Bendigo and Adelaide Bank Limited v Jaeger (No.2)

[2019] FCCA 2404

FEDERAL CIRCUIT COURT OF AUSTRALIA

BENDIGO AND ADELAIDE BANK LIMITED v JAEGER (No.2)

[2019] FCCA 2404

Catchwords:

BANKRUPTCY – PRACTICE & PROCEDURE – Creditor’s petition lapses after order is made adjourning it to a directions hearing – whether through inadvertence applicant creditor failed to apply on the day of the order for an order under s.52(5) of the Bankruptcy Act 1966 (Act) – whether Court would have made an order under s.52(5) of the Act had the applicant creditor requested such order – order adjourning creditor’s petition amended pursuant to slip rule to include an order under s.52(5) of the Act.

Legislation:

Bankruptcy Act 1966 (Cth), s.52

Federal Circuit Court Rules 2001(Cth), rr. 13.05(2)(e), 16.05(2)(e), 16.05(2)(h)

Cases cited:

L Shaddock & Associates Pty Ltd v Parramatta City Council (No 2) [1982] HCA 59; (1982) 151 CLR 590

Luck v University of Southern Queensland [2018] FCAFC 102

Richard Busuttil & Co Pty Ltd v Flint; In the Matter of Flint [2013] FCA 575

Applicant:

BENDIGO AND ADELAIDE BANK LIMITED ABN 11 068 049 178

Respondent:

MICHAEL KARL JAEGER

File Number:

SYG 1619 of 2018

Judgment of:

Judge Manousaridis

Hearing date:

Decided on the papers

Date of Last Submission:

23 August 2019

Delivered at:

Sydney

Delivered on:

28 August 2019

REPRESENTATION

Counsel for the Applicant:

Mr D J McDonald-Norman

Solicitors for the Applicant:

TurksLegal

Counsel for the Respondent:

Mr N Olson

Solicitors for the Respondent:

Mercantile Legal

ORDERS

(1) Pursuant to r.16.05(2)(h) of the Federal Circuit Court Rules 2001(Cth) the order made on 18 April 2019 adjourning the creditor’s petition to a date to be administratively advised is varied by adding the order:

Pursuant to s.52(5) of the Bankruptcy Act 1966 (Cth) the period at the expiration of which the creditor’s petition will lapse will be the period of 24 months following its presentation on 6 June 2018.

1. FEDERAL CIRCUIT COURT

OF AUSTRALIA

AT Sydney

SYG 1619 of 2018

BENDIGO AND ADELAIDE BANK LIMITED

Applicant

And

MICHAEL KARL JAEGER

Respondent

REASONS FOR JUDGMENT

Introduction

1. In these reasons for judgment I consider whether I should make an order under r.16.05(2)(h) of the Federal Circuit Court Rules 2001 (Cth) (FCC Rules) to vary an order made by a Judge of this Court (Judge) on 18 April 2019 to include an order under s.52(5) of the Bankruptcy Act 1966 (Cth) (Act) extending the period at the expiration of which the creditor’s petition will lapse.

2. Paragraph 16.05(2)(h) of the FCC Rules provides that the Court may vary or set aside an order after it has been entered if “there is an error arising in the judgment or order from an accidental slip or omission”. The parties agree that r.16.05(2)(h) of the FCC Rules applies, and that I should exercise the power provided by that paragraph to vary the orders made on 18 April 2019 to include an order under s.52(5) of the Act.

Background

3.      On 6 June 2018 the applicant (Bank) presented a creditor’s petition in relation to the respondent, Mr Jaeger. The act of bankruptcy on which the creditor’s petition relies is Mr Jaeger’s failure to comply with the requirements of a bankruptcy notice issued on 10 December 2017. The bankruptcy notice demands payment of a judgment of $670,036.37 that was entered in the District Court of New South Wales on the basis of a judgment delivered by Gibb DCJ on 1 December 2017.

4.      On 5 October 2018 the Judge heard an application by Mr Jaeger for an adjournment of the hearing of the creditor’s petition. The ground of the adjournment was that Mr Jaeger had lodged an appeal against an order made by Peter Johnson DCJ dismissing an application Mr Jaeger made to set aside the orders of Gibb DCJ. On 30 October 2018 the Judge adjourned the hearing of the creditor’s petition pending the Court of Appeal’s determination of Mr Jaeger’s appeal. On 14 December 2018, after Mr Jaeger abandoned his appeal, the Judge set down the creditor’s petition for hearing on 31 January 2019.

5.      The creditor’s petition was heard on 31 January 2019. At the conclusion of the hearing the Judge directed the Bank file submissions on a particular issue, and on 7 February 2019 the Judge directed Mr Jaeger file submissions in response to those filed by the Bank. The matter came before the Judge for directions on 29 March 2019. The matter was set down for further directions on 18 April 2019. On that day the Judge directed the parties file and serve submissions relating to the admission of evidence that had not been tendered at the hearing of the creditor’s petition. The Judge further ordered that the matter be listed before him “on a date to be administratively advised”.

6. By email sent from the Judge’s chambers on 24 April 2019, the parties were notified that the matter was listed for directions on 2 July 2019. By that day, however, the twelve month period prescribed by s.52(3) of the Act had passed which means that, subject to the application of r.16.05(2)(h) of the FCC Rules, the creditor’s petition lapsed.

The slip rule

7. A rule to the effect of that contained in r.16.05(2)(h) of the FCC Rules is often referred to as “the slip rule”. The slip rule is available to permit a court to vary an order that has been entered if, through some slip or omission, the order omits matters, including an order, that should have been included or made, or includes matters, including an order, that ought not to have been included or made. The rule has been applied to a broad range of errors. In addition to clerical errors of judges or court staff involved in the drafting and entering of orders and judgments, the slip rule has been applied to errors made by litigants and their legal representatives.

8. There are a number of cases where it has been held that the slip rule is available to permit the Court to make an order under s.52(5) of the Act, even after the time for making the order permitted by s.52(4) has passed. A recent example is Luck v University of Southern Queensland. In that case a Registrar of this Court, on a day before the twelve month period under s.52(3) of the Act elapsed, by consent adjourned the creditor’s petition to a day after the twelve month period had elapsed, but without making any order under s.52(5) of the Act. The primary judge amended the Registrar’s orders by including an order under s.52(5) of the Act extending the life of the creditor’s petition after the twelve month period had elapsed. The primary judge did not rely on the slip rule; he relied on r.16.05(2)(e) of the FCC Rules.

9.      On appeal Charlesworth and Logan JJ held that the slip rule applied. Logan J said:

On the footing that resort to the slip rule was available, the present was, in my respectful opinion, a paradigm case for its application. There was at the relevant time a consensus between the parties, for their own separate reasons, that the creditor’s petition ought to be adjourned, rather than be the subject of any contest as to whether it should be allowed to lapse. It was only by inadvertence that neither the parties nor the registrar did not, in seeking or, as the case may be, in responsively ordering the adjournment of the petition prior to the expiration of the 12 month period additionally seek and order an extension of time. That a discretion would at the time have been entailed in the granting of an extension is not, as is explained in Flint v Richard Busuttil, by reference to L Shaddock & Associates Pty Ltd v Parramatta City Council (No. 2) [1982] HCA 59; (1982) 151 CLR 590, incompatible with an ability later to have resort to a slip rule.

10. Mortimer J (with whose reasons Logan J agreed) found that r.13.05(2)(e) of the FCC Rules applied.

Does the slip rule apply?

11. I am satisfied that on 18 April 2019, when the Judge ordered that creditor’s petition be listed for directions on a date to be advised administratively, the parties did not direct their minds to s.52(3) of the Act. Had the parties done so, they, or at the very least the Bank, would have made enquiries about the day on which the Judge intended to list the matter for directions; and that, had the parties been informed the Judge intended to list the matter after 6 June 2019 they, or at the very least the Bank, would have applied to the Judge to make an order under s.52(5) of the Act to extend the life of the creditor’s petition for a further twelve months. I am also satisfied that had such application been made, given the history and apparent complexity of the issues that have arisen in the course of the proceeding, the Judge would have been satisfied that it would be just and equitable to make an order under s.52(5) of the Act extending the life of the creditor’s petition for a further twelve months.

Disposition

12. I propose, therefore, to make an order under r.16.05(2)(h) of the FCC Rules that the orders made by the Judge on 18 April 2019 be amended to include an order to the effect that the period at the expiration of which the creditor’s petition will lapse will be the period of 24 months following its presentation on 6 June 2018.

I certify that the preceding twelve (12) paragraphs are a true copy of the reasons for judgment of Judge Manousaridis

Associate: 

Date: 29 August 2019