AYOUB v Windlock Pty Ltd

[2016] FCCA 992

FEDERAL CIRCUIT COURT OF AUSTRALIA

AYOUB v WINDLOCK PTY LTD [2016] FCCA 992

Catchwords:
BANKRUPTCY – Whether an order extending time for compliance with a bankruptcy notice was beyond power – whether proceedings commenced after the act of bankruptcy – no jurisdiction to set aside bankruptcy orders – applications to set aside dismissed.

Legislation:

Bankruptcy Act 1966, ss.30, 33, 41(6A), 306

Applicant: MICHAEL AYOUB

Respondent: WINDLOCK PTY LTD

File Number: SYG 23 of 2016

Applicant: MICHAEL AYOUB

Respondent: WINDLOCK PTY LTD

File Number: SYG 29 of 2016

Judgment of: Judge Street

Hearing date: 28 April 2016

Date of Last Submission: 28 April 2016

Delivered at: Sydney

Delivered on: 28 April 2016

REPRESENTATION

Counsel for the Applicant: Ms S Haddad

Solicitors for the Applicant: Donnelly Lawyers

Counsel for the Respondent: Mr B Skinner

Solicitors for the Respondent: O'Neill Partners Commercial Lawyers

ORDERS

1. The order of the Registrar under s.41(6A) of the Bankruptcy Act 1966 and pursuant to the Bankruptcy Rules is set aside.

2. The order of the Registrar purporting to extend time for compliance with the bankruptcy notice is set aside

3. The application is dismissed.

4. The applicant pay the costs of the respondent as taxed or agreed.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 23 of 2016

MICHAEL AYOUB

Applicant

And

WINDLOCK PTY LTD

Respondent

SYG 29 of 2016

MICHAEL AYOUB

Applicant

And

WINDLOCK PTY LTD

Respondent

REASONS FOR JUDGMENT

1. These two proceedings involve applications to set aside bankruptcy notices. Both respective proceedings, I find, were commenced after the act of bankruptcy occurred. I find that in each case service of the bankruptcy notice on the applicant occurred on 14 December 2015, and in those circumstances the act of bankruptcy occurred on 4 January 2016. The proceedings were commenced after that date. Notwithstanding those circumstances, a Registrar of the Court purported to extend time for compliance with the bankruptcy notice and purported to make an order extending time for compliance under s.41(6A) of the Bankruptcy Act 1966 (Cth).

2. The requirement identified in s.41(6A) of the Bankruptcy Act 1966 referring to “before the expiry of the time fixed for compliance with the requirement of the bankruptcy matters” is a condition in respect of the power conferred to set aside a bankruptcy notice. That condition is one that must be complied with and cannot be the subject of a retrospective order or extension of time under s.33 or s.30 of the Bankruptcy Act 1966.

3. Further, the non-compliance with the condition in s.41(6A) is not a defect of irregularity within s.306 of the Bankruptcy Act 1966. A necessary condition for the exercise of the power to be able to set aside a bankruptcy notice is that the proceedings are commenced prior to the act of bankruptcy. In the present case, I find that both applications are ones in which the proceedings were commenced after the Act of Bankruptcy. The purported orders by the Registrar under s.41(6A) of the Bankruptcy Act 1966 and the purported extension of time were beyond power and of no effect. For the purpose of correcting the record these orders will be set aside.

4. Ms Haddad on behalf of the applicant has identified that the applicant has personal medical difficulties which prevent him being able to attend Court and have created a difficulty with instructions.  Notwithstanding that assertion, it is clear that these two proceedings are misconceived and are doomed to failure.

5. It is in those circumstances that the medical impediments faced by the applicant do not give rise to any reason why the Court should not make orders in relation to the applications advanced in these proceedings which, for the reasons I have identified, are beyond the jurisdiction of the Court.  Each application to set aside the bankruptcy notice is without jurisdiction by reason of the failure to comply with the condition that required commencement of the proceedings prior to the act of bankruptcy. The applications to set aside the bankruptcy notices are dismissed.

I certify that the preceding five (5) paragraphs are a true copy of the reasons for judgment of Judge Street

Associate: 

Date:  10 May 2016