CATCHWORDS BANKRUPTCY - judgment debt under appeal - bankruptcy notice application to extend time for compliance - appeal bona fide diligent pursuit of appeal - no evidence as to assets or debts where evidentiary burden lies. Bankruptcy Act 1966 ss.41(6A); 41(6C)(b) Re: Oswald Frederick Sibbles & Anor. Ex Parte: Highfern Pty. Ltd. QLd BN1187 of 1986 PINCUS J. BRISBANE 11 AUGUST 1986 PSION Coy Ausra ITN URT OF IN THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISION ~ QLD BN1187 of 1986 BANKRUPTCY DISTRICT OF THE SOUTHERN ) DISTRICT OF THE STATE OF QUEENSLAND w~ RE: OSWALD FREDERICK SIBBLES and LORNA SIBBLES EX PARTE: HIGHFERN PTY. LTD. MINUTES OF ORDER JUDGE MAKING ORDER: PINCUS J. DATE OF ORDER: 11 AUGUST 1986 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. The time for compliance with the bankruptcy notice issued on 19 June, 1986 be extended until further order. 2. The applicants and respondent be at liberty to relist the matter on reasonable notice. NOTE: Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules. ee eee ee oy ee eof a M - cae Fore on re IN THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISION ~ QLD BN1187 of 1986 BANKRUPTCY DISTRICT OF THE SOUTHERN ) DISTRICT OF THE STATE OF QUEENSLAND ) RE: OSWALD FREDERICK SIBBLES and LORNA SIBBLES EX PARTE: HIGHFERN PTY. LTD. PINCUS J. 11 AUGUST 1986 REASONS FOR JUDGMENT This is an application to extend the time for compliance with a bankruptcy notice, under s.41(6A) of the Act. In litigation in the Supreme Court of Queensland, Williams J. gave judgment against the applicants, on 8 May 1986, in a sum of $69,680.29, in favour of the respondent. His Honour also gave judgment for the applicants against the respondent in a much smaller sum, together with a further judgment for the applicants for damages to be assessed by a Master. No argument was addressed to me on the question whether the last-mentioned judgment prevents the whole from being final. On 19 June, a bankruptcy notice was issued on the basis of the debt of $69,680.29. On 30 June, the applicants served a notice of appeal against the judgment of Williams J. (which had been entered on 10 June) and that was entered for argument on 1 July. On 25 July, the solicitors for the applicant wrote to the Court Reporting Bureau at the Supreme Court asking for preparation apm te me pee a Lo . : 2. of an appeal record. On 1 August, the bankruptcy notice was issued, and this application was filed on 7 August. It seems unnecessary to discuss the reasons of Williams J. other than to say that I am satisfied that the appeal has been instituted bona fide: see s.41(6C)(b). It appears that, in general, a court sitting in bankruptcy should not, in this sort of situation, "explore the merits of the ... appeal except on the widest footing" - Verma v. Deputy Commissioner of Taxation (unreported, 22 February 1985, Full Court). There is no significant evidence before me on any other issue; in particular, there is no evidence as to whether the applicants have a business, or whether they have assets sufficient to pay the judgment debt, or whether there are any other debts. From what counsel for the applicants, Mr. Mullins, told me, it seems likely that the appeal will not come on in the Supreme Court until September or October. The last day for compliance with the bankruptcy notice is 15 August. I was referred to Lipov v. Alexander Fraser and Son Ltd. (1978) 36 F.L.R. 126 at 130 and to Re Sterling; Ex Parte Esanda Ltd. (1980) 44 F.L.R. 125. I note that unless the time for compliance is extended, non-compliance will be an act of bankruptcy, even if subsequently the appeal succeeds: Re Vella; Ex Parte Seymour (1983) 48 A.L.R. 420, Re Goldspink; Ex Parte Deputy Commissioner of Taxation (Beaumont J., 11 June 1986, unreported). , oR The decision last mentioned concerned the question whether a petition for sequestration should be adjourned pending the resolution of other proceedings. A similar question was considered in Re Maloney (unreported, 11 July 1986). It may often be a reasonably satisfactory outcome for the judgment creditor to be allowed to go as far as issuing a petition, on the basis that it will be adjourned pending the determination of the appeal from the judgment debt. That is a significantly different stage at which to hold the creditor up from that proposed here - where, if the application succeeds, the creditor may suffer significant substantive disadvantages under, for example, s.122 of the Bankruptcy Act. The peculiarity of the present case is the paucity of evidence referred to above; that seems to make it necessary to determine whether, where nothing more is known than that a bona fide appeal is being properly pursued, time should prima facie be extended. In a sense, what is called for is the exercise of a discretion, but here there is nothing but the bare fact of a bona fide appeal diligently pursued on which to base the exercise of that discretion. It should be added that the judgment creditor neither consented to, nor opposed, the application. That does not seem, however, to assist in determining whether it is one which it is proper to grant. The view to which I have come, not without doubt, is that negation of the circumstances set out in s.41(6C)(b) is ae eae Sg ee eee eee a nd one see eee weeny nt 4. enough to throw an onus on the judgment creditor at least to come forward with some evidence providing a basis for refusal of the application. On that narrow footing, I think this application should be allowed, but with provision for re-listing if, for example, the appeal is not pursued or fails. It will be ordered that the time for compliance with the bankruptcy notice mentioned above be extended until further order, and that the applicants and respondent be at liberty to relist the matter on reasonable notice. t eerie thar thig and the 3 preceding poccscrpatioces, of 19 reasons for ye baspent herein of rs Honcur Ke succwce Pincus pi iyore . Associate ated I Fong (GSE we + esses a see