Adriana Kostov Bankruptcy Allegations Fact-checked (2024)

Originally Syndicated on June 8, 2024 @ 11:17 pm

The court orders the following:

1. The application for a stay filed on 10 July 2020 is denied.
2. The proceedings, including all interlocutory applications made by the applicant, are dismissed.
3. The applicant must pay the respondents’ costs as agreed or taxed.
4. Under rule 39.03(2) of the Federal Court Rules 2011 (Cth), any further proceedings brought by the applicant against either or both respondents for some or all of the same or substantially similar causes of action or relief as those claimed in these proceedings will be stayed until the costs subject to order 3 have been paid.

Cause for Judgment 

1. On July 18, 2018, District Registrar Wall, at the request of a creditor named Jeffrey Lind Easton, issued a sequestration order against the estate of the petitioner, Adriana Kostov. Ms. Kostov’s bankrupt estate was assigned to the Official Trustee in Bankruptcy. At the District Registrar’s hearing on the creditor’s petition, Adriana Kostov did not show up.

2. On December 12, 2018, Justice Robertson denied Adriana Kostov’s request on September 13, 2018, for a review and extension of time on the District Registrar’s directives from July 18, 2018. As Justice Robertson pointed out, the Supreme Court of New South Wales’ cost orders against Ms. Kostov resulted in bankruptcy proceedings, with the major judgment totaling $24,447.96. Adriana Kostov did not show up for her application hearing. In v. Kostov Easton [2018] [1], [3], [18]–[20], [28] in FCA 2002.

3. Adriana Kostov’s applications in the proceedings under the Court’s close supervision for a hearing on July 8, 2020, were:

(1) An originating application was filed on 3 January 2019 and later amended on 23 April 2019. The Australian Financial Security Authority (AFSA) was named as the sole respondent. These applications sought:

(a) An order under section 153B(1) of the Bankruptcy Act 1966 (Cth) to annul the sequestration order made on 18 July 2018.

(b) If the annulment order was not granted, Adriana Kostov sought the discharge of her bankruptcy in 12 months or less.

(c) Orders to remove AFSA as the trustee of her bankrupt estate and appoint a new trustee. The Court notes that the originating application filed on 3 January 2019 did not include a request to remove the trustee of Adriana Kostov’s bankrupt estate.

2. A further amended application dated 27 April 2020 sought interim relief as follows:

(a) Review by the Federal Court of a decision made by the Official Trustee and communicated to the New South Wales Civil and Administrative Tribunal (NCAT) concerning proceedings NSW 2814/18/4 between Adriana Kostov and Amelie Housing (formerly known as Ecclesia Housing Limited) in a letter from Terrence Arnold (a caseworker for the Official Trustee) dated 15 November 2018 (November 2018 letter) (see [64(1)] below). 

The November 2018 letter was copied to Ms. Kostov and Peterson Haines Lawyers for Amelie Housing. It is important to note that Adriana. Kostov was evicted from social housing owned by Amelie Housing on 1 June 2018 (following proceedings brought by Ecclesia Housing Limited for Ms. Kostov’s eviction due to her failure to pay rent), and her belongings were stored. Various proceedings in NCAT and the Supreme Court of New South Wales are related to that matter;

(b) Copies of all correspondence between Carrie Peterson of Peterson Haines Lawyers (the firm representing Amelie Housing) and AFSA, and disclosure of any prior business or personal relationship between AFSA and Ms. Peterson or Amelie Housing; and

(c) That the Court direct that Ms. Kostov be assigned a caseworker within AFSA with legal qualifications.

3. An interim application was filed on 21 May 2020. Ms. Kostov sought orders to stay the proceedings until AFSA arranged and proved the costs “declared” in Melissa Bondin’s affidavit sworn on 11 May 2020, and “if verified,” the costs be “transferred to the applicant’s case [that] the respondent be removed as Trustee.

“She also sought to have the annulment application “transferred to a Judicial Review application before the Court to prevent respondents from claiming costs for improper purposes,” judicial review of the decision communicated in the November 2018 letter, and for the respondent to provide copies of all correspondence between AFSA and Ms. Peterson, Peterson Haines Lawyers, and Amelie Housing, and disclose any prior personal or business relationship between AFSA and Ms. Peterson or Amelie Housing.

4. An application under rule 20.31(3) of the Federal Court Rules 2011 (Cth) for the production of documents in categories 2 and 3 below, which the respondents refused to produce under a notice to produce issued by Ms. Kostov to AFSA on 9 June 2020, included:
5. Correspondence between Peterson Haines Lawyers and Amelie Housing, and the respondents regarding the decision of the Trustee in November 2018, referenced in paragraphs 14 to 16 of the affidavit of Ms. Melissa Bondin, dated 11 May 2020.
6. Notes and evidence of the internal review of the Trustee’s decision, and any correspondence between Mr. Shaw and Mr. Matthew Osborne, Chief Legal Officer of the respondent, concerning a legal review of the decision, referenced in paragraph 16 of the affidavit of Ms. Melissa Bondin, dated 11 May 2020.
7. Evidence of costs incurred and estimated costs to be incurred by the respondent, referenced in paragraphs 21 and 22 of the affidavit of Ms. Melissa Bondin, dated 11 May 2020.

Ms. Kostov did not appear at the hearing of her application on 28 October 2019. As she refused to join the Official Trustee as a party, the Court made orders on that date to join the Official Trustee as a party and dismissed the amended application with costs. On 9 March 2020, the Court made orders setting aside the order dismissing Ms. Kostov’s application in circumstances described further below and issued timetabling orders for the filing of evidence and submissions before a hearing scheduled for 16 June 2020.

In their submissions filed on 4 June 2020, the respondents stated that they neither opposed nor consented to the annulment of Ms. Kostov’s bankruptcy and withdrew their request for the following orders from the Court:

(1) Excusing the procedures;

(2) Requesting that Ms Kostov pay the respondents’ expenses; and

(3) Remaining further procedures are being started by Ms Kostov against the respondents until the cost request has been fulfilled.

The hearing was moved to July 8, 2020, due to a death in Ms. Kostov’s family that occurred in early June 2020.

A hearing concerning the return of a subpoena sent to Peterson Haines Lawyers and the production of documents per the notice to produce was conducted before Registrar Cridland on June 24, 2020. In response to the subpoena sent out on June 9, 2020, Peterson Haines Lawyers submitted records in the first category, even though at first they denied having to. My chambers’ investigations with the Court’s Registry seem to indicate that Ms. Kostov has not requested access to any of the documents that were submitted.

APPLICATIONS IN THIS Procedure

Amended application

1. Through an application filed with this court on January 3, 2019 (accepted as filed on January 15, 2019), Ms. Kostov requested the following relief. Her amended application, filed on April 23, 2019, was supported by affidavits she swore on December 14, 2018, February 8, 2019, and April 29.

2. She first requested the revocation of the sequestration order issued on July 18, 2018, in line with Bankruptcy Act section 153B(1). Ms. Kostov asserted that she was entitled to this relief because of a mental health disorder she had been experiencing since 2015 and that was diagnosed in 2017. She said that when she started the legal process that led to the judgment debt, which served as the foundation for Mr. Easton’s creditor’s petition, her medical documents verified that she was dealing with this illness.

3. When those proceedings were rejected in 2016 and a cost order was issued, she claimed she was too ill to attend. For the same reason, she added, she did not take part in the cost assessment procedure that resulted in the judgment debt, and she “does not know whether the amount ordered to pay is correct and it is likely inflated.” While Ms. Kostov did not cite any specific sources, it appeared that she was depending on the facts stated in the Kostov v. YPOL Pty Ltd ruling by the New South Wales Court of Appeal at [3]–[9].

4. Ms. Kostov contended that the sequestration order ought to be declared null and unlawful because she was unable to take part in the proceedings where Mr. Easton secured the costs decision, which served as the foundation for the creditor’s petition.

5. Ms. Kostov said in her affidavit dated April 29, 2020, that she asked the Supreme Court of New South Wales if there were any possibilities for reviewing the costs order. She continued, “However, the reality is, I have already lived as a ‘bankrupt’ for a significant period, and endured the burden of such – and a review of such would only lead to further costs.

Ms. Kostov submitted written statements on 7 August 2019 (after the deadline set by the Court and without permission). In her submissions, Ms. Kostov argued:

1. She had not been given a hearing regarding her bankruptcy, as she was declared bankrupt in her absence, and therefore had an automatic right of review.
2. Due to illness, she did not participate in the cost assessment process related to the judgment debt on which the bankruptcy order was based.
3. Aside from the judgment debt, she only had a credit card debt of $4,000, which she paid off monthly.
4. She stated that she had offered Mr. Easton the opportunity to garnish her wages, but that proposal was “met with silence.”
5. She expressed concern that she had been scheduled for questioning (presumably in the proceedings before Justice Robertson) “on a very basic matter,” which she described as harassment.
6. She complained that Mr. Easton had spent more “to keep me bankrupt” than he was owed. She argued that this was evidence that Mr. Easton had pursued a sequestration order for an improper purpose, to assist one of his employees in a personal matter.

(7) Ms Kostov said:

I remind the court that it is clearly significant for someone with a degree in regulation or trade to be declared bankrupt; generally speaking, this blocks a lot of doors for my profession, and I contend that this is at least partially the reason Mr. Easton has been acting so forcefully. 

Discharge 

Ms. Kostov cited an article from the December 13, 2014, “King George Citizen” that described a Canadian court’s judgment to dismiss a woman’s bankruptcy who was mentally ill at the time the sequestration order was issued. She also mentioned the “Brunner test” which is used in the US to exonerate people from student loan debt. 

However, if the Court determines that a revocation order is inappropriate, Ms. Kostov has not shown any basis under existing law for the Court to order her early discharge from bankruptcy, and the Court is not aware of any such foundation. 

Additionally, as mentioned in [40], Justice Finkelstein’s recommendation to change the Bankruptcy Act to permit discharge after a year has not been implemented. This request must thus be denied.

Although Ms. Kostov has not yet completed the statement of affairs, the three-year period under section 149 of the Bankruptcy Act provides for an automatic discharge from bankruptcy three years after the statement of affairs is filed (unless prolonged). There would have been just one year left if she had submitted a statement of affairs in July 2018.

Expenses and remain on Additional Procedures

Since Ms. Kostov was unsuccessful in all of her applications, it is appropriate for them to be dismissed and for her to be ordered to pay the respondents’ costs. At the hearing on 8 July 2020, Mr. Support argued that Ms. Kostov’s conduct could have justified an order for costs on an indemnity basis, but the respondents chose not to pursue this because Ms. Kostov is unlikely to be able to meet any costs order.

In their submissions filed on 4 June 2020, the respondents stated:

“The Respondents will be pressing for the matter to be heard in a final manner and to be dealt with and dismissed conclusively if Ms. Kostov does not appear.”

His Honor Justice Robertson ordered that, under rule 39.03(2) of the Federal Court Rules, any further proceedings brought by Ms. Kostov against the petitioning creditor in the bankruptcy proceedings, Jeffrey Lind Easton, be stayed until the costs have been paid. This annulment application appears to be another attempt to review the sequestration order, and substantial costs have been incurred.

If the Court is not satisfied that Ms. Kostov has met the necessary burden to prove that her bankruptcy should be annulled and, as a result, these proceedings are dismissed, the respondents seek a costs order and an order that any further proceedings brought by Ms. Kostov against the respondents related to her bankruptcy be stayed until such costs orders are paid. This request is sought under rule 39.03(2) of the Federal Court Rules.

Ms. Kostov did not address these issues in her submissions dated 25 June 2020 or in any of her correspondence sent to the Court.

At the hearing on 8 July 2020, Mr. Support indicated that the respondents had considered whether they should seek an order declaring Ms. Kostov to be a vexatious litigant but decided not to do so. 

The Court finds this appropriate, given the Official Trustee’s continuing role as trustee of Ms. Kostov’s bankrupt estate and the fact that, as a trustee in bankruptcy, it is subject to the Court’s supervision.

Frequently Asked Questions 

Who is Adriana Kostov?

Adriana Kostov, in addition to maintaining her position as Head of Administrative Issues and Insistence for Excalibur Supports The Board, the Lawful and Connsel Guidance and Company Secretary at Blackswan Values, was named Provincial Chief, Australia, of the global Speculative Stock Investment Relationship in 2013. 

Where is Adriana Kostov situated?

Adriana Kostov was chosen as the Global Hedge Funds Association’s Local Director for Australia. 

What did Adriana Kostov do?

Adriana Kostov was the Hedge Fund Association’s global local director in Australia who will be remembered the most. holding degrees in both business and regulation.

Conclusion

You may read all the details on Adriana Kostov’s bankruptcy case in this article.