Dawkins v D.C.T. - [2004] FMCA 322

FEDERAL MAGISTRATES COURT OF AUSTRALIA

DAWKINS v D.C.T.

[2004] FMCA 322

BANKRUPTCY – Application for extension of time for compliance with bankruptcy notice – sections 41(6A) and 41(6C) Bankruptcy Act 1966 – application for extension of time filed within compliance period – application to set aside bankruptcy judgment filed after expiration of compliance period – whether implied extension of time – power of Court to extend time a statutory power – condition precedent – no discretionary power – express condition not satisfied – application dismissed.

Bankruptcy Act 1966 (Cth)
Bankruptcy Regulations 1966 (Cth)
Federal Court Rules

Streimer v Tamas (1981) 37 ALR 211
Derek George Shephard v Chiquita Brands South Pacific Limited [2004] FCAFC 76
James v Abrahams (1981) 34 ALR 657
Re Carter; Ex parte National Mutual Trustees Ltd (1995) 129 ALR 435

Applicant:

KATHLEEN LINDA DAWKINS

Respondent:

DEPUTY COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA

File No:

MZ 471 of 2004

Delivered on:

21 May 2004

Delivered at:

Melbourne

Hearing Date:

17 May 2004

Judgment of:

Hartnett FM

REPRESENTATION

Counsel for the Applicant

Ms Forsyth

Solicitors for the Applicant

Ledermans

Counsel for the Respondent:

Ms Mavroudis

Solicitors for the Respondent:

ATO Legal Practice

ORDER

The application filed 5 May 2004 is dismissed.
The applicant pay the respondent’s costs as agreed and according to the Federal Court Rules or failing agreement as taxed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA

MZ 471 of 200

KATHLEEN LINDA DAWKINS

Applicant

and

DEPUTY COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA

Respondent

REASONS FOR JUDGMENT

A Bankruptcy Notice dated 31 March 2004 and prescribed under subsection 41(2) of the Bankruptcy Act 1966 (Cth) by r 4.02 of the Bankruptcy Regulations was served upon the debtor Kathleen Linda Dawkins on 14 April 2004. It was founded upon a judgment obtained in the County Court of Victoria at Melbourne on 3 September 2003. The total debt owing as stated in the Schedule forming part of the Bankruptcy Notice is $171,148.60.
No issue is taken with the bankruptcy notice itself. The applicant in the proceedings, whom is the debtor, filed an application in this Court on 5 May 2004 seeking:
An extension of time amounting to thirty (30) days to enable an application to be made to the Court to set aside the County Court judgment of 3 September 2003 in matter no. C1-03-00463.
Thus the applicant did not make any application to set aside the bankruptcy notice.
That application was supported by a very brief affidavit sworn by the applicant’s solicitor filed contemporaneously. Objection was taken to the contents of paragraphs 4, 5, 6 and 7, all of such objections being sustainable. That affidavit provided no factual matters of relevance in support of the application.
The applicant subsequently filed an affidavit sworn by her on 14 May 2004 and filed on that day. That affidavit was said to be in support of her application for:
An extension of time in which to comply with a Bankruptcy Notice pursuant to section 41(6A) and [section] 41(6C) of the Bankruptcy Act 1966.
The application was first returnable on 13 May 2004. The respondent opposed the application. On that day Registrar Efthim adjourned the proceedings to 17 May 2004 and made an order of costs reserved. The time for compliance with the Bankruptcy Notice ended on 5 May 2004.
On 14 May 2004 the applicant made application in the County Court of Victoria at Melbourne for an order to set aside the judgment obtained in default of defence made on 3 September 2003. That application was made by her as the second defendant, her estranged husband being the first named defendant. A copy of the Summons and affidavit in support of that application were handed up to the Court.
Sections 41(6A) and 41(6C) relevantly provide:
41
(6A)Where, before the expiration of the time fixed for compliance with the requirements of a bankruptcy notice:
(a)proceedings to set aside a judgment or order in respect of which the bankruptcy notice was issued have been issued by the debtor; or
(b)an application has been made to the Court to set aside the bankruptcy notice
the Court may, subject to subsection (6C), extend the time for compliance with the bankruptcy notice.
(6C) Where:
(a)a debtor applies to the Court for an extension of the time for complying with a bankruptcy notice on the ground that proceedings to set aside a judgment or order in respect of which the bankruptcy notice was issued have been instituted by the debtor; and
(b)the Court is of the opinion that the proceedings to set aside the judgment or order:
i. have not been instituted bona fide; or
ii. are not being prosecuted with due diligence;
the Court shall not extend the time for compliance with the bankruptcy notice.
Counsel for the applicant appropriately conceded that the applicant could not rely on section 41(6A)(b). It is clear that the proceeding to set aside the Judgment was not filed prior to 5 May 2004 being the date on which the period of time for compliance with the bankruptcy notice expired. It is also clear that an extension of time may be ordered after expiry of the time for compliance with the bankruptcy notice (Streimer v Tamas (1981) 37 ALR 211).
Counsel for the applicant argued that there had been by implication, an extension of time for compliance from the date of filing of the application and ongoing until the conclusion of this matter.
I conclude that the Court lacks power to extend the time for compliance in this application for the following reasons:
a)There has been no extended time for compliance with the requirements of the bankruptcy notice before this hearing. There is no evidence that a proceeding to set aside the Judgment had been instituted prior to 5 May 2004. Although the Court has power to extend time for compliance with a bankruptcy notice that power is statutory and it is a condition of the existence of the Court’s power that prior to the expiration of the time provided for in the bankruptcy notice, a proceeding to set aside the Judgment has been instituted. The making of an extension of time order is one in support of the already existing, and continuing, principal application;
b)The County Court proceedings instituted on 14 May 2004 were obviously not on foot at the time the application to extend the time for compliance was made. That was clear from the wording of the application itself. Thus, it cannot be said that the debtor’s application for an extension of time was in aid of proceedings to set aside the Judgment on which the bankruptcy notice was based (Derek George Shephard v Chiquita Brands South Pacific Limited [2004] FCAFC 76 per Sackville J at [60]);
c)In the absence of the satisfaction of s.41(6A)(a) being a condition precedent to the exercise of the power to extend time there is no discretionary power to be exercised on the part of the Court. The specific cases mentioned in s.41(6A) preclude the implication of a general inherent power in the Court to extend the time for compliance with the notice (James v Abrahams (1981) 34 ALR 657).
In conclusion the jurisdiction may be invoked, by the making of the application for extension, only if one or other of the express conditions [as set out in s.41(6A)(a) or (b)] to the existence of that jurisdiction have been satisfied within the time originally fixed for compliance (Streimer v Tamas (1981) 37 ALR 211; Re Carter; Ex parte National Mutual Trustees Ltd (1995) 129 ALR 435).
Accordingly, the application is dismissed and the applicant is to pay the costs of the respondent according to the Federal Court Rules, to be taxed if not agreed.

I, Sophie Killen, certify that the preceding twelve (12) paragraphs are a true copy of the reasons for judgment of Hartnett FM

Associate: Sophie Killen

Date: 21 May 2004