Van Reesema v Official Trustee in Bankruptcy - [1983] FCA 213

Re: ERNST ABRAHAM SIEWSERTSZ VAN REESEMA
And: THE OFFICIAL TRUSTEE IN BANKRUPTCY (1983) 69 FLR 424
No. G3 of 1983
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
BANKRUPTCY DISTRICT OF THE STATE OF SOUTH AUSTRALIA
Sweeney(1), Sheppard(2) and Beaumont(3) JJ.

CATCHWORDS

Bankruptcy - appeal from an order refusing an application for discharge made pursuant to s.150 - whether bankrupt was discharged by operation of s.149(2) upon the expiration of three years from the date of his bankruptcy - whether objection by trustee to discharge of bankrupt by operation of law was entered on one of the statutory grounds - order made by trial judge amending the ground upon which the objection was granted after the expiration of three years from the date of his bankruptcy

Bankruptcy Act 1966 ss.33; 149; 150; 153; 269; 272; 306

Bankruptcy Rules: R49; 51A; Form 23

Companies Code: s227

Bankruptcy - Objection to discharge - Grounds of objection - Whether objection complied with statutory grounds - Whether compliance must be strict or only substantial - Whether non-compliance involved a formal defect or irregularity - Amendment of objection after automatic discharge at expiration of three year period - Effect of amendment - Bankruptcy Act 1966 (Cth), ss 33(1)(b), 149, 150, 153, 269, 272, 306 - Bankruptcy Rules, rr. 49, 51A; form 23.

HEADNOTE

The appellant was made bankrupt on 17 September 1979. By notice of objection dated 19 November 1981 the official receiver objected to the discharge of the appellant on the ground that he "is likely before the date of his discharge from bankruptcy to be in a position to make a significant contribution to his estate". By application dated 10 March 1982 the appellant sought an order of discharge under s. 150 of the Bankruptcy Act 1966 (Cth). In those proceedings, before a single judge of the Federal Court, the official receiver applied for and was granted leave under s. 33(1)(b) to amend the objection so that the ground stated therein agreed precisely with the second limb of s. 149(4)(a) of the Act. Section 149(4) provides that an objection to discharge shall not be entered otherwise than on one or more of the grounds stated therein, and s. 149(4)(a) contains the following ground: "(a) that the bankrupt is able, or is likely within five years from the date of the bankruptcy to be able, to make a significant contribution to his estate. . . ."

The primary judge's order allowing the amendment and refusing the appellant's application for discharge was made on 24 November 1982, after the expiration of three years from the date of the bankruptcy and therefore after the date on which the appellant would have been automatically discharged pursuant to s. 149(2) but for the objection. Against that decision the appellant appealed arguing that the original objection was invalid, as it failed to comply strictly with the terms of s. 149(4)(a), that the primary judge had no power to make the order allowing the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1983] FCA 213
Decision Date: 26 AUGUST 1983

CaseChat Overview and Summary

Van Reesema, the appellant, appealed against orders made by the Federal Court of Australia concerning his bankruptcy. The Official Trustee in Bankruptcy, the respondent, had objected to the discharge of the bankrupt under the Bankruptcy Act 1966 (Cth). The primary issue was whether the bankrupt was discharged by operation of law three years after the date of his bankruptcy. Another legal question was whether the objection entered by the trustee was based on a statutory ground.

The court considered that under section 149(2) of the Bankruptcy Act, a bankrupt is discharged by operation of law if the trustee does not object within the prescribed time. Here, the trustee objected after the statutory period had expired, which meant that the bankrupt should have been discharged. The court further analysed whether the objection was entered on a statutory ground, as stipulated in section 150(1) of the Act. The objection was based on a ground that was not listed in the statute, leading to an improper objection. Consequently, the court held that the bankrupt was discharged by operation of law and that the objection was invalid.

The court allowed the appeal, set aside the orders of 24 November 1982 and 4 January 1983, and declared that the bankrupt was discharged from bankruptcy on 17 September 1982. The appeal against the refusal of the application for amendment was upheld, and the application was refused.

Orders

Orders of the court

1. The appeal be allowed against the order of 24 November 1982 and the order of 4 January 1983.

2. The order of 24 November 1982 be set aside and in lieu thereof it be ordered that the application for amendment be refused.

3. The order of 4 January 1983 be set aside and in lieu thereof it be declared that the bankrupt was discharged from bankruptcy upon the expiration of three years from the date of his bankruptcy which was 17 September 1979. Orders that:

The appeal be allowed against the order of 24 November 1982 and the order of 4 January 1983.

The order of 24 November 1982 be set aside and in lieu thereof it be ordered that the application for amendment be refused.

The order of 4 January 1983 be set aside and in lieu thereof it be declared that the bankrupt was discharged from bankruptcy upon the expiration of three years from the date of his bankruptcy, which was 17 September 1979.

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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