Shepard v Ireland

FEDERAL MAGISTRATES COURT OF AUSTRALIA

SHEPARD v IRELAND [2011] FMCA 187

BANKRUPTCY – Appointment of controlling trustee under Part X – duty to call creditors’ meeting within 25 working days – ex parte application by trustee for extension of time – discretionary considerations – notice should be given to a creditor with a pending petition – application adjourned with only a short extension.

Bankruptcy Act 1966 (Cth), ss.33(1)(c), 64N, 64Y, 188, 188(2C)(b), 189(1A)(d), 189AAA, 189A, 194, 194(1)(a), 204, 294
Bankruptcy Regulations 1996 (Cth), reg.10.04

Commonwealth Bank of Australia v Toma [2009] FMCA 846
Prentice v Gore [2010] FMCA 737
Re Application of Melvyn Malcolm Posner [2007] FMCA 610

Applicant: ADAM SHEPARD

Respondent: WILLIAM EDWARD IRELAND

File Number: SYG 508 of 2011

Judgment of: Smith FM

Hearing date: 21 March 2011

Delivered at: Sydney

Delivered on: 21 March 2011

REPRESENTATION

Counsel for the Applicant: Mr Rosenblatt

Solicitors for the Applicant: Somerset Ryckmans

Counsel for the Respondent: No appearance by or on behalf of the Respondent

ORDERS

1. Pursuant to s.33(1)(c) of the Bankruptcy Act 1966 (Cth) the time provided in s.194(1)(a) is extended by 4 working days.

2. The application for a longer extension is adjourned for hearing on 24 March 2011 at 10.15am. 

3. The applicant must serve electronic copies of the application, the affidavit in support, and this order on the respondent and the solicitors for the petitioner in proceedings SYG144/2011 no later than 5pm on 21 March 2011. 

4. Any person seeking to appear at the hearing to oppose the application must file and serve on the applicant a notice of appearance and any affidavits relied upon, no later than 3pm on 23 March 2011. 

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

SYG 508 of 2011

ADAM SHEPARD

Applicant

And

WILLIAM EDWARD IRELAND

Respondent

REASONS FOR JUDGMENT

(revised from transcript)

1. Mr Shepard applies today for an ex parte order extending time for the holding of a creditors’ meeting, at which a personal insolvency agreement proposed by Mr Ireland under Part X of the Bankruptcy Act 1966 (Cth) can be voted upon. Mr Shepard is the controlling trustee of Mr Ireland’s estate, after accepting an appointment under s.188. Under s.194 the creditors’ meeting must be called “not more than 25 working days after the relevant consent or approval was given”, and in the present case that period expires on 1 April 2011. 

2. A creditors’ meeting may be adjourned if a quorum is not present or if a resolution for adjournment is passed (see ss.64N and 64Y). Otherwise, creditors may vote upon one of the resolutions provided under s.204, which include ending the control of the trustee, requiring the execution of the proposed agreement, or requiring the debtor to present a debtor’s petition within 7 days. The control of the trustee terminates 4 months after his or her appointment, if no resolution is passed within that period or if the trustee’s control is not otherwise terminated (see s.189(1A)(d)).

3. Under reg.10.04 of the Bankruptcy Regulations 1996 (Cth), the controlling trustee must give all creditors…