Shirley had enlisted a firm of solicitors to assist in administering her deceased mothers estate. After the solicitors had run up $85,000 in costs on an estate worth $340,000 she took the file to another firm who put the amount owed into trust and paid it to the first solicitors upon finalisation of the estate.
Unfortunately an amount of $1270 was missed through an oversight. With the second lawyer no longer acting and Shirley uncontactable with serious anxiety and depression the first lawyers sued for it, received judgments including costs for over the requisite $5000, and bankrupted her!
Suncoast Community Legal Service made an application to the Federal Circuit Court to have the bankruptcy annulled on the basis that it ought not have been made. Fortunately the judgments both had technical irregularities and we were able to set them aside, then argue that the bankruptcy sequestration order should never have been made. Ultimately the Judge was not convinced on this basis, or on arguments about incomplete service of the bankruptcy notice or creditors petition, but decided in our favour simply on the basis of the classic test of solvency, that Shirley had at all times been able to pay her bills as they fell due.