Donnelly v Edelsten - [1992] FCA 135

Re: MAX CHRISTOPHER DONNELLY
And: GEOFFREY WALTER EDELSTEN
No. W 497 of 1988
FED No. 135
Bankruptcy
(1992) 34 FCR 556

COURT

IN THE FEDERAL COURT OF AUSTRALIA

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

CATCHWORDS

Bankruptcy - Discharge by effluxion of time - notice of objection to discharge - notice allegedly lodged at Australian Document Exchange, not noted on Court file - onus of proving time and fact of filing - effect of failure to file notice - meaning of s.152 Bankruptcy Act, r.195 Bankruptcy Rules, "formal defect or irregularity" - application for extension of time to file notice of objection - scope of Court's discretion - s.33 Bankruptcy Act, "expressly provided to the contrary" - effect of discharge by effluxion of time - whether Court can retrospectively nullify discharge effected by operation of s.149(2)(b).

Bankruptcy Act: s.33; s.149; s.152; s.306.

Bankruptcy Rules: r.49; r.195.

Federal Court Rules: O.1 r.5A; O.1 r.11.

Van Reesema v Official Trustee (1983) 69 FLR 424.

Chorlton v Lings (1868) LR 4 CP 374.

Re Karounos; Ex Parte Official Trustee (1989) 25 FCR 177.

Powell v Official Trustee (1990) 26 FCR 444.

Bater v Bater (1906) p 209.

HEARING

MELBOURNE

#DATE: 20:3:1992

Counsel for the Applicant: Mr W. Caldwell QC and Mr R. Harper

Solicitor for the Applicant: Isenberg Spedding and Player

Counsel for the Bankrupt/
Respondent: Mr N.H.M. Forsyth QC and Mr H.A. Aizen

Solicitor for the Bankrupt/
Respondent: Mowbray Erdynast

ORDER

That the application be dismissed.
That the applicant pay the respondent's taxed costs of the application.
NOTE: Settlement and entry of orders with in O.124 of the Bankruptcy Rules.

JUDGE1

By an application dated 18 September 1991, the applicant who, on 11 March 1988 was appointed trustee of the bankrupt estate of the respondent Geoffrey Walter Edelsten ("Dr Edelsten") seeks a declaration that the applicant on or about 6 March 1991 filed a valid notice of objection to Dr Edelsten's discharge from bankruptcy and a declaration that Dr Edelsten remains an undischarged bankrupt. In the alternative, the applicant seeks, pursuant to s.33 of the Bankruptcy Act 1966, an extension of time for the filing of a notice of objection to Dr Edelsten's discharge from bankruptcy.

The evidence discloses that on or about 6 March 1991 there was prepared in the office of the applicant trustee a notice of objection to Dr Edelsten's discharge from bankruptcy invoking the following grounds:

"(a) That the bankrupt is able, or is likely within 5 years from the date of the bankruptcy to be able, to make a significant contribution to his estate.

(b) That the discharge of the bankrupt by force of this section would prejudice the administration of his estate.

(c) That the bankrupt has failed to co-operate in the administration of his estate.

(d) That the conduct of the bankrupt, either in respect of the period before or the period after the date of the bankruptcy, has been unsatisfactory."

The notice of objection 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.

Continue reading Donnelly v Edelsten

Details

AGLC: Donnelly, M.C. v Edelsten, G.W. [1992] FCA 135 ((1992) 34 FCR 556)
Case: [1992] FCA 135
Decision Date: 20 MARCH 1992

CaseChat Overview and Summary

In the Federal Court of Australia, the case of Donnelly v Edelsten involved a dispute regarding the discharge of a bankrupt individual, Mr. Edelsten, by the operation of time. Mr. Donnelly, the trustee of the bankrupt's estate, sought to object to the discharge, arguing that the notice of objection was not properly filed. The crux of the case was whether the failure to properly file the notice of objection led to any formal defect or irregularity that would nullify the discharge of the bankrupt.

The court had to decide whether the onus lay with the objector to prove the timely and proper filing of the notice of objection and whether the failure to do so constituted a formal defect or irregularity under the Bankruptcy Act. Additionally, the court had to determine the scope of its discretion in allowing an extension of time to file the notice of objection and whether the discharge by effluxion of time could be retrospectively nullified.

The Court found that the onus of proving the time and fact of filing the notice of objection was on the objector, and since the notice was not properly noted on the Court file, it was deemed not to have been filed. The Court held that the failure to file the notice constituted a formal defect or irregularity. However, the Court exercised its discretion under section 33 of the Bankruptcy Act and refused to extend the time for filing the notice of objection, reasoning that there was no provision expressly allowing the Court to retrospectively nullify a discharge effected by the operation of section 149(2)(b). Consequently, the application was dismissed, and the applicant was ordered to pay the respondent's costs.

The Court ordered that the application be dismissed and that the applicant pay the respondent's taxed costs of the application. The orders were settled and entered in accordance with Order 124 of the Bankruptcy Rules.

Orders

Orders of the court

That the application be dismissed.

That the applicant pay the respondent's taxed costs of the application.

NOTE: Settlement and entry of orders with in O.124 of the Bankruptcy 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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