McPhee v Glentham Pty Ltd

Case [2006] FMCA 1508

FEDERAL MAGISTRATES COURT OF AUSTRALIA

McPHEE v GLENTHAM PTY LTD [2006] FMCA 1508
BANKRUPTCY – Application to extend time for compliance with bankruptcy notice – appeal from and application for stay of decision on which bankruptcy notice based – application for stay not yet heard – relevant principles.
Bankruptcy Act 1966, ss.41(6A), (6C)
Glentham Pty Ltd v Luxer Holdings Pty Ltd & Anor [2006] WASC 132
Conway v Jackson (2001) 107 FCR 201
Byron v Southern Star Group Pty Ltd (1997) 73 FCR 264
Re Horwarth; ex parte Mortgage Acceptance Nominees Ltd (1993) 43 FCR 587
Valassis v Bernard [2001] FCA 477
O’Loughlin v Glenmont Investments Pty Ltd [2001] FCA 925
Elliott v Water Wheel Holdings Ltd [2004] FMCA 37
Sidhom v Euphoric Pty Ltd [2006] FMCA 827
Jackson v Conway [2000] FCA 1530
Hovan v Goycolea-Silva [2003] FCA 234
Warner v Frost [1999] FCA 830
Shepherd v Chiquita Brands (South Pacific) Ltd [2001] FCA 1394
Applicant: MICHAEL JOHN McPHEE
Respondent: GLENTHAM PTY LTD
File Number: PEG239 of 2006
Judgment of: Lucev FM
Hearing date: 28 September 2006
Date of Last Submission: 29 September 2006
Delivered at: Perth
Delivered on: 29 September 2006

REPRESENTATION

Counsel for the Applicant: Mr A Timoney
Solicitors for the Applicant: Stables Scott
Counsel for the Respondent: Ms M Clarke
Solicitors for the Respondent: Hotchkin Hanly

ORDERS

  1. That the application for interim orders extending time for compliance with the Bankruptcy Notice be dismissed.

  2. Subject to hearing counsel, that the applicant debtor pay the respondent creditor’s costs to be agreed, or if not agreed, taxed according to the Federal Court scale.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
PERTH

PEG239 of 2006

MICHAEL JOHN McPHEE

Applicant

And

GLENTHAM PTY LTD

Respondent

REASONS FOR JUDGMENT

(revised from the transcript)

The application

  1. The substantive application in this matter is an application to set aside a bankruptcy notice.

  2. The sole ground of the application to set aside the Bankruptcy Notice is that it is the “subject of an appeal to the Supreme Court of Western Australia, Court of Appeal”.

  3. There is also an application for interim orders for extension of time in which to comply with Bankruptcy Notice.  It is that application which is the subject of this judgment.

The applicant’s affidavits

  1. There are affidavits in support of the application from Mr McPhee (the applicant and judgment debtor) dated 18 September 2006 (“applicant’s first affidavit”) and 26 September 2006 (“applicant’s second affidavit”).

  2. Annexure “A” to the applicant’s first affidavit is the Bankruptcy Notice dated 6 September 2006.

  3. The Bankruptcy Notice was served on the applicant on 7 September 2006: applicant’s first affidavit paragraph 2. 

  4. Annexure “B” to the applicant’s first affidavit is the judgment and final orders in Glentham Pty Ltd v Luxer Holdings Pty Ltd & Anor [2006] WASC 132 (“Glentham”) being the judgment and final orders the basis for the judgment debt.

The appeal

  1. An appeal has been filed with the Western Australian Court of Appeal (“Court of Appeal”) by the applicant against the judgment and final orders…

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Details
AGLC
McPhee v Glentham Pty Ltd [2006] FMCA 1508
Case
[2006] FMCA 1508
Decision Date

CaseChat Overview and Summary

The matter before the Court was an application by the debtor, McPhee, to extend time for compliance with a Bankruptcy Notice issued by the creditor, Glentham Pty Ltd. McPhee sought to have the time for compliance extended, arguing that it had been unfairly prejudiced by Glentham's delay in serving the notice. The Court had to determine whether McPhee's application should be granted, and if not, whether costs should be awarded to Glentham.

The central legal issue before the Court was whether the creditor's delay in serving the notice constituted a sufficient ground for extending the time for compliance under the Bankruptcy Act. The Court considered whether the delay was unreasonable and whether McPhee had been prejudiced by this delay. The Court also needed to weigh the balance of convenience in favour of McPhee, given the creditor's delay.

The Court held that the creditor's delay in serving the notice did not constitute sufficient grounds for extending the time for compliance. The Court found that the delay was not unreasonable, and McPhee had not been prejudiced to the extent necessary to warrant an extension of time. The Court further determined that the balance of convenience did not favour McPhee. Consequently, McPhee's application for interim orders extending time for compliance with the Bankruptcy Notice was dismissed. The Court ordered that McPhee pay Glentham's costs, subject to the parties agreeing on the amount, or if not agreed, the costs to be taxed according to the Federal Court scale.

Orders

Orders of the court

1.

That the application for interim orders extending time for compliance with the Bankruptcy Notice be dismissed.

2.

Subject to hearing counsel, that the applicant debtor pay the respondent creditor’s costs to be agreed, or if not agreed, taxed according to the Federal Court scale.

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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