Application of Melvyn Malcolm Posner
[2007] FMCA 610
•16 April 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| APPLICATION OF MELVYN MALCOLM POSNER | [2007] FMCA 610 |
| BANKRUPTCY – Creditors meetings not held within time prescribed – power of Court to extend time. |
| Bankruptcy Act 1966 (Cth), ss.33(1)(c), 188, 189A, 190, 194(1) |
| Re Gowing & Anor, ex parte Deputy Registrar in Bankruptcy (1985) 11 FCR 111 |
| Applicant: | MELVYN MALCOLM POSNER |
| File number: | PEG 62 of 2007 |
| Judgment of: | FM Lucev |
| Hearing date: | 16 April 2007 |
| Date of last submission: | 16 April 2007 |
| Delivered at: | Perth |
| Delivered on: | 16 April 2007 |
REPRESENTATION
| Counsel for the Applicant: | Ms F F Xue |
| Solicitors for the Applicant: | Christensen Vaughan |
ORDERS
The time limit in s.194(1) of the Bankruptcy Act 1966 (Cth) in which the controlling trustee is to call a meeting of the debtor's creditors be extended until hearing of this application;
The time limit in s.194(1) of the Bankruptcy Act 1966 (Cth), in which the controlling trustee is to call a meeting of the debtor's creditors, be further extended to a date 28 days from today.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PERTH |
PEG62 of 2007
| MELVYN MALCOLM POSNER |
Applicant
REASONS FOR JUDGMENT
(Revised from transcript)
This is an application under s.33 of the Bankruptcy Act 1966 (Cth) (“Bankruptcy Act”) to enlarge the time limit set by s.194(1) of the Bankruptcy Act, in which the controlling trustee must call a meeting of the debtor's creditors. The applicant seeks interim relief in terms of an order that the time limit in s.194(1) of the Bankruptcy Act, in which the controlling trustee is to call the meeting of the debtor's creditors, be extended until the hearing of this application. The substantive relief sought is an order in similar terms, but to extend time under s.194(1) of the Bankruptcy Act to call a meeting of the debtor's creditors to be extended for a period of 28 days from today.
The grounds on which the application are made are set out in the affidavit of Christopher James Daws sworn on 10 April 2007.
Mr Daws deposes that he is a director employed by Dickson Carrello, Chartered Accountants, and that the applicant is the controlling trustee of the property of Stephen Drake-Brockman. The day to day conduct of the administration is with Mr Daws. He indicates that he has caused to be prepared a controlling trustee's report under s.189A of the Bankruptcy Act, and that that report is currently in draft form and intended to be finalised once a date has been set down for the creditors' meeting.Mr Daws deposes to the fact that on 30 March 2007 he received a call from an inspector with Insolvency and Trustee Service Australia, inquiring whether a creditors' meeting had been held in accordance with s.194 of the Bankruptcy Act. Mr Daws says that he then realised that he had not caused the controlling trustee to call the meeting to be held before 4 April 2004, and as such the controlling trustee could not comply with s.190(1) and s.194 of the Bankruptcy Act. The explanation given, and it is the only explanation on the evidence, is "that it was an oversight on my behalf" - that is, on Mr Daws' behalf.
Mr Daws says he told the ITSA inspector of his oversight and advised that he would be obtaining advice with respect to holding the creditors' meeting out of time. Mr Daws' affidavit indicates that all other duties set down by Part X of the Bankruptcy Act have been complied with. He does not believe that any prejudice would be suffered by any party, should the Court grant an extension of time in which to hold the meeting of creditors, because ITSA have already been informed of the oversight and kept advised of the progress of the administration, and that all other requirements under Part X of the Bankruptcy Act have been complied with.
Section 194 (1) of the Bankruptcy Act provides for a meeting to be called under an authority under s.188 of that Act, not more than 25 working days after the relevant consent or approval was given, or, if the relevant consent or approval was given in December, not more than 30 working days thereafter. Section 33(1)(c) of the Bankruptcy Act provides that the Court may extend time before its expiration, or, if the Bankruptcy Act does not expressly provide to the contrary after its expiration, any time limited by the Act for doing an act or thing, or abridge any such time.
On the face of the statute the Court has the power to extend time for the calling by the controlling trustee of the meeting of creditors, both until the hearing of this application and generally. In Re Gowing & Anor, ex parte Deputy Registrar in Bankruptcy (1985) 11 FCR 111, at page 112 (“Re Gowing”) Beaumont J said:
“In my opinion there is nothing in the language of section 194 or elsewhere in the Act which could form a foundation for a suggestion that the general power to extend time contained in section 33(2)(c) is not available for the purpose of extending the time for holding the meeting. All that section 194(1) relevantly does is to fix a time limit for this purpose. It is silent on the question whether any extension of that time limit should be permitted. It follows, in my view, that the qualification in section 33(2)(c) is not applicable.”
At page 113 the Federal Court answered the question it was asked in that particular case as follows:
“Section 33(2)(c) of the Act does empower the Registrar to extend the time by which the meeting of creditors should have been held pursuant to section 194 of the Act after that time has expired.”
Section 33(2)(c) of the Bankruptcy Act as it then was has since been repealed, but was in essentially the same terms as s.33(1)(c) now, other than that it was directed to the powers of the Registrar, rather than a Court. Section 194 of the Bankruptcy Act has also been amended since the decision in Re Gowing, but not in any material respect which would affect the application of that decision. The Court applies the principles outlined by Beaumont J in Re Gowing as applicable to the circumstances here.
The question remains whether I should exercise the discretion. The cause of the time expiring, albeit some considerable time ago now, a matter of years, is simple human error. There is no prejudice on the evidence to any party by reason of an extension of time in which to hear the application and generally. Therefore, the Court proposes to exercise the discretion vested in the Court and make the orders sought by the applicant to extend time for the calling of the creditors' meeting.
I certify that the preceding nine (9) paragraphs are a true copy of the reasons for judgment of Lucev FM
Associate: Maryna Hewitt
Date: 23 April 2007
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