TOTEV v SFAR

[2004] FMCA 910

FEDERAL MAGISTRATES COURT OF AUSTRALIA

TOTEV v SFAR [2004] FMCA 910

BANKRUPTCY – Application to set aside bankruptcy notice – where initially there was a dispute as to the date on which the notice was served – where applicant debtor conceded before the Registrar that the notice was served on the earlier date as alleged by the respondent creditor – where the act of bankruptcy took place before the application to set aside the notice was brought – where the time for compliance with the bankruptcy notice was therefore not extended – whether the applicant has a counter-claim, set-off or cross demand.

Bankruptcy Act 1966 (Cth), s.41(7)

Applicant: VASIL TOTEV

Respondents: MICHAEL SFAR & ENAYET SFAR

File No: SYG 2899 of 2004

Delivered on: 26 November 2004

Delivered at: Sydney

Hearing date: 26 November 2004

Judgment of: Raphael FM

REPRESENTATION

For the Applicant: Applicant in Person

Counsel for the Respondent: Mr P Beale

Solicitors for the Respondent: McGrath, Dicembre & Company

ORDERS

1. Application dismissed.

2. Applicant to pay the respondent's costs to be taxed, if not agreed, according to the Federal Court Act and Rules

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 2899 of 2004

VASIL TOTEV

Applicant

And

MICHAEL SFAR & ENAYET SFAR

Respondents

REASONS FOR JUDGMENT

1. I have before me today an application filed on 22 September 2004 by a debtor for the setting aside of a bankruptcy notice pursuant to s.41(7) Bankruptcy Act 1966.  In the details of claim in that application, the debtor asserts that the bankruptcy notice was served upon him on

   
   

   2 September 2004 and because the applications had been filed within 21 days of service, the time for compliance of the bankruptcy notice was deemed to have been extended under s.41(7).

2. There is on the file a number of affidavits which I read and which indicate that the bankruptcy notice itself was probably served on

   
   30 August 2004

   .  It would seem, however, that I do not have to decide that matter because when the case was first before the Registrar, a concession was made by the debtor that service took place on that date.  The effect of this is that the act of bankruptcy had already taken place before the debtor brought the present proceedings and there is therefore no utility in setting aside the bankruptcy notice.

3. The grounds upon which the applicant sought to have the bankruptcy notice set aside were contained in an affidavit also filed on

   
   

   22 September. It appears that the debt, which is the subject matter of the bankruptcy notice is a debt for costs ordered in certain proceedings between the applicant and the respondents in the District Court of New South Wales.  Those costs were assessed and the assessed costs were made the subject of a local court judgment, which is annexed to the bankruptcy notice.

4. In an affidavit of Anthony Leonardo Dicembre, a solicitor, there is annexed a transcript of certain proceedings before Rolfe J on 2 June 2003.  His Honour says at [T-5]:

   “I do not think that under the rules you are precluded from having those costs assessed, are you?  If there is any doubt about it, I grant the defendant leave to proceed to have the costs set [assessed] forthwith.  I am not going to grant a stay at this stage, Mr Earl [respondent's solicitor or counsel].”

5. It is clear from the extracted part of the transcript that Rolfe J intended that these costs be paid immediately and that proceedings to enforce any assessment could be brought.  In those circumstances, I do not believe that this is a case in which the applicant could necessarily allege that he has a counter-claim, set-off or cross demand equal to or greater than the amount of the claim,  notwithstanding his proceedings for recovery of damages.  However, it is not necessary for me to decide that issue because, as I have said, the act of bankruptcy had already been committed before the application had been made.  In those circumstances, there is really nothing that I can do to assist the debtor.

6. The application must be dismissed.  The applicant must pay the respondent's costs to be taxed, if not agreed, according to the Federal Court Act and Rules.

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

Associate: 

Date:  1 December 2004