Re Udowenko; Ex parte Mitchell - [1996] FCA 879

CATCHWORDS

BANKRUPTCY - application to extend time for compliance with bankruptcy notice - whether jurisdiction to order extension of time where an application to set aside bankruptcy notice was made prior to expiry but dismissed prior to expiry, and further application to set aside is made after expiry.

Bankruptcy Act 1966, s 41

Re Sterling; Ex parte Esanda Ltd (1980)44 FLR 125 (FCA/Lockhart J)
Re Lentini; Ex parte CSR Ltd (1991) 29 FCR 363 (FCA/Neaves J) McLean v Australia and New Zealand Banking Group Ltd (1993) 42 FCR 300 (FCA/Ryan J)
Streimer v Tamas (1981) 37 ALR 211 (FCA/FC)
Re Carter; Ex parte National Mutual Trustees Ltd (1995) 129 ALR 435 (FCA/Gummow J)

Re:MICHAEL UDOWENKO
HELEN UDOWENKO
WOLODYMYR UDOWENKO

Ex parte:ALAN BERNARD MITCHELL

No NP 856 of 1996

Lindgren J
Sydney
9 October 1996

IN THE FEDERAL COURT OF AUSTRALIA )
GENERAL DIVISION                 )
BANKRUPTCY DISTRICT OF THE       )        No NP 856 of 1996
STATE OF NEW SOUTH WALES             )

Re:MICHAEL UDOWENKO
HELEN UDOWENKO
WOLODYMYR UDOWENKO

Ex parte:ALAN BERNARD MITCHELL

CORAM:Lindgren J
PLACE:Sydney
DATE:9 October 1996

MINUTE OF ORDERS
THE COURT ORDERS:

THAT the Debtors' application filed on 1 October 1996, in so far as it seeks the relief referred to in para (1) thereof, be dismissed.

THAT the Debtors pay the costs of Alan Bernard Mitchell of the hearing on 1 October 1996.

THAT the Debtors' application otherwise be listed on Monday 14 October 1996 at 9.30 am before Lindgren J.

THAT the creditor's petition No NP 856/96 be listed on Monday 14 October 1996 at 9.30 am before Lindgren J.

NOTE: Settlement and entry of orders is dealt with in rule 124 of the Bankruptcy Rules.

IN THE FEDERAL COURT OF AUSTRALIA )
GENERAL DIVISION                 )
BANKRUPTCY DISTRICT OF THE       )        No NP 856 of 1996
STATE OF NEW SOUTH WALES             )

Re:MICHAEL UDOWENKO
HELEN UDOWENKO
WOLODYMYR UDOWENKO

Ex parte:ALAN BERNARD MITCHELL

CORAM:Lindgren J
PLACE:Sydney
DATE:9 October 1996

REASONS FOR JUDGMENT

INTRODUCTION
By an application filed on 1 October 1996, the three Debtors apply for the following substantive orders:

"1.Time for compliance with the Bankruptcy Notice herein to be extended to such date as the Court may think fit.

2.The Bankruptcy Notice be set aside."

Only the relief referred to in para (1) was pursued at this stage.

The bankruptcy notice bears date, and was issued on, 19 December 1995. The total amount referred to in it is $31,270.00. It was common ground on the hearing that the bankruptcy notice was served on 21 March 1996 and I proceed accordingly. It allowed 21 days after service, that is to say, until 11 April 1996, for compliance. The period for compliance was extended several times by Deputy Registrars. The period of the last extension expired on 4 June 1996. A creditor's petition No NP 856/96 was presented on 12 July 1996 founded on the Debtors' failure to comply with the bankruptcy notice on or before 4 June 1996. The creditor's…

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.

Continue reading Re Udowenko; Ex parte Mitchell

Details

AGLC: Re Udowenko; Ex parte Mitchell [1996] FCA 879
Case: [1996] FCA 879
Decision Date: 9 OCTOBER 1996

CaseChat Overview and Summary

In the case of Re Udowenko; Ex parte Mitchell, the three Debtors, Michael, Helen, and Wolodymyr Udowenko, applied for an extension of time for compliance with a bankruptcy notice and for the notice to be set aside. The bankruptcy notice, which had a total amount of $31,270.00, was served on 21 March 1996, with a compliance period ending on 11 April 1996. The time for compliance was extended several times, with the final extension expiring on 4 June 1996. A creditor's petition was subsequently presented on 12 July 1996 based on the Debtors' failure to comply with the bankruptcy notice.

The legal issues the court was required to decide were whether the Court had jurisdiction to order an extension of time for compliance with the bankruptcy notice, considering that an application to set aside the bankruptcy notice was made prior to the expiry of the compliance period but dismissed prior to its expiry, and whether a further application to set aside the bankruptcy notice could be made after the expiry of the compliance period. The court examined the statutory power to extend time for compliance with a bankruptcy notice under section 41(6A) of the Bankruptcy Act 1966. The court found that the condition of the existence of the power to extend time was not satisfied as the application to set aside the bankruptcy notice had ceased to be a current proceeding before the expiry of the compliance period.

The court concluded that it lacked power to extend time for compliance with the bankruptcy notice. Even if the court had such power, it would not exercise it as an exercise of discretion. The court also dismissed the application to set aside the bankruptcy notice, ordering the Debtors to pay the creditor's costs of the hearing on 1 October 1996. The application to set aside the bankruptcy notice and the creditor's petition were listed before the court for further directions.

The final orders of the court were as follows: the Debtors' application, in so far as it sought an extension of time for compliance with the bankruptcy notice, was dismissed and the Debtors were ordered to pay the creditor's costs of the hearing on 1 October 1996; the Debtors' application, in so far as it sought a setting aside of the bankruptcy notice, was dismissed; and the creditor's petition was listed before the court for further directions.

Orders