Re Hibbard; Ex parte Playroom Pty Ltd - [1988] FCA 689

Re: NORMAN KINGSLEY HIBBARD
Ex parte: PLAYROOM PTY LTD
No. QLD P1606 of 1987
Bankruptcy - Practice

COURT

IN THE FEDERAL COURT OF AUSTRALIA

GENERAL DIVISION
BANKRUPTCY DISTRICT OF THE SOUTHERN DISTRICT OF THE STATE OF QUEENSLAND
Pincus J.(1)

CATCHWORDS

Bankruptcy - creditor's petition adjourned - adjournment date beyond 12 months from presentation - lapsed - whether slip rule gives power to correct mistake.

Practice - slip rule - by mistake, order not asked for - whether statute prevents correction of slip.

Bankruptcy Act, 1966 ss.52(4), 52(5).

HEARING

BRISBANE

#DATE 5:12:1988

Counsel for the petitioning creditor: Mr. D.R. Cooper

Solicitors for the petitioning creditor: Morris Fletcher & Cross

Counsel for the debtor: Mr M.M. Stewart

Solicitors for the debtor: Peter J. Davis &

Associates

ORDER

The petitioning creditor's application for correction of the order of 14 October 1988 by adding to it an order under s.52(5) be dismissed;

There be no order as to costs.

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

JUDGE1

This bankruptcy petition was presented on 9 November 1987 and filed on 11 November 1987. On 14 October 1988 it was adjourned to 29 November 1988, beyond the period of twelve months mentioned in s.52(4) of the Bankruptcy Act 1966, which reads as follows:

"A creditor's petition lapses at the expiration of -

(a) subject to paragraph (b), the period of 12 months commencing on the date of presentation of the petition; or

(b) if the Court makes an order under sub-section

(5) in relation to the petition - the period fixed by the order,

unless, before the expiration of whichever of those periods is applicable, a sequestration order is made on the petition or the petition is dismissed or withdrawn."

Due to a mistake, when the petition was adjourned no order was made under sub-s.(5), which reads as follows:

"The Court may, at any time before the expiration of the period of 12 months commencing on the date of presentation of a creditor's petition, if it considers it just and equitable to do so, upon such terms and conditions as it thinks fit, order that the period at the expiration of which the petition will lapse be such period, being a period exceeding 12 months and not exceeding 24 months, commencing on the date of presentation of the petition as is specified in the order."

It will be noted that the Court's power to make an order under sub-s.(5) is expressed to be limited to the period before the expiration of the first twelve months from the date of presentation of the petition.
Counsel for the petitioning creditor has argued that the Court's failure to make an order under s.52(5) was a slip capable of being corrected under the inherent jurisdiction. None of the Bankruptcy Rules provides for correction of a slip, but the power to correct orders is inherent: L. Shaddock & Associates Proprietary Limited v. The Council of the City of Parramatta (1982) 151 CLR…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1988] FCA 689
Decision Date: 05 DECEMBER 1988

CaseChat Overview and Summary

In the Federal Court of Australia, the case of Re Hibbard; Ex parte Playroom Pty Ltd involved a bankruptcy petition by Playroom Pty Ltd against Hibbard. The primary issue was whether the court had the authority to correct an order that had been made more than 12 months after the presentation of the creditor's petition, which under s.52(5) of the Bankruptcy Act 1966 (Cth) would otherwise have lapsed. The court was tasked with determining if the slip rule provided sufficient grounds to rectify what was perceived as an administrative error.

The legal question at the heart of this case was whether the court possessed the inherent jurisdiction to amend an order that had lapsed due to the passage of time, specifically beyond the 12-month period stipulated in the legislation. The court had to weigh the strict statutory timeframes against the potential for inherent judicial powers to address administrative errors in the context of bankruptcy proceedings. Playroom Pty Ltd argued that the court should exercise its inherent jurisdiction to correct the mistake, while Hibbard contended that the statutory provisions were clear and conclusive.

The court held that the slip rule, which allows for corrections of obvious errors in judgments, orders, or processes, did not extend to situations where the statutory timeframes had expired. The court reasoned that the clear legislative intent was to provide a definitive period within which actions must be taken, and any attempt to extend this period, even to correct errors, would undermine the statutory framework. Consequently, the court dismissed the creditor's application for correction of the order, finding no basis under the slip rule to extend the statutory period.

The court's final orders were that the petitioning creditor's application for correction of the order be dismissed, and there be no order as to costs. The decision underscores the importance of adhering to statutory deadlines in bankruptcy proceedings and the limited scope of inherent jurisdiction to correct errors that go beyond the statutory mandates.

Orders

Orders of the court

The petitioning creditor's application for correction of the order of 14 October 1988 by adding to it an order under s.52(5) be dismissed;

There be no order as to costs.

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

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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