Sibbles, Re O.f. and Anor Ex Parte Highfern Pty Ltd

[1986] FCA 347

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C A T C H W O R D S

BANKRUPTCY - judgment debt under appeal - bankruptcy notice -

application to extend time for compliance - appeal bona fide -

diligent pursuit of appeal - no evidence as to assets or debts -

where evidentiary burden lies.

Bankruptcy Act 1966 ss.nl(6A); 41(6C)(b)

Re: Oswald Frederick Sibbles & Anor. L

Ex Parte: Hiqhfern Pty.

Ltd.

QLd BN1187 of 1986

PINCUS J.

BRISBANE

11 AUGUST 1986

IN THE FTDERAL COURT OF AUSTRALIA )

GENERAL DIVISION	)	BNIlR7	QLD	of 1986
BANKRUPTCY DISTRICT OF THE SOUTHERN	)
DISTRICT OF THE STATE OF OUEENSLAND	1

RE: OSWALD FREDERICK SIBBLES and LORNA SIBBLES

M PARE: HIGHFERN PTY. LTD.

MINUTES OF ORDER

I	MAKING	JUDGE	ORDER:	PINCUS J.
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DATE OF ORDER:	11 AUGUST 1986
i	WHERE MADE:
I	BRISBANE

THE COURT ORDERS THAT:

I	1.	The time for compliance with the bankruptcy notice issued on 19 June, 1986 be extended untll further order.
2.	The appllcants and respondent be at liberty to relist the matter on reasonable notice.

NOTE : Settlement and entry of orders 1 s dealt with in Rule 124

of the Bankruptcy Rules. ,

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TN THE FEDERAL COURT OF AUSTRALIA	)
GENERAL	DIVISION	) 1986 QLD BN1187 of

BANKRUPTCY DISTRICT OF THE SOUTHERN )

DISTRICT OF THE STATE OF OUEENSLAND	)	I	.
,	.I

RE: OSWALD FREDERICK SIBBLES and	LORNA SIBBLES
EX PARTE: HIGHFERN PTY. LTD.

PINCUS J. 11 AUGUST 1986

REASONS FOR JUDGMENT

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This is an application to extend the time for compliance I . .

with a bankruptcy notice, under s.41(6A) of the Act.

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In litlgation In the Supreme Court of Queensland,

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Willlams J. gave ~udgment against the applicants, on 8 May 1986,

In a sum of $69,680.29, in favour of the respondent. His Honour

also gave judgment for the applicants against the respondent in a

much smaller sum, together with a further judgment for the

applicants for damages to be assessed by a Master. No argument

was addressed to me on the question whether the last-mentioned

judgment prevents the whole from being final.

On 19 June, a bankruptcy notice was issued on the basis

of the debt of $69,680.29. On 30 June, the applicants served a

notice of appeal against the judgment of Williams J. (which had

been entered on 10 June) and that was entered for argument on 1

July. On 25 July, the solicitors for the applicant wrote to the

Court Reporting Bureau at the Supreme Court asking for preparation

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of an appeal record. On 1 August, the bankruptcy notire was

issued, and this application was filed on 7 August.

It seems unnecessary to discuss the reasons of Williams

J. other than to say that I am satisfied that the appeal has been

instituted bona fide: see s.41(6C)(b). It appears that, in

general, a court sltting in bankruptcy should not, in this sort of

situation, "explore the merits of the ... appeal except on the

widest footing" - Verma v. Deputv Commissioner of Taxation

(unreported, 22 February 1985, Full Court).

There is no signiflcant evidence before me on any other

issue; in particular, there 1 s no evidence as to whether the

appllcants have a business, or whether they have assets sufficient

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to pay the judgment debt, or whether there are any other debts.

From what counsel for the appllcants, Mr. Mulllns, told me, it

seems likely that the appeal will not come on in the Supreme Court

until September or October. The last day for compllance with the

bankruptcy notice is 15 August.

I was referred to Lipov v. Alexander Fraser and Son Ltd.

(1978) 36 F.L.R. 126 at 130 and to Re Sterlinq; Ex Parte Esanda

m. (1980) 44 F.L.R. 125. I note that unless the time for

compliance is extended, non-compliance will be an act of bankruptcy, even if subsequently the appeal succeeds: Re Vella;

Ex Parte Sevmour (1983) 48 A.L.R. 420, Re Goldspink: Ex Parte

Deputv Commissioner of Taxation (Beaumont J., 11 June 1986,

unreported).

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The decision last mentioned concerned the question

whether a petition for	sequestration should be adjourned pending	I-
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the resolution of other proceedings. A similar question was

considered in Re Maloney (unreported, 11 July 1986). It may often L

be a reasonably satisfactory outcome for the judgment creditor to '_ .

be allowed to go as far as issuing a petition, on the basis that

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it will be adjourned pending the determination of the appeal from . ,

the judgment debt. That is a significantly different stage at .

which to hold the creditor up from that proposed here - where, if

the application succeeds, the creditor may suffer significant

substantive disadvantages under, for example, 5.122 of the

l Bankruptcy Act.

! The peculiarity of the present case is the paucity of

evidence referred to above; that seems to make it necessary to

determine whether, where nothing more is known than that a bona

fide appeal is being properly pursued, time should prima facle be

extended. In a sense, what is called for is the exerclse of a

discretion, but here there is nothing but the bare fact of a bona

fide appeal diligently pursued on which to base the exercise of

that discretlon.

It should be added that the judgment credltor neither

consented to, nor opposed, the application. That does not seem,

however, to assist in determining whether it is one which it is

proper to grant.

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The view to which I have come, not without doubt, is

that negation of the circumstances set	out	in s.41(6C)(b) is	i
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enough to throw an onus on the judgment creditor at least to come

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forward with some evidence providing a basis for refusal of the

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application. On that narrow footing, I think this application

should be allowed, but with provision for re-listing if, for

example, the appeal is not pursued or fails. !

It will be ordered that the time for compliance with the

bankruptcy notice mentioned above be extended until further order,

and that the applicants and respondent be at liberty to relist the

matter on reasonable notice.

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