Savage, Re P. Savage, Ex Parte P. v Castlemaine Tooheys

[1986] FCA 657

i	.I	Not for distributlon
I	d

IN THE FEDEPJIJ,	COURT OF AUS’IRALIA	)
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DIVISION	GENERAL	)	QLD. BN1780 of 1986
BF-NKRUPTCY DISTRICT OF THE SOUTHERN )
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!	DISTRICT OF THE STATE OF OUEENSLFJID 1
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SPENDER J.
0RISBFNE
I	18 Mo17ember, 1986.
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REXSONS FOP JUDGKENT

The applicant debtors have applied for an order that the

time for compliance with the requirements of Bankruptcy Notice Mo.1780 of 1986 served on each of them be extended pending the

hearing of the notice of appeal lodged by them in Action No.2931

of 1984 in the Supreme Court of Queensland. It is the judgment

in that action that founds the bankruptcy notice. On 7 August

1986, his Honour, Mr. Justice Matthews, in the Supreme Court of

Queensland gave judgment to Castlemaine Tooheys Limited, who was

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the plaintiff In that Supreme Court action. The nature of that

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action was proceedings on a guarantee.

A Notice of Appeal dated 9 September 1986 has been filed

in the Supreme Court of Queensland against that order. The

grounds of the appeal seek to challenge findlngs of fact and

assessments credibility of which Honour his made.

Notwithstanding that appeals on that basis face greater

difficulties than appeals t7hic'n are founded on questions of law,

or which do not involve assessments of a subjective kind by the

trial judge who has the opportunity of observing the witnesses

give oral evidence, or against findlngs of fact based on oral

evidence, it is not right to regard those appeals as inherently

doomed to failure.

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Counsel f o r the debtors who appeared in the trial before

Mr. Justice Matthew has, according to an affidavit filed by the

solicitors for the debtors, advised there are reasonable

prospects of success on the appeal. A point of critlcism by

counsel for the credltor t.7as that the debtors do not themselves depose to the fact they have reasonable prcspects of success. However, I am prepared to accept that where counsel, particularly

counsel who appeared in the trial, has advised that there are

reasonable prospects of success, and where there is nothing in

the material filed which suggests that that is a wholly erroneous

assessment, I proceed on the basis that the debtors have shown,

on a proper basis, that there are some prospects of success	in
their appeal.

"his is not a case such as Re Taylor; Ex parte Deputy

Commissioner of Tasatlon (1983) 74 F.L.R. 377. In that case,

there is no evidence either from counsel, solicitors, or the

debtors themselves concerning the prospects of success other than

the notice of appeal which was eshibited before the trial judge

hearing the application for an extension of time. In that case,

Mr. Justice Sheppard, invidiously as he commented, was obliged to

view the prospects of success simply on his perusal of the notice

Of appeal, and concluded that there was no real basis f o r a

successful challenge to the judgment he subject of the

bankruptcy notice.

The notice of appeal seeks an order that the L7hOle of

the judgment of Mr. Justlce Matthews given on 7 August l985 be

set aside and in lieu thereof there be judgment for the

appellants against the respondent with costs t o be taxed. The

proceedings therefore satisfy the requirements that they are

proceedings to set aside the judgment or order in	respect	of
which the bankruptcy notice was issued.

In Lipov v. Alexander Fraser & Son Ltd. & Anor. (1978)

36 F.L.R. 126, Sweeney J. said at 130:-

"It is f o r the Supreme Court to decide whether it

will make such an order. (i.e. a stay of

esecution). It is for this Court to say whether

the time for compliance with a bankruptcy notice

will be extended. It has been held that the

institution of an appeal, which appears to be bona

fide, is a good reason fo r adjourning the hearing

of a bankruptcy petition based upon the judgment

subject to the appeal (Ex parte Hevworth; In re

Rhodes (1884) 14 O.B.D. 49: Union Bank of

Australia Ltd.	(No.41 v . Dean (1898) 24 V.L.R.
453.

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The courts have had regard to the grave

consequences which flow from the effluvion of the

time fixed for compliance with a bankruptcy

notice. Judgment has been obtained against the

applicant, who has regularly instituted an appeal

against it. He has sworn that he belleves that he

has proper grounds of appeal against it. He has

not been cross-examined. The creditors have not

offered any evidence in opposition."

He then proceeded to grant an extension of time to

enable the applicant, should his appeal succeed, to avoid the

commisslon of an act of bankruptcy.

The point taken by the creditor in this case was that

there was no power in the court after the expiration of the time

fixed for compliance with the bankruptcy notice to extend time.

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In the light of the judgment of the Full Court of the Federal

Court in Streimer V. Tamas (1981) 37 A.L.R. 211, particularly the observations at 215, it was pr@perly accepted that I am bound by that judgment. In any event, I am of the m e w that I am

empowered by s.dl(6A) of the Bankruptcy Act 1956 to grant the

extension sought in this appllcation.

Before the time fixed by the Registrar for compliance

with the bankruptcy notice in respect of which an extension is

sought, proceedings to set aside the judgment or order were

instituted by the debtors. I therefore hold, consistent with the

judgments in Streimer	v. Tamas, that I have power to extend the
time for compliance.

mere is nothing to suggest that the appeal is other

than bona fide, and I am prepared to accept that there are some

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prospects of success. The order of the court is that the time

f o r compliance with the bankruptcy notice be extended until

further order, liberty being reserved to either party to apply to

the Registrar for relisting of the application on a day whlch

will permit the giving of seven days' notice to the other party.