Streimer v Tamas

[1981] FCA 140

Re: BETTINA STREIMER
And: JANOS ISTVAN TAMAS (1981) 54 FLR 253
No. G42 of 1981
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Deane(1), Sheppard(2) and Ellicott(1) JJ.

CATCHWORDS

Bankruptcy - Extension of time for compliance with Bankruptcy Notice - where time originally fixed and previous granted extension of time expired - Bankruptcy Act, 1966, s.41(6A) considered - express conditions precedent to jurisdiction to extend time.

Bankruptcy Act, 1966, s.41(6A), (6C)

Bankruptcy - Bankruptcy notice - Extension of time for compliance with bankruptcy notice - Time for making application - Expiry of time originally fixed and extensions of time subsequently granted - Inherent power of court - Slip rule - Bankruptcy Act 1966 (Cth), s. 41 (6A), (6C).

HEADNOTE

In October 1980 the appellant obtained judgment in the District Court in New South Wales in the sum of $12,905 against the respondent. On 13th November, 1980, the respondent filed a notice of appeal. Unaware of the institution of any appeal, the appellant sought the issue of a fourteen-day bankruptcy notice on 26th November, 1980, which was served on the respondent on 2nd December, 1980. On 16th December, 1980, the respondent filed an application for the extension of time for compliance with the bankruptcy notice and for an order for setting it aside. An extension of time for compliance with the bankruptcy notice was granted ex parte and was later further extended, whereupon the appellant filed an application for orders setting aside the orders extending time for compliance with the bankruptcy notice. So that both applications could be heard together the time for compliance with the bankruptcy notice was extended to 6th April, 1981, and both applications were adjourned to that date.

On 6th April, 1981, the court was unable to deal with the applications and adjourned them to the following afternoon. No orders extending time for compliance with the bankruptcy notice were then sought or made. On the following day counsel for the appellant submitted that it would be futile to purport to grant any further extension of time as time had expired and an act of bankruptcy had been committed. The judge in the course of the hearing which extended over three days purported to extend the time for compliance with the bankruptcy notice and on 9th April, 1981, made orders extending the time for compliance until further order. Against that order the appellant appealed.

Held: Per Deane and Ellicott JJ., Sheppard J. dissenting. Section 41 (6A) of the Bankruptcy Act 1966 confers jurisdiction on the court to make orders extending the time for compliance with a bankruptcy notice notwithstanding the fact that at the time of making the order the time for compliance with the bankruptcy notice has already expired, provided that one of the two limbs of sub-s. (6A) has been fulfilled.

Per Sheppard J. (1) Notwithstanding the absence in the Bankruptcy Rules of any specific "slip rule", the court had inherent power to correct errors.

Hatton v. Harris, (1982) AC 547; Gikas v. Papanayiotou, (1977) 2 NSWLR 944, referred to with approval.
(2) The court, by adjourning the applications to the following day due to pressure of its business, was clearly intending to grant to the parties the hearing which they expected to have on the original day. If the matter of the extension of time had been mentioned, clearly the extension would have been granted. In such circumstances, though the slip or error is attributable to a failure on the part of counsel or solicitor or the party himself to draw the court's attention to the particular matter, the error may be corrected pursuant to the inherent power of the court.

Per Deane and Ellicott JJ. Clearly any prudent practitioner will continue to observe the present practice of endeavouring to ensure that the original or extended time for compliance with a bankruptcy notice is not allowed to expire without an extension or further extension being obtained.

HEARING

Sydney, 1981, June 30; August 21. #DATE 21:8:1981

APPEAL.

Appeal from the decision of a single judge (McGregor J.) extending the time for compliance with a bankruptcy notice until further order pursuant to s. 41 (6A) of the Bankruptcy Act 1966.

The facts are set out in the judgment of Deane and Ellicott JJ.

A. C. Bridge, for the appellant.

G. C. Lindsay, for the respondent.

Cur. adv. vult.

Solicitors for the appellant: Smithers, Warren & Tobias.

Solicitor for the respondent: Adrian Hall.

D. LEVIN

ORDER

THAT the appeal be dismissed with costs.

JUDGE1

On 26 November, 1981, a bankruptcy notice directed to the respondent issued at the request of the appellant. The notice was a fourteen day notice and was served upon the respondent on 2 December, 1980. It was based on a judgment in the amount of $12,905.70 which the appellant had, on 17 October, 1980, obtained against the respondent in the New South Wales District Court. On 13 November, 1980, a Notice of Appeal against that District Court judgment had been filed on behalf of the respondent. A copy of that Notice of Appeal had not been served upon the appellant who was, at the time she caused the issue of the bankruptcy notice, unaware that the appeal had been instituted.

On 16 December, 1980, an application for an extension of the time for compliance with the requirements of the bankruptcy notice and for an order setting the bankruptcy notice aside was filed on behalf of the respondent. On that day, McGregor J. granted, ex parte, an extension of time for compliance with the bankruptcy notice up to and including 24 February, 1981. On 24 February, 1981, Lockhart J. extended the time for compliance up to and including 13 April, 1981 and adjourned the hearing of the application to set the bankruptcy notice aside until that day.

On 4 March, 1981, the appellant filed an application for orders setting aside the orders extending the time for compliance with the bankruptcy notice. This application came before Lockhart J. on 16 March, 1981. After some discussion it was adjourned to 23 March, 1981. On that day, after general discussion, it was adjourned to 6 April, 1981. In order that both appellant's and respondent's applications could be dealt with together, Lockhart J. ordered that the respondent's application to set the bankruptcy notice aside be brought on on 6 April, 1981 and varied the extant order extending time for compliance with the bankruptcy notice so that the time was extended up until and including 6 April, 1981 instead of up until and including 13 April, 1981.

On 6 April, 1981, the applications were listed before McGregor J. The list on that day was, as is commonly the case, a lengthy one. At 3.57 p.m., his Honour announced that the applications would not be dealt with on that day. After some discussion as to a further affidavit being filed on behalf of the respondent, his Honour indicated that the applications would be heard not before 2 p.m. on the following day, that is 7 April, 1981. No doubt as the result of an oversight on the part of counsel who then appeared for the respondent, his Honour was not asked to make an order further extending the time for compliance with the bankruptcy notice and he did not do so. As a result, the prima facie position was that the extended time for compliance with the bankruptcy notice expired at midnight on 6 April, 1981.

When the matter was called on for hearing before McGregor J. on 7 April, 1981, counsel for the appellant drew his Honour's attention to the fact that the extended time for compliance with the bankruptcy notice had expired and submitted that, that being the case, an act of bankruptcy had already been committed by the respondent and that it would be futile to purport to grant any further extension of time. The hearing of argument extended over 7 April, 8 April, 1981 and 9 April, 1981 when his Honour delivered an ex tempore judgment. When adjourning the matter on 7 April, 1981, his Honour made an order extending the time for compliance with the bankruptcy notice up to and including 4 p.m. on 8 April, 1981 or further order. When adjourning the matter on 8 April, 1981 his Honour made an order extending the time for compliance with the bankruptcy notice up to and including judgment delivered or further order. On 9 April, 1981, in accordance with his reasons for judgment, his Honour made an order extending the time for compliance with the bankruptcy notice until further order. The present appeal by the appellant is from that last-mentioned order.

Sub-section (6A) of s.41 of the Bankruptcy Act, 1966 ("the Act") provides:
"Where, before the expiration of the time fixed by the Court or the Registrar for compliance with the requirements of a bankruptcy notice - -

(a) proceedings to set aside the judgment or order in respect of which the bankruptcy notice was issued have been instituted by the debtor; or

(b) an application to set aside the bankruptcy notice has been filed with the Registrar, the Court may, subject to sub-section (6C), extend the time for compliance with the bankruptcy notice."
Sub-section (6C) of s.41 provides:
"Where - -

(a) a debtor applies to the Court or the Registrar for an extension of the time for complying with a bankruptcy notice on the ground that proceedings to set aside the judgment or order in respect of which the bankruptcy notice was issued have been instituted by the debtor; and

(b) the Court or the Registrar, as the case may be, is of the opinion that the proceedings to set aside the judgment or order - -

(i) have not been instituted bona fide; or

(ii) are not being prosecuted with due diligence,

the Court or the Registrar, as the case may be, shall not extend the time for compliance with the bankruptcy notice.
These two sub-sections were inserted in the Act by the Bankruptcy Amendment Act, 1980.

It is common ground between the parties that, in the present case, both of the express conditions contained, as alternatives, in sub-section (6A) had been satisfied: proceedings to set aside the judgment in respect of which the bankruptcy notice was issued had been instituted by the respondent and an application to set aside the bankruptcy notice had been filed before the expiration of the time fixed by the Registrar for compliance with the requirements of the bankruptcy notice. The question which arises is whether the provisions of sub-section (6A) conferred upon McGregor J. jurisdiction to make the orders extending the time for compliance with the bankruptcy notice which he made on 7, 8 and 9 April, 1981, notwithstanding the fact that, at the time of the order which was made on 7 April, 1981, the extended time for compliance with the bankruptcy notice had already expired.

It was argued on behalf of the appellant that a long line of authority makes it apparent that s.41(6A) should not be construed as conferring jurisdiction to make an order extending time for compliance with the requirements of a bankruptcy notice in circumstances where, at the time of the proposed order, the time originally fixed and any previously granted extension or extensions thereof have expired. The reason for this, it was said, is that the Act confers no authority upon the Court to annul an act of bankruptcy which has been committed. Upon the expiry of the time originally fixed and any extension or extensions thereof without compliance with the terms of the bankruptcy notice, an act of bankruptcy is complete. Any subsequent extension of time would, so the argument proceeds, be futile since it could not annul the act of bankruptcy which had already been committed and which would remain. In particular, reliance was placed upon King v. Henderson ((1898) A.C. 720 at p. 728); Re Grace ((1931) 3 A.B.C. 131); Re McDonald ((1934) 8 A.B.C. 184 at p. 193); Re Edmunds ((1936) 9 A.B.C. 1); Re Hanby ((1967) 10 F.L.R. 378 at p. 381); Re Hayes ((1970) 18 F.L.R. 216).

The above argument plainly possesses considerable force. We have, however, come to the conclusion that it should not be accepted.

Section 41(6A) introduced into Commonwealth bankruptcy legislation, for the first time, express provision on the subject of extending the time for compliance with the requirements of a bankruptcy notice. The Parliament plainly turned its attention to the question of what steps needed to be taken before the expiry of the time which the bankruptcy notice fixed for compliance with its terms. It specified two alternative steps, namely, the institution of proceedings to set aside the relevant judgment or order or the filing of an application to set aside the bankruptcy notice. Subject to either of those steps being taken within the time limited for compliance, the power to extend time is conferred in general words. It would, in our view, be contrary to the plain import of the words used by the Parliament to construe s.41(6A) as requiring not only that one or other of the alternative express conditions precedent to jurisdiction be fulfilled within the time originally fixed for compliance but as also requiring that both the application for an order and any initial order be made within that time. Indeed, such a constricted construction would render otiose a large part of the sub-section, namely, the words "before the expiration of the time fixed by the Court or the Registrar for compliance with the requirements of a bankruptcy notice".

We do not accept the proposition that, in the absence of an independent power to annul an act of bankruptcy, an order extending the time for compliance with the requirements of a bankruptcy notice would be futile if it were not made within the time initially fixed for compliance or some persisting extension thereof. The power conferred by s.41(6A) is a power to "extend" the previous period of time. It is not a power to establish a new, distinct and independent period of time for compliance. The effect of an order extending the time for compliance, which is made after the expiry of the time originally fixed and any previous extension thereof, will be to enlarge the overall time allowed for compliance with the result that what would otherwise have constituted an act of bankruptcy no longer does (cf. Esso Research and Engineering Co. v. Commissioner of Patents (1960) 102 C.L.R. 347 at p. 351). Ignoring any transitional problems where special considerations may be applicable, this does not mean that s.41(6A) operates so as retrospectively to divest rights to rely upon an act of bankruptcy which would otherwise exist. What s.41(6A) does is to modify, by the introduction of a contingency, the actual and potential rights and liabilities resulting from failure to comply with the requirements of a bankruptcy notice within the time allowed by the notice in a case where, within that time, one of the two conditions specified in the sub-section has been fulfilled.

It is true that to give, as we would, to the words which the Parliament has used their plain and full meaning may be productive of a degree of uncertainty and inconvenience in practice. If proceedings to set aside the relevant judgment or order have been instituted or an application to set aside the bankruptcy notice has been filed within the time limited for compliance with the requirements of the bankruptcy notice, there may remain doubt as to whether a subsequently granted extension of time will preclude a previous period of non-compliance, which has expired without extension, from constituting an act of bankruptcy. The creditor would, however, ordinarily be aware that proceedings to set the judgment aside had been instituted or that an application to set aside the bankruptcy notice had been filed. He would therefore be on notice that the time for compliance might be extended. In any event, any detriment suffered as a result of such uncertainty or inconvenience would be relevant on an application to extend time for compliance and may be a factor militating against the making of an order extending time. Clearly, any prudent practitioner will continue to observe the present practice of endeavouring to ensure that the original or extended time for compliance is not allowed to expire without an extension or further extension being obtained. One would hope that the circumstances where time was allowed to expire before an application to extend, or further to extend, time was made or dealt with, would be restricted to cases resulting from ignorance on the part of a debtor acting in person, inadvertance on the part of a debtor's legal representative or, conceivably, temporary unavailability of a Judge or Registrar of a court entrusted with the exercise of bankruptcy jurisdiction. Be this as it may, we are unable to accept possible uncertainty or inconvenience as constituting any proper ground for cutting down the circumstances in which, under the plain words of the Statute, a person is entitled to seek from the Court an order extending the time for compliance with the requirement of a bankruptcy notice which has been served upon him.

In the result, we are of the view that McGregor J. possessed jurisdiction to make the orders extending the time for compliance with the bankruptcy notice which he made. It is, in the circumstances, unnecessary to consider a number of alternative submissions which were advanced on behalf of the respondent. It is also unnecessary to consider whether the respondent should be granted leave, at this stage, to appeal against his Honour's order of 6 April, 1981 adjourning until the following day, the application to set aside the bankruptcy notice without extending the time for compliance with the requirements thereof.

The appeal should be dismissed with costs.

JUDGE2

In this matter I have had the advantage of reading the judgment to be delivered by Deane and Ellicott JJ. I am thus saved the necessity of setting out the facts and the terms of the legislation which is in question.

The appellant appeals against that part of the judgment "which extends the time for compliance with a bankruptcy notice issued by the Appellant". In the appellant's submission there was either no power further to extend time for compliance or, if there was, it should not have been exercised because any exercise of it was purposeless or futile.

It was the respondent's contention that the case was within sub-section (6A) because proceedings to set aside the judgment had been instituted and an application to set aside the bankruptcy notice filed before the expiration of the time fixed by the Registrar for compliance with the requirements of the notice. That is clearly so and was not a matter in contest before us, it being conceded by counsel for the appellant that the appeal to the Court of Appeal was a proceeding to set aside the judgment within the meaning of the sub-section. Both the appeal and the application to set aside the bankruptcy notice were instituted or filed on or before 16 December, 1980, which was the original date fixed for compliance with the requirements of the notice. It was the respondent's submission that in those circumstances the sub-section authorised the extension of time for compliance notwithstanding that the application further to extend the time was not made until 7 April, 1981, by which date the time limited by Lockhart J., in the variation of the original order which he had made extending the time, had expired.

Support for the appellant's submissions is to be found in a number of authorities. However, none is directly in point because the legislation in force when each was decided was not in terms the same as it now is. The first of the authorities is a decision of the Privy Council under the then existing New South Wales bankruptcy legislation. It is King v. Henderson (1898) A.C. 720. There was no provision enabling time for compliance with a bankruptcy notice to be extended. Lord Watson delivered the opinion of the Board. He said (pp.728-729):

"These Acts (the Bankruptcy Acts of the then colony of New South Wales) define with great minuteness the various ways in which an act of bankruptcy may be constituted, one of them being by a bankruptcy notice under s.4, sub-s.2, of the principal Act. When an application is made for a sequestration order which complies with the requirements of ss.6, 7, and 8 of the same Act, ample discretion is vested in the judge either to grant or refuse the petition; and, if a sequestration order be made, it may subsequently (s.5, (ii.)) be discharged or annulled. But, whilst the judge may in his discretion competently refuse to follow up an act of bankruptcy by issuing a sequestration order, the statutes give him no jurisdiction to annul an act of bankruptcy, or to declare that it never was committed."

Cases which have subsequently referred to King. v. Henderson have been decided in the context of the Bankruptcy Act 1924 and the Bankruptcy Act 1966 prior to the amendment of s.33 effected by Act No.12 of 1980. Sub-section (1)(c) was then as follows:
"The Court may -

. . . . . . . . .

(c) extend before its expiration or, if this Act does not expressly provide to the contrary, after its expiration, any time limited by this Act for doing an act or thing or abridge any such time."
Section 33(2)(c) providing for certain powers of the Registrar was in similar terms.

In that form the section was identical with s.27(2)(c) of the 1924 Act. Since the amendment effected in 1980, s.33(1)(c) of the 1966 Act - the current Act - has been as follows:
"The Court may -

. . . . . . . . .

(c) extend before its expiration or, if this Act does not expressly provide to the contrary, after its expiration, any time limited by this Act, or any time fixed by the Court or the Registrar under the Act (other than the time fixed for compliance with the requirements of a bankruptcy notice), for doing an act or thing or abridge any such time."
The effect of the amendment made in 1980 was to remove from the powers conferred by s.33 of the Act upon the Court and the Registrar power to extend time for compliance with the requirements of bankruptcy notices. Henceforth those powers were conferred by the new sub-sections (6A) and (6B) of s.41 as modified by sub-section (6C) thereof. So far as I am aware, no case has arisen under the amended legislation except James v. Abrahams (1981) 34 A.L.R. 657, which is not in point.

Another matter which should be mentioned before coming to a consideration of the later authorities is that there was not, until the amendments made in 1980, any reference in the 1924 or 1966 Acts to any power in the Court to set aside a bankruptcy notice or to extend time for compliance therewith. That was so except in relation to the automatic extension of time that is provided for in s.41(7) of the Act in a case where a debtor has filed an affidavit to the effect that he has a counter-claim, set-off or cross demand such as is referred to in paragraph 40(1)(g) of the Act. That provision has no relevance to the present problem.

Courts exercising bankruptcy jurisdiction both in England and Australia early recognised the necessity for a procedure to enable debtors to test the validity of bankruptcy notices, for example in cases where it was alleged that there was an irregularity, bad service or payment of the debt. Notwithstanding the silence of the legislation on the point, it was decided that an application could be made to set aside the bankruptcy notice and that the Court would in an appropriate case extend the time for compliance therewith until the application to set aside had been disposed of. The Court considered that it had power to extend time by reason of the provision of s.33 of the Act or its predecessor. But the authorities required that the application for extension of time be made and dealt with prior to the time limited for compliance or any previously granted extension thereof.

The first of the authorities to which I refer is Re Grace (1931) 3 A.B.C. 131. There a debtor applied, pursuant to s.27(2)(c) of the 1924 Act, for an extension of time for compliance with the requirements of a bankruptcy notice. His application was made after the time for compliance had expired. Lukin J. referred to King v. Henderson. He said (p.132):
"I think that the application is entirely misconceived, for, if there be power in the Court to extend the time under s.27, and such an order were made, the act of bankruptcy would still have been committed, would subsist, and would be operative in a bankruptcy petition alleging it. No provision is made in the Act enabling the Court to annul or to set aside such act of bankruptcy. The only power to prevent the non-compliance maturing, under the circumstances herein narrated, into an act of bankruptcy would be to have the time for compliance extended before its termination, that is, before the act of bankruptcy came into existence. Once it matures in accordance with the provisions of the Statute the Statute operates, and the Court is powerless."

It would seem that his Honour did not decide the question of whether he had power to extend the time. His view was that it was pointless to exercise any power which he had because the act of bankruptcy was committed prior to any application for an extension being made. The Court was powerless to bring about any alteration of that situation. To the same effect are the decisions of Lukin J. in Re McDonald (1934) 8 A.B.C. 184 and Re Edmunds (1936) 9 A.B.C. 1 at p.5.

These cases were referred to by Gibbs J. (as he was) in Re Hanby (1967) 10 F.L.R. 378. His Honour referred to them (p.381) with apparent approval when he held that where a bankruptcy notice had not been complied with there was an available act of bankruptcy, notwithstanding that the debtor subsequently succeeded in having the judgment set aside. His Honour held that failure to comply with the notice, although it was based upon a judgment which was subsequently set aside, constituted an available act of bankruptcy to the judgment creditor who later recovered a second judgment in the proceedings.

To the like effect is Re Hayes (1970) 18 F.L.R. 216 where Street J. (as he then was) said (p.218) that Re Hanby was in his view clear authority for the proposition that non-compliance with a bankruptcy notice will constitute an available act of bankruptcy notwithstanding that the judgment may subsequently be set aside.

None of the Australian authorities to which I have referred is a decision of an appellate court. King v. Henderson was a decision of the Privy Council but was decided in the context of bankruptcy legislation which did not authorise the court to extend time. It would therefore be possible for this Court to overrule the Australian authorities if it thought that they were wrongly decided. In my opinion we ought not to take that course. Not only have the authorities stood for a period of 50 years; I think they were rightly decided. I am strengthened in that view by a decision of the Court of Appeal in England which came to my attention after we had reserved our decision. It is In Re a Debtor (No. 6864 of 1980), The Times newspaper, 21 May, 1981. There it was held that there was no power under s.109(4) of the Bankruptcy Act 1914 (U.K.) to extend the time for allowing a debtor to file an affidavit relating to a counter-claim, set-off or cross demand against his creditor after 10 days, when by virtue of s.1(1)(g) of the Act the debtor had committed an act of bankruptcy, nor was there power to extend the 10 day period fixed by s.1(1)(g). Section 109(4) of the English Act is in similar terms to s.33(1)(c) of the Australian Act as it was prior to the amendment effected in 1980. It empowers the Court to extend time for doing any act either before or after the expiration thereof. A difference between the two provisions, which I consider to be immaterial, is that the English provision does not contain the words, "if this Act does not expressly provide to the contrary" before the words "after the expiration thereof".

Eveleigh L.J. is reported as saying that the question was whether the Court had power to extend time in such a way -
"as to cancel or revoke that act (the act of bankruptcy) or deem it never to have occurred. If the Court extended time it would be refusing to recognise the consequence which Parliament had said should ensue. Once there was a failure to satisfy the Court of a counter-claim it was properly to be seen as a condition which had been fulfilled and had given rise to the consequence that an act of bankruptcy had been committed".
The decision In re a Debtor is in line with the Australian authorities.

The question then arises as to whether the amending legislation which came into force in 1980 has made any difference to the situation which prevailed up to that time. Counsel for the respondent contends that the position has changed. In his submission a simple and literal construction of s.41(6A) of the Act leads to the conclusion that there was power to extend time notwithstanding that the time for compliance with the bankruptcy notice had expired. The Court's power to extend time was conditioned only upon one of the steps provided for in paragraphs (a) and (b) of the sub-section having been taken before the expiration of the time limited for compliance. In the present case both steps had been taken. The appeal to the Court of Appeal - a proceeding to set aside the judgment - had been instituted and the application to set aside the bankruptcy notice had been filed prior to the expiration of the time. The Court's power to extend time had arisen and would continue in existence irrespective of the fact that the time had expired and an act of bankruptcy been committed. The fact that the Court was asked to exercise the power after the expiration of the time limited for compliance was relevant only to the way in which its discretion should be exercised.

Counsel for the appellant relied principally upon three matters. These were -

(1) An act of bankruptcy is an act in the law of fundamental importance. It may be the starting point for a change in the status of a person. Furthermore, if a sequestration order is made, the bankruptcy will relate back to the date of the earliest act of bankruptcy committed within the period of six months prior to the presentation of the petition; s.115 of the Act. The Court would require the clearest indication from the legislature before concluding that it had been given power to affect an act of bankruptcy already committed. The effect of an order extending time after the event would really be to deem the act of bankruptcy not to have been committed.

(2) The provisions of s.33 in its amended form specifically confer power, if the Act does not expressly provide to the contrary, to extend time after the expiration of a time limited for the doing of any act. Thus the legislature has expressly provided for situations where the Court is to have power to extend time, notwithstanding that time has expired. Power to extend time in relation to bankruptcy notices no longer derives from s.33. It must follow that the power conferred by s.41(6A) is not to be exercised after time has expired; the Act would have said that it might be, as it did in s.33, if that had been the legislature's intention.

(3) The amending sub-sections were inserted alongside sub-section (7) of s.41 which, in the circumstances there provided for, gives a debtor an automatic extension of time. If the legislature had thought it appropriate that time be extended once an application to set aside a judgment or to set aside a bankruptcy notice had been made, it could have followed the course adopted in s.41(7) and provided for an automatic extension of time.

Each of the matters upon which the appellant relies provides a powerful reason why the view should be taken that the amendments to the Act did not bring about any change in the situation which had prevailed up to their coming into force. But there are countervailing considerations. It is to be observed that s.41(6A) does not speak of the making of an application. All it does is to confer power on the Court to extend time. The question here is not whether an application for extension of time must be made before the expiration of the time originally limited for compliance or any extension thereof; rather it is whether the grant of the extension of time must be made before the earlier time expires. The section expressly requires either the institution of proceedings to set aside the judgment or order in respect of which the bankruptcy notice was issued or the filing of an application to set aside the bankruptcy notice before the expiration of the time fixed for compliance. Provided one of these steps is taken within time, the Court has power to act. But the sub-section is silent on the question of when the Court may exercise its power to extend time. If it had been intended that that power should only be exercised prior to the expiration of the period limited for compliance or any extension thereof, it would have been easy enough for the draftsman to have said so.

Then one must have regard to the provisions of sub-section (6C). The Court is not to extend time if it is of opinion that the proceedings to set aside the judgment or order have not been instituted bona fide or are not being prosecuted with due diligence. It is unlikely that the Court would become aware, within the time originally limited for compliance, of evidence which would suggest to it that there was an absence of bona fides on the part of the debtor. And a situation in which it can be seen that a debtor is not prosecuting proceedings to set aside a judgment with due diligence may arise long after the expiration of that time. Sub-section (6C) is plainly intended to have a continuing operation and effect. On the other hand it could be read as if it proceeded upon the assumption that a debtor would have obtained, pursuant to sub-section (6A), all necessary extensions of time.

In my opinion the matters to which I have referred provide substantial reasons why it should be concluded that there is power to extend time notwithstanding that the period for compliance (whether previously extended or not) has expired.

I confess that I have not found the task of coming to a judgment on the matter an easy one. The considerations on each side are powerful and compelling. One consideration persuades me, however, that the appellant's submissions should be preferred to those of the respondent. It is the fact that there is not to be found in the Act any express power, in circumstances such as here exist, to annul or set aside the act of bankruptcy which has been committed. That was the consideration relied upon by Lukin J. in the passage earlier cited from his judgment in Re Grace (supra) and was also the matter relied upon by Eveleigh L.J. in In re a Debtor. In that respect the Act in its present form is no different from what it was before the amendments came into force. Whether one says that upon the proper construction of sub-section (6A) there is no power to act after time has expired or whether one says, although there is power, it is pointless to exercise it because one cannot undo the act of bankruptcy which has, by force of s.40(1)(g), been committed is a matter which I find it unnecessary to determine; although, by reason of the existence of a special sub-section dealing with extensions of time in relation to bankruptcy notices, I tend to favour the former view.

In reaching my conclusion I have taken into account the operation which sub-section (6C) must be accorded. In my opinion it is predicated upon the debtor having obtained an extension or extensions of time so that at the time the Court is asked to form the required opinion it is doing so in the context of a bankruptcy notice time for compliance with which has been extended beyond the day upon which the Court has to consider the matter.

Before leaving this aspect of the case I should say that the conclusion at which I have arrived is but the result of the application of the general principle of statutory construction referred to by Fullagar J. in Esso Research and Engineering Co. v. Commissioner of Patents (1960) 102 C.L.R. 347. His Honour said (p.351):
"I think I would concede that a provision for 'extending' a prescribed period during which a thing may be done should prima facie be construed as operating only while the originally prescribed period is still current. It may even be said that, when the originally prescribed period has expired, there is nothing to represent the most natural meaning of the word 'extend', that word is by no means incapable of a wider reference. It is by no means a misuse of language to speak of what is really the prescription of a new period as an 'extension' of the period originally prescribed."

In the end, of course, the matter is one of the ascertainment of the intention of the legislature from the words which it has used. It is my view that, on balance, the relevant considerations in the present case suggest that it is one where the ordinary rule of construction referred to by Fullagar J. in the earlier part of the passage cited should apply. The respondent's alternative submission was that in the circumstances which prevailed on the afternoon of 6 April, 1981, his Honour had, by adjourning the matter, by implication, extended the time for compliance to 7 April, 1981. Otherwise his adjournment of the application was pointless. This submission was put in a number of ways reliance being placed on the slip rule and upon s.306 of the Act as well as upon some other matters.

In my opinion the respondent is entitled to succeed on its submission because the case falls within the Court's inherent power to vary its own orders so as to carry out its own meaning or to make its meaning plain; The Supreme Court Practice 1979 (U.K.) Vol.1 pp.356-357. In the Rules of this Court there is to be found what is commonly known as the slip rule; Order 35 Rule 7. For reasons which are not apparent to me that rule, along with other rules of the Court which have general application, does not apply to proceedings in bankruptcy; Order 1 Rule 11. Proceedings in bankruptcy are governed almost entirely by the Bankruptcy Rules made pursuant to the Bankruptcy Act 1966. These do not contain any counterpart of Order 35 Rule 7. They do contain Rule 195 which provides that non-compliance with the Rules does not render a proceeding void unless the Court so directs. But I do not regard Rule 195 as being of relevance here any more than I do s.306 of the Act which provides that formal defects and irregularities are not of themselves to invalidate proceedings.

However, the authorities mentioned at the pages of The Supreme Court Practice which I have cited show that the Court, in addition to having express power to correct errors - Order 20 Rule 11 of the English Rules - has also an inherent power to do so. This Court, constituted as it is as a superior court of record, also has that power. The cases cited in the Practice provide a myriad of examples of the Court's exercise of the power. In Hatton v. Harris (1892) A.C. 547 the Court was concerned with the correction of a decree which had erroneously charged moneys upon a person's lands. Lord Watson said (p.560):
"When an error of that kind has been committed, it is always within the competency of the Court, if nothing has intervened which would render it inexpedient or inequitable to do so, to correct the record in order to bring it into harmony with the order which the judge obviously meant to pronounce. The correction ought to be made upon motion to that effect, and is not matter either for appeal or for rehearing."
I refer also to the judgment of Needham J. in Gikas v. Papanayiotou (1977) 2 N.S.W.L.R. 944, where there is an extensive review of the authorities. Both in Hatton and in Gikas decrees had been taken out. That is not the case here but that circumstance does not make the authorities inapposite; rather it strengthens their application to a case such as the present.

This case was one where the Court adjourned it to the following day because its commitments prevented it from reaching it in the ordinary course of its business. I think it plain that the Court was acting, or at least was intending to act, so as to give to the parties, when the matter could be reached, the hearing which they expected to have on the day on which the matter was listed. It is not in my opinion to the point that the slip or oversight which occurred when the time for compliance was not further extended was not that of the judge. In my opinion the Court has power to act where, as in the present case, the slip or oversight is solely attributable to a failure on the part of counsel or solicitor or of the party himself, if he be not represented, to draw the Court's attention to the particular matter. It would have been pointless to stand this matter over unless time were extended. If the matter had been mentioned, there can be no doubt but that his Honour would have extended the time. The appellant would plainly not have raised any opposition to his doing so. Time was not extended because the matter was not mentioned and not adverted to by the judge.

In his judgment he did not refer expressly to the inherent power he had to correct such an accidental mistake, but he did refer to the matters which I have mentioned and he was justified, in my opinion, in proceeding as he did on 7 April, 1981, by reason of the inherent power which he had. He should be taken to have so proceeded.

For those reasons I have reached the conclusion that his Honour's orders were made within power. His exercise of discretion should not be disturbed with the result that the appeal should be dismissed.

Before concluding I should say that I have looked at this case in the light of its own special facts. There may be other cases where it would be inappropriate to act under the slip rule, particularly cases where the hearing of an application for an injunction is adjourned and an existing injunction is not continued from day to day, although I express no concluded view on such a case. Certainly it would be unwise for practitioners not to follow the existing practice of seeking extensions of time when cases are adjourned either because they are not reached or are part heard.

For the reasons given I would dismiss the appeal with costs.