re Moss, L. ex parte Tyaraf Pty. Limited

[1985] FCA 403

Re: LOU MOSS (also known as LOUIS MOSS)
Ex Parte: TYARAF PTY. LIMITED
No. P 627 of 1985
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA
GENERAL DIVISION BANKRUPTCY DISTRICT
OF THE STATE OF NEW SOUTH WALES
Morling J.

CATCHWORDS

Bankruptcy - act of bankruptcy - not committed within 6 months before presentation of petition - application for extension of time - power of Court to extend time - application dismissed.

Bankruptcy Act 1966, ss. 33(1)(c) and 44(1)(c)

HEARING

SYDNEY
#DATE 23:8:1985

ORDER

1. Petition dismissed.

JUDGE1

Tyaraf Pty. Limited (the petitioning creditor) seeks an order that the estate of Lou Moss (the debtor) be sequest rated. The case raises a short and novel point as to whether the Court is given power by s. 33(1)(c) of the Bankruptcy Act 1966 to extend the time referred to in s. 44(1)(c) of the Act within which a petition may be presented for the sequestration of a debtor's estate.

1. The point appears to be free from authority. Section 44(1)(c) is in the following terms:
   
   

"44. (1) A creditor's petition shall not be presented against a debtor unless -

. . .

(c) the act of bankruptcy on which the petition is founded was committed within 6 months before the presentation of the petition."

1. The date of the act of bankruptcy relied upon in the petition was 24 October 1984 and the petition was presented on 24 April 1985. Since, in calculating the period of six months the day on which the petition is presented must be excluded (Acts Interpretation Act 1901, s.36(1)) the act of bankruptcy was not committed "within 6 months" before the presentation of the petition. However counsel for the creditor seeks an order under s. 33(1)(c) to overcome this difficulty.

2. Section 33(1) provides as follows:
   
   

"33. (1) The Court may -

(a) upon such terms as it thinks fit, at any time adjourn any proceeding before it, either to a fixed date or generally;

(b) at any time allow the amendment of any written process, proceeding or notice under this Act; or

(c) extend before its expiration or, if this Act does not expressly provide to the contrary, after its expiration, any time limited by this Act, or any time fixed by the Court or the Registrar under this Act (other than the time fixed for compliance with the requirements of a bankruptcy notice), for doing an act or thing or abridge any such time."

1. Counsel argues that the court is given power by s. 33(1)(c) to "extend ... any time limited by this Act ... for doing an act or thing ..." and that this power is sufficient to enable the court to order that the time for presentation of the petition be extended to 24 April 1985. He argues that in the circumstances of the case, no prejudice would be suffered by the debtor or by other creditors were the court to make the order sought.

2. However, I am of the view that s. 33(1)(c) does not afford a sufficient source of power for the making of the order. I do not think the expression "any time limited by this Act ... for doing an act or thing" is apt to apply to the prohibition against presentation of a petition referred to in s. 44(1)(c) in a case in which the act of bankruptcy on which the petition is founded is committed otherwise than within 6 months before the presentation of the petition. Counsel submits that the effect of s. 44(1)(c) is to limit the time within which a petition may be presented and hence the time so limited is susceptible of being extended under s. 33(1)(c). But in my opinion the effect of s. 44(1)(c) is to make it a condition precedent to the due presentation of a petition that the act of bankruptcy upon which the petition is founded is committed within six months before the presentation of the petition. Section 44(1)(c) is not a limitation of time of the kind referred to in s. 33(1)(c). As was pointed out in Re Young; Ex parte Smith (1985) 59 ALR 385 at 390 s. 33(1)(c) is directed essentially to the provisions in the Act requiring the doing of certain acts or things within specific times. The Court there referred to examples of such provisions found in the Act, e.g. ss. 54(1) and (2), 56(13), 102(1), 104(3), 167(6) and (7), 188(4) and 203(1), (3) and (4). In Young's Case the court considered whether s. 33(1)(c) gave the court power to make an order under s. 52(4) and (5) extending the period at the expiration of which a creditor's petition will lapse if the period of 12 months commencing on the date of presentation of the petition has expired before the court is asked to make an order extending the petition. The court held that s. 33(1)(c) was not efficacious for this purpose. At p.388 it said:
   
   

"Counsel for the petitioning creditor submitted that s. 33(1)(c) of the Act confers upon the court a general power applicable to all circumstances in which time is limited by the Act or fixed by the court or the registrar, other than the time fixed for compli ance with the requirements of the bankruptcy notice. She submitted that the section applied to s. 52(4) and

(5) of the Act; and she identified the time limited by the Act for doing an act or thing within the mean ing of s.33(1)(c) as the time mentioned in s.52(5) for the exercise of the court's power of extension, namely, any time before the expiration of the period of 12 months commencing on the date of presentation of the petition.

Sub-sections (4) and (5) of s.52 cannot be considered independently of each other. They are designed to ensure that a petition has no life beyond a maximum of 24 months from the date of its present ation. It has an automatic span of 12 months from the date of its presentation, but it cannot survive beyond the initial 12 month period without an order of the court. The life of a petition may, however, at any time during its life, be brought to an end by the making of a sequestration order on the petition or by the dismissal or withdrawal of the petition."

1. The court went on to say that there were sound reasons why there should be no uncertainty surrounding the time during which a petition is pending and pointed out that if counsel's argument were correct then, if a petition is more than 12 months old and its life has not been extended during that time, it is inherently capable of being extended at any time thereafter, though for a maximum life of 24 months from the date of presentation of the petition.

2. The same sort of observations may be made about the consequences of the acceptance of counsel's argument in the present case. If s. 33(1)(c) gives the court power to permit a creditor's petition to be presented where the act of bankruptcy upon which the petition is founded is committed outside the period of six months before the presentation of the petition, then it could permit a petition to be presented even if the act of bankruptcy had been committed, say, 12 months before the presentation of the petition. This would render nugatory the condition precedent referred to in s.44(1)(c). It is obvious that it is of great importance to a debtor and persons who have business dealings with him that they should know with certainty when an act of bankruptcy committed by him will cease to afford the basis for a petition for the sequestration of his estate. That certainty would disappear if it were possible for a creditor to obtain an order which would permit a petition to be presented after the expiration of the six month period referred to in s. 44(1)(c). It cannot have been intended that s.33(1)(c) would authorise the making of such an order. I share the view expressed in Young's Case that s. 33(1)(c) is directed to the provisions in the Act requiring the doing of acts within specified times. It is not a provision which enables the court to, in effect, circumvent the statutory bar to the making of a sequestration order in a case where the act of bankruptcy has not been committed within 6 months before the presentation of the petition.

3. So far as the researches of counsel have revealed, there has been no case where the court has made an order of the kind sought. This is not of itself a reason for refusing the application, but it confirms my view that s. 33(1)(c) does not authorize the making of the order.

4. Since the act of bankruptcy relied upon in the petition was not committed within 6 months before presentation of the petition, it is inevitable that the petition must be dismissed and I so order. There will be no order as to costs.