Re Paterson, Ex parte Official Trustee - [2000] FCA 116

FEDERAL COURT OF AUSTRALIA
Re Paterson, Ex parte Official Trustee [2000] FCA 116
OFFICIAL TRUSTEE IN BANKRUPTCY IN THE MATTER OF
THE ESTATE OF DAVID COLIN PATERSON
N 8284 of 1999
HILL J
14 FEBRUARY 2000
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 8284 OF 1999

APPLICANT:

OFFICIAL TRUSTEE IN BANKRUPTCY AS TRUSTEE
OF THE ESTATE OF DAVID COLIN PATERSON

JUDGE:

HILL J

DATE:

14 FEBRUARY 2000

PLACE:

SYDNEY

EX TEMPORE REASONS FOR JUDGMENT

Before the Court is an application by the Official Trustee in Bankruptcy as trustee of the estate of David Colin Paterson (“the bankrupt”) for the time within which the Official Trustee is to make an election pursuant to s 60(3) of the Bankruptcy Act 1966 (“the Act”) to be extended to seven days after orders are made in the application. The application also seeks an order that the Official Trustee be permitted to accept an offer, which has been made by Glenn Robert Jarrett, to sell and assign to Mr Jarrett any chose in action which the Official Trustee may have against Australian Guarantee Corporation Limited (“AGC”) and a Mr Peter Head. The Official Trustee has indicated that he does intend to accept that offer.
The order for extension of time is made pursuant to s 33(1) of the Act. It seems now to be accepted that the Court has power under that section to extend the time for electing whether or not to continue proceedings under s 60 of the Act notwithstanding that the time for making that election has expired: Re Faulkner, Ex parte Official Receiver (1981) 52 FCR at 109, Abeyratne v Milorad Trkulja (unreported, North J 18 December 1998) and Brien v P & E Phontos Pty Limited (1999) FCA 1072.
The bankrupt is party to litigation in this Court, numbered G 3244 of 1995, the principal applicant of which is Endormer Pty Limited (“Endormer”). The proceedings allege deceptive conduct, inter alia, on the part of AGC and breaches of the Corporations Law by that company as well as claims in negligence. Endormer brings the proceedings in its capacity as trustee of a unit trust. It does not seem that Mr Paterson directly is a beneficiary of that trust although he is a shareholder in a company called Alinbow Pty Limited which company owns shares in Endormer, the trustee.
Mr Paterson, however, claims to have a personal claim in damages against AGC, which he maintains as the fourth applicant in those proceedings. There is also a cross-claim in the proceedings brought by AGC against, inter alia, Mr Paterson.
Mr Paterson disclosed in his statement of affairs his claim against, inter alia, AGC. Inquiries were made by the Official Trustee. It might be noted there were no assets in the estate from which the proceedings could be funded and a report was forwarded to creditors seeking their advice as to whether they were prepared to contribute. They were not.
On 30 July 1999 the…

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.

Keep reading for free

Create a free CaseChat account to read Re Paterson, Ex parte Official Trustee and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2000] FCA 116
Decision Date: 14 FEBRUARY 2000

CaseChat Overview and Summary

In the case of Re Paterson, Ex parte Official Trustee, the Official Trustee in Bankruptcy sought an extension of time to make an election under section 60(3) of the Bankruptcy Act 1966, as well as permission to accept an offer to sell and assign a chose in action against Australian Guarantee Corporation Limited and Mr Peter Head. The application was made in the Federal Court of Australia, with Hill J presiding. The Official Trustee, as trustee of David Colin Paterson's estate, intended to accept an offer from Glenn Robert Jarrett to purchase the chose in action, which was made shortly after the time for making the election had expired.

The primary legal issues before the court were whether the court had the power to extend the time for making the election under section 33(1) of the Act, and whether the Official Trustee should be permitted to accept the offer to sell and assign the chose in action. The court considered relevant case law and found that it had the power to extend the time for making the election, as it had been previously established in cases such as Re Faulkner, Ex parte Official Receiver (1981) 52 FCR at 109, Abeyratne v Milorad Trkulja (unreported, North J 18 December 1998), and Brien v P & E Phontos Pty Limited (1999) FCA 1072.

Hill J exercised the court's discretion to extend the time for making the election and granted the application for the extension of time. The court noted that the offer to acquire the chose in action was made shortly after the expiry of the period within which an election ought to have been made, that no creditors or other parties were disadvantaged, and that the consequence of accepting the assignment would be a benefit, albeit a small one, for the creditors of the estate. Furthermore, the creditor most affected by the decision, Australian Guarantee Corporation, did not oppose the application. Hill J concluded that it would be inappropriate to make a conditional order regarding the acceptance of the offer, as that decision should be left to the Official Trustee.

The court's final orders were to extend the time within which the Official Trustee could make an election pursuant to section 60(3) of the Act to seven days after the date of the order. There was no order as to costs.

Orders