Application By Glenn Douglas Trinick and Benjamin Peter Piggott in the Matter Of the Estate Of Robert Charles Atherley
[2011] FMCA 481
•27 June 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| APPLICATION BY GLENN DOUGLAS TRINICK & BENJAMIN PETER PIGGOTT IN THE MATTER OF THE ESTATE OF ROBERT CHARLES ATHERLEY | [2011] FMCA 481 |
| BANKRUPTCY – Extension of time for holding of creditors meeting – power to extend time – exercise of discretion – factors. |
| Bankruptcy Act 1966 (Cth), ss.33(1)(c), 120, 121, 190(2)(d), 194 Bankruptcy Regulations 1996 (Cth), reg.10.04 |
| Application by Benjamin Peter Piggott [2010] FMCA 23 Re Gowing; Ex parte Deputy Registrar in Bankruptcy (1985) 11 FCR 111 |
| Applicants: | APPLICATION BY GLENN DOUGLAS TRINICK & BENJAMIN PETER PIGGOTT IN THE MATTER OF THE ESTATE OF ROBERT CHARLES ATHERLEY |
| File Number: | PEG 165 of 2011 |
| Judgment of: | Lucev FM |
| Hearing date: | 27 June 2011 |
| Date of Last Submission: | 27 June 2011 |
| Delivered at: | Perth |
| Delivered on: | 27 June 2011 |
REPRESENTATION
| Counsel for the Applicant: | Mr D Butler |
| Solicitors for the Applicant: | Lavan Legal |
ORDERS
The time for the holding of the Meeting of Creditors pursuant to Section 194 of the Bankruptcy Act 1966 (Cth) be extended from
29 June 2011 to 29 August 2011.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PERTH |
PEG 165 of 2011
| APPLICATION BY GLENN DOUGLAS TRINICK & BENJAMIN PETER PIGGOTT IN THE MATTER OF THE ESTATE OF ROBERT CHARLES ATHERLEY |
Applicants
REASONS FOR JUDGMENT
(Edited Ex-tempore judgment)
This is an application under s.33(1)(c) of the Bankruptcy Act 1966 (Cth)[1] to extend the time set by s.194(1) of the Bankruptcy Act, in which the controlling trustees of the estate of Robert Charles Atherley[2] must call a meeting of creditors. The application was heard instanter at noon today.
[1] “Bankruptcy Act”.
[2] “Debtor”.
Mr Piggott, one of the controlling trustees, has filed an affidavit, sworn on 22 June 2011.[3]
[3] Affidavit of Benjamin Peter Piggott, sworn 22 June 2011 (“Affidavit”).
The Affidavit deposes to the appointment of the controlling trustees on 24 May 2011,[4] that is less than five weeks ago, and also to the following:
[4] Affidavit, para.1.
a)that there is a requirement to hold a meeting of creditors by 29 June 2011;[5]
[5] Affidavit, para.6.
b)the number of issues and complexities concerning the Debtor’s affairs, continuing trade activities, associated entities’ affairs and possible related party dealings means that the controlling trustees need more time to fulfil their statutory obligations and to investigate relevant issues;[6]
[6] Affidavit, para.10.
c)that the creditors meeting cannot reasonably be held until late August 2011;[7]
[7] Affidavit, para.11.
d)as a result of the Debtor’s complex business operations, a considerable amount of the controlling trustees’ time has been occupied with the continuity of the Debtor’s business operations, with a view to selling the business in due course as a going concern. Amongst other things, that time has been applied towards:
i)liaising with and negotiating continuity of leased property;
ii)arranging completion of the Debtor’s remaining work-in-progress;
iii)complying with ongoing taxation and business services client lodgement obligations prior to the 30 June 2011 deadline; and
iv)liaising with and assessing the viability of the Debtor’s business.[8]
[8] Affidavit, paras.14 and 15.
e)ongoing endeavours to sell the Debtor’s business, in respect of which one offer has been received but which does not, according to a business broker with whom the controlling trustees have been liaising, reflect the market value of the Debtor’s business;[9]
[9] Affidavit, para.16 and Annexure BPP 5.
f)the receipt of a bundle of proofs of debt in respect of the Debtor’s estate, including proofs for:
i)an estate of Mary Eva (in relation, the Court is informed by Counsel for the controlling trustees, to claims of negligence against the Debtor);
ii)objectors constituted by an alleged group of beneficiaries of that estate; and
iii)other “normal” creditors;[10]
[10] Affidavit, para.18.
g)that investigations into the Debtor’s business activities are continuing including investigations of:
i)potential voidable transactions under ss.120 and 121 of the Bankruptcy Act;[11]
[11] Affidavit, para.19.2.
ii)possible dealings, transfer of funds and possible interests in loan accounts of entities associated with the Debtor, particularly the Debtor’s disposal of his financial planning practice in December 2010 and subsequent dealings with the sale proceeds;[12]
iii)the veracity of claims of creditors against the Debtor;[13]
iv)the status of a number of legal actions and bankruptcy proceedings that the Debtor was or is currently a party to, particularly in relation to the claims of the creditors;[14] and
v)the Debtor’s conduct generally, in particular his use of funds, possibly overseas, given the activities of a migration business run by the Debtor, and the Debtor’s activities and dealings with other parties’ funds, including the possibility of the commission of offences under the Bankruptcy Act which should be reported to the Inspector-General in Bankruptcy or other enforcement authorities;[15]
h)the necessity for more time to consider whether:
i)the draft Personal Insolvency Agreement[16] is in the interests of creditors;
ii)the draft Personal Insolvency Agreement requires revision to best serve the interests of creditors; or
iii)bankruptcy, or the ceasing of the controlling trustees’ control of the Debtor’s property, would be better alternatives.[17]
[12] Affidavit, para.19.1.
[13] Affidavit, para.19.4.
[14] Affidavit, para.19.3.
[15] Affidavit, para.19.5.
[16] Affidavit, Annexure BPP 4.
[17] Affidavit, para.20.
In all the circumstances, the controlling trustees consider that an additional six to eight weeks is necessary to fully consider all of these issues.[18]
[18] Affidavit, paras.11 and 21.
Grounds for extension of time application
The grounds for the extension of time application are those set out in the Affidavit summarised above.
Power to extend time
The power to extend time for purposes including the s.194 meeting of creditors, is a power vested in this Court under s.33(1)(c) of the Bankruptcy Act. That power has been referred to and upheld in
Re Gowing; Ex parte Deputy Registrar in Bankruptcy,[19] Application of Melvyn Malcolm Posner[20] and Application by Benjamin Peter Piggott.[21][19] (1985) 11 FCR 111 at 112 and 113 per Beaumont J.
[20] [2007] FMCA 610 at paras.5-8 per Lucev FM.
[21] [2010] FMCA 23 at paras.5-6 per Lucev FM (“Piggott”).
As Pretoriusv Daltons Carpet Tiles Pty Ltd,[22] Council of the New South Wales Bar Association v Eddy[23] and Piggott make clear, it is only under s.33(1)(c) that time for a meeting of creditors under s.194 can be validly extended.
[22] (1984) 1 FCR 346 at 352 and 353 per Smithers, Northrop, and Beaumont JJ.
[23] (2006) 151 FCR 34 at 39-40 per Edmonds J; [2006] FCA 254 at para.30 per Edmonds J.
Exercise of discretion
In terms of the exercise of the discretion to extend time, no criteria for extending the time for a meeting of creditors under s.194 is set out in the Bankruptcy Act.
In the Court’s view, it is appropriate to apply principles similar to those ordinarily applied by courts in determining whether to extend time, namely to have regard to:
a)the fact that relevant time limits ought not be lightly ignored;
b)the length of the delay and whether there is an acceptable reason for the delay;
c)the merit of the substantive matter; and
d)whether there is prejudice suffered by an affected party.[24]
[24] Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 at 348-349 per Wilcox J.
In this case the relevant time limits have not been ignored.
The controlling trustees have made an application prior to the time that the creditors meeting was required to be held, but after the passing of the time for notice of the date, time and place of the meeting to be given to the Official Receiver, Debtor and any creditors.[25] Obviously applications made in those circumstances ought not be encouraged, but in this case there is no evidence, or reason to consider, that any of the notifiable parties are prejudiced in any particular way. The Court also notes that Counsel for the controlling trustees informed the Court that a further creditors’ petition for a significant creditor, Landaise Pty Ltd, was before the Registrar this morning and has been adjourned to 2 August 2011.[25] Bankruptcy Regulations 1996 (Cth), reg.10.04.
The two month delay in holding the meeting of creditors is not short, but it is also not undue, given the effect of the facts outlined in support of the application for an extension of time.
There is an acceptable reason for the delay, given the necessity to undertake further and continuing investigations into the various matters set out above, particularly the sale of the Debtor’s business, and also the matters which may be the subject of investigation for the purposes of ss.120 and 121 of the Bankruptcy Act.
There appears to be merit in the substantive matters being pursued by the controlling trustees (as confirmed by the various papers including the Debtors Form 3 Statement of Affairs and the Debtors proposed Personal Insolvency Agreement), and an extension of time would therefore hopefully allow the controlling trustees to deal with the Debtor’s property in a way that will be in the interests of creditors.[26]
[26] Bankruptcy Act, s.190(2)(d).
No party affected appears to oppose the application for an extension of time, and the Court again notes the adjournment of another creditors’ petition before the Registrar this morning. The Court can therefore infer that no prejudice is suffered by any affected party by an extension of time being granted for the holding of the creditors meeting.
In the circumstances, the Court considers that it is appropriate to extend time for the holding of the creditors meeting from 29 June 2011 to 29 August 2011. There will be an order accordingly.
I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of Lucev FM
Associate:
Date: 27 June 2011
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