Accounts Control Management Services Pty Ltd v McConnachie
[2008] FMCA 555
•15 April 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| ACCOUNTS CONTROL MANAGEMENT SERVICES PTY LTD v McCONNACHIE | [2008] FMCA 555 |
| BANKRUPTCY – Creditor’s petition – expiry without extension under s.52(5) – dismissal by registrar – review of registrars’ orders – retrospective extension granted – sequestration order made. |
| Bankruptcy Act 1966 (Cth), ss.52, 52(5) Federal Court Rules (Cth), O.35 r.7(3) Federal Magistrates Act 1999 (Cth), s.104 |
| Roskell v Snelgrove [2008] FCA 427 |
| Applicant: | ACCOUNTS CONTROL MANAGEMENT SERVICES PTY LTD ACN 050 268 141 |
| Respondent: | PAUL McCONNACHIE |
| File Number: | SYG 651 of 2007 |
| Judgment of: | Smith FM |
| Hearing date: | 15 April 2008 |
| Delivered at: | Sydney |
| Delivered on: | 15 April 2008 |
REPRESENTATION
| Counsel for the Applicant: | Mr M Holmes |
| Solicitors for the Applicant: | Patane Lawyers |
| Counsel for the Respondent: | No appearance by or on behalf of the respondent |
ORDERS
The orders made by Registrar Hedge on 26 February 2008 are set aside.
The orders made by Registrar Tesoriero on 22 February 2008 are corrected under Federal Court Rules O.35 r.7(3) by the addition of an order under s.52(5) of the Bankruptcy Act 1966 (Cth) that the period at the expiration of which the petition will lapse shall be a period of 24 months commencing on the date of the presentation of the petition.
A sequestration order be made against the estate of Paul McConnachie.
The applicant creditor’s costs, including all reserved costs but not including costs of and relating to the application for review filed on 12 March 2008, be taxed and paid from the estate of the respondent debtor in accordance with the Bankruptcy Act 1966 (Cth).
Note that the date of the act of bankruptcy is 29 November 2006.
Note that a consent to act as trustee has been signed by David John Kerr and has been or will be lodged with the Official Receiver in Sydney.
The applicant must within 2 days give a copy of this order to the Official Receiver in Sydney.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 651 of 2007
| ACCOUNTS CONTROL MANAGEMENT SERVICES PTY LTD ACN 050 268 141 |
Applicant
And
| PAUL McCONNACHIE |
Respondent
REASONS FOR JUDGMENT
(revised from transcript)
In this matter, a creditor’s petition was filed on 26 February 2007. There was a lengthy delay before it could be served on the debtor on 8 January 2008. It was then adjourned by consent, until a listing before the Registrar on 22 February 2008. On that day, negotiations had broken down, and the creditor’s representative had instructions to proceed on the petition, but it was not possible to do so due to lack of proof of sufficient service of that listing. Registrar Tesoriero therefore adjourned the hearing of the petition to 26 February 2008.
It appears on evidence now before me that that date was chosen at the request of the representative of the petitioning creditor, upon instructions from the solicitors for the petitioning creditor in Queensland indicating that it was their belief that the petition was due to expire on 26 February 2008, that is, on the date of the proposed adjournment.
Their opinion was incorrect, as is now appreciated by the petitioner in the light of a judgment given by Lindgren J in Roskell v Snelgrove [2008] FCA 427 on 2 April 2008. As his Honour points out, the 12 month period under which a petition expires unless that time is extended under s.52(5) of the Bankruptcy Act 1966 (Cth), is to be counted by including the date on which the petition is lodged. In the present case the 12 month period in fact was due to expire at midnight on 25 February 2008.
In all the circumstances shown in the evidence before me, I am satisfied that had this been drawn to the attention of Registrar Tesoriero on 22 February 2008, he undoubtedly would have extended the time before which the petition would have expired. I am satisfied that the failure to ask the Registrar on that occasion, and his omission to extend time under s.52(5), did arise by reason of an “error … from an accidental slip or omission” within Order 35 Rule 7(3) of the Federal Court Rules (Cth), which Lindgren J explains is available to this Court in circumstances such as the present. I am therefore satisfied that it would be appropriate now to correct Registrar Tesoriero’s order by including a period for extending the life of the petition.
When the matter was listed before Registrar Hedge on 26 February 2008, it would seem that the Registrar was not taken to authorities which preceded Roskell v Snelgrove, and which supported the Court’s power to extend the life of the petition retrospectively. The Registrar dismissed the petition on the ground that it had expired.
I now have before me an application to set aside her order under s.104 of the Federal Magistrates Act 1999 (Cth), which allows me to address de novo the question whether the petition should be upheld or dismissed, and in the course of that to address the question of correcting the previous order of Registrar Tesoriero.
I am satisfied that an application to do this has been properly served on the respondent debtor, and that he is aware that the petitioner would also be seeking to obtain a sequestration order today. There has been no appearance by or on behalf of the debtor.
I am satisfied on the evidence that the respondent debtor committed the act of bankruptcy alleged in the petition, and as to the other matters required by s.52. In my view it is appropriate to make a sequestration order against the estate of the debtor. I note the act of bankruptcy occurred in relation to a failure to comply with a bankruptcy notice before 29 November 2006.
I therefore propose to make all the orders sought by the creditor.
I certify that the preceding nine (9) paragraphs are a true copy of the reasons for judgment of Smith FM
Associate: Lilian Khaw
Date: 12 May 2008
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