Court finds previous unsuccessful challenges weigh against reopening registered foreign judgment
The Federal Court of Australia has refused to set aside a bankruptcy notice arising from unpaid legal fees owed to a United Kingdom (UK) law firm, finding insufficient grounds to examine the underlying debt despite a pending application for permission to appeal in the UK.
In St Clair v Irwin Mitchell LLP, in the matter of St Clair [2026] FCA 1526, the court dismissed a debtor's application for review. It affirmed earlier orders refusing to set aside a bankruptcy notice issued at the request of Irwin Mitchell LLP.
The dispute arose from legal services the firm provided in 2021. Irwin Mitchell commenced proceedings in the UK to recover unpaid fees, costs, and disbursements, obtaining a default judgment in January 2023.
The Supreme Court of New South Wales registered the UK judgment under the Foreign Judgments Act 1991 (Cth) in August 2024. The debtor subsequently made two unsuccessful applications to set aside the registration.
The court dismissed her appeal against the original UK judgment in August 2025, and dismissed a further application to set aside that judgment in July 2026. She subsequently sought permission to appeal the July decision.
Irwin Mitchell obtained a bankruptcy notice in January 2026. The debtor challenged the notice and sought to preserve the status quo while pursuing her application for permission to appeal in the UK.
The Federal Court considered whether it should exercise its discretion to go behind the registered Supreme Court judgment and investigate whether the underlying debt was genuinely owed. The court acknowledged that bankruptcy courts may examine judgment debts in appropriate circumstances, including where a default judgment raises a bona fide allegation that no genuine debt underlies the judgment.
However, the court found that the debtor's repeated unsuccessful challenges in Australia and the UK weighed against reopening the registered judgment. The court also noted that neither judgment was subject to a stay and that neither judgment suggested fraud, malice, or collusion.
The court found that the latest application for permission to appeal did not undermine the significance of the previous unsuccessful challenges, which strongly suggested that no reasonably arguable grounds existed to challenge the registered judgment.
The court further concluded that extending the bankruptcy notice's compliance period would conflict with the interests of the debtor's general body of creditors. It dismissed the review application, affirmed the earlier orders, and ordered the debtor to pay Irwin Mitchell's costs.
