Re Sterling; Ex parte Esanda Ltd

Case [1980] FCA 75


Re: ROBERT STERLING ALSO KNOWN AS EMOD TARISZNYAS; SUSAN STERLING ALSO KNOWN
AS SUSAN BARBARA STERLING ALSO KNOWN AS SUSAN TARISZNYAS
Ex parte: ESANDA LIMITED (1980) 44 FLR 125
No. B1140 of 1980
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA


BANKRUPTCY DISTRICT OF THE STATE OF NEW SOUTH WALES AND THE AUSTRALIAN CAPITAL TERRITORY
Lockhart J.(1)
CATCHWORDS

BANKRUPTCY - bankruptcy notice - application for extension of time for compliance with requirements of bankruptcy notice - applicant having filed with Registrar an application to set aside notice - Act expressly conferring power to extend time; but not to set aside the notice itself - ubi aliquid conceditur, conceditur etiam et id sine quo res ipsa non esse potest - inherent jurisdiction to set aside bankruptcy notice - relation between paras. 41 (6A) (a) and (b) - exercise of discretion to grant extension of time.

Bankruptcy Act 1966 (cth.) ss. 30, 33, 41 (6A), (6B) and (6C)

Bankruptcy Amendment Act 1980 (Cth.)

Bankruptcy - Bankruptcy notice - Application for extension of time for compliance with requirement of bankruptcy notice - Applicant having filed with Registrar an application to set aside notice - Act expressly conferring power to extend time but not to set aside notice itself - Inherent jurisdiction to set aside - Relation between pars. (a) and (b) of Bankruptcy Act s. 41 (6A) - Exercise of discretion to grant extension of time - Bankruptcy Act 1966 (Cth), ss. 30, 33, 41 (6A), (6B), (6C) - Bankruptcy Amendment Act 1980 (Cth), ss. 20, 24.

HEADNOTE

Section 41 (6A) of the Bankruptcy Act, as amended, provides that: "Where, before the expiration of the time fixed by the Court or 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 Court may, subject to sub-section (6C), extend the time for compliance with the bankruptcy notice."

Application was made to set aside a bankruptcy notice before the time for compliance with its requirements had expired; together with application for an extension of time for compliance with the bankruptcy notice. The applicants also instituted proceedings to set aside the default judgment obtained against them in the District Court upon which the bankruptcy notice was grounded, but this application was made after the time for compliance with the bankruptcy notice had already expired.

Held: (1) Although the Bankruptcy Act does not expressly confer power on the court to set aside a bankruptcy notice, the court derives this power from at least two sources: (a) from s. 30 (1) of the Act, which gives the court power to decide all questions coming within the cognizance of the court and the power to make orders necessary for carrying out or giving effect to the Act; (b) from the principle that a power conferred by…

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Details
AGLC
Robert & Susan Sterling v Esanda Ltd [1980] FCA 75 ((1980) 44 FLR 125)
Case
[1980] FCA 75
Decision Date

CaseChat Overview and Summary

Esanda Limited sought an extension of time for the debtor, Sterling, to comply with the requirements of a bankruptcy notice. The debtor subsequently filed an application to set aside the notice. The application was heard by the court which had to decide whether it had the power to extend the time for compliance with the notice, despite the application to set it aside, and whether it was appropriate to exercise this discretion in the circumstances. The court considered the statutory provisions and the principles of equity, particularly the maxim ubi aliquid conceditur, conceditur etiam et id sine quo res ipsa non esse potest. It concluded that while the statute expressly provided for the extension of time, it did not empower the court to set aside the notice itself. However, the court also recognised its inherent jurisdiction to set aside a bankruptcy notice. The court balanced the relevant statutory provisions and exercised its discretion to grant the extension of time, while reserving the right to set aside the notice if the application was successful.

The court carefully examined the relationship between the statutory provisions and the inherent jurisdiction. It determined that the statutory provisions did not preclude the exercise of inherent jurisdiction, and that the maxim supported the court's ability to grant the extension while preserving the right to set aside the notice if warranted. The court noted that the debtor had made a substantial response to the notice and had demonstrated a willingness to engage in negotiations. These factors, along with the potential prejudice to the creditor if the extension was not granted, influenced the court's decision. The court found it appropriate to extend the time for compliance while allowing the applications to set aside the notice to proceed, reserving the right to relist the applications to ensure adequate notice to all parties.

Orders

Orders of the court

1. Time for compliance with the requirements of bankruptcy notice No. B 1140 of 1980 be extended until further order.

2. Liberty be reserved to any party to apply for relisting of the applications on a day which will permit the giving of seven (7) day's notice to other parties.

3. The applications to set aside the bankruptcy notice be adjourned generally, with liberty being reserved to any party to apply for relisting of the applications on a day which will permit the giving of seven (7) day's notice to the other parties.

4. Costs of all parties are reserved.

Orders accordingly.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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