Newman v Bain - [2012] FMCA 629

FEDERAL MAGISTRATES COURT OF AUSTRALIA

NEWMAN v BAIN

[2012] FMCA 629

BANKRUPTCY – Application for extension of time for election by trustee pursuant to s.60(3) of the Bankruptcy Act – matters relevant to exercise of discretion.

Bankruptcy Act 1966 (Cth), ss.33 & 60

Abeyratne v Trkulja and Ors (1998) 90 FCR 253
Vince v Sellers & Ors (2004) FMCA 564

Applicant:

PHILIP NEWMAN AS TRUSTEE FOR THE BANKRUPT ESTATE OF JOHN FRANCIS DESMOND KEET

Respondent:

CLIVE STEWART BAIN

File Number:

PEG 87 of 2012

Judgment of:

Lindsay FM

Hearing dates:

8 June 2012 & 5 July 2012

Date of Last Submission:

5 July 2012

Delivered at:

Perth

Delivered on:

5 July 2012

REPRESENTATION

Counsel for the Applicant:

Mr H.M. Reynoldson

Solicitors for the Applicant:

Corser & Corser

Counsel for the Respondent:

Mr R.F. Edwards

Solicitors for the Other Respondent:

DLA Piper Australia

ORDERS

That the Application for an extension of time in which to make the election referred to in s.60(3) of the Bankruptcy Act 1966 constituted by the Application filed on 16 April 2012 is dismissed.
That the Application by the Respondent for an order for costs is refused.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT PERTH

PEG 87 of 2012

PHILIP NEWMAN AS TRUSTEE FOR THE BANKRUPT ESTATE OF JOHN FRANCIS DESMOND KEET

Applicant

And

CLIVE STEWART BAIN

Respondent

REASONS FOR JUDGMENT

This is an application by the trustee of the bankrupt estate of one John Francis Desmond Keet for an extension of time for the purposes of making an election pursuant to s.60(3) of the Bankruptcy Act 1966 (“the Act”). Section 60 of the Act deals with a miscellany of matters relating to stay of legal proceedings, but s.60(2) and (3) deals with the issue of whether or not a trustee is to continue to participate in legal proceedings to which the bankrupt to that point had been a party.
Section 60(2) says:
An action commenced by a person who subsequently becomes a bankrupt is, upon his or her becoming a bankrupt stayed until the trustee makes election, in writing, to prosecute or discontinue the action.
Subsection (3) says:
If the trustee does not make such an election within 28 days after notice of the action is served upon him or her by a defendant or other party to the action, he or she shall be deemed to have abandoned the action.
In its terms the application puts up two dates as the proposed dates at which the election is made, and one of those dates is 14 February 2012 at which time the trustee’s solicitors sent a letter to the other party’s solicitor advising of his intention to prosecute the proceeding which the bankrupt had instituted in the Supreme Court against the other party. The other party, incidentally, is a third party and not a defendant to those proceedings.
The second date proposed in respect of which the extension of time should be made is 8 March 2012, which is the date upon which 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.

Continue reading Newman v Bain

Details

AGLC: Newman v Bain [2012] FMCA 629
Case: [2012] FMCA 629
Decision Date: 5 July 2012

CaseChat Overview and Summary

Newman applied for an extension of time to make an election under section 60(3) of the Bankruptcy Act 1966, as their initial election was not made within the statutory timeframe. The dispute was heard in the Federal Circuit Court of Australia, with Bain being the respondent. The application for an extension was made on 16 April 2012.

The legal issues before the court included whether the delay in making the election was reasonable and whether an extension should be granted under section 60(4) of the Act. The court considered the statutory provisions, the circumstances of the delay, and the potential prejudice to the respondent if the extension was granted.

The court found that the delay in making the election was not reasonable and that granting an extension would cause significant prejudice to the respondent. It was held that the delay was due to inaction by the applicant and that the applicant had not demonstrated any exceptional circumstances warranting an extension. Consequently, the application for an extension of time was dismissed. Additionally, the court declined to make an order for costs against the applicant.

The orders made by the court included dismissing the application for an extension of time and refusing the respondent's application for an order for costs.

Orders

Orders of the court

That the Application for an extension of time in which to make the election referred to in s.60(3) of the Bankruptcy Act 1966 constituted by the Application filed on 16 April 2012 is dismissed.

That the Application by the Respondent for an order for costs is refused.

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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