Re Forsyth, P.D. v Ex parte Cobport Pty Ltd

[1987] FCA 309

C A T C H W O R D S

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BANKRUPTCY - costs, of creditor's petition - ex parte order for

extension of,time to comply - failure to inform petitioning

credi'tor - search of file by petitioning creditor - petition

dismissed - fault by both parties - practice as to service	of
ex parte orders.

Re: Paul Desmond Forsvth

Ex parte: Cobport Pty. Ltd.

Qld. P504 of 1987 l

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PINCUS J.

BRISBANE

19 JUNE 1987 l

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IN THE FEDERAL COURT OF AUSTRN;IA	)
GENERAL DIVISION	) QLD P504 of 1987
BANKRUPTCY DISTRICT OF THE SOUTHERN	)
DISTRICT OF THE STATE OF QUEENSLAND	)

RE: PAUL DESMOND FORSYTH

Debtor

M PART??,: COBPORT PTY. LTD.

Creditor

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MINUTES OF ORDER

JUDGE MAKING	ORDER:	PINCUS J.
DATE OF ORDER:	BRISBANE
WHERE MADE:	19 JUNE 1987

THE COURT ORDERS THAT:

1. There be no order for costs In relation to the

creditor's petition filed 3 April 1987 and

supporting documents.

m:	Rule 124 of the Bankruptcy Rules.
Settlement and entry of orders is dealt with in

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IN THE FEDERAL COURT OF AUSTRALIA )

I GENERAL DIVISION ) QLD P504 of 1987

BANKRUPTCY DISTRICT OF THE SOUTHERN 1

DISTRICT OF THE STATE OF OUEENSLAND )

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1 ' RE: DESMOND PAUL FORSYTH

Debtor

EX PARTE: COBPORT PTY. LTD.

Creditor	i : .
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PINCUS J. 19 JUNE 1987

REASONS FOR JUDGMENT

This is a creditor's petition for a sequestration order.

It is conceded that the petition should be dismissed. Mr.

Templeton for the debtor says that it should be dismissed with

costs, whereas M r . O'Donnell for the creditor says the debtor

should pay the creditor's costs.

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The creditor obtained a judgment in the District Court

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of Queensland on 13 February 1987 and caused a bankruptcy notice

based upon it to be served on 13 March 1987.

On 27 March 1987 an application was made for an

extension of time for compliance with the notice. That

application, which was made ex parte, was granted by a Deputy

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Registrar "until the Court determines this application".

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"This application" was an application to extend the time

for compliance until the determination of an appeal to the Full

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Court of the Supreme Court against the judgment of the District

Court.

It appears that the debtor did not inform the creditor

of the order obtained. However, on 1 April 1987 the creditor

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I	caused a search to be made of the proceedings under the bankruptcy notice and an affidavit was filed on that date on behalf of the
i	creditor saying that no application had been made to the Court to
i	set aside the notice. That was true, but there was then on file
the application to extend time which I have mentioned and that
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should have been noticed by the person searching. There was also
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I	an affidavit In support of the appllcation to extend tune on the
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file, and that also should have been noticed. The ex parte order
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referred to was noted on the papers.
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j I say these documents should have been noticed because

I	they were two of only four documents then on	the	file; it would
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have been difficult to do any sort of search of the file without

observing them.

On the other hand, the debtor should in my opinion have

taken the obvious step of promptly advising the creditor that it

had obtained an order ex parte.

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1 In ignorance of the step which the debtor had taken, the

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creditor presented a petition for sequestration on the erroneous

assumption that an act of bankruptcy had been committed and filed

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in support of it an affidavit of service of the bankruptcy notice

and an affidavit deposing to the search just mentioned. Later

documents were filed relating to the application to extend time

for compliance; that came on before me on	28	April and was
dismissed with costs.

On 22 May the Deputy Registrar issued a certificate

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under r.22 setting out the circumstances mentioned above. When

the matter came on for hearing	on 25 May the partles advanced the	. .
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submissions I have referred to. I was told that the debt was paid

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I have not found any provision in the rules which

requlres that an ex parte order be notified promptly to the other

side. Here it was not notified at all. The case was argued

before me on 28 April on the assumption that no extension of time

had been obtained.

There may be a	gap in the rules in not specifically	. ,
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requiring service of orders taken out. Nevertheless, in *.

accordance with the ordinary practice of the profession, the

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obtaining	of	the	order	ex	parte	should	have	been	promptly	! .
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notified, especially since it was got on the last day for I.

compliance; it was quite predictable that a petition would be

issued promptly unless notice of the order was given.

On the other hand, as I have said, the creditor caused

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the file to be searched on 1 April, when the presence of the,

relevant documents was very plain.

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In my opinion the fairer coursc is not to make an order

for costs in favour of either side.

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The petition will be dismissed.

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Assoclate

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