Re Young, P.N. & Anor. v Ex parte Hunter MMI Finance Ltd

230 , ICn3

JUDGMENT No. ........ ........ .. .......,..,,

CATCHWORDS

BANKRUPTCY - relationship of S. 31A(7) with S . 37 -

sequestration order made by the Registrar set aside and rehearing ordered where debtor had failed to attend the original hearing by reason of a simple error as to the date of the hearing.

Bankruptcy Act 1966, ss. 31A and 37

Re Anasis; Ex parte Total Australia Ltd (1985) 11 FCR 127

: PAUL NORMAN YOUNG and KRISTINE YOUNG: EX PARTE: HUNTER MM1

FINANCE LIMITED

Burchett J.
Sydney

C A )
GENERAL DIVISION

BANKRUPTCY DIVISION OF THE NB 419 of 1993

STATE OF NEW SOUTH WALES )

RE: P p G

Debtor

EX PARTE: HUNTER MM1 FINANCE LIMITED

Creditor

CORAM: Burchett J.
PLACE: Sydney

DATE : 23 March 1993

EX TEMPORE REASONS FOR JUDGMENT

BURCHETT J.:

In this matter, the debtor attended in person to secure an adjournment, and the petition was adjourned to a date which the debtor understood to be 25 February 1993. In fact, the matter was adjourned to 23 February. It does not appear on the evidence exactly how the error occurred, and I am certainly not attributing blame to anyone for it. The fact is that an error did occur, and the debtor went away, consulted

which I am satisfied does raise a serious question to be tried his solicitor, and prepared an affidavit verifying a defence
as to whether there is not a complete answer to the petition.

However, before the affidavit could be filed, the date to which the matter had actually been adjourned had arrived, and a sequestration order was made by a Registrar pursuant to the power conferred upon him under S. 31A(l) (n) of the Bankru~tcv

- I Act 1966.
That section provides, by subs. (6), for a review of the
exercise by the Registrar of a power delegated under subs.

(1) :

"A party to a proceeding in which a Registrar has exercised any of the powers of the Court under subsection (1) may, within the time prescribed by the rules, or within any further time allowed in accordance with the rules, apply to the Court to review that exercise of power."

An application was in fact made within the time provided, which is so provided by r. 119A. By S. 31A(7), the Court may, on an application under subs. 6, or indeed of its own motion, review an exercise of power by a Registrar pursuant to the section, and the subsection goes on: "and may make such order or orders as it thinks fit with respect to the matter with respect to which the power was exercised."

My attention has been properly directed to S. 37 which
provides, as it has fairly recently been amended, a bar to the

rescission by the Court of a sequestration order. However, it

which is not a general provision about the powers of the Court seems clear to me that S. 37 has nothing to say to S. 31A,

in bankruptcy, but a specific provision dealing with the delegation of powers to the Registrar, and with the consequences of such a delegation, framed, of course, in terms designed to overcome the constitutional problem which was highlighted in Rea. v. Davison (1954) 90 CLR 353.

In my opinion, S. 31A(7) means what it says, and the Court has an extremely wide power of review where a sequestration order has been made by the Registrar.

The facts of this case are somewhat reminiscent of,
although of course not at all identical with, the facts of
Anasis: Ex Darte Total Australia Ltd (1985) 11 FCR 127, where
a sequestration order that had been made ex parte in the
absence of the respondent, by reason of circumstances which,
like those of the present case, were fairly special and
provided a satisfactory explanation for the absence of the
respondent, was set aside by the Court. In the present
matter, I think justice demands that the serious ground of
defence which has been raised ought to be litigated, if the
matter is not able to be compromised, and that the applicant
should have his day in court. Accordingly, I set aside the
sequestration order made by the Registrar, and direct that the
matter be set down for rehearing on a date to be fixed by the
Registrar. I make no order in respect of the costs of this
application.

I certify that this and the preceding two (2) pages are a true copy of the Reasons for Judgment herein of his Honour Mr Justice Burchett.
Associate:
Date: 22 April 1993

Solicitor for the Debtors: M r S Golledge of Messrs
Parish Patience
Solicitors for the Creditor: Messrs Benjafield Coyle &
Shanahan

In the case of Re Young, P.N. & Anor. v Ex parte Hunter MMI Finance Ltd, the court was presented with a dispute regarding a sequestration order made by a Registrar in the Bankruptcy Division of the Federal Court of Australia. The debtor, Mr. Paul Norman Young, had failed to attend the original hearing due to a simple error concerning the date of the hearing. The creditor, Hunter MMI Finance Limited, sought to enforce the sequestration order. The primary legal issue before the court was whether the sequestration order made by the Registrar could be set aside and a rehearing ordered, given that the debtor had not attended the original hearing due to a misunderstanding of the date.

The court addressed the interplay between sections 31A(7) and 37 of the Bankruptcy Act 1966. Section 31A(7) grants the court the power to review the exercise of power by a Registrar in making a sequestration order, while section 37 generally bars the court from rescinding a sequestration order. The court concluded that section 37 does not restrict the court's powers under section 31A(7). The court found that the circumstances of the case warranted a review of the sequestration order, as the debtor's absence was due to an understandable error and a serious defence was raised. The court set aside the sequestration order and ordered a rehearing to ensure that the debtor had an opportunity to present his case.

In summary, the court determined that the error in the date of the hearing provided a sufficient ground for setting aside the sequestration order made by the Registrar. The court exercised its power under section 31A(7) to review the exercise of power by the Registrar and ordered a rehearing to allow the debtor to address the serious defence raised. The final orders of the court were to set aside the sequestration order made by the Registrar and to schedule a rehearing on a date to be determined by the Registrar. No order was made regarding the costs of the application.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established

BANKRUPTCY DIVISION OF THE	NB 419 of 1993
STATE OF NEW SOUTH WALES	)

which is not a general provision about the powers of the Court	seems clear to me that S. 37 has nothing to say to S. 31A,
in bankruptcy, but a specific provision dealing with the delegation of powers to the Registrar, and with the consequences of such a delegation, framed, of course, in terms designed to overcome the constitutional problem which was highlighted in Rea. v. Davison (1954) 90 CLR 353.
In my opinion, S. 31A(7) means what it says, and the Court has an extremely wide power of review where a sequestration order has been made by the Registrar.
The facts of this case are somewhat reminiscent of, although of course not at all identical with, the facts of Anasis: Ex Darte Total Australia Ltd (1985) 11 FCR 127, where a sequestration order that had been made ex parte in the absence of the respondent, by reason of circumstances which, like those of the present case, were fairly special and provided a satisfactory explanation for the absence of the respondent, was set aside by the Court. In the present matter, I think justice demands that the serious ground of defence which has been raised ought to be litigated, if the matter is not able to be compromised, and that the applicant should have his day in court. Accordingly, I set aside the sequestration order made by the Registrar, and direct that the matter be set down for rehearing on a date to be fixed by the Registrar. I make no order in respect of the costs of this application.

Solicitor for the Debtors:	M r S Golledge of Messrs
Parish Patience