Lipov v Alexander Fraser & Son Ltd - [1978] FCA 121

LIPOV v. ALEXANDER FRASER & SON LTD. (1978) 36 FLR 126
Bankruptcy

COURT

FEDERAL COURT OF AUSTRALIA

GENERAL DIVISION
C.A. Sweeney J.(1)

CATCHWORDS

Bankruptcy - Application to set aside bankruptcy notice until after determination of appeal against judgment on which notice based - Appeal against judgment on which notice based already lodged - Time for service of notice of appeal expired - Power of court to extend time for compliance with bankruptcy notice - Circumstances of exercise of power - Bankruptcy Act 1966 (Cth.), ss. 33, 40.

HEADNOTE

The respondents issued a bankruptcy notice, based on a judgment debt against the applicant, requiring compliance with its terms within fourteen days. Within the fourteen days the applicant filed an application to set aside the notice until after the determination of an appeal already lodged against the judgment on which the notice was based. The respondent opposed the application on the grounds that at the time of service of the bankruptcy notice the time for service of notice of appeal from the judgment had expired and the applicant had not then been granted an extension of time for service of the notice of appeal: in those circumstances, it was argued, the pending appeal was not in law a proper ground for setting aside the notice.

Section 40(1)(g) of the Bankruptcy Act 1966 provides, inter alia, that a debtor commits an act of bankruptcy if he fails to comply with a notice within the time fixed by the registrar, in the case of a notice served within Australia, or within the time fixed by an order giving leave to effect service, in the case of a notice served elsewhere.

Section 33(1)(c) of the Act provides, inter alia, that the court may "extend before its expiration . . . any time limited by this Act for doing any act or thing or abridge any such time".

Held: (1) The time of fourteen days fixed by the registrar or the time fixed by an order giving leave under s. 40 of the Act is a time limited by the Act within the meaning of s. 33 of the Act.

Re Grace (1931), 3 ABC 131, referred to.

(2) The institution of a bona fide appeal against a judgment upon which a bankruptcy notice is based is a good reason for adjourning the hearing of the petition.

Ex parte Heyworth; In re Rhodes (1884), 14 QBD 49; Union Bank of Australia Ltd. v. Dean (No. 4) (1898), 24 VLR 453, referred to.

(3) In the circumstances, the time for compliance with the bankruptcy notice should be extended.

HEARING

Melbourne, 1978, August 10, 15; September 27. #DATE 27:9:1978

APPLICATION.

The material facts appear from the judgment.

The applicant appeared in person.

D.L. Harper and P. McCurdey, for the respondents.

Cur. adv. vult.

Solicitors for the respondents: Thomas, Frenkel & Berkovitch.

R. L. Crisp

JUDGE1

September 27.

The following judgment was delivered.

C. A. SWEENEY J. The applicant, Maurice Lipov, is the debtor named in a bankruptcy…

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: [1978] FCA 121
Decision Date: 27 SEPTEMBER 1978

CaseChat Overview and Summary

The case of Lipov v Alexander Fraser & Son Ltd involves the applicant, Lipov, seeking to set aside a bankruptcy notice issued against him until after the determination of an appeal against a judgment on which the notice was based. The respondent, Alexander Fraser & Son Ltd, had issued the notice pursuant to a judgment obtained against Lipov in the Federal Court of Australia. Lipov had already lodged an appeal against the judgment but had missed the time for serving the notice of appeal. The primary legal issue for the court was whether it had the power under the Bankruptcy Act 1966 to extend the time for compliance with the bankruptcy notice and, if so, under what circumstances it could exercise that power.

The court examined sections 33 and 40 of the Bankruptcy Act, focusing on whether the court's discretion to extend time for compliance with a bankruptcy notice could be invoked even after the expiration of the time for lodging an appeal. It considered the purpose of the statutory scheme, the potential prejudice to creditors if the notice were set aside, and the balance between the rights of the debtor and the interests of creditors. The court held that while it had the power to extend the time for compliance with a bankruptcy notice, it was not an unfettered discretion. The exercise of this power should be guided by considerations of fairness and the statutory objectives. The court found that setting aside the bankruptcy notice in these circumstances would unduly prejudice the respondent, Alexander Fraser & Son Ltd.

Ultimately, the court dismissed Lipov's application to set aside the bankruptcy notice. It concluded that the balance of convenience favoured the respondent and that setting aside the notice would not serve the purposes of the statutory scheme. The court held that the appeal time had expired, and the statutory process for bankruptcy notices could not be circumvented by subsequent applications to set them aside.

Orders