Gordon O. v Commonwealth Bank of Australia

[1995] FCA 784

IN THE FEDERAL COURT OF AUSTRALIA     )
  )
NEW SOUTH WALES DISTRICT REGISTRY    )  NN3652 of 1994
  )
BANKRUPTCY DIVISION  )

OSBORNE GORDON

Debtor/Applicant

EX PARTE:  COMMONWEALTH BANK   OF AUSTRALIA

Creditor/Respondent

Coram:      Davies J
Date:          18 July 1995
Place:                  Sydney

REASON FOR JUDGMENT

This is an appeal from a decision of the Registrar refusing an application by the debtor to extend the time for compliance with a bankruptcy notice.  Apparently, the matter was put to the Registrar on the footing that an order had been made staying execution.  If that was the basis on which the matter was put, the Registrar would properly have dismissed the application. 

However, the matter is put to the Court today under s.41(6A) Bankruptcy Act 1966 (Cth) which provides that:

"Where, before the expiration of the time fixed by the Court or the Registrar for compliance with the requirements of a bankruptcy notice:

(a)proceedings to set aside the judgment or order in respect of which the bankruptcy notice was issued have been instituted by the debtor; or

(b)an application to set aside the bankruptcy notice has been filed with the Registrar,

the Court may, subject to subsection (6C), extend time for compliance with the Bankruptcy notice."

Paragraphs (a) and (b) are both satisfied in the present case. 

Section 41(6C) provides that the Court shall not extend time where the Court is of the opinion that:

"...proceedings to set aside the judgment or order:

(i)have not been instituted bona fide; or

(ii)are not being prosecuted with due diligence..."

Neither of those circumstances apply in this case.  Accordingly the Court has a discretion to extend time.

In re Lentini ex parte Lentini v CSR Limited (t/a The Readymix Group) (1991) 29 FCR 363 Neaves J held that proceedings to set aside a judgment did not include the circumstance where an appeal had been lodged to set aside a judgment; but other cases such as Re Bryant ex parte Joseph Richard Bryant v Commonwealth Bank of Australia (unreported Hill J, 4 May 1994), and on appeal, Joseph Richard Bryant v Commonwealth Bank of Australia (unreported Davies, Foster, O'Loughlin JJ, 11 November 1994), have taken a contrary view.

The question then, is whether the time for compliance should be extended.  It
seems to me that there is no reason to doubt that the appeal has been instituted bona fide or that it is being prosecuted with due diligence.  Indeed the delay appears to have resulted from the reservation of judgment for some months.  It seems to me fair and just to the debtor that time for compliance be extended.

I will set aside the order of the Registrar.  I will substitute therefore an order that the time for compliance with the bankruptcy notice be extended to 14 days after the handing down of the judgment in the Supreme Court in the proceedings in which there is an appeal from the judgment on which the bankruptcy notice is founded.

I order that the costs before the Registrar be costs in the cause in the application to set aside the bankruptcy notice. 

I order that the respondent, the petitioning creditor, pay the costs of this day.

I certify that this and the 2 preceding pages
are a true copy of the reasons for judgment of
the Honourable Justice Davies.

Associate:

Date:     18 July 1995

Counsel for the debtor:  C. Birch

Solicitors for the debtor:  Konstan & Associates

Counsel for the petitioning creditor:    M. Stiel

Solicitors for the petitioning creditor:  Abbott Tout

Date of hearing:  18 July 1995

Date of judgment:  18 July 1995