Springhall, Pauline (Re Bankrupt Estate of Summers)

[2006] FMCA 1630

FEDERAL MAGISTRATES COURT OF AUSTRALIA

SPRINGHALL, PAULINE (RE BANKRUPT ESTATE OF SUMMERS) [2006] FMCA 1630

PAULINE SPRINGHALL
APPLICANT

BANKRUPTCY– Application under s.58(3)(b) Bankruptcy Act 1966 − where applicant seeking leave to continue related proceedings in the District Court of South Australia − where orders made in District Court for possession and sale of a property − where bankrupt seeking judicial review of that decision as no leave was obtained under s.58(3)(b) before the District Court proceedings were completed − whether court has power to grant leave nunc pro tunc.

Bankruptcy Act 1966, s.58(3)(b)

Veghelyi; Re: Smith v Official Trustee in Bankruptcy (1993) 45 FCR 413
Allanson v Midland Credit Limited (1977) 30 FLR 108
Ezekiel v Orakpo (1976) 3 All ER 659

Applicant: PAULINE SPRINGHALL

File Number: ADG296 of 2006

Judgment of: Raphael FM

Hearing date: 31 October 2006

Date of Last Submission: 31 October 2006

Delivered at: Sydney

Delivered on: 31 October 2006

REPRESENTATION

Counsel for the Applicant: Mr G Dart

Solicitors for the Applicant: Andersons Solicitors

Solicitors for the Trustee: Mr K Ryder

ORDERS

1. To the extent necessary leave to be granted nunc pro tunc pursuant to

   
   

   s 58(3)(b) of the Bankruptcy Act 1966 to Pauline Mary Springhall to take all necessary steps in relation to a Notice for Specific Directions filed in the District Court of South Australia in Action No. 4 of 2005 on 3 August 2006 and the Orders made by the District Court of South Australia on 16 August 2006.

2. Such leave does not extend to the taking of any other steps in the said District Court proceedings without further leave of this court.

3. The costs of this Application be reserved.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY VIA VIDEOLINK TO ADELAIDE

ADG296 of 2006

In the matter of the Bankrupt Estate of Stormy Summers

PAULINE SPRINGHALL

Applicant

REASONS FOR JUDGMENT

1. I have before me an application under s.58(3)(b) of the Bankruptcy Act 1966 (the “Act”) which is in the following form:

   “(3)  Except as provided by this Act, after a debtor has become a bankrupt, it is not competent for a creditor

   (a)     to enforce any remedy against the person or the property of the bankrupt in respect of a provable debt; or

   (b)   except with the leave of the Court and on such terms as the Court thinks fit, to commence any legal proceeding in respect of a provable debt or take any fresh step in such a proceeding.”

2. The applicant seeks leave to continue certain proceedings in the District Court of South Australia to put into effect the obtaining of possession and sale of a property in respect of which the bankrupt claims an interest.  The trustee in bankruptcy supports the action of the applicant because he believes that this is the best way in which to release funds for the benefit of creditors.

3. I am advised, by way of the affidavit of Felix Christian Hoelscher sworn on 25 October 2006, that a series of proceedings in the state courts of South Australia have taken place between the present applicant and the bankrupt, with whom she was in partnership in business and in the purchase of a property.  Orders were made in the District Court for possession and for the sale of the property on certain terms which have been agreed to by the trustee.  What has occurred is that the bankrupt herself has taken the matter to the Supreme Court for judicial review arguing, inter alia, that no leave as required under s.58(3)(b) was obtained before the proceedings in the District Court were completed.

4. It is clear from the authorities that the court has power to grant this order nunc pro tunc; Veghelyi; Re: Smith v Official Trustee in Bankruptcy (1993) 45 FCR 413 at [417]. It is also clear that where there is a dispute as to whether or not leave should be granted then an application should be made to the court for the grant of leave nunc pro tunc rather than have a sterile argument in a third court about the validity of the proceeding; Allanson v Midland Credit Limited (1977) 30 FLR 108.

5. In this case the applicant does not believe that it is necessary for leave to be granted because the proceedings are not proceedings to enforce the payment of a debt or seek any remedy against the property of a debtor.  They are proceedings in the nature of relief for possession which were considered by the High Court in England in Ezekiel v Orakpo (1976) 3 All ER 659 where that court concluded that an application of this nature did not require leave under the equivalent English subsection. She is making the application to avoid this very argument.

6. I am satisfied that the relevant issues to be determined between the parties are better and more comprehensively dealt with in the Supreme Court of South Australia where they have gone by right for judicial review and that I should put no impediment in the way of those proceedings being heard and determined there.  On that basis I grant leave and make the final orders sought by the applicant and found in the application.  Such orders have been reduced to writing and have been initialled by me and will be placed with the papers so that they may be taken out in the appropriate way. 

I certify that the preceding six (6) paragraphs are a true copy of the reasons for judgment of Raphael FM

Associate: 

Date: