Re Faulkner; Ex parte Official Receiver

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Re: SYLVIA MARGARET FAULKNER
Ex parte: THE OFFICIAL RECEIVER, Trustee of the bankrupt estate of Sylvia
Margaret Faulkner
And: DANIEL JOSEPH NOEL BLUETT, Official Receiver in Bankruptcy for the State
of New South Wales (1981) 52 FLR 109
No. 190 of 1978
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA


GENERAL DIVISION
BANKRUPTCY DISTRICT IN THE STATE OF NEW SOUTH WALES AND THE AUSTRALIAN CAPITAL TERRITORY
Lockhart J.(1)
CATCHWORDS

Bankruptcy - application by Official Receiver to elect to proceed with action in High Court commenced by bankrupt prior to her bankruptcy - whether time for making of such election can be extended - whether Official Receiver had abandoned the action - factors to be considered when exercising discretion to extend time

Bankruptcy Act 1966 (Cth.) ss. 33 (1) (c), 60.

Bankruptcy - High Court action commenced by bankrupt before her bankruptcy - application to continue action in her own name - whether action is for damages for personal injury or wrong done to the bankrupt within the meaning of s. 60 (4) (a) and s. 116 (2) (g) - discussion as to history and meaning of those sections.

Bankruptcy Act 1966 (Cth.), ss. 60, 116

Bankruptcy - Bankrupt commenced court proceedings prior to bankruptcy - Election by official receiver to proceed with court action - Time for making election - Extension of time for making election - Abandonment of action by official receiver - Discretion of court in extending time - Principles to be applied - Bankruptcy Act 1966 (Cth), ss. 33 (1)(c), 60.

HEADNOTE

In March 1978 a sequestration order was made against the estate of the bankrupt, who, in 1974, had commenced an action in the High Court against the Commonwealth of Australia and one Brigadier Flint. On 20th September, 1978, notice of the High Court proceedings was served on the official receiver. On 17th October, 1978, Evatt J. ordered that the time to comply with the notice be extended to 1st November, 1978. On 31st October, 1978, the official receiver convened a meeting of creditors who resolved to authorize him to continue the action; the creditors however failed to provide him with any indemnity in respect of costs. Between November 1978 and July 1979 correspondence between the official receiver and the Commonwealth Crown Solicitor ensued, culminating in a letter from the Commonwealth Crown Solicitor stating that the official receiver was deemed to have abandoned the action as he had not prosecuted the same within the time specified in s. 60(3) of the Bankruptcy Act 1966 (the Act).

The official receiver applied pursuant to s. 305 of the Act to the Minister for his approval to the Commonwealth meeting the costs of the High Court action. On 6th March, 1980, approval in this regard was given. In reliance upon s. 33 (1)(c) of the Act the official receiver sought an extension of the time prescribed for making an election pursuant to s. 60(3). In opposition to the application the Commonwealth submitted that the time for making the election…

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Details
Case
[1981] FCA 3
Decision Date

CaseChat Overview and Summary

In the case of Re Faulkner; Ex parte Official Receiver, the Official Receiver sought an extension of time to make an election regarding whether to proceed with a High Court action that had been initiated by Sylvia Margaret Faulkner prior to her bankruptcy. The Official Receiver, as trustee of the bankrupt estate, needed to decide whether to prosecute or discontinue the action. The central legal issues were whether the time for making this election could be extended and whether the Official Receiver had effectively abandoned the action.

The court considered several factors in exercising its discretion to extend the time for making the election. These included the reasons for the delay in making the election, the potential prejudice to the respondent if the election were delayed, and the extent to which the Official Receiver had acted in the best interests of the bankrupt estate. The court found that there were sufficient grounds to warrant an extension of time and that the Official Receiver had not abandoned the action. Consequently, the court extended the time for making the election up until 27 February 1981.

In addition to extending the time for the election, the court also dismissed the application for costs. The Official Receiver was ordered to pay the respondent's costs of the application, including reserved costs. The court's decision underscored the importance of the discretion in extending time for legal actions and the need for careful consideration of the circumstances surrounding such requests.

Orders

Orders of the court

1. The time for the Official Receiver as trustee of the bankrupt estate of Sylvia Margaret Faulkner to make an election in writing to prosecute or discontinue action No. 52 of 1974 in the High Court of Australia be extended up to and including 27 February 1981.

2. No order be made as to costs.

1. The application be dismissed

2. The applicant pay the respondent's costs of the application including reserved costs. Order accordingly.

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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