Commonwealth Bank of Australia v Maher
[2008] FMCA 552
•18 March 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| COMMONWEALTH BANK OF AUSTRALIA & ORS v MAHER | [2008] FMCA 552 |
| BANKRUPTCY – An application to extend the life of a petition pursuant to s.52(5) of the Bankruptcy Act 1966 (Cth). |
| Bankruptcy Act 1966 (Cth), Federal Magistrates Act 1999, Federal Court Rules |
| Maher v Commonwealth Bank of Australia (2008) FCA 205, Re Young Ex Parte: Smith (1985) 5 FCR 204 at 206-207, Re Norman Kingsley Hibbard Ex Parte: Playroom Pty Ltd (1988) FCA 424 |
| Applicant: | COMMONWEALTH BANK OF AUSTRALIA, GREG FIRTH GRAY & JOHNSON |
| Respondent: | DENNIS MAHER |
| File Number: | MLG 263 of 2008 |
| Judgment of: | Hartnett FM |
| Hearing date: | 18 March 2008 |
| Delivered at: | Melbourne |
| Delivered on: | 18 March 2008 |
REPRESENTATION
| Counsel for the Applicant: | Mr Shepard |
| Solicitors for the Applicant: | A.J. Mullumby Solicitors for the Commonwealth Bank of Australia |
| The Respondent: | In person |
ORDERS
That there be leave to Mr Maher to withdraw his notice of motion filed and dated 17 March 2008.
That pursuant to section 52(5) of the Bankruptcy Act 1966 (Commonwealth), the period at the expiration of which the creditor's petition filed 23 March 2007 will lapse be extended to 23 February 2009.
That the hearing of the creditor's petition be fixed for 21 July 2008 at 10:00am with priority and urgency.
That any further affidavit material sought to be relied upon by the respondent be filed and served prior to 18 April 2008.
That the applicants respond to any material filed by the respondent pursuant to Order 4 herein within 21 days of service of same upon them.
That the respondent debtor pay the costs of the applicants fixed in the sum on $3000.
That there be liberty to apply.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLG 263 of 2008
| COMMONWEALTH BANK OF AUSTRALIA & OTHERS |
Applicant
And
| DENNIS MAHER |
Respondent
REASONS FOR JUDGMENT
The application before the court was filed on 6 March 2008 by the applicant creditors. In support of that application the applicants rely upon an affidavit of Mr Grant Dewar sworn 6 March 2008. The applicant also handed to the court this day an outline of submissions. The respondent relied upon an affidavit in opposition to application to extend the life of the petition, sworn by him on 16 March 2008. Each of the parties was at liberty to, and did cross-examine the other.
These proceedings commenced upon the filing of a creditor's petition on 23 March 2007. That creditor's petition is founded upon the respondent debtor's alleged failure to comply with the requirements of a bankruptcy notice number VN1355 of 2006, with which he was served. This application is made pursuant to section 52(5) of the Bankruptcy Act 1966 (Commonwealth) (“the Act”) in order that the period at the expiration of which the creditor's petition filed on 23 March 2007 will lapse be such period exceeding 12 months and not exceeding 24 months, commencing on the date of presentation of the petition. The applicants seek an extension of time to 23 February 2009, being a period of approximately 23 months, and thus a period which falls within section 52(5) of the Act.
The respondent debtor earlier made application to the court to set aside the bankruptcy notice relied upon. O'Dwyer FM dismissed that application with costs on 19 March 2007. On 5 April 2007 the respondent debtor filed a notice of appeal in relation to the decision of O'Dwyer FM and on 10 April 2007 the respondent debtor filed an amended notice of appeal. On 14 February 2007 Jessup J in the Federal Court of Australia had refused motions filed by the respondent debtor, such motions seeking to attack the underlying order for costs that was the subject of the bankruptcy notice. On 20 April 2007 Tracey J in the Federal Court of Australia refused an application for leave to appeal from the orders of Jessup J on 14 February 2007.
On 26 April 2007 the respondent debtor was ordered to file an affidavit of financial circumstances. He failed to comply with that order. On 7 June 2007 the respondent refused to enter the witness box to be cross-examined upon his affidavit supporting motions filed by him despite being requested to do so by Registrar Mussett. His motions were dismissed and he was further ordered to file and serve an affidavit of financial circumstances by 8 June 2007. He did not comply with that order.
On 29 June 2007 Sundberg J ordered in the appeal proceeding that the respondent Commonwealth Bank of Australia file and serve any application for security of costs by 27 July 2007. The bank did seek security for costs in the appeal. On 11 October 2007 Registrar Moore ordered security and gave reasons for his decision. The respondent debtor sought review of the orders of Registrar Moore.
On 19 December 2007 by order of McInnis FM the creditor's petition proceeding was transferred to the Federal Court of Australia pursuant to section 39 of the Federal Magistrates Act 1999. On the same day the applicant creditors through their solicitor served a bankruptcy notice, being the third bankruptcy notice, upon the respondent debtor in respect of an unpaid order for costs in the sum on $2000.
On 9 January 2008 the respondent debtor applied to set aside the third bankruptcy notice and the time for compliance with the third bankruptcy notice was extended. On 27 February 2008 by order of Sundberg J the petition proceeding was transferred back to the Federal Magistrates Court and pursuant to order 82 of the Federal Court Rules.
Thus in summary, after the creditor's petition was filed in March 2007 the respondent debtor appealed from the refusal of his application to set aside the second bankruptcy notice. Whilst that appeal was pending it was considered by the applicants that the petition could not be further advanced other than the obtaining of directions. After security for costs were ordered and not provided the appeal was stayed.
At that point the applicant creditors would again have been in a position to further advance the creditor's petition had it not been for the respondent debtor then seeking review of the orders of Registrar Moore. Once that review was sought the petition again could not be further advanced other than during the interlocutory stages to obtain directions.
The debt the subject of the second bankruptcy notice has not been paid. The debt is in the sum on $57,603 and the respondent has exhausted his avenues of appeal in relation to that debt. In Maher v Commonwealth Bank of Australia (2008) FCA 205 (29 February 2008) Sundberg J said (referring to the respondent in these proceedings):
In my view the applicant is impecunious. He has failed to pay the $57,603 costs order and other smaller costs orders. He has filed no material in support of his solvency or as to his assets. The material in the respondent's affidavits (see at 2) suggesting impecuniosity is unanswered.
(13)There is no evidence that the applicant's impecuniosity has been caused by the respondent.
The court must be satisfied that it is just and equitable to extend the life of the petition. The purpose of section 52(5) of the Bankruptcy Act 1966 (Commonwealth) is to prevent stale petitions remaining on foot and to limit the opportunities for parties to obtain indefinite adjournments (Re Young Ex Parte: Smith (1985) 5 FCR 204 at 206-207). If the petition is not extended by 23 March 2008 then it lapses and cannot be extended (Re Norman Kingsley Hibbard Ex Parte: Playroom Pty Ltd (1988) FCA 424 Pincus J at paragraph 3).
In the history of the matter as described the court is satisfied that the reasons for the petition not being the subject of a final order within a 12-month period are as a result of the actions taken by the respondent. In addition this petition proceeding was transferred to the Federal Court in December 2007 to thereupon be transferred by the Federal Court back to this court some two months later. I am satisfied that the applicant creditors have not effectively been in a position to advance the application in the petition for a sequestration order to final decision.
There is no prejudice to the respondent debtor to grant the orders sought this day. He retains his right to oppose the petition and argue that it cannot succeed. I note the applicants' submission that the respondent debtor’s argument as to flaws in the second bankruptcy notice have already been the subject of consideration by Sundberg J in Maher v Commonwealth Bank of Australia (2008) FCA 205 (29 February 2008) where his Honour (referring to the respondent) said:
Having reviewed the magistrate's reasons my assessment is that the applicant's prospects of succeeding on any appeal are slight. (See at 10.)
The court is satisfied that it is just and equitable to extend the life of the petition and accordingly will so order.
I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of Hartnett FM
Deputy Associate: Kate Gray
Date: 30 April 2008
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