Re Neate, David William Ex Parte Pegasus Leasing Ltd Re Neate, Anne Elizabeth Ex Parte Pegasus Leasing Ltd

[1996] FCA 12

CATCHWORDS

BANKRUPTCY - costs - review of decision of Deputy Registrar - application for costs before Deputy Registrar on application for extension of time for compliance with bankruptcy notice - power of Court to award costs - whether proceeding before Court - whether Deputy Registrar was exercising a power or function of a Registrar in Bankruptcy or exercising a power of the Court as a Registrar of the Court - distinction between powers of Registrar in Bankruptcy and powers of a Registrar of the Court.

Bankruptcy Act 1966 (Cth) ss 5, 13, 14, 31A, 32, 41(6A) (6B) (6C) and 315
Bankruptcy Rules (Cth) r 7
Federal Court of Australia Act 1976 (Cth) s 18N

Re Kwiatek and Kwiatek; Ex parte Big J Ltd v Pattison (1989) 21 FCR 374
Re Kusmenko:  Golovachenko v Official Receiver (1976)     28 FLR 183

No SP 297 of 1995
Re:          DAVID WILLIAM NEATE
Ex Parte:     PEGASUS LEASING LIMITED

AND

No SP 298 of 1995
Re:          ANNE ELIZABETH NEATE
Ex Parte:     PEGASUS LEASING LIMITED

Branson J
Adelaide
30 January 1996

IN THE FEDERAL COURT OF AUSTRALIA )
  )
SOUTH AUSTRALIA DISTRICT REGISTRY )
  )
GENERAL DIVISION                 )    No SP 297 of 1995 and
  )    No SP 298 of 1995
BANKRUPTCY DISTRICT OF           )
  )
THE STATE OF SOUTH AUSTRALIA     )

RE:           DAVID WILLIAM NEATE

Debtor

EX PARTE:     PEGASUS LEASING
  LIMITED

Petitioning Creditor

AND

RE:          ANNE ELIZABETH NEATE

Debtor

EX PARTE:     PEGASUS LEASING
  LIMITED

Petitioning Creditor

REASONS FOR DECISION

CORAM:    Branson J
PLACE:    Adelaide
DATE:     30 January 1996

On 15 December 1995 I gave ex tempore reasons in these matters confirming decisions of Deputy Registrar Fisher of 20 November 1995.  At that time I ordered the debtors to pay the petitioning creditor's costs of the applications for the review of the Deputy Registrar's decisions.  However, consideration of the petitioning creditor's applications for its costs before the Deputy Registrar was reserved to allow

the parties, if so advised, to file written submissions.  Written submissions have been filed on behalf of the debtors but not on behalf of the petitioning creditor.

The applications argued before the Deputy Registrar were for extensions of time for compliance with bankruptcy notices. The notice in each case was issued by a Deputy Registrar and thus the time for compliance with the notice was fixed by that Deputy Registrar. The applications were made pursuant to s41(6B) of the Bankruptcy Act 1966 (Cth) ("the Act") which is set out below.

It is, however, important to determine in what capacity the Deputy Registrar was acting when dealing with the applications made pursuant to s41(6B) of the Act. Was he exercising a power or function of a Registrar in Bankruptcy (s14 of the Act) or was he exercising a power of the Court as a Registrar of the Court (s31A of the Act and s18N of the Federal Court of Australia Act 1976 (Cth))?

Section 13 of the Act provides for the proclamation of bankruptcy districts, and s14 of the Act provides for a Registrar in Bankruptcy and such numbers of Deputy Registrars in Bankruptcy as is determined by the Minister by notice published in the Gazette. Section 14(2) provides that each "... Registrar and Deputy Registrar has such powers and functions as are conferred or imposed on a Registrar ..." by the Act. Section 14(5) provides that "[a]n order or direction made or given, or an act done, by a Registrar or a Deputy Registrar under this Act is subject to a review on summary application to the Court."

Section 5 of the Act contains the following definition of "Registrar":-

'"Registrar" means a Registrar in Bankruptcy, and
       includes a person acting as a Registrar.'

Section 5 of the Act defines the expression "this Act" to include the rules and the regulations.  The same section defines "the rules" to mean the rules made under the Act. The reference to "regulations" in s5 of the Act may be understood as a reference to regulations made pursuant to s315 of the Act. The expressions defined by s5 of the Act, unless the contrary intention appears, are thus also defined on the same basis for the purposes of the rules and regulations made under the Act.

The bankruptcy notices with which these proceedings are concerned were issued following an application made to the Registrar pursuant to rule 7 of the Bankruptcy Rules.  By reason of the definition of "Registrar" contained in s5 of the Act, the reference in rule 7 to the "Registrar" is to be understood as a reference to the Registrar in Bankruptcy.

The application argued before the Deputy Registrar was made pursuant to s41(6B) of the Act. That subsection is in the following terms:-

"Where, before the expiration of the time fixed by the Registrar for compliance with the requirements of a bankruptcy notice -

(a)proceedings to set aside the judgment or order in respect of which the bankruptcy notice was issued have been instituted by the debtor; or

(b)an application to set aside the bankruptcy notice has been filed with the Registrar,

the Registrar may, subject to sub-section (6C), extend the time for compliance with a bankruptcy notice."

As is the case with respect to rule 7 of the Bankruptcy Rules, the reference in s41(6B) of the Act to "the Registrar" is to be understood as a reference to the Registrar in Bankruptcy. Section 14(2) of the Act, set out above, gives to each Deputy Registrar in Bankruptcy the powers and functions conferred by the Act on a Registrar in Bankruptcy.

The powers of a Registrar in Bankruptcy under the Act are not to be confused with the powers of a Registrar of the Court. Section 31A(1) of the Act provides for certain powers of the Court to be exercised by a Registrar of the Court where a Judge of the Court so directs in writing. Although s31A(6) provides for a review by the Court of the exercise by a Registrar of the Court of a power of the Court under s31A(1), it may be noted that the review provision in s31A(6) is not in identical terms with that in s14(5) for the review of a decision of a Registrar in Bankruptcy.
The power of the Court to award costs in proceedings under the Act is found in s32 of the Act. It provides as follows:-

"The Court may, in any proceeding before it, including a proceeding dismissed for want of jurisdiction, make such orders as to costs as it thinks fit."

Section 5 of the Act defines "proceeding" to mean "proceeding under this Act".  The words "proceedings before it" in s32 of the Act are thus to be read as meaning "proceedings under this Act before the Court".

In my view, upon a proceeding being properly brought before a Registrar of the Court pursuant to s31A(1) of the Act, the Registrar will exercise the powers of the Court and the proceeding will thus be one before the Court within the meaning of s32 of the Act (see Re Kwiatek and Kwiatek; Ex parte Big J Ltd v Pattison (1989) 21 FCR 374 at 379). However, when exercising the power vested in the Registrar in Bankruptcy by s41(6B) of the Act, a Registrar is not exercising the powers of the Court: such power is directly vested in the Registrar in Bankruptcy. In my view, the proceedings, in such circumstances, are not proceedings before the Court within the meaning of s32 of the Act. I note that ss41(6A) and (6C) of the Act expressly recognise that the powers of the Court and the powers of the Registrar to extend time for compliance with a bankruptcy notice are distinct.

I find support for my above conclusions in Re Kusmenko:  Golovachenko v Official Receiver (1976) 28 FLR 183 at 188. In
that case Riley J concluded that s32 of the Act did not authorise an order for costs on an examination pursuant to s81 of the Act before a Registrar.

I conclude that the Court has no authority to order the debtors to pay the creditor's costs of the application made under s41(6B) of the Act to the Registrar in Bankruptcy.

I certify that this and the preceding     pages are a true copy of the Reasons for Decision of the Honourable Justice Branson.

Associate:

Dated:

Counsel for the Debtors              :    Mr C J Townsend

Solicitors for the Debtors           :    Piper Alderman
  as agents for
  White Cleland

Counsel for the Petitioning Creditor  :    Mr G Coppola

Solicitors for the Petitioning Creditor    :    Kelly & Co

Date of receipt of written
     submissions  :    22 December 1995