Re Innes, Donal James & Anor Ex Parte Hr & Ce Griffiths Pty Ltd

[1997] FCA 579

IN THE FEDERAL COURT OF AUSTRALIA     
GENERAL DIVISION  
  No  QG 7198 of 1997
BANKRUPTCY DISTRICT OF THE                    
STATE OF QUEENSLAND  

RE:DONALD JAMES INNES AND KATHY ADELE INNES

EX PARTE:H R & C E GRIFFITHS PTY LTD ACN 004 948 823

DONALD JAMES INNES AND KATHY ADELE INNES

Applicants

H R & C E GRIFFITHS PTY LTD ACN 004 948 823

Respondents

CORAM:       Spender J
PLACE:         Brisbane
DATE:  24 June 1997

MINUTES OF ORDER

THE COURT ORDERS THAT:

1. Bankruptcy Notice No 7198 of 1997 be extended until the determination of the appeal No 1341/97 instituted by the applicants against the judgment of his Honour Justice Williams in the Supreme Court of Queensland dated 16 January 1997, or further order.

1. The costs of today’s application be reserved.

THE COURT GRANTS liberty to apply.

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

IN THE FEDERAL COURT OF AUSTRALIA     
GENERAL DIVISION  
  No.  QG 7198 of 1997
BANKRUPTCY DISTRICT OF THE  
STATE OF QUEENSLAND  

RE:DONALD JAMES INNES AND KATHY ADELE INNES

EX PARTE:H R & C E GRIFFITHS PTY LTD ACN 004 948 823

DONALD JAMES INNES AND KATHY ADELE INNES

Applicants

H R & C E GRIFFITHS PTY LTD ACN 004 948 823

Respondents

CORAM:       Spender J
PLACE:         Brisbane
DATE:  24 June 1997

REASONS FOR JUDGMENT

By an application filed on 7 April 1997, Mr and Mrs Innes sought orders that the court extend the time for compliance with the bankruptcy notice pursuant to s 41(6C) of the Bankruptcy Act 1966 (‘the Act’) under s 41(6A)(a) and (b) or, in the alternative, or together with, an order that the bankruptcy notice be set side or in the alternative or together with an order that the bankruptcy notice be set aside on the ground that a counter-claim, set-off or cross demand exceeding the notice exists and could not be set up in the action in which judgment was obtained.

I have had the benefit, if that is the right word, of extensive submissions on behalf of Mr and Mrs Innes and the usual helpful response by Mr McQuade on behalf of the applicant. In my opinion, there is no basis on which the bankruptcy notice should be set aside, nor am I satisfied that the material filed within the time specified by the Act satisfies the requirements of s 41(7).

However, it seems to me that the appeal from the judgment of Williams J of the Supreme Court of Queensland in respect of the relatively small amount of the order of $3500.00 has been embarked upon by the applicants in a bona fide manner.  At least in one respect it seems to me that there is an arguable basis for the appeal.  That basis concerns the question of whether the ordinary rule that a variation by the principal of an obligation by an obligee releases a guarantor has the effect in the circumstances of this particular document (and in particular the wide-ranging terms of cl 3 of the document), of rendering imperative the guarantees given by Mr and Mrs Innes.

While not offering any sanguine prospects for success, it seems to me that the appeal is arguable, and in those circumstances I think the appropriate order is to extend the bankruptcy notice 7198 of 1997 until the determination of the appeal instituted by Mr and Mrs Innes, or further earlier order.

I accept the undertaking given on behalf of the applicants to pursue the proceedings with due diligence.  I grant liberty to apply, and I reserve the question of costs.

I note that the costs before Drummond J were reserved, and I will not make any further order in respect of those.

I certify that this and the preceding two (2) pages are a true copy of the reasons for judgment herein of the Honourable Justice Spender.

Associate

Date:  24 June 1997

The applicants appeared in person

Counsel for the respondents    :          Mr P McQuade

instructed by  :          Sykes Pearson & Miller

Date of hearing  :          24 June 1997