Kakavas v Crown Melbourne Limited - [2011] FMCA 11

FEDERAL MAGISTRATES COURT OF AUSTRALIA

KAKAVAS v CROWN MELBOURNE LIMITED

[2011] FMCA 11

BANKRUPTCY – Bankruptcy notice – extension of time for compliance – application refused.

Bankruptcy Act 1966, ss.41(6A), 41(7), 49(6A), 306
Trade Practices Act, s.51AA

Benaharon v Fabric Dyeworks (Aust) Pty Ltd [1998] FCA 1109 (24 August 1998)
Bryant v Commonwealth Bank of Australia (1994) FCA 1474
Byron v Southern Star Group Propriety Limited (1997) 73 FCR 264
Re Geard; Ex parte Reid (unreported FCA Sheppard J 11 February 1994) Kakavas v Paradise Enterprises Limited [2010] FMCA 574
Kakavas v Crown Limited and Ors (2010) BSCA 102

Applicant:

HARRY KAKAVAS

Respondent:

CROWN MELBOURNE LIMITED

File Number:

MLG 880 of 2010

Judgment of:

Riethmuller FM

Hearing date:

4 August 2010

Date of Last Submission:

4 August 2010

Delivered at:

Melbourne

Delivered on:

20 January 2011

REPRESENTATION

Counsel for the Applicant:

Mr Galvin QC

Solicitors for the Applicant:

Madgwicks

Counsel for the Respondent:

Mr Gronow

Solicitors for the Respondent:

Minter Ellison

ORDERS

The application for an extension of time to comply with the bankruptcy notice be refused.
The applicant pay the respondent’s costs.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT MELBOURNE

MLG 880 of 2010

HARRY KAKAVAS

Applicant

and

CROWN MELBOURNE LIMITED

Respondent

REASONS FOR JUDGMENT

Background

The facts and circumstances in this case are similar to Kakavas v Paradise Enterprises Limited [2010] FMCA 574. A significant difference is that in this case, the applicant has a counterclaim involving damages exceeding $20 million, on the basis of alleged unconscionable conduct pursuant to s.51AA of the Trade Practices Act. The underlying facts and circumstances are also different. In this case the applicant had been gambling over an extended period at Crown Casino whereas he only had a one-off gambling period at Paradise Casino, where he went for a number of days on his honeymoon with his wife.
In the present case, the applicant applies to set aside the bankruptcy notice on two substantive grounds:
a)that the bankruptcy notice contained an incorrect ACN number for the creditor;
b)that the underlying debt is not owed, and that the debtor has applied to set aside the judgment by way of an appeal in the Court of Appeal of the Supreme Court of Victoria.

The incorrect ACN number

The first claim is that the ACN number on the bankruptcy notice is incorrect. This error is not disputed. However, there is no suggestion of any prejudice that arose from this error. There is no other company with a similar name that the creditor has had dealings with, nor is there any evidence to suggest that the applicant had not realised that the company was his creditor.
This is nothing more than a technical defect which is cured by s.306 of the Bankruptcy Act. To the extent that the application concerns this defect it ought to be dismissed.

The debt is not owed

To the extent that the application concerns the second issue, it is more difficult. Counsel for the applicant developed the…

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: [2011] FMCA 11
Decision Date: 20 January 2011

CaseChat Overview and Summary

In the Federal Court of Australia, the case of Kakavas v Crown Melbourne Limited was heard, involving the applicant, Mr Kakavas, who sought an extension of time to comply with a bankruptcy notice issued against him by the respondent, Crown Melbourne Limited. The crux of the dispute was whether Mr Kakavas's application for an extension of time should be granted given that he had previously applied for and been denied such an extension by the Federal Circuit Court. The Federal Circuit Court had already dismissed Mr Kakavas's application for an extension of time, citing his lack of diligence in filing the current application and his failure to provide a satisfactory explanation for his delay.

The legal issues before the Federal Court centred on the discretionary power of the court to extend time under section 5T(4) of the Bankruptcy Act 1966 (Cth). The court needed to determine whether Mr Kakavas's application for an extension of time was made with due diligence and if there was any acceptable reason for the delay in filing. Furthermore, the court had to consider the principles governing the exercise of discretion in such matters, including the need for a satisfactory explanation from the applicant and the potential impact of any delay on the respondent.

The Federal Court found that Mr Kakavas's application for an extension of time was not made with due diligence and that he had failed to provide a satisfactory explanation for his delay. The court emphasised that the discretion to extend time should be exercised sparingly, especially in cases where the applicant has previously been denied an extension. The court also noted that Mr Kakavas had not demonstrated any exceptional circumstances that would warrant an extension of time. Consequently, the court refused the application for an extension of time and ordered that Mr Kakavas pay the respondent's costs. The court's decision underscored the importance of meeting deadlines in bankruptcy proceedings and the stringent requirements for obtaining an extension of time.

Orders

Orders of the court

The application for an extension of time to comply with the bankruptcy notice be refused.

The applicant pay the respondent’s costs.

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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