Re McLean, H.M. v Ex parte McLean - [1994] FCA 521

JUDGMENT No. .Y........ ......r S21 L

RE:

Debtor

EX PARTE: -

Applicant

BIZTOLE W M E N T S PTY LTD

JRECEIVER AND M A G E R APPOINTED1

Respondent

mYf!x: NORTHROP J
EL&%: MELBOURNE
R&l!E: 4 JULY 1994

PEASONS FOR JUDGMENT

This application brought by Helen Muriel

a most unfortunate history which may have arisen from a
multitude of errors, but those errors are capable, on one
view, of giving rise to very serious consequences. The

bankruptcy notice has stamped on it a stamp indicating it was

application is in matter No VN 3191 of 1993. The VN number
indicates it is a matter arising in the Bankruptcy District of
the State of Victoria in a matter which arose in 1993 in
relation to a bankruptcy notice and was given the number 3191
for identification purposes. The bankruptcy notice was

actually issued by a Registrar in Bankruptcy of the Bankruptcy

District of the State of Victoria. I use the word Registrar

as including a Deputy Registrar in Bankruptcy. It was issued

on 18 January 1994, but the application for the issue of the

filed on 20 December 1993. The application for the bankruptcy

notice is dated 16 December 1993. It appears from the file

that the bankruptcy notice was served on Helen Murid McLean,

the judgment debtor named in the bankruptcy notice, on 23

. . April 1994. . The bankruptcy. notice was a 14. day. notice.

Accordingly the time limit within which to pay the amount of the debt mentioned in it would have expired on 7 May 1994. On the day before, namely 6 May 1994, the judgment debtor filed an application under paragraph 41(6B)(b) of the Bankruptcy Act 1966 which provides:

"Where, before the expiration of the time fixed by the
Registrar for compliance with the requirements of a
bankruptcy notice:
(a) ...

(b)

an application to set aside the bankruptcy notice has been filed with the Registrar
the Registrar may, subject to subsection (6C), extend the
time for compliance with the bankruptcy notice."

The application filed on 6 May 1994 sought to have the bankruptcy notice set aside on a number of grounds. Pursuant

to that application, a Deputy Registrar in Bankruptcy made an
order on 9 May 1994 extending the time for compliance with the
bankruptcy notice up to and including 31 May 1994 or until

further order. That order was made on the basis that the
bankruptcy notice had been served not earlier than 22 April

1994. It should be noted that the affidavit of service had not been filed by 9 May.

The bankruptcy notice had been
served on 23 April, thus no problem arises in relation to this
issue.

On 31 May 1994 the time for compliance with the

bankruptcy notice was further extended to 22 June 1994 and
thereafter was extended until midnight tonight. It follows

that the time for compliance with the bankruptcy notice has

.. not yet expired and therefore that no act of bankruptcy has

been committed.

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: [1994] FCA 521
Decision Date: 4 Jul 1994

CaseChat Overview and Summary

In the case of Re McLean, H.M. v Ex parte McLean, the Bankruptcy District Court of the State of Victoria was tasked with deciding the validity of a bankruptcy notice issued against Helen Muriel McLean by Biztole Developments Pty Ltd (Receiver and Manager appointed). The primary legal issue was whether the bankruptcy notice was correctly issued and served, and if it was valid given the circumstances surrounding the judgment it was based upon. The Court examined the procedural correctness of the issuance and service of the bankruptcy notice, as well as the substantive correctness of the judgment upon which the notice was based. The Court found that the bankruptcy notice was defective as it failed to correctly reference the stay of execution of the judgment, which rendered the notice misleading. Consequently, the Court held that the bankruptcy notice was invalid and ordered it to be set aside. The Court also ruled that the judgment creditor should bear the costs of the application, as the defects in the notice were significant and procedural in nature.

Orders