Horne In the Matter Of Peter Wyss
[2003] FMCA 214
•25 February 2003
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| HORNE IN THE MATTER OF PETER WYSS | [2003] FMCA 214 |
| BANKRUPTCY – Authority given by debtor under section 188 – four months passed since authority – effective control ended – whether power to extend time of control – whether in interests of creditor and debtor to extend time. |
Bankruptcy Act 1966, ss.33, 189
Nillant v Mackyar (1997) 78 FCR 419
| Applicant: | STIRLING LINDLEY HORNE IN THE MATTER OF PETER WYSS |
| File No: | MZ 1014 of 2002 |
| Delivered on: | 25 February 2003 |
| Delivered at: | Melbourne |
| Hearing Date: | 25 February 2003 |
| Judgment of: | Phipps FM |
REPRESENTATION
| Counsel for the Applicant: | Mr M. Stirling |
| Solicitors for the Applicant: | Cornwall Stodart |
ORDERS
That the time during which the property of Peter Wyss has and will remain under the control of Stirling Lindley Horne pursuant to section 189 of the Bankruptcy Act 1966 (Cth) be extended as though the words “4 months” appearing in section 189(1A)(d) of the Act were substituted with the words “8 months”.
That the Applicant’s costs of this application and the costs reserved pursuant to the Order of Federal Magistrate McInnis made 9 October 2002 be costs in the estate of the debtor Peter Wyss.
That the court certifies that it was reasonable to employ an advocate.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MZ 1014 of 2001
| STIRLING LINDLEY HORNE IN THE MATTER OF PETER WYSS |
Applicant
REASONS FOR JUDGMENT
This is an application by a person appointed as controlling trustee under Part X of the Bankruptcy Act 1966. The Applicant was appointed controlling trustee of the estate of the debtor on 6 September 2002, the debtor having signed an authority pursuant to section 188 of the Bankruptcy Act. Once the debtor has signed authority the trustee is obliged to call a meeting of creditors, this is pursuant to section 194A of the Bankruptcy Act.
By Order of McInnis FM on 9 October 2002 the time for calling that meeting was extended until 16 December 2002. The meeting was held on that date and was adjourned for a period of 90 days and the affidavit of Mr Horne, the controlling trustee, sets out the reasons for that.
The debtor is an estate agent. There were at the time of the meeting on 16 December 2002 two unresolved issues. The first being his interest in a rent roll and a dispute with partners in the estate agency in which he was situated. The other was a dispute over his entitlement to commissions from the developer of an apartment block within the centre of Melbourne. Significant amounts of money were potentially involved in both of those matters and so the creditors resolved to adjourn the meeting.
What was overlooked, as the trustee says in his affidavit, at that time were ss.189(1) and (1A)(d) of the Bankruptcy Act 1966. That provides:
(1)When an authority given by a debtor under section 188 becomes effective the property of the debtor becomes subject to control under this division.
(1)(A) The control continues until one of the following events happens:
(d) four months pass since the authority under section 188 became effective.
Four months have passed since the authority became effective in September 2002.
The current situation is that on 18 December 2002 the debtor, with the trustee's authority, sold the rent roll for $53,000.00. The terms of the agreement provided for payment in two instalments: the first on 7 February 2003, a payment of $15,000.00, that has occurred; the second is to be paid on 11 March 2003 and the trustee expects that to be paid.
The other matter, the question of commissions, the trustee, with the authority of the debtor, served a statutory demand under the Corporations Law on Melbourne Coach Terminal for payment of the sum of $289,000.00. Melbourne Coach Terminal has applied to set aside the statutory demand. That application has been made in the Supreme Court of Victoria and is listed for hearing before Senior Master Mahony this Thursday, 27 February 2003. The outcome of the claim for the $289,000.00 is a significant matter in the debtor's affairs.
The application to extend time is made under section 33 of the Bankruptcy Act; that section provides:
(1) The court may:
(a)upon such terms as it thinks fit at any time adjourn any proceeding before it either to a fixed date or generally;
(b)at any time allow the amendment of any written process, proceeding or notice under this act or;
(c)extend before its expiration or, if this act does not expressly provide to the contrary, after its expiration any time limited by this act or any time fixed by the court or the registrar under this act (other than the time fixed for compliance with the requirements of bankruptcy notice) for doing an act or thing or abridge any such time.
The submission which is put by Mr Stirling, who appears for the trustee, is that that section does apply because the trustee is, in the wording of paragraph (c), “doing an act”, that is, controlling the property of the debtor under Part X of the Bankruptcy Act, specifically division 2 of Part X of the Bankruptcy Act.
There are various authorities which have dealt with s.33. The Full Court of the Federal Court of Australia in Nillant v Mackyar (1997) 78 FCR 419 held there was no power to abridge time for an automatic discharge under section 149(3). The court there said, that the time limited and time fixed which may be abridged have both to be read as times for doing any act or thing and on that basis held that it did not apply to any automatic discharge.
But I consider that Mr Stirling's argument that under section 189 what is occurring is that the trustee is doing an act, that is he is controlling the property of the debtor is correct. There is contained in section 189 a time limited for doing that act which is four months and paragraph 33(1)(c) gives this court power to extend the time for doing any act.
Therefore, I consider that section 33 does apply to section 189. There is power to extend the time in which the trustee carries out the act of controlling the debtor's property.
So far as the merits of the application are concerned, what is occurring is with the consent of the creditors. The history of what has occurred shows that it is in the interests of the creditors that the trustee's control be extended so that the assets of the debtor or the asset of the debtor which is in doubt, that is his right to commissions from Melbourne Coach Terminal, can be determined.
If it is established that he is entitled to $289,000.00, plainly that will affect the way the creditors vote at the adjourned meeting. If it is determined that he is entitled to nothing or something in between, again that will affect the way the creditors vote at the adjourned meeting. It is plainly in the interests of the creditors and the debtor that they have the opportunity to determine what will happen once they know what the position is.
I will therefore make an order that the property of Peter Wyss has and will remain under the control of Stirling Lindley Horne pursuant to section 189 of the Bankruptcy Act 1966 as though the words “four months” appearing in section 189(1)(a)(d) of the act were substituted with the words “eight months”.
I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of Phipps FM
Associate:
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