Sacca, J. v Drevikovsky, M. - [1993] FCA 1044

IN THE FEDERAL COURT OF AUSTRALIA )

BANKRUPTCY DISTRICT 1 No. NB 2229 of 1992
OF THE STATE OF NEW SOUTH WALES )

Re: JOSEPH SACCA
Debtor
Ex parte: MARTIN DREVIKOVSKY. RICHARD PEGG arid STEPHEN TOOMEY tradina as TOOMEY PEGG & DREVIKOVSKY
Creditor

REASONS FOR JUDGMENT

EINFELD J SYDNEY 22 DECEMBER i993

This matter concerns an application to extend time for compliance with a bankruptcy notice after the time has expired. I am satisfied that the failure of the debtor to apply for an extension of time when the matter was before Justice Hill on 22 June 1993 was an accidental oversight. Up to then, time for compliance had been extended on several occasions but the case had always been before a registrar where there is a standard form available to parties for this purpose which specifically draws extension of time to attention. The form is not normally used when the matters come before Judges. In the proceedings before Justice Hill on 22 June and me on 21 September, the matter slipped the mind of the debtor's solicitor and it did not particularly occur fully to either his Honour or to me probably

because we were not familiar with the very complex and lengthy history of the litigation in this matter and because of its
exceptional nature. The matter was then dealt with in the
bankruptcy list in the ordinary way.

In a judgment given on 6 August this year in Howarth v Mortaaae Acceptance Nominees [l9931 43 FCR 139, I examined the authorities concerning the question of whether an extension may be granted after the time has expired. Quite a number of cases have considered this matter, not all of which are entirely clear and some of which have caused not a little controversy. Nevertheless, I concluded, following Justice Heerey in

Halstead & Anor ex warte Westwac Bankina Corworation No. 2 [l9911 32 FCR 394, that there is power in the Court in certain circumstances to extend the time for compliance with a bankruptcy notice after the time has expired. It remains open what actually happens to the act of bankruptcy that has occurred in the intervening time but that matter seems unlikely to figure largely in the future litigation of the matters in dispute here.
Howarth involved an application for an extension of time by a

creditor but most of the other cases have involved the more normal applications by debtors as in this case. The relevant

circumstances of this matter include an enormously long history of the litigation and repeated applications by the debtor for an extension of time for compliance. In addition a most unusual controversy arises as a result of the judgment of the District Court on 30 November 1992 which purported to set aside the judgment on which the bankruptcy notice is based, on conditions about which there is a dispute on compliance. All these matters impel me to believe that the reason for the failure to apply for the extension on…

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.

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Details

Case: [1993] FCA 1044
Decision Date: 22 Dec 1993

CaseChat Overview and Summary

In the Federal Court of Australia, the case of Sacca, J. v Drevikovsky, M. addresses an application to extend time for compliance with a bankruptcy notice after the stipulated period had lapsed. The debtor, Joseph Sacca, faced bankruptcy proceedings initiated by Martin Drevikovsky, Richard Pegg, and Stephen Toomey, trading as Toomey Pegg & Drevikovsky. The primary legal issue before the court was whether the time for compliance with the bankruptcy notice could be extended beyond the prescribed deadline. Einfeld J found that the debtor's failure to apply for an extension when the matter was before Justice Hill was an accidental oversight, noting the complexity and lengthy history of the litigation. The judge examined previous cases and concluded that the Court indeed has the power to extend the compliance time in certain circumstances, even after the deadline has passed.

The court's reasoning was rooted in the exceptional nature of the case, the history of repeated applications for time extensions by the debtor, and the ongoing dispute in the District Court regarding the conditions under which a previous judgment was set aside. The judge deemed the failure to apply for an extension as an oversight rather than an intentional act, given the debtor's consistent efforts to keep the bankruptcy notice active. The court also highlighted the excessive costs and the negative impact of the ongoing litigation on both parties and the legal profession. Ultimately, Einfeld J decided not to set aside the bankruptcy notice but extended the compliance time, allowing the matter to be revisited if the debt issue was finally resolved in the District Court. The court set a future date for further proceedings and encouraged the parties to reach a consensus to avoid unnecessary costs and further litigation.

Orders