Re Bleyer, R. v Ex parte TCN Channel 9 Pty Limited

[1993] FCA 117

Re: ROLAND BLEYER
Ex Parte: TCN CHANNEL 9 PTY LIMITED
No. N N4500 of 1992
FED No. 117
Number of pages - 5
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Gummow J.(1)

CATCHWORDS

Bankruptcy - bankruptcy notice - whether application to extend time for compliance is competent if filed after expiry of time for compliance.

Bankruptcy Act 1966, s. 41

Streimer v. Tamas (1981) 37 ALR 211

Re Lentini (1991) 29 FCR 363

Thurgood v. National Bank of Australasia Ltd (1981) 53 FLR 51

Van Reesema v. Australian Growth Resources Pty Ltd (1987) 75 ALR 311

HEARING

SYDNEY, 2 March 1992

#DATE 2:3:1992

Counsel and solicitors : Mr J.R. Young instructed
for the debtor: by Newman and Associates.

Counsel and solicitors : Mr M.B. Oakes instructed
for the creditor: by Kemp Strang and Chippindall.

ORDER

The Court orders that:

1. The application filed 1 March 1993, is dismissed.

2. The debtor pay the costs of the creditor.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

GUMMOW J. In this matter, the relevant bankruptcy notice expired on 15 February 1993. The documents for the petition were filed on 24 February 1993, and the petition issued at approximately 3.50 p.m. on 1 March. On 24 February 1993 a Judge of this Court (Morling J.) had refused an application for an injunction restraining the creditor from proceeding with the issue of the petition.

1. The bankruptcy notice is based upon a judgment against the debtor for costs in unsuccessful proceedings for defamation in the Supreme Court of New South Wales. The trial continued before a jury for some 18 days in June and July 1989. A judgment for costs was entered on 18 October with effect from 7 July.

2. The figure of $80,000 for costs was quantified after negotiations between the parties which are evidenced in a letter of 27 February 1992. This is annexure G to the affidavit sworn by Mr Paul Reidy on 2 March 1993 and filed on the present application. The appeal has been ready in the New South Wales Court of Appeal, as I understand it, since appeal books were lodged some time ago, namely, on 16 April 1992. Apparently the appeal is awaiting a callover. It is expected that the next available callover will be in November 1993. One of the orders sought on the appeal would have the effect of discharging the order for costs on which the bankruptcy notice is based.

3. The application before the Court today is based on sub-s. 41 (6A) of the Bankruptcy Act 1966 ("the Act"). This provides:
   

"41 (6A) Where, before the expiration of the time fixed by the Court or the Registrar for compliance with the requirements of a bankruptcy notice -

(a) proceedings to set aside the judgment or order in respect of which the bankruptcy notice was issued have been instituted by the debtor; or

(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 application was filed by the debtor on 1 March 1993, that is to say some days after the expiry of the bankruptcy notice on 15 February, and after the judgment of Morling J. dismissing the injunction application. But the present application was filed on the same day as the petition issued.

1. The application is opposed on various grounds. Counsel for the debtor applicant anticipated the first of those grounds by inviting the Court's attention to the unreported decision of Burchett J. delivered on 3 December 1987 in the matter of Re Barbaro; Ex parte Amalgamated Television Services Pty Limited. On p 4 of his reasons, his Honour referred to the Full Court decision in Streimer v. Tamas (1981) 37 ALR 211. His Honour said that it was held by the Full Court in that case that sub-s. (6A) conferred jurisdiction upon the Court to extend time:
   

". . . in a case where the requirements of the

subsection were met, even though the application for the extension of the time was not made until after expiry of the time sought to be extended."

However, counsel opposing the application, Mr Oakes, took me to a close analysis of Streimer v. Tamas. In that case, the application under the section had been instituted during the currency of the bankruptcy notice although it had not been disposed of until after the period had expired. The sequence of events appears most clearly in the judgment of Sheppard J. at 220-1.

1. Further, in the case of Re Lentini (1991) 29 FCR 363 at 372, Neaves J., in the course of discussing the authorities, said that:
   

"The time for compliance with the requirements

of a bankruptcy notice may be extended after the expiration of the time limited by the notice for compliance provided an application to set aside the notice is made within the time so limited."

His Honour referred, as authority for that proposition, to Streimer v. Tamas and also to the decision delivered just before the Full Court decision by Lockhart J. in Thurgood v. National Bank of Australasia Ltd (1981) 53 FLR 51.

1. There is also the decision of Spender J. in Re Conte (1990) 27 FCR 120. Again, it is apparent from the facts in that case as they appear at 121, that the application to set aside the notice was filed within the time limit of the compliance with the bankruptcy notice. Finally, the decision of the Full Court in Van Reesema v. Australian Growth Resources Pty Ltd (1987) 75 ALR 311 at 320-1, provides further support for the proposition formulated by Neaves J. in the above passage.

2. That being the state of authorities, I should follow what has been indicated by the majority of them, in preference to the statement which I read out from the judgment of Babaro. It would follow, for that reason alone, that the present application was defective.

3. That being so, it is strictly unnecessary to consider Mr Oakes' second point. This is that the reasoning which supports the first ground taken by him applies a fortiori where the sequence of events is such that the application is instituted after the issue of the petition based upon the expiry of the relevant bankruptcy notice. And I should add, in relation to the second point, that questions might arise as to the exact sequence of events on 1 March between the filing of the application and the presentation of the petition.

4. The third point concerns discretion. Mr Oakes submits that even if he be wrong on the first and primary construction point concerning sub-s. (6A), nevertheless, the matters which are agitated in the present case as going to discretion were matters which could or should have been brought forward before Morling J. on 24 February 1993 as going to the merits of the application then made to restrain the issue of the bankruptcy petition. Counsel also makes the point that the existence, or otherwise, of the relevant act of bankruptcy may be debated on the hearing of the petition.

5. There is considerable force, in my view, in these submissions notwithstanding what was put this afternoon as to the significance, now appreciated apparently for the first time by the advisers to the debtor, of para. 14 of the affidavit of Mr Reidy sworn and filed in Court today. That paragraph refers to what passed late last month between the legal advisers to the debtor and creditor on an interlocutory application in the Court of Appeal.

6. There is the further consideration adverted to in some of the decisions to which I have referred, namely, that there are cases, of which this may be one, where the Court should not proceed to hear the petition in advance of the resolution of the appeal in the State Court. I say no more at this stage as to the likely prospects of success of any such application, but the existence of such a real possibility is something to be taken into account.

7. Accordingly, for these reasons, which depend not only upon the matter of construction to which I have referred but also upon the alternative issue of discretion on the assumption that I was wrong as to the question of construction, the application filed 1 March 1993 is dismissed with costs.