Ogle v Brown
[2007] FMCA 2160
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| OGLE v BROWN | [2007] FMCA 2160 |
| BANKRUPTCY – Stale bankruptcy notice – costs of application to set aside notice. |
| Bankruptcy Regulations, Regulation 4.02A |
| Applicant: | DONALD GORDON OGLE |
| Respondent: | WARREN THOMAS BROWN |
| File number: | BRG 701 of 2007 |
| Judgment of: | Wilson FM |
| Hearing date: | 7 September 2007 |
| Date of last submission: | 7 September 2007 |
| Delivered at: | Brisbane |
| Delivered on: | 7 September 2007 |
REPRESENTATION
| Counsel for the Applicant: | N/A |
| Solicitors for the Applicant: | James Conomos Lawyers |
| Counsel for the Respondent: | Mr D. de Jersey |
| Solicitors for the Respondent: | Jones King |
ORDERS
The application filed 16 August 2007 be dismissed.
There be no order as to costs.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRG 701 of 2007
| DONALD GORDON OGLE |
Applicant
And
| WARREN THOMAS BROWN |
Respondent
REASONS FOR JUDGMENT
The debtor applies to set aside a bankruptcy notice issued on 19 December 2006 and for consequential orders. The application was filed on 16 August 2007. The creditor accepts that upon expiry of the six month period following its issue, the bankruptcy notice became stale and could not be served without the imprimatur of the Official receiver: see Regulation 4.02A Bankruptcy Regulations.
No such extension was obtained or had been obtained when the bankruptcy notice was served on 25 July 2007. It is accepted by the creditor that that service was ineffective. The creditor has subsequently attempted to obtain an extension of time from the Official Receiver, pursuant to Regulation 4.02A(b), but that has been unsuccessful.
The consequence, which is accepted by both sides, is that the bankruptcy notice issued on 19 December 2006 is ineffective, and service of it cannot be relied upon to constitute an act of bankruptcy by the debtor.
The matter first came before the court on 16 August 2007, when it was adjourned to enable litigation to continue in the Supreme Court of Queensland. Counsel for the creditor accepts that on the face of the application and supporting affidavit material, it was apparent that the debtor was relying upon the fact that the bankruptcy notice was stale when served. Thereafter, as I have said, the creditor sought to obtain the appropriate approval from the Official Receiver.
On 5 September 2007, the solicitor for the creditor wrote to the solicitor for the debtor, advising that her client would consent to an adjournment of the debtor’s application with no order as to costs. The letter contained the following:
Please let us know whether your client will consent to adjourn his application to a date after he has been served with the bankruptcy notice and the authorisation.
In my view, it is apparent from this letter that the creditor was still hopeful of being able to rely upon the bankruptcy notice, albeit with the recognition that it would have to be re-served. I was told from the bar table, without objection, that upon the decision of the Official Receiver becoming known, the solicitor for the creditor wrote to the solicitor for the debtor, stating in unequivocal terms that the bankruptcy notice would not be relied upon by the creditor.
In those circumstances, there is no justiciable dispute that requires determination by the court. There is no need for an order to be made that the bankruptcy notice be set aside.
I turn, then, to the question of costs. In my view, it was appropriate for the debtor to file the application which he did on 16 August 2007. It ought to have been apparent to the creditor at that time that there were fatal deficiencies in the service of the bankruptcy notice. The creditor nevertheless persisted in attempting to seek the approval of the Official Receiver, which, of course, it was free to do, but up until 5 September 2007, was maintaining the position that the bankruptcy notice should remain on foot, notwithstanding that it would have to be re-served.
There is therefore much to be said for the conclusion that the creditor should pay the debtor’s costs from 16 August until 5 September. However, on 6 September, the need for the application disappeared. Upon being advised in unequivocal terms that the creditor did not intend to rely upon the bankruptcy notice, there was no need for the debtor to persist with his application. The costs of the appearance today could therefore have been avoided.
It follows in my view that there are good grounds for concluding that the debtor should pay the creditor’s costs of the appearance today. Although there is no evidence before me, enabling me to quantify the respective costs, I would be surprised if the costs of the appearance today did not outweigh the costs incurred by the debtor between 16 August and 5 September. I say that because, from the material put before me, all of the costs would have been incurred in the Supreme Court proceedings, or on the creditor’s side, in making application to the Official Receiver. It seems that little was done by the debtor before today, apart from corresponding with the solicitors for the creditor.
Counsel for the creditor submits there should be no order for costs, and in my view, that order would be, on balance, to the benefit of the debtor.
I order that the application filed 16 August 2007 be dismissed, and that there be no order as to costs.
I certify that the preceding twelve (12) paragraphs are a true copy of the reasons for judgment of Wilson FM
Associate: Lynnette Chin
Date: 17 April 2008
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