Younan, Re T. Ex Parte Hidabe Pty Ltd

[1986] FCA 625

)

1

) No. B2350 of 1986

)

m: TONY YOUNAN

M PARTE: HIDABE PTY LIMITED

CORAM: Evatt J

: 23 December 1986

PLACE : Sydney

REASONS FOR JUDGMENT

Before the Court 1 s an applicatlon dated 26 August 1986 by the judgment debtor seeking order of the Court that the Court order made earller that day in the proceedings be vacated and that the

Bankruptcy Notice B2350/86 Issued on 28 May 1986 be set aside.

The brief history leading up to the filing of the said

applicatlon by the judgment debtor 1 s as follows.

The judgment creditor, Hidabe Pty Limited, trading as Rlgby's

Home Furnishers, on 8 May 1986 made application that a Bankruptcy

Notice be issued under the Bankruptcy Act 1966 (the Act) against

Tony Younan (the ~udgment debtor), in respect of a final ]*%dppgt

obtained by the judgment creditor agalnst the . .

District Court at Taree on 25 February 1986

$11,789.12. The said notice was issued by the Court on 28 May

1986, it being a “21 day notice”. It would appear that the said

notice was served upon the debtor on 17 June 1986 so that the

last day	for compliance with the Notice would have been 8 July
1986.

On 7 July 1986 an application supported by affidavits of the

judgment debtor and a Mr Thomas Mlchael Clune, a law clerk, and

Patrick Joseph O‘Brien, solicitor, was flled with the Court.

That application sought an order that the said Bankruptcy Notice

be set aside on the grounds set out and further that the time for

compliance with the requirements of the Notice be extended until

the determlnation of the applicatlon. In accordance with

s.41(6B3 of the Bankruptcy Act, a Deputy Registrar In Bankruptcy

ordered that upon condition that the Bankruptcy Notlce was served

on the debtor on 17 June 1986 the time allowed for compllance

with the requirements of the Bankruptcy Notice was extended to 26

August 1986. Unfortunately, a copy of this order was not with

the Court’s papers when the matter was listed before a Deputy

Registrar on the morning of 26 August 1986 when the application

xas listed at 9.30am in accordance with the usual practice.

Apparently when the matter was called on before the Deputy

Registar there was po appearance by the judgment debtor but Mr

Hughes, solicitor of Hughes & CO of Sydney, acting as agent for

Baker and Borthwick, Sollcitors of Forster, solicitors for the

judgment credltor appeared. The judgment debtor’s application =as then referred to the Court as presently constituted shortly

after 1O.OOam on 26 August 1986 when the matter was again called

outslde the Court. Again there was no appearance by the judgment

debtor. At 10.20am Mr Huqhes asked that the matter be struck

out. A perusal of the file by the Court showed that the application had been filed by the applicant‘s solicitors whose address was shown as 135 Macquarie Street, Sydney. As pointed out above there was no copy of the Deputy Reglstar’s order of 7

July 1986 extending the time for compliance wlth the requirements

of the Notice in the file. Consequently at 10.20am the Court

ordered that the application of the judgment debtor	be dlsmissed
with costs.

Later during the forenoon, while the Court was attending to other

bankruptcy matters, the clerk to the Deputy Registrar’s Court

approached the Bench to ascertam what had happened to the

present application as a solicitor for the ~udgment debtor had

arrived in the Deputy Registrar’s Court. The Clerk, having been

Informed that the matter had been struck out, was handed the file

debtor’s solicitor that If he could contact Mr Huqhes the matter

could be rementioned before the Court that mornlng. The Court

completed its listing at 12.45pm and as nothing further had been

heard from any of the parties in the present matter, adjourned.

with the suggestion that the Deputy Registrar inform the judgment solicitor was seeking an order abridging time for service of an application seeklng orders varying or vacating the Courts order dismissing the appllcation, it being hoped that the matter could

4.

be returned for hearing on the following day, 27 August 1986.

The Court at that time was still not aware of the order of a

Deputy Registrar of 7 July 1986 extending the time for compliance

with the Notice. Time was abridged as asked.

The fresh application came on for mention on 27 August 1986 at

10.15am when Mr O'Brien, solicitor, appeared for the judgment

debtor. He apologised for his absence the day before and the

Court accepted his explanation fo r the cause of that absence.

When the matter was called on the applicatlon of 26 August 1986

was further amended allowlnq the applicant to seek an order

extending time for compliance with the Bankruptcy Notlce until

further order of the Court.

It was at this time that the Court as presently constituted,

became aware of the Deputy Registrar's order of 7 July 1986.

Further, it was then clear that the ~udqment debtor had filed a

motion in the Dlstrict Court of New South Wales at Taree on 4

July 1986 requesting that the default judgment obtained on 25

February 1986 against the ~udgment debtor, the judgment referred

to in the Bankruptcy Notice, be set aslde and that that motion

was set down for hearing on 15 September 1986. Accordingly on 27

August 1986 the Court adjourned the application filed on 26

August 1986 until 22 September 1986, the Court extending time for compliance wlth the Notice from that day up and until 22

September 1986. This was done dellberately so that in effect

there was a gap between midnlght on 26 August 1986 until the

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order of the Court on the afternoon of 27 August 1986 during

xhich it could be said that an act of bankruptcy had occurred.

On 22 September 1986 the matter was relisted before the Court

when the Court became aware that the judgment debtor’s motlon in

the District Court seeking an	order setting aslde the judgment
had been successful.

Mr Hughes for the judgment creditor then submitted that the

decislon in Streimer v Tamas (1981) 37 ALR 211 was

distingulshable.

In my view the present case falls wlthin the principles lald down

in that case. I reject Mr Hughes’ submission and his further

submission that the ~udgment debtor had not prosecuted his

application to set aside the District Court judgment with due

diligence (see ~.41(6C)(b)(ii)). The chronology in this matter

is such that in my view the judgment creditor cannot be heard to

say that the debtor had not prosecuted with due diligence an

applicatlon to set aside the District Court judgment. The

default ~udgment was obtained on 25 February 1986. The

Bankruptcy Notice was issued on 28 May 1986 and served on 17 June

1986. On 7 July

1986 the judgment debtor’s solicitor filed an application in this Court under the Bankruptcy Act seeking orders

setting aside the said Bankruptcy Notice and for an order

extending the time for compliance with the requirements of that

Notice. On 4 July 1986 the debtor‘s solicitor had forwarded a

Notice of Motion to the District Court at Taree wherem orders

xere souuht setting aside the judgment.

It is clear in my n e w that it cannot be said that the debtor

acted without due diliqence in all the circumstances.

Accordingly on 22 September 1986 the Court ordered that time for

compliance with the Notice be extended up and until that day and

further ordered that the Bankruptcy Notice issued herein and

dated 28 May 1986 be set aside and then indicated that	the Court
would publish its reasons at a future date.

As to costs, the Court in its discretlon is of the view that no

order as to costs should be made in all the clrcumstances.

I certify that this and the # ) d e

preceding pages are a true copy of the

Reasons for Judgment herein	of his
Honour Mr Justice Evatt

Associate

Solicitors for the Judgment Debtor: Colin W Love & C o . , Sydney acting as agent for Baker and Borthwlck of Forster

Solicitors for the Judgment Creditor: Huqhes & Co. of Sydney