Re Bates, M.E.; Ex Parte Southport Yacht Club Inc.

[1992] FCA 494

4q4 q2

JUDGMENT No. ....." ....... ..J -

C A T C H W O R D S

BFMZRUPTCY - application to set aside bankruptcy notice - no

appearance by or on behalf of applicant - no evidence denying existence or propriety of judgment debt - no cross-claim - conduct of the applicant.

BANKRUPTCY - bankruptcy notice - application for extension of time for compliance with bankruptcy notice by petitioning creditor - whether may be granted after time for compliance has expired.

Streimer v. Tamas (1981) 54 F.L.R. 253

, Re Conte: Ex Darte ~onte v. Commissioner of Taxatlon (1990)

27 F.C.R. 120

Re Hanbv: Ex ~arte	Fleminaton Central Spares Ptv Ltd (1967)
2 JULY 1992

10 F.L.R. 378

RE: MARK EDWARD BATES: EX PARTE: THE SOUTHPORT YACHT CLUB INC.

No. QN1348 of 1991

SPENDER J.

BRISBANE

IN THE FEDERAL COURT OF AUSTRALIA	1
GENERAL DIVISION	)

No. QN1348 of 1991

BANKRUPTCY DISTRICT OF THE

STATE OF OUEENSLAND

RE:	MARK EDWARD BATES
EX PARTE:	THE SOUTHPORT YACHT CLUB INC.

MINUTES OF ORDER

JUDGE MAKING ORDER:	Spender J.
DATE OF ORDER:	2 July 1992
WHERE MADE:	Brisbane
THE COURT ORDERS THAT:

l. The application to set aside Bankruptcy Notice No. 1348 of 1991 filed on 19 November 1991 is dismissed with costs, including reserved costs.

2.   The time for compliance with Bankruptcy Notice No. 1348 of 1991 be extended to 4 p.m. on 16 July

1992.

THE COURT DIRECTS THAT:

3.    The solicitors for The southport Yacht Club Inc. serve a copy of these orders on Mark Edward Bates; such service to be effected by posting a copy of these

Office, Coolangatta, 4225", forthwith. orders to Mr. Bates, by ordinary mail, to "C/- Post

NOTE:	Settlement and entry of orders is dealt with in Rule
124 of the Bankruvtcv Rules.
IN THE FEDERAL COURT OF AUSTRALIA	1
GENERAL DIVISION	1  No. QN1348 of 1991
BANKRUPTCY DISTRICT OF THG STATE OF OUEENSLAND

RE :	MARK EDWARD BATES
EX PARTE:	THE SOUTHPORT YACHT CLUB INC.

CORAM:	Spender J.
PLACE :	Brisbane
DATE:	2 July 1992

EX TEMPORE REASONS FOR JUDGMENT

This is an application made by Mark Edward Bates to set aside Bankruptcy Notice No. 1348 of 1991. M r Bates did not appear at the hearing of that application today. It is necessary to set out in some detail the events that have happened concerning the bankruptcy notice and Mr Bates's application in respect of it.

What is apparent from that material, however, is that Mr Bates has not been zealous in his own interest and has been	on a number of occasions keen to apportion blame to other
persons. The difficulties that have arisen in the conduct of the matter seem to be almost exclusively the fault of Mr Bates. Making proper allowance for difficulties that the legal system might pose, particularly in the bankruptcy jurisdiction, provisions of the bankruptcy law apply to Mr Bates as they do to others against whom a bankruptcy notice is issued. It is hardly a satisfactory answer to act as Mr Bates has acted.
On 7 December 1990, Moynihan J. in the Supreme Court of Queensland made orders including a costs order. On taxation, that costs order against Mr Bates was taxed at $4320.06. A bankruptcy notice based on that judgment issued on 10 September
1991. There is no affidavit of service in respect of that
bankruptcy notice, but on 19 November 1991 Mr Bates filed an application seeking an order simply that:

" The bankruptcy notice herein be set aside. "

Also on that day, a handwritten affidavit by Mr Bates was filed. That affidavit sets out a large body of historical matters concerning his education and work history and details some of his dealings with The Southport Yacht Club Inc. He says that in July 1987 he paid an amount of $272 .OO being subscription fees and a reinstatement fee for which he received a receipt but that on 24 December that year he received a letter dated 18 December 1987 advising that his membership was denied and returning the moneys that had been paid five months before.

He initiated Supreme Court proceedings which were heard before Moynihan J. on 7 December 1990 with the results that I have indicated. There is nothing in that affidav1.t which is directed to the existence or propriety of the judgment debt nor is there any properly formulated cross-claim which would provide a basis on which the bankruptcy notice might be set aside.
Mr Bates's application that the bankruptcy notice be set aside was set down for hearing on 12 December 1991.	The

Registrar by a letter dated 19 December 1991 wrote to Mr Bates at the address which he gave as his address for service which was "C/- Post O f f i c e , Coolangat ta , Queensland, 4225" and in that letter the District Registrar advised:

" The a p p l i c a t i o n s e e k i n g an o r d e r t h a t t h e

bankrup t cy notice be set a s i d e was set down f o r

h e a r i n g on 12 December. There was n o appearance

by you on t h a t d a t e .

The m a t t e r was adjourned to 15 December 1991 a t

9.30 a.m. The o n l y addre s s f o r you s t a t e d on t h e

documents f i l e d by you i s "C/- P. 0. Coolangatta

4225". The m a t t e r h a s been removed from t h e l i s t

f o r 18 December 1991 and i n s t e a d h a s been l i s t e d

for ment ion only before t h e Court a t 9.30 a.m.	on
Wednesday 29 January 1992. "
I f t h e m a t t e r i s t o proceed	t o h e a r i n g d i r e c t i o n s
o r d e r s may be made on	29 January 1992 w i t h a v i ew

o f hav ing the m a t t e r heard i n February 1992.

You should appear or be r e p r e s e n t e d when t h e

m a t t e r i s b e f o r e t h e Cour t	f o r ment ion o n l y on	29
January 1992. "

On 29 January 1992, M r Bates appeared in person.

The matter was adjourned to the Registrar for a date and serve any further affidavit material on which he intended to	to be fixed, but in addition the Court ordered that Mr Bates file
rely within 14 days from 29 January 1991. The Court ordered that the creditor file and serve any affidavit material, including affidavits in reply, within 14 days of the date of service of the debtor's material, that costs be reserved, and liberty to apply was granted to both parties.
On 3 March Messrs Primrose Couper Cronin and Rudkin, sol ici tors for The Southport Yacht Club Inc., wrote t o the Registrar seeking that the matter be re l i s t ed .
That l e t t e r indicated t h a t , notwithstanding statements made by Mr Bates on the earlier occasion that Messrs Stephens and Tozer were acting as his sol ici tors , inquiries by the solicitors for The Southport Yacht Club Inc. indicated that t h a t f i r m d i d not have instructions i n relation t o the matter.

On 25 March 1 9 9 2 the District Registrar again wrote t o

Mr	Bates referring t o the orders made by the Court on 29 January
1 9 9 2 and	continuing:

"	An examination o f the f i l e reveals that you have not f i led any a f f i d a v ~ t material since the orders
o f the Court made on 29 January 1992. I am about
t o allocate a hearing date for t h i s matter. You are requested t o telephone the List Clerk a t th i s o f f i c e forthwith t o discuss suitable hearing dates. Should you not contact the List Clerk a hearing date w i l l be allocated i n any event.
I f you do not intend t o proceed with your
application I request that you n o t i f y the List
Clerk forthwith. "
On 27 March 1 9 9 2 Mr Bates wrote t o the District

Registrar	referring	t o the	l e t t e r	o f	25	March	1 9 9 2	and
continuing:

"	To the best o f my knowledge I was required t o attend the Court, which I d i d on the 29 January " f o r mention only." I was not aware o f any orders being made, the only thing that was required o f me was t o ask my sol ic i tor t o contact Primrose Couper Cronin Rudkin, which I d i d .
Mr Young o f S tephens & Tozer r e c e n t l y sent me the
Legal A id A p p l i c a t i o n Form w h i c h in formed me t h a t
the r e q u e s t f o r a i d was r e f u s e d , n o t h i n g else.
I am forwarding a copy o f t h i s let ter t o Mr
Michael Veivers MLA who i s i n c o n t a c t w i t h the
Attorney-General r egard ing t h i s m a t t e r .

Yours	f a i t h f u l l y ,
M.E.	B a t e s .

PS:  Perhaps you should c o n t a c t them. "

On 27 April 1992 the list clerk wrote to Mr Bates

saying:

" I a d v i s e t h a t t h i s m a t t e r h a s been l i s t e d f o r

ment ion on Wednesday 13 May 1992 a t 9.30 a.m. t o

enab l e the R e g i s t r a r t o de t e rmine the r e a d i n e s s

f o r t r i a l o f th i s m a t t e r .

I t	i s	e s s e n t i a l	t h a t	you	or	your	l e g a l
t h a t	d a t e .	"

r e p r e s e n t a t i v e a t t e n d Court on

On 9 May 1992 Mr Bates wrote to the District Registrar saying:

" I wish t o i n f o r m you t h a t I am unable t o a t t e n d

the h e a r i n g l i s t e d f o r men t i on on Wed. 1 3 t h May

because	o f h e a l t h	reasons .	I	have	no	l e g a l
r e p r e s e n t a t i o n	and	am	a t t e m p t i n g	t o	g e t	Legal
A id .	W h i l s t	i l l e g a l	b o a t	peop l e ,	a rab	t h u g s ,

f o r e i g n e r s w i t hou t pas spor t s , wogs, and o f cour se

A u s t r a l i a ' s own can ge t L A i d , a W W I I Veteran

A f f a i r s pens ioner	i s n o t ,	s o f a r ,	e l i g i b l e .
Something stinks,	don ' t	you	t h i n k .

Enclosed p l e a s e f i n d a Doc to r ' s C e r t i f i c a t e . "

The doctor's certificate forwarded with that letter is

addressed:

"	T o whom i t may concern. Re: hi- Mark B a t e s D08 29/7/24
T h e a b o v e p a t i e n t i s c u r r e n t l y u n d e r
i n v e s t i g a t i o n and t r e a t m e n t for v e r t i g o . H e i s
a l s o u n d e r g o i n g c o n s i d e r a b l e stress r e l a t e d t o a
recent bereavemen t i n the f a m i l y and the c i r c u m s t a n c e s s u r r o u n d i n g h i s l e g a l d i f f i c u l t i e s .
I feel , i n v i e w o f the above , t h a t s y m p a t h e t i c c o n s i d e r a t i o n be g i v e n t o M r B a t e s and t h a t h i s
C o u r t appearance be d e f e r r e d t o a l a t e r d a t e on
m e d i c a l grounds . "

The letter seems to be signed by a Dr Coetzee.

On 25 May 1992 the District Registrar wrote to Mr Bates

saying:

"

I refer to y o u r l e t t e r d a t e d 9 May 1992. You a r e

r e q u i r e d	t o	f i l e	a n	a d d r e s s	for	service.	An
a d d r e s s	c a r e	o f	a	p o s t	o f f i c e	box	i s

i n s u f f i c i e n t . You m u s t s t a t e an a d d r e s s a t which

documents may be s e r v e d upon you .

I a t t a c h for y o u r i n f o r m a t i o n a c o p y o f the

orders made by the C o u r t on 13 May 1992.

A d a t e for h e a r i n g w i l l be set a s soon a s

possible. You w i l l n o t e t h a t t i m e l i m i t s h a v e

been set i n r e l a t i o n t o the f i l i n g o f documents

by y o u r s e l f and the c r e d i t o r .

You w i l l be n o t i f i e d o f the d a t e f o r h e a r i n g o f

the a p p l i c a t i o n t o set a s i d e the b a n k r u p t c y

notice a s soon a s p o s s i b l e . "

On 13 May 1992 orders that were made as follows:

" 1 . The d e b t o r f i l e and serve a n y m a t e r i a l upon which he

i n t e n d s t o rely w i t h i n 10 d a y s from t o d a y ;

2. The c r e d i t o r f i l e and serve a n y f u r t h e r m a t e r i a l upon

which i t i n t e n d s t o rely, i n c l u d i n g a f f i d a v i t s i n r e p l y ,

w i t h i n 10	d a y s from	the d a t e o f service	o f the d e b t o r ' s
m a t e r i a l ;

3. The a p p l i c a t i o n be set down for h e a r i n g before a Judge

o f the C o u r t a s soon a s p o s s i b l e ( o n e d a y t o be

a l l o c a t e d ) ;

4 . Costs be r e s e r v e d . "

By a letter dated 18 June 1992 which was received by the Registrar on 23 June 1992 Mr Bates said:

"

Thank you for y o u r let ter o f 25 May, contents o f

wh ich h a v e been n o t e d .

I w i s h t o a p o l o g i s e for the d e l a y i n r e p l y i n g ,

I h a v e not been very w e l l a t a l l recently. I

r e g r e t t o i n f o r m you t h a t I am u n a b l e t o g i v e an

a d d r e s s for service	a s I	l i ve i n a m o b i l e home a
camper	v a n	a t C o o l a n g a t t a .

I enclose a f u r t h e r let ter from my Doctor who h a s t o l d me	t o ' l e a v e the a r e a ,	g e t away and	t a k e a
b r e a k from a l l the p r e s s u r e . '	I	d o n ' t	know how,

b u t I w i l l be l e a v i n g the a r e a a t the end o f t h i s

month . "

The letter attached to that letter, again, is from Dr Coetzee addressed "To Whom It May Concern", and it is in these terms:

" Due t o the u n c e r t a i n t y o f the l e g a l p r o c e e d i n g s

p e n d i n g a g a i n s t my p a t i e n t , M r B a t e s h a s

d e v e l o p e d an a n x i e t y s t a t e which i s d e t r i m e n t a l

t o his h e a l t h . T h i s i s i n a d d i t i o n t o the

d e p r e s s i o n c a u s e d by the recent a c c i d e n t a l d e a t h

o f a g r a n d c h i l d .

A s p a r t o f h is t h e r a p y and i n his best interests,

I	h a v e a d v i s e d t h a t he	t a k e a	short	h o l i d a y away
from	the	C o a s t	i n o r d e r t o d i v o r c e h i m s e l f	from

a l l the stress here and g i v e h i m a c h a n c e t o

r e c u p e r a t e . "

In response to that letter, the list clerk wrote on 23 June 1992 to Mr Bates, C/- Post Office, Coolangatta, 4225. That letter was not returned unclaimed to the Registry. The list clerk wrote as follows:

" I acknowledge receipt of your letter dated 18

June, 1992 which was received on 23 June, 1992.

I advise that this matter has been listed for hearing by a Judge of the Court on Thursday

2 July, 1992 at 10.15 a.m.

I note that you have not filed any further material as ordered by the Court on 13 May, 1992. If you intend to file any such material it should be filed and served without delay.

An appearance by you or a legal representative on your behalf will be necessary on 2 July, 1992. If there is no appearance Orders may be made by the Court in your absence. "

Today, 2 July 1992, nobody appeared on Mr Bates's behalf, nor did he appear in person.

Having regard to the history of the matter and taking particular note of the correspondence from Mr Bates, including the letters from Dr Coetzee, in my opinion the position is plain and the application to set aside the bankruptcy notice ought to be set aside with costs, including reserved costs.

A further difficulty arises, however. While the precise date of service of the bankruptcy notice is uncertain,	I infer that it happened prior to the filing of the application
to set aside the bankruptcy notice on 19 November 1991.

Section 44(l)(c) of the Bankru~tcv Act 1966 provides:

" A creditor's position shall not be presented against

a debtor unless:

. . .

(c) the act of bankruptcy on which the petition is founded was committed within six months before the presentation of the petition. "

The effect of that provision here is that in the absence of an order extending the time for compliance with the bankruptcy notice an act of bankruptcy has been committed and the petitioning creditor, The Southport Yacht Club Inc., would be precluded from relying on that act of bankruptcy to found a creditor's petition.

Section 41(6A) of the Bankru~tcv Act provides:

"

Where, before the expiration of the time fixed by the Court or the Registrar for compliance with the requirements of a bankruptcy notice:

. . .

(b) an application to set aside the bankruptcy notice has been filed with the Registrar;

the Court may, subject to subsection (6C), extend the time for compliance with the bankruptcy notice. "

The provisions of S. 41(6C) are not presently relevant.

No application has been made hitherto by Mr Bates for
an extension of time for compliance with the bankruptcy notice,

although one of the requirements for such an extension does apply

before the expiration of the time fixed for compliance, an	in the factual circumstances of this case, in that I accept that
application to set aside the bankruptcy notice was filed with the Registrar. In the special circumstances of the history of this matter, the creditor seeks an order that the Court, pursuant to S. 41(6A), extend the time for compliance with the bankruptcy notice to 16 July 1992.

In Re Conte: Ex ~arte Conte v. commissioner of Taxation

(1990) 27 F.C.R. 120, I concluded that notwithstanding the powerful observations by Gibbs J. (as he then was) in Re Hanbv:

Ex Darte Fleminaton Central Spares Ptv Ltd (1967) 10 F.L.R. 378,

at 381, and the other cases referred to by Deane and Ellicott JJ. in Streimer v Tamas (1981) 54 F.L.R. 253, at 257, the judgment of the Full Court in Streimer v. Tamas (supra) was binding on me and is authority that an extension of time for the compliance with the requirements of a bankruptcy notice can be granted after the time for compliance has expired.

~t is of course possible to decline to make any such order, with the effect that an act of bankruptcy has been committed by Mr Bates and if the creditor wished to do anything further concerning sequestration of Mr Bates's estate, a fresh bankruptcy notice would have to be issued and served, which, in turn, could be the subject of further applications and further delay as illustrated in the history of the present matter. The delay that has been occasioned in this Court is in no way the

conduct of Mr Bates has been in part to hinder the progress of	fault of the petitioning creditor, and since, in my view, the
the expeditious hearing of his application to set aside the bankruptcy notice, in the particular circumstances of this case I am prepared to make the order which the creditor seeks.
I order that the application to set aside Bankruptcy Notice No. 1348 of 1991 is dismissed with costs, including reserved costs. I order that the time for compliance with Bankruptcy Notice No. 1348 of 1991 be extended to 4 p.m. on 16 July 1992.
I direct that the service of these orders be effected on Mark Edward Bates by the solicitors for The Southport Yacht
Club posting, by ordinary mail, a copy of the orders to Mr Bates
at C/- Post Office, Coolangatta, 4225, forthwith.

I certify that this and the preceding pages are a true copy of the reasons for judgment herein of the Honourable Mr. Justice Spender.

Date j"&$Z-*

Counsel for the petitioning creditor:	Mr. P. E. Hack
instructed by:	Primrose Couper Cronin Rudkin
Date of Hearing:	2 July 1992