Byron v Southern Star Group Pty Ltd - [1997] FCA 151

Bankruptcy - Application under subs 41(6A) of the Bankruptcy Act 1966 for an extension of time to comply with a bankruptcy notice - whether application out of time - whether time for compliance with notice should be extended - principles governing courts discretion to extend time where an appeal has been instituted from judgment upon which notice is based - whether all that is needed is that appeal is "arguable" - whether different principles from those governing courts discretion to adjourn debtors petition - relevance of facts that no stay sought or ordered, an appeal has already been dismissed and proceeding in question is application for special leave to make a further appeal

Companies Code - whether under para 556(2)(a) consent was given to incurring of a debt - whether consent can be implied from "mere activity" of a director who has no authority to incur or prevent the incurring of the debts

Bankruptcy Act 1966, subs 41(6A), s 33
Companies (NSW) Code, s 556
Federal Court Rules, O 3 r 5, O 77 r 1(3)

Bryant v Commonwealth Bank of Australia 9 November 1994 unreported FCA FC
Re Baker; Ex parte Baker v Staples 4 September 1995 unreported FCA Kiefel J
Streimer v Tamas (1981) 37 ALR 211
Re Carter; Ex parte National Mutual Trustees Ltd (1995) 129 ALR 435
Re Sterling; Ex parte Esanda Ltd (1980) 44 FLR 125
Olivieri v Stafford (1989) 24 FCR 413
Wilkinson v Osborne (1915) 21 CLR 89
Re Geard; Ex parte Reid 11 February 1994 FCA unreported
Agrillo v Codisposto 16 December 1994 FCA unreported
Re Smith 4 May 1994 FCA unreported
Re Taylor; Ex parte Deputy Commissioner of Taxation (1983) 74 FLR 377
Standard Chartered Bank of Australia Ltd v Antico (1995) 38 NSWLR 290

ALISTER BYRON v SOUTHERN STAR GROUP PTY LTD
No. NG 7033 of 1997

CORAM:Lehane J
PLACE:Sydney
DATE:11 March 1997

IN THE FEDERAL COURT OF AUSTRALIA  )
NEW SOUTH WALES DISTRICT REGISTRY  )
GENERAL DIVISION  )         No. NG 7033 of 1997

BETWEEN:ALISTER BYRON
Applicant

AND:SOUTHERN STAR GROUP PTY LTD
Respondent

CORAM:Lehane J
PLACE:Sydney
DATE:11 March 1997

MINUTE OF ORDERS

THE COURT ORDERS THAT:

Application refused.

Time for compliance with bankruptcy notice extended to the day seven days after delivery of judgment on this application.

The applicant to pay the respondent's costs of the application.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA  )
NEW SOUTH WALES DISTRICT REGISTRY  )
GENERAL DIVISION  )         No. NG 7033 of 1997

BETWEEN:ALISTER BYRON
Applicant

AND:SOUTHERN STAR GROUP PTY LTD
Respondent

CORAM:Lehane J
PLACE:Sydney
DATE:11 March 1997

REASONS FOR JUDGMENT

LEHANE J: This is an application, under subs 41(6A) of the Bankruptcy Act 1966 (the Act), for an extension of time to comply with a bankruptcy notice. It is the most recent episode in long‑running litigation between Southern Star Group Pty Ltd (Southern Star), the creditor on whose application the bankruptcy notice was…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1997] FCA 151
Decision Date: 11 MARCH 1997

CaseChat Overview and Summary

This case involved an application by Alister Byron for an extension of time to comply with a bankruptcy notice issued by Southern Star Group Pty Ltd. The application was brought under subsection 41(6A) of the Bankruptcy Act 1966. The primary legal issues before the court were whether the application was out of time and whether the time for compliance with the bankruptcy notice should be extended. The court first considered whether the application was out of time, noting that the application was made more than 14 days after the delivery of the judgment of the Court of Appeal. The court found that the application was not out of time as Mr Byron had already filed an application to set aside the bankruptcy notice before the time for compliance expired. The court then examined the principles governing the court's discretion to extend time where an appeal has been instituted from the judgment on which the bankruptcy notice is based. The court held that while the appeal was arguable, different principles apply to the exercise of the court's discretion to extend time for compliance with a bankruptcy notice compared to the principles governing the court's discretion to adjourn a debtor's petition. The court found that the circumstances of this case did not warrant an extension of time for compliance with the bankruptcy notice. The court refused the application for an extension of time but extended the time for compliance with the bankruptcy notice for a period of seven days from the date of the judgment. The applicant was ordered to pay the respondent's costs of the application.

Orders