BANKRUPTCY – Application to review a registrar’s decision not to set aside a bankruptcy notice – review application made out of time – where the applicant is 417 days out of time – application dismissed and bankruptcy notice not set aside.
[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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AGLC
Kuek v Wade [2025] FedCFamC2G 1512
Case
[2025] FedCFamC2G 1512
Decision Date
CaseChat Overview and Summary
In the case of Kuek v Wade, the Applicant, Kuek, filed an application to review a decision by a Registrar not to set aside a bankruptcy notice served by the Respondent, Wade. The application was heard by the court and determined by the Registrar under the delegated power pursuant to s 254(1) of the Federal Circuit and Family Court of Australia Act. The central legal issue was whether the court should grant an extension of time for the Applicant to file a review application, which was filed 417 days beyond the statutory time limit.
The court considered the principles for exercising its discretion in extending time as outlined in Hawkins v Kingsway Group Ltd, which involved weighing the explanation for the delay, the likelihood of prejudice to the Respondent, and whether the Applicant had an arguable case. The court noted that the Applicant had not provided a reasonable explanation for the significant delay in filing the review application. Additionally, the Respondent had already acted on the decision by the Registrar, and there was no indication of any prejudice that could be remedied by allowing the review application. Given that the Applicant had an adequate alternative remedy by filing an amended complaint, the court exercised its discretion to refuse the extension of time.
As a result of the court's decision, the application for an extension of time was dismissed, and the Registrar's decision not to set aside the bankruptcy notice was upheld. The court did not find any grounds for setting aside the Registrar's decision based on the arguments presented by the Applicant. Consequently, the bankruptcy notice remained in effect.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
On 26 June 2016, proceedings were heard by Magistrate Michael Smith. The hearing was conducted by both parties making opening submissions, adducing evidence in turn and then making closing submissions. The Magistrate conducted an inquisitorial process in which he initially questioned the Respondent and then engaged in a detailed exchange with counsel for the Applicant, Mr Doherty. Once it became apparent to the Magistrate that the Respondent did not dispute making the Agreement, he focused on what costs estimates were given to her before the making of the agreement. Mr Doherty informed the Magistrate that the only information about costs that was provided to the Respondent prior to signing the Agreement was that the solicitor-client costs and party-party costs meant that the Agreement was unenforceable. This prompted the Applicant to ask Mr Doherty to call him into evidence. The Magistrate questioned him extensively, with some of the questions being in the nature of a vigorous cross-examination. The Magistrate firmly expressed the view that the Agreement was unenforceable, and Mr Doherty applied for leave to amend the complaint to plead a claim in quantum meruit and for an adjournment of the hearing to enable to do him so. The Magistrate granted this. The Magistrate did not publish any discrete reasons for his decision, but stated his reasons were those he articulated during the course of the hearing (Magistrate’s Decision).[18][18] [6]-[9] Kuek v Wade [2017] VSCA 329. On 29 June 2016, Magistrate Michael Smith made a self-executing order which granted leave to the Applicant to amend his complaint and provided that the proceeding be struck out if an amended complaint was not filed within 30 days (Magistrates’ Court Order).[19][19] [10] Kuek v Wade [2017] VSCA 329. The Applicant prepared an amended complaint which claimed $13,953 on the basis of quantum meruit. When the Applicant attempted to file the amended complaint on 3 August 2016, this being five days after the expiration of the period specified in the Magistrate's Court Order, the Magistrates' Court refused to accept it.[20][20] [11] Kuek v Wade [2017] VSCA 329. On 25 August 2016, the Applicant sought judicial review of the Magistrates’ Court Order on the grounds of jurisdictional error, denial of procedural fairness, apprehended bias and error of law on the face of the record.[21][21] [12] Kuek v Wade [2017] VSCA 329. On 1 March 2017, the application for judicial review was heard by Bell J in the Supreme Court of Victoria. The Respondent was self-represented. At the conclusion of the hearing, Bell J made orders dismissing the application on the basis that, even if the grounds of review were made out, relief should not be granted to the Applicant in the exercise of the Court's discretion. The discretionary matter relied upon by Bell J was that the Applicant had available to him an adequate alternative remedy, the filing of an amended complaint which he failed to exercise.[22][22] [13] Kuek v Wade [2017] VSCA 329.
Ratio Decidendi
Legal Principle Established
The evidence that was before the Registrar may be supplemented by any other evidence on the hearing of the review application.[42][42] Re Kwiatek; Ex parte Big J Ltd v Pattison (1989) 21 FCR 374; 89 ALR 631; Re Brindle: Ex parte FB & FA McMahon Pty Ltd (1992) 35 FCR 506; 108 ALR 470; Ginnane v Diners Club Ltd (1993) 42 FCR 90; 120 ALR 375; Re Gray; Gray v Ball BC9707278; [1997] FCA 1512.CONSIDERATION On 21 May 2024, a Registrar made a decision to set aside the Bankruptcy Notice served by the Respondent on the Applicant. The Registrar made this decision exercising delegated power pursuant to s 254(1) of FCFCOA Act.[43][43] See also item 58 in r 21.01 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth). Rule 2.02(3) of the Bankruptcy Rules provides that an application for the review of the exercise of a power by a Registrar must be made within 21 days. The Registrar’s Decision was made on 21 May 2024, which means that the last day for filing the Application for review was (Tuesday) 11 June 2024. The Application for review was filed on 2 August 2025. Therefore, the Application for review was made 417 days out of time. The Respondent has sought an extension of time to review the Registrar’s Decision. I refuse the extension of time for the reasons that are set out below. The application for an extension of time provided for in r 2.02(3) of the Bankruptcy Rules involves the Court exercising the discretion provided for also in r 2.02(3). In Hawkins v Kingsway Group Ltd,[44] Stone J stated:The court’s general power to extend time is to be found in O 3 r 3 of the Federal Court Rules. It is a wide power that permits the court to extend or abridge the time before or after the time expires, at the discretion of the court. In Bishop v R (1982) 40 ALR 40 Deane J considered the principles to be applied in the exercise of the court’s discretion. At 42, his Honour quoted with approval the following statement of Cullen CJ in Morres v Papuan Rubber & Trading Co Ltd (1914) 14 SR(NSW) 141 at 144:… when a party, who has neglected to observe those requirements which the rules place him under for the protection of the other side, comes for the indulgence of the Court to ask that the proceedings shall continue notwithstanding that default, he has to satisfy the Court that justice requires that that default of his shall be overlooked, and he must satisfy the Court that there is some reasonable kind of explanation or excuse for his neglect of the rules.As Deane J observed, the explanation required will depend on the circumstances of the case. In addition to the explanation for the delay, however, it has generally been accepted, in relation to a wide range of applications, that it is also necessary to consider the likelihood of prejudice to the respondent and whether the applicant for an extension of time has an arguable case: Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 at 348–349 per Wilcox J; Bahonko v Royal Melbourne Institute of Technology [2006] FCA 1325 at [21]–[24] per Weinberg J; Bahonko v Nurses Board (Vic) (No 4) (2007) 97 ALD 721 at [48] per Middleton J.It is for the court to weigh up all three factors and exercise its discretion accordingly. In particular circumstances one factor may outweigh the others. For example, an extension of time may be granted where the applicant has a strongly arguable case, even in the case of long delay for which the explanation is not strong. Similarly the prejudice to a respondent who, the prescribed time for appeal having expired, has exercised his or her rights under the decision from which an applicant now seeks to appeal, may be sufficient to justify the court exercising its discretion to refuse an extension of time.[44] [2009] FCA 1073; BC200908919.