FEDERAL CIRCUIT COURT OF AUSTRALIA
| SOMMER v C PTY LTD (No.2) | [2020] FCCA 1898 |
| Catchwords: BANKRUPTCY – Determination of separate question – whether it is open to a creditor who has procured the issue and service of a bankruptcy notice to “withdraw” the bankruptcy notice or to waive compliance with its requirements after an application has been made for an order that it be set aside – question answered in the negative. |
| Legislation: Bankruptcy Act 1966 (Cth), ss.40(1)(g), 41, 43 Bankruptcy Regulations 1996 (Cth), reg.4.02 |
| Cases cited: Abignano v Wenkart [1998] FCA 1468 Australian Securities and Investments Commission v Forge [2003] FCAFC 274 Colin Richard Hubner v ANZ Banking Group Ltd [1998] FCA 1779 Maine v Esplins Solicitors [2010] FMCA 885 Maples v Siteberg Pty Ltd [2013] FMCA 123 Murphie v Vita Domus Pty Ltd [2019] FCCA 2063 O’Connor v SP Bray Ltd [1936] NSWStRp 14; (1936) 36 SR (NSW) 248 Rasile v Ground & Foundation Supports Pty Ltd [2003] FMCA 568 Re Conomo: A Debtor (1960) 18 ABC 174 Re Hastings; Ex parte Dearle (1884) 14 QBD 184 Re Hood; Ex parte English Scottish & Australian Bank Ltd [1971] ALR 151 Sommer v C Pty Ltd [2020] FCCA 1412 The Commonwealth of Australia v Verwayen (1990) 170 CLR 394 Valamios v Demarco [2007] FMCA 298 |
| Applicant: | MS SOMMER |
| Respondent: | C PTY LTD |
| File Number: | SYG 697 of 2020 |
| Judgment of: | Judge Manousaridis |
| Hearing date: | 10 July 2020 |
| Date of Last Submission: | 10 July 2020 |
| Delivered at: | Sydney |
| Delivered on: | 14 July 2020 |
REPRESENTATION
| Applicant in person, by video |
| Counsel for the Respondent: | Mr D Edney, by video |
| Solicitors for the Respondent: | ICL Lawyers |
ORDERS
The question whether the respondent, on whose application a bankruptcy notice has been issued, and who arranged to serve it on the applicant, can unilaterally “withdraw” it, or “waive” compliance with its requirements, after the applicant applied for an order that the bankruptcy notice be set aside, is answered in the negative.
The costs of the separate determination of the question referred to in order 1 are reserved.
IT IS NOTED that publication of this judgment under the pseudonym Sommer & C Pty Ltd (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 697 of 2020
| MS SOMMER |
Applicant
And
| C PTY LTD |
Respondent
REASONS FOR JUDGMENT
Introduction
In these reasons for judgment I consider as a separate question whether the respondent, on whose application a bankruptcy notice has been issued, and who arranged to serve it on the applicant, can unilaterally “withdraw” it, or “waive” compliance with its requirements, after the applicant applied for an order that the bankruptcy notice be set aside.
How question arises
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- AGLC
- Sommer v C Pty Ltd (No.2) [2020] FCCA 1898
- Case
- [2020] FCCA 1898
- Decision Date
CaseChat Overview and Summary
The central legal issue before the court was whether a creditor, having issued and arranged for the service of a bankruptcy notice, could subsequently elect to "withdraw" that notice or "waive" the requirement for compliance with its terms once an application to set it aside had been filed by the debtor.
Judge Manousaridis determined that it was not open to a creditor to unilaterally withdraw a bankruptcy notice or waive compliance with its requirements after the debtor had applied to have the notice set aside. The court reasoned that once such an application is made, the bankruptcy notice and the creditor's rights under it become the subject of judicial scrutiny, and the creditor cannot unilaterally alter the situation to circumvent the legal process.
Accordingly, the court answered the separate question in the negative. The costs associated with this separate determination were reserved.
Orders
Orders of the court
1.
The question whether the respondent, on whose application a bankruptcy notice has been issued, and who arranged to serve it on the applicant, can unilaterally “withdraw” it, or “waive” compliance with its requirements, after the applicant applied for an order that the bankruptcy notice be set aside, is answered in the negative.
2.
The costs of the separate determination of the question referred to in order 1 are reserved.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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