Gray, Garrick Lewis v Ball, Michael Lee - [1997] FCA 1512

FEDERAL COURT OF AUSTRALIA

BANKRUPTCY - Bankruptcy notice - Application to set aside - Source of power ‑ Ineffective service ‑ Extensions of time for compliance with notice - Before hearing of application identical notice effectively served - Application dismissed by Registrar ‑ Time for compliance not extended - Whether act of bankruptcy committed - Application to review Registrar’s decision seeking setting aside of notice and extension of time for compliance - Nature of review - Expiration of time for compliance with second notice - Whether time for compliance with second notice to be extended.

Bankruptcy Act 1966, ss 30, 41(6A)(b)
Federal Court Rules O 77 r 8

Re Kwiatek (1989) 89 ALR 631 considered
Shaddock v Commonwealth Bank of Australia (Ryan J, 16 September 1997, unreported) distinguished
McLean v Australia and New Zealand Banking Group Ltd (1993) 42 FCR 300 considered
Re Udowenko; Ex parte Mitchell (1996) 69 FCR 299 considered
Guss v Johnstone (Full Court, 13 November 1997, unreported) considered

GARRICK LEWIS GRAY v MICHAEL LEE BALL as a representative of ALLEN ALLEN & HEMSLEY
VG 7588 OF 1997

SUNDBERG J
24 DECEMBER 1997
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VG7588 of 1997

In the matter of GARRICK LEWIS GRAY

BETWEEN:

GARRICK LEWIS GRAY
APPLICANT

AND:

MICHAEL LEE BALL as a representative of ALLEN ALLEN & HEMSLEY
RESPONDENT

JUDGE:

SUNDBERG J

DATE OF ORDER:

24 DECEMBER 1997

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

The time for compliance with the bankruptcy notice served on the applicant on 23 October 1997 be extended to 4:00 pm on 14 January 1998.

The motion notice of which was filed on 10 November 1997 be otherwise dismissed.

The respondent pay the applicant’s taxed costs of the motion.

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

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VG7588 of 1997

In the matter of GARRICK LEWIS GRAY

BETWEEN:

GARRICK LEWIS GRAY
APPLICANT

AND:

MICHAEL LEE BALL as a representative of ALLEN ALLEN & HEMSLEY
RESPONDENT

JUDGE:

SUNDBERG J

DATE:

24 DECEMBER 1997

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

On 16 September 1997 the applicant applied to have a bankruptcy notice “for payment of $119,115.34 and purportedly served” on him on 26 August 1997 set aside. The application bore an endorsement that it was made under s 41 of the Bankruptcy Act 1966. But the source of the power to set aside a bankruptcy notice is, I think, s 30. The application was supported by the affidavit of Eugene Wawer, a solicitor employed by the applicant’s solicitors, Garrick Gray & Co. Mr Wawer asserted that the bankruptcy notice had not been served in accordance with reg 16.01 of the Bankruptcy Regulations. He claimed that a copy of a document which appeared to be a bankruptcy notice had been “found by chance” in the corridor outside the solicitors’ office. It appeared to have been dropped there, and was not in an envelope. No one in Mr…

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: [1997] FCA 1512
Decision Date: 24 DECEMBER 1997

CaseChat Overview and Summary

Garrick Lewis Gray applied to the Federal Court to set aside a bankruptcy notice served on him by Michael Lee Ball as a representative of Allen Allen & Hemsley. The application was initially made under s 41 of the Bankruptcy Act 1966, but the court clarified that the correct source of power is s 30. The applicant argued that the initial notice served on August 26, 1997, was not served in accordance with the Bankruptcy Regulations, and a copy was found in the corridor outside his solicitor’s office without any knowledge of how it got there. Additionally, the applicant claimed that the notice was defective because the amount claimed was not clear. A Registrar initially extended the compliance time but later dismissed the application on October 28, 1997, without extending the time further. The applicant sought to review this decision.

The legal issues involved determining whether the review under O 77 r 8 of the Federal Court Rules was de novo and whether an act of bankruptcy was committed when the compliance time expired without an extension. The respondent argued that since no extension was granted before the compliance time expired, an act of bankruptcy occurred. However, the court found that the initial notice was not properly served, and hence, the compliance period did not begin to run. The second notice served on October 23, 1997, was valid, but an application to set it aside was made before the compliance time expired, entitling the applicant to an extension.

The court held that the review under O 77 r 8 was indeed de novo and that the second notice was valid. Since an application to set aside the second notice was made before the compliance time expired, the court extended the time for compliance to 4:00 pm on January 14, 1998. The court also ruled that no act of bankruptcy was committed as the initial notice was not properly served. The respondent was ordered to pay the applicant’s costs of the review application.

Orders