Creditor's Petition falsely states that Kenyon owes Lavan the amount of $69,145.50 when Lavan knows that the amount claimed is not the correct amount and that there is a valid dispute between the parties as to the amount owing, if any;
     2. the Creditor's Petition falsely sets out that an act of bankruptcy was committed on 8 July 2016 based on the service of the Second Bankruptcy Notice on 17 June 2016 when, on the best case scenario for Lavan, there is no evidence of when the Second Bankruptcy Notice was posted, or the manner of its posting; and
     100. the Butler Verifying Affidavit fails to swear to the accuracy of the statements made in paragraph 4 of the Creditors Petition, which deals with the act of bankruptcy and merely states that there was a failure to deal with a bankruptcy notice within 21 days of it being served, but does not confirm any of the dates contained in paragraph 4 of the Creditors Petition.
144. Lavan submits that:
     1. on 17 June 2016 Lavan caused Kenyon to be served with the Second Bankruptcy Notice;
     2. the Second Bankruptcy Notice satisfied the requirements of form and substance pursuant to the FCC Bankruptcy Rules;
     100. the debt was not paid within the 21 day period provided pursuant to the Second Bankruptcy Notice, and remains unpaid by Kenyon, and the Second Bankruptcy Notice is not invalidated by reason only that the sum specified therein seemingly exceeds the amount in fact due: Bankruptcy Act, s.41(5);
     4. Kenyon has not, and is unable to, put before the Court any substantive evidence of payments made to Lavan in excess of $25,854.50 (being the amount recorded as paid by Kenyon in the Second Bankruptcy Notice);
     5. any submission that the Court ought to exercise its discretion to dismiss the Creditor’s Petition due to the circumstances surrounding the Second Bankruptcy Notice ought to be dismissed due to Kenyon’s inability to overcome the presumption of service and inability to negate the validity of the Bankruptcy Notice; and
     6. rather, the Court in exercising its discretion must consider that Kenyon has failed to put before the Court any material and substantiated evidence of payments made by Kenyon, or his solvency.

Consideration as to whether Creditor’s Petition accurate and correctly verified

145. The only aspect in which the Creditor’s Petition is relevantly and plainly inaccurate is in relation to its statement that the Second Bankruptcy Notice was served on Kenyon on 17 June 2016. In that regard, the Court has found that there was not proper service of the Second Bankruptcy Notice for the reasons set out at [100]-[117] above.

Kenyon’s solvency

146. Kenyon bears the burden of proving his solvency: Bulic v Commonwealth Bank of Australia Ltd [2007] FCA 307; (2007) 5 ABC(NS) 122; Nathan v Burness (No 2) [2011] FCA 289.
147. Kenyon did not put before the Court any or any sufficient material evidence as to his solvency, that is evidence that any assets could be realised sufficient to pay the debt within a relatively short period of time: Re Ditford; Ex parte Deputy Commissioner of Taxation (1988) 19 FCR 347; (1988) 83 ALR 265.
148. In circumstances where the Court has found that Lavan failed to serve the Second Bankruptcy Notice, Kenyon’s failure to establish his solvency is, however, not material.

Conclusion and orders

149. The Court has concluded that the Second Bankruptcy Notice was not properly served on Kenyon, and as a consequence there was no act of bankruptcy as asserted by Lavan, and therefore no foundation for the issuance of the Sequestration Order by the Registrar on 16 January 2017.
150. In the circumstances, the Court will order that:
     1. Orders 2 and 3 of the Registrar’s orders of 16 January 2017 be set aside; and
     2. the Creditor’s Petition be dismissed,
151. The Court will hear the parties as to costs.

I certify that the preceding one hundred and fifty-one (151) paragraphs are a true copy of the reasons for judgment of Judge Antoni Lucev

Associate:

Date: 20 October 2017