Re Lenarduzzi, A.J. Ex parte Transitmix P/L

[1993] FCA 836

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JUDGMENT No. ...m...I..m.o .... ,l ,.

IN THE FEDERAL COURT OF AUSTRALIA )

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NEW SOUTH WALES DISTRICT REGISTRY ) No. NN 3125 of 1993

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GENERAL DIVISION i

+ 2 November, 1993

REASONS FOR JUDGMENT

LOCKHART J.

The Court has before it today an application by Anthony
Joseph Lenarduzzi to set aside a bankruptcy notice and to extend

time for compliance with the requirements of that notice until

a subsequent date. The bankruptcy notice is dated 20 August 1993

and was issued by the registrar at the request of Transitmix Pty Limited. The notice recites that Transmitmix obtained a judgment against Mr Lenarduzzi on 19 July 1993 in the sum of $91,958.06, which includes a component of interest.

of the notice. However, Transitmix has argued by its counsel	that notwithstanding that, the Court does not have power to set
aside the notice and therefore no power to extend time to comply with its requirements in the meantime, because the act of bankruptcy has already been committed.
The case has the unusual flavour about it that it is an application to set aside a notice which, although made in time, has been made before any order of the registrar or a judge has been made actually extending time before the date fixed for compliance. There are decisions of this Court by single judges and judges on appeal that support the proposition that because the application has been filed with the registrar before the expiration of the time fixed for compliance, nevertheless there will be no act of bankruptcy if in due course the notice is set aside. I do not propose to make any observations about the state of the authority on this matter: it is my view that the application this mornings falls to be considered on discretionary grounds.
Mr Lenarduzzi has set out in brief form the type of defence that he wishes to raise to the claim of Transitmix. It is common
ground that the evidence as it presently exists is basically not in admissible form and I have allowed it to be given on the basis of stating particulars of the type of case that Mr Lenarduzzi wishes to make. I need not deal with that question in any depth: it is sufficiently set out in his two affidavits of 13 September
1993 and 1 November 1993. Although I have no evidence of the
next matter, I accept as correct the statement by counsel from
the bar table that his instructing solicitor sought this morning to file with the District Court of New South Wales in Sydney an application to set aside the default judgment of which Mr Aldridge's client has the benefit at the moment against Mr Lenarduzzi, but that the outcome of that will not be known until this afternoon when a solicitor for Mr Lenarduzzi speaks to a registrar of the District Court. I accept that Mr Lenarduzzi now seeks to set aside that judgment and will no doubt move with all due expedition to achieve that end.
The evidence, however, which was given orally, though in brief form, as to Mr Lenarduzzi's financial position causes me some disquiet. I will not recite it in depth. It is plain that there are substantial sums owed to creditors, though the bulk of it is secured over Mr Lenarduzzi's house which is in the names of himself and his wife. There are arrangements currently on foot whereby Mr Lenarduzzi hopes to reorganise his affairs with his major creditors, the Australia and New Zealand Banking Group Limited and the Commonwealth Bank of Australia, with what success, of course, I have no idea. He also owes moneys to other creditors, including moneys due under credit cards. He also has
involvement in businesses carried on, past or presently, by certain private corporations.
It seems to me that justice in this case is best achieved by the matters that Mr Lenarduzzi wishes to raise being raised in his motion to the District Court to set aside the default judgment signed against him. If he succeeds in that that will have a very strong bearing on the outcome of any petition that Transitmix may present henceforth against him based on the act of bankruptcy constituted by the failure to comply with the requirements of the bankruptcy notice involved in the present proceeding.
It is true that he suffers the detriment of the commission of an act of bankruptcy if the application this morning fails and I take that into account as a detriment. I also take into account the detriment that could be sustained by Transitmix and indeed other creditors of Mr Lenarduzzi if an available act of bankruptcy does not occur by reason of non-compliance with the requirements of the notice, should any subsequent petition succeed. In all I am not persuaded that it is an appropriate case to extend time to comply with the requirements of the notice and accordingly I decline to make an order that time for compliance with the notice be extended.
It will, I assume, be a necessary consequence of that order that an act of bankruptcy will be committed. It also falls as a necessary consequence of the order that the bankruptcy notice will not be set aside. However, that last position could be coloured by whatever course Transitmix subsequently takes in the matter and by whatever Mr Lenarduzzi does in relation to the District Court setting aside of his default judgment. I am not asked thls morning to set aside the bankruptcy notice and I would
not do so.
The Court orders that the costs of Transitmix Pty Limited of the application to set aside the bankruptcy notice and to extend time for compliance with its requirements should be costs In any subsequent petltion that Transitmix may present to the Court based on the act of bankruptcy constituted by failure to comply with the requirements of bankruptcy notice 3125 of 1993.
The Court also orders that the application to set aside the notice be dismissed.

The application of Mr Lenarduzzi to set aside the notice was filed on 13 September 1993. It is a 14 day notice. It has become common ground between the parties that the application by Mr Lenarduzzi to set aside the notice is one that is brought pursuant to section 41(6)(A)(b) of the Bankruptcy Act and that the application was filed with the registrar before the expiration of the time fixed for compliance with the requirements

I certify that this and the preceding four (4) pages are a true copy of the reasons for judgment herein of the Honourable Mr. Justice Lockhart.

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Associate -&Q- 9 -

Dated: 2 November 1993

Counsel for the Debtor	M K Meek
Solicitors for the Debtor	Margiotta
Counsel for the Petitioning
Creditor	M R Aldridge
Solicitors for the Petitioning
Creditor:	P W Turk & Associates
Date of Hearing	2 November 1993
Date of Judgment	2 November 1993