Re Vescovi, I. & Anor v Ex parte Knight, D.W

[1988] FCA 86

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C A T C H W O R D S

BANKRUPTCY - time limit for election by trustee under s.60 explred

- election by trustee to proceed with action 3 days late -

appllcation by trustee for an extension of time to give

notice of election.

EIankruptcy Act 1966, 5 5 . 3 3 ,	60
PIXCUS J.
BR I	S EIILME

9 MARCH 1988

IN THE FEDERAL COURT OF AUSTRALIA	)
GENERAL DIVISION	) QLD E1487 of 1987
BANKRUPTCY DISTRICT OF THE SOUTHERN	)
DISTRICT OF THE STATE OF OUEENSLAND	)

RE:	IVAN VESCOVI (Bankrupt) and DEBRA MARIE VESCOVI
(Bankrupt  )

Debtors

EX PARTE:  DESMOND WILLIAM KNIGHT as Trustee of the Estates of IVAN VESCOVI (Bankrupt) and DEBRA MARIE VESCOVI (Bankrupt)

Applicant

MINUTES OF ORDER

JUDGE MAKING PINCUS ORDER: J.

DATE OF ORDER:	9 MARCH 1986
WHERE MADE:	BRISBNAE

THE COURT ORDERS THAT:

1. the tlme for making the electlon mentloned in

s . 6 0 ( 2 ) of	the Bankruptcy Act 1966 ln respect	of
the action mentloned	i n	the papers be extended to
15 January 1966; and

2 .	the costs be reserved pending the outcome	of	the
District Court proceedings.

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

IN THE FEDERAL COURT OF AUSTRALIA )

DIVISION	GENERAL	)	QLD E1487 of 1987
BANKRUPTCY DISTRICT OF THE SOUTHERN	)
DISTRICT OF THE STATE OF QUEENSLAND	1

RE:  IVAN VESCOVI (Bankrupt) and DEBRA MARIE VESCOVI
(Bankrupt)

Debtors

M PARTE:	DESMOND WILLIAM KNIGHT as Trustee of the Estates of IVAN VESCOVI (Bankrupt) and
DEBRA MARIE VESCOVI (Bankrupt)

Applicant

PINCUS J. 9 MARCH 1988

REASONS FOR JUDGMENT

Thls 1s ar. applicatlon by the trustee of the estates of

two bankrupts for an extenslon of tune to glve a notice of

election under 5 . 6 0 of the Bankruptcy Act 1966. The sequence of

events appearmg from the materlal and from informatlon I was

glven from the bar table was as follows:

10.	Sequestration	12.87	order;	applicant	becomes
trustee.

15.12.87 Millard and others (the respondents to this

application) give notlce to the applicant

under s.60(3	1 .
L .

16.12.87 Applicant's representative enquires of

respondents' solicitor what the action	1s all
about and discusses posslbillty	of settlement.

18.12.87	District Court callover: case set	down	for
hearing on 28 and 29 January 1988.

12. 1.88 Last day (under s . 6 0 ( 3 ) ) for electing to

prosecute actlon.

15. 1.88 Trustee elects

Section 6 0 ( 2 ) & ( 3 ) read as follows:

" ( 2 ) An action commenced by a person who

subsequently becomes a bankrupt is, upon hls

becomlng a bankrupt, stayed untll the trustee

makes election, In wrlting, to prosecute or

discontlnue the actlon.

(3)	If the trustee does not make such an electlon within 28 days after notice of the actlon 1 s served upon hlm by a defendant or other party
to the actlon, he shall be deemed to have
abandoned the action."

It is unnecessary to dlscuss the nature of the actlon in

question and enough to mentlon that the trustee says he 1s advlsed

that he has good prospects of success and t'nat the clam in the

action is the only sLbstantla1 asset in the estates of the

bankrupts.

Mr Matthews, for the applicant, says there is power

under s.33(1)(c) to extend time. The provision reads as follows:

"The Court may -

...

(c)	does not expressly provide to the contrary, after its explratlon, any tune llmited by	extend before its expiration or, if thls Act the Registrar under thls Act (other than the tune fixed for compliance wlth the
requirements of a bankruptcy notlce), for
d o m g an act or thing or abridge any such
t Ime . "
It seems plain enough that	if the time can	be extended,

It should be. Notice was given only three days late and the

conversation of 16 December would have been llkely to make the

respondents' sollcltors aware that the trustee was interested in

the matter.

Mr Robb contended, however, that once the trustee 1 s

"deemed to have abandoned the actlon" under s.60(3), nothlng In

s.33(1)(c) 1s strong enough to undo the abandonment.

Mr Robb relied upon a llne of authority to the effect

that once an act of bankruptcy has been commltted, tlme for

be extended; those cases are not of any relevance, presently, on	compliance wlth the requlrements of the bankruptcy notlce cannot
the precise polnt they declded, because of s.41(6A) (inserted in
1980) as construed by the Full Court in Streimer v. Tamas (1981) 37 A.L.R. 211.

However, it was argued that their principle applies by

analogy.

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Were the matter free from authority, this might be

thought a point of some difficulty. Obviously, not all times

mentioned in the Act are intended to be subject to extension: a

distinction might rationally be drawn between tlme provislons

which attach a specific consequence to effluxion of the time

stated and those which do not.

However, in Re 'Faulkner; Ex parte Official Recelver

(1981) 52 F.L.R. 109, the precise question was decided by Lockhart

J. in a way favourable to the applicant: see pp.112 and 113.

That decision was treated as correct by Shepherdson	J. in Holmes
v . Goodyear Tyre & Rubber Co. (Aust.) Ltd (1984) 55 A.L.R. 594	at

p.598 and by Burchett	J. In Re Colllns;	Ex parte Offlcial Trustee
in Bankruptcy and Bracher	( 1 9 8 6 ) 65 A.L .R .	338 at p.342.

While I accept that the vlew propounded by Mr Robb is

reasonably open, ~t 1 s clear	that	I should follow these
authoritles.

There wlll be an order that the tune for maklng the

election mentloned In s . 6 0 ( 2 ) In respect of the action mentloned

In the papers be excended to 15 January 1988

The questlon of costs poses some dlfficulty. I thlnk

the applicant	should have them If he wlns the Distrlct Court case.
Therefore, to	await the outcome of those proceedlngs, costs wlll
be reserved.

1 certify that this and the 3	preceding
pages are a trus copy of the reasons	for

~udgment herem of HIS Honour

Mr. Justice Pincus