Re Manuel Lopes Ex Parte Patomar Pty Ltd
[1995] FCA 772
•20 SEPTEMBER 1995
CATCHWORDS
BANKRUPTCY - Application to extend time for compliance with bankruptcy notice - application to set aside bankruptcy notice abandoned - proceeding to set aside judgment filed within time - unexplained delay - no material as to prospects before the court - extension of six months sought.
Bankruptcy Act 1966 (Cth) s.41(6A)
Magistrates Court rules rr.16, 157(7)
Bryant v. Commonwealth Bank of Australia (Unreported, Davies, Foster and O'Loughlin JJ, 9 November 1994) - Appl.
Re Manuel LOPES; Ex parte Manuel Lopes and Patomar Pty Ltd
No. QN851 of 1995
Cooper J., Brisbane, 20 September 1995
IN THE FEDERAL COURT OF AUSTRALIA
GENERAL DIVISION
BANKRUPTCY DISTRICT OF THE STATE OF QUEENSLAND
No. QN851 of 1995
RE: MANUEL LOPES
EX PARTE: MANUEL LOPES
Applicant
AND: PATOMAR PTY LTD
ACN 010 659 846
Respondent
JUDGE MAKING ORDER: Cooper J.
WHERE MADE: Brisbane
DATE OF ORDER: 20 September 1995
MINUTES OF ORDER
THE COURT GRANTS LEAVE to the applicant to amend the application filed 4 August 1995 to read in paragraph 1 :-
"..... issued by the Respondent to 31 March 1996;"
THE COURT ORDERS THAT:-
The application filed 4 August 1995 be dismissed.
The applicant pay the respondent's costs of and incidental to the application to be taxed.
Note: Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules.
IN THE FEDERAL COURT OF AUSTRALIA
GENERAL DIVISION
BANKRUPTCY DISTRICT OF THE STATE OF QUEENSLAND
No. QN851 of 1995
RE: MANUEL LOPES
EX PARTE: MANUEL LOPES
Applicant
EX PARTE: PATOMAR PTY LTD
ACN 010 659 846
Respondent
CORAM: Cooper J.
PLACE: Brisbane
DATE: 20 September 1995
REASONS FOR JUDGMENT
This is an application by Manuel Lopes ("the judgment debtor") to set aside bankruptcy notice number 851 of 1995, or alternatively to extend time for compliance with that notice until 31 March 1996. For reasons which are not clear to me, the application insofar as it sought to have the bankruptcy notice set aside, was not pursued. The judgment debtor now seeks only to have the time for compliance with the bankruptcy notice extended.
The application is opposed by Patomar Pty Ltd ("the judgment creditor"). The debt the subject of the judgment was incurred in or about August 1993. Its recovery was sought by a plaint filed in the Magistrates Court at Brisbane on 6 December 1994 which plaint was served on the judgment debtor on 13 December 1994. Judgment was entered by default against the judgment debtor on 14 February 1995 in the sum of $18,912.33.
On 21 June 1995 a bankruptcy notice was issued in respect of the judgment debt and was served on the judgment debtor on 9 July 1995. Until this time no action had been taken on the part of the judgment debtor to set aside or in any way challenge the default judgment. An application was first made on 1 August 1995 (twenty-three days after the service of the bankruptcy notice) to have the action struck out for want of jurisdiction pursuant to r.16 of the Magistrates Court Rules or alternatively to have the judgment set aside pursuant to r.157(7) of the Magistrates Court Rules.
On 4 August 1995 the application now before me was filed seeking the relief I have indicated. The application to the Magistrates Court was heard and dismissed during the pendency of the application now before me. A second application was filed on 15 September 1995 seeking exactly the same relief as had been sought in the application filed on 1 August 1995. That application was also refused. Subsequently a notice of appeal to the District Court was filed on 19 September 1994.
On the hearing of the application today the application, insofar as it seeks to have the bankruptcy notice set aside, has not been pursued. No material has been filed which would have been relevant to an examination by me as to whether or not there was in truth and reality a debt due and owing by the judgment debtor to the judgment creditor, nor to the question of whether there was consideration for the judgment, nor whether the court ought in the exercise of its discretion to go behind the judgment. For all practical purposes the application to have the bankruptcy notice set aside has been abandoned.
The judgment debtor submits that I should treat the appeal to the District Court as a proceeding to set aside the judgment within the meaning of s.41(6A) of the Bankruptcy Act 1966 (Cth) ("the Act"), and in that respect relies upon a decision of a Full Court of this court in Bryant v. Commonwealth Bank of Australia (Unreported, Davies, Foster and O'Loughlin JJ, 9 November 1994) wherein their Honours say (at p.13 of their reasons) :-
"The trial judge treated the appeal in the Supreme Court as a proceeding to set aside the judgment in respect of which the bankruptcy notice was issued, a course with which we agree."
It is submitted on behalf of the judgment creditor that I ought not treat the appeal as being a proceeding to set aside the judgment because the appeal is not an appeal within the Magistrates Court, that being the court which granted the judgment, but an appeal to another court. I am not satisfied that this ground of distinction has any merit. The proper appeal from a judgment of the Magistrates Court is to the District Court. There is no appeal structure as such within the Magistrates Court itself. This may be contrasted with a superior court of record such as the Supreme Court of Queensland where an appeal lies within the internal structure of the court itself.
There was in this case a relevant application made within time which was unresolved at the time the application now before me was filed. I therefore intend for present purposes to accept that I have jurisdiction under s.41(6A) of the Act to entertain the application.
The material before me is, to say the least, scant. I do not have an affidavit deposing to the merits. I do not have the reasons of the Magistrate for refusing
the set aside the default judgment. I do not know, other than the general grounds stated in the notice of appeal, the substance of the grounds of appeal and whether or not there is any prospect that the appeal will succeed. It is submitted for the judgment debtor that the ground of appeal is one of substance. Namely, that the Magistrate failed to take into account matters other than mere delay in rejecting the application. If that is in fact the approach taken by the magistrate, it would seem to me to be, as a general proposition of law, an incorrect one. The authorities to which I was referred would seem to support my view in this regard (see Davies v. Pagett (1986) 10 FCR 226; National Mutual Life Association of Australasia Ltd v. Oasis Developments Pty Ltd [1993] 2 Qd.R. 441).
Whether or not the Magistrate in all of the circumstances was obliged to consider anything beyond mere delay on the evidence that was put before him is a matter which is relevant to the prospects on appeal. It is a matter which unfortunately I can form no view about in the absence of any material. In my view it is not sufficient where there is a long unexplained delay to put no material as to the merits before this court on an application of this kind.
In any event, for the purpose of the bankruptcy proceedings, the appeal from the Magistrates Court to the District Court was unnecessary in order to avoid the consequence of the bankruptcy notice. If the judgment debtor establishes that there are proper grounds to believe that there is in truth and reality no debt due and owing behind the judgment, the judgment debtor could persuade the court to set aside the bankruptcy notice. Thereby the judgment debtor could avoid the consequences, in the bankruptcy context, of the judgment remaining on foot. For some inexplicable reason that course
was abandoned. It has not been sought to show that there is any basis for concern that the judgment is other than proper, bona fide and supported by a true consideration.
In this case there is a further matter of some concern. The material which I do have before me discloses that the appeal to the District Court will not, in the ordinary course, be heard before March 1996 at the earliest. In effect, therefore, an extension of six months to comply with the bankruptcy notice is being sought in circumstances where there is absolutely no material to show that there is any prospect of success on appeal, that there is any reason to doubt that the judgment is other than a proper judgment, or that the defence which is sought to be pressed on appeal is anything other than a technical defence based on a question of locality.
In all the circumstances and having regard to the requirements set out in Bryant v. Commonwealth Bank of Australia as to the matters relevant to the proper exercise of discretion, I decline to extend the time for compliance with the bankruptcy notice. The application will therefore be dismissed.
THE COURT GRANTS LEAVE to the judgment debtor to amend the application filed 4 August 1995 to read in paragraph 1 :-
"..... issued by the Respondent to 31 March 1996;"
THE COURT ORDERS THAT:
The application filed 4 August 1995 be dismissed.
The applicant pay the respondent's costs of and incidental to the application to be taxed.
I certify that this and the preceding five (5) pages are a true copy of the reasons for judgment herein of his Honour Justice Cooper.
Date:20 September 1995
Associate
Solicitor for the Applicant: Richardson & Lyons
Solicitor for the Respondent: Jones King Lawyers
Date of Hearing: 20 September 1995
Place of Hearing: Brisbane
Date of Judgment: 20 September 1995
0
0
0