4 10 CATCHWORDS ° BANKRUPTCY - Petition - Lapse of petition upon expiration of 12 months from date of filing - Extension of time - Power of Court to extend time after the petition has lapsed. Bankruptcy Act 1966 ss.33, 52 PE JOHN WILLIAM CAVANAGH EX PARTE WEA RECORDS PTY LID T/as WARNER HOME VIDEO P.1526 OF 19283 WILCOX J 14 OECEMBER 1984 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA 'oO [pa] OS ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. P.1526 of 1 ) GENERAL DIVISTON ) JOHN WILLIAM CAYANAGH Debtor EX PAPTE: WEA RECOPDS PTY LTD Tyas WAPNER HOME VIDEO Creditor OPDEPS COPAM WILCOX J DATE 14 DECEMBER 1984 PLACE SYDNEY THE COURT ORDERS THAT l. The period at the expiration cf which the petition w111 lapse be extended to 6 November 1985. 2. A sequestration order be made. 3. The costs of the petitioning creditor. including all reserved costs, be paid out of the estate of the debtor. 4. The petitioning creditor. pursuant to ¢.1L2d(2) deliver to the Reqistrar within seven (7) days of this dav a draft order. IN THE FEDERAL COURT OF AUSTRALIA ) ' NEW SOUTH WALES DISTRICT REGISTRY ) No. P.1526 of 19823 ' GENERAL DIVISION ) PE: TOHN WILLIAM CAVANAGH Debtor EX PARTE: WEA RECOPDS PTY LTD Tas WARNER HOME _VTDEO Creditor REASONS FOR JUDGMENT CORAM WILCOX J DATE 14 DECEMBER 1984 PLACE SYDNEY The Bankruptcy Petition in this matter vas filed on 7 November 1983. There were delavs in effecting service. By a Motice of Opposition filed on 18 June 1984 the debtor indicated that he proposed to oppose the makina of a sequestration order. The grounds of opposition included a number of disputed contentions of fact. The debtor resides in Western Australia and, under those circumstances and on 27 August 1334, the Deputy Reqistrar decided that the most appropriate course would be for a special fixture to be arranged and stood the matter over toa date to be fixed. Subsequently the petition was fixed for hearing on 11 December 1984 before me. 2. When the matter was called on Miss D Ba1rley, solicitor, appeared as agent for the Perth solicitors who had previously acted for the debtor. Miss Bailey informed the Court that her principals lacked instructions to proceed with the matter and in those circumstances she sought, and was granted, leave to withdraw. Miss Sally Nash. solicitor for the petitioning creditor, by leave, filed in court the usual affidavits as to the continuation of the debt and as to search. On her application I amended para 4 of the petition so as to substitute a reference to 7 June, instead of 3 June. as the date upon which the act of bankruptcy was committed. I dispensed with reverification or reservice. In the usual course, then. a sequestration order could have been made. However Miss Wash very properly draw to my attention the fact that the petition was now more than 12 months old and that there had been no extension of Filme pursuant to s.52:15) of the Bankruptcy Act. Section 52(4) and '5) provide: "(4) A creditor's petition lapses at the expiration of - (a) subiect to paragraph (b). the period of 12 months commencing on the date of presentation of the petition; or 1b) if the Court makes an order under sub-section (5) in relation to the petition - the period fixed by the order, unless. before the expiration of whichever of those periods is applicable, a sequestration order is made on the petition or the petition is dismissed or withdrawn. (5) The Court may, at anv time before the expiration of the period of 12 months commencing on the date of presentation of a creditor's petition. 1f it considers 1t just and equitable to do so, upon such terms and conditions as 1t thinks fit, order that the period at the expiration of which the petition will lapse be such period, being a period exceeding 12 months and not exceeding ?4 months. commencing on the date of presentation of the petition as is specified in the order." Miss Nash sought an order under subs (5) extending the period at the expiration of which the petition will lapsa toa date sufficient to allow a sequestration order to be made. She pointed out that it had been the intention of the Deputy Registrar, and of the parties, that the pexition be heard on its merits - having reqard to the terms of the filed Notice of Opposition - on the fixed date and that it would have been likely that the Court would have exercised 1ts power to extend time had it been asked at any time before the expiration of 12 months from the date upon which the petition was filed. I indicated my view that, 1f the Court had jurisdiction to extend time at this staqe, the extension should be granted but I reserved the auastion whether there was such jurisdiction. Section 33(1)(c) of the Act provides: 4. "33(1) The Court may - ... (c) extend before its expiration or, 1f this act does not expressly provide to the contrarv, after its expiration, any time limited by this act, or any time fixed by the Court or the Reqistrar under this Act (other than the time fixed for compliance with the requirements of a bankruptcy notice), for doing any act or thing or abridge any such time", Section 33(1)(c) confers upon the Court a general power applicable to all situations in which time is limited bv the Act or fixed by the Court or the Reqistrar other than the specific case referred to in the paraqdraph. 1e the time fixed for compliance with the requirements of a bankruptcy notice. In terms, therefore, 1t applies to an extensicn of the time limited by the Act at the expiration of which a petirion will lapse. Furthermore, the power conferred bv the paragraph mav be extended either before or after the expiration of the particular time in relation to which an extension is sought. If the power canferred by s.33(1}(c) is applicable to the present case, it matters not that the period of time Limited by 5.52(4)(a) has already expired; the power may be exercised at this staqe. Section 52(5) makes provisian for the Court to extend time "at any time before the expiration of the period of 12 months commencing on the date of presentation of a creditor's petition". Words conferring a power exercisable within a particular time would usually be read as excluding the exercise of that power outside that time. However. such an exclusion 5. arises by implication rather than through express words. Any implication to be derived from the reference in 5.5215) to an extension within 12 months is not an express provision excludindg the power of the Court to extend the life of the petition after the expiration of 12 months. Section 33(1)(c) applies unless the Act expressly provides to the contrary. Consequently s.33(1)(c) applies to the present case and confers power on the Court to extend time notwithstanding the fact that the 12 month period has already expired. The conclusion I have reached accords with the view expressed by Mc Greqor J in Re_Draper; ez parte Brosalen Phy Limited (1983) 48 ALP 656. In that case the 12 month period Pa) expired at a time when a defended petition -zas part heard by his Honour. Mo attention was paid to that fact until the conclusion of the case when counsel for the debtor arqued that the petition had lapsed. His Honour held that the vower conferred bv 3.33:(1)(c) applied and he extended time pursuant to 3.52/°°) and made a sequestration order. His Honour cammented at p 464: "In my opinion that the leqislaturs referred to a bankruptcy notice in s.33(1)(¢) makes it easier toa conclude that the life or the petition, being the process which relies ona bankruptcy notice in most applications for sequestration. was not to be sa tightly controlled." I respectfully aqree with the view taken by McGreqor J. IT hold that the Court does have turisdiction to extend time and I propose to order accordingly. The case, like Draper, raises the > auest'iion whether there is any point in maintainina the twelve month lapse provision in s.52(4). A petition is process of the Court and under the control of the Court, which can be trusted to guard aqainst undue prolondation of the proceedinas. The imposition of a provision for lapse at the expiration of an arbitrary period appears likely to serve merely as a trap for the unwary petitioning creditor and a windfall for a possibly undeserving debtor. I am satisfied that the judgement debtor committed the act of bankruptcy alleqed in the petition and of the other matters of which s.52(1) of the Act requires proof. I note that David Lewis Clout, a registered trustee. has consented to act as trustee of the estate of the debtor. I will make the usual orders. I certify that this and the duce (3) preceding paqes are a true copy of the Reasons tor Judgement herein orf his Honour Mr Justice Wilcox. Associate aud Wyle mere of ja] ey.