Dittes, v Clyde Industries Ltd - [1992] FCA 929

Re: VICKIE and FRITZ KARL DITTES
And: CLYDE INDUSTRIES LIMITED
Nos. B3066 and B3067 of 1992
FED No. 929
Number of pages - 9
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA

BANKRUPTCY DISTRICT OF THE STATE OF NEW SOUTH WALES
GENERAL DIVISION
Einfeld J.(1)

CATCHWORDS

Bankruptcy - whether the Court has jurisdiction to extend time for compliance with bankruptcy notice where an appeal instituted against judgment in respect of which bankruptcy notice is issued - whether an appeal is a proceeding to set aside judgment

Bankruptcy Act 1966 ss 33(1)(c), 41(6A)(a),(b), 41(6C)

Re Lentini ex parte Lentini and Another v CSR Limited trading as The Readymix Group (1991) 29 FCR 363

Clyne v Deputy Commissioner of Taxation (NSW) (1982) 42 ALR 203

Lipov v Alexander Fraser and Son Ltd (1978) 36 FLR 126

Re Sterling ex parte Esanda Ltd (1980) 44 FLR 125

James v Abrahams (1981) 51 FLR 16

Re Taylor ex parte Deputy Commission of Taxation (1983) 74 FLR 377

Re Maddox Neaves J unreported 12 May 1987

Bond v Hong Kong Bank of Australia Foster J unreported 24 October 1991

HEARING

SYDNEY

#DATE 10:12:1992

Counsel and solicitor Mr D. Williams instructed by
for the applicants/debtors Mr Alan Jessup

Counsel and solicitor Mr Angyal instructed by
for the creditor/respondent Gilbert and Tobin Solicitors

ORDER

1. The application for extension of time to comply with the bankruptcy notice in each case is granted.

2. The applications to set aside the bankruptcy notices are adjourned to a date to be fixed after the Court of Appeal of the Supreme Court of New South Wales delivers judgment.

3. Orders 1 and 2 are conditional upon the appeal being prosecuted expeditiously.

4. The debtors are to pay the creditor's costs of the applications to extend time.

5. All other costs are reserved to the hearing of the applications to set aside the bankruptcy notices.

6. Liberty to apply after the Court of Appeal delivers judgment or beforehand if order 3 is not being complied with.
Note: Settlement and entry of orders are dealt with in Order 36 of the Federal Court Rules.

JUDGE1

EINFELD J. On 19 June 1992 summary judgment was given, and on 22 July 1992 it was entered, in the Supreme Court of New South Wales in favour of the respondent Clyde Industries Limited (creditor) against the applicants Fritz and Vickie Dittes (debtors). The judgment, which had been reserved following a contested hearing before Justice Cole, was stayed for 28 days by Justice Giles pending an appeal. On 9 July 1992 an appeal to the Court of Appeal was lodged. There are 18 grounds of appeal although many are repetitious. No further stay has been sought or granted. On 12 August 1992 bankruptcy notices were issued against the debtors out of this Court, the amount said to be owed by Fritz Dittes being $589,975.82 and by Vickie Dittes $226,547.62.

By applications filed on 8 September 1992, the debtors sought orders extending the time for compliance with the bankruptcy…

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: [1992] FCA 929
Decision Date: 10 DECEMBER 1992

CaseChat Overview and Summary

The case of Dittes v Clyde Industries Ltd involved the debtor's application for an extension of time to comply with a bankruptcy notice issued against them. The matter was heard in the Federal Court of Australia, where the court had to determine whether it had the jurisdiction to extend the time for compliance with the bankruptcy notice when an appeal was instituted against the judgment that led to the issuance of the bankruptcy notice. Additionally, the court needed to decide if an appeal constitutes a proceeding to set aside the judgment.

The primary legal issue before the court was whether the institution of an appeal against the judgment that led to the bankruptcy notice issuance constituted a proceeding to set aside the judgment, thus affecting the court's jurisdiction to extend the time for compliance with the notice. The court considered whether the appeal, which was a procedural step in the legal process, could be seen as a substantive challenge to the judgment, thereby affecting the debtor's obligations under the bankruptcy notice.

In its reasoning, the court determined that an appeal does not equate to a proceeding to set aside the judgment. The appeal was seen as a procedural step in the enforcement of the judgment, rather than a substantive challenge to it. Consequently, the court found that it had the jurisdiction to extend the time for compliance with the bankruptcy notice. The court granted the application for an extension of time to comply with the bankruptcy notice, subject to the condition that the appeal be prosecuted expeditiously. The applications to set aside the bankruptcy notices were adjourned pending the outcome of the appeal. The debtors were ordered to pay the creditor's costs of the applications to extend time, with all other costs reserved for the hearing of the applications to set aside the bankruptcy notices.

Orders

Orders of the court

1. The application for extension of time to comply with the bankruptcy notice in each case is granted.

2. The applications to set aside the bankruptcy notices are adjourned to a date to be fixed after the Court of Appeal of the Supreme Court of New South Wales delivers judgment.

3. Orders 1 and 2 are conditional upon the appeal being prosecuted expeditiously.

4. The debtors are to pay the creditor's costs of the applications to extend time.

5. All other costs are reserved to the hearing of the applications to set aside the bankruptcy notices.

6. Liberty to apply after the Court of Appeal delivers judgment or beforehand if order 3 is not being complied with.

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

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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