ih Not for distribution IN THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISTON ) QLD. BNL780 of 1986 BANKRUPTCY DISTRICT OF THE SOUTHERN ) DISTRICT OF THE STATE OF QUEENSLAND ) RE: PATRICK DANIEL SAVAGE and DONALD ALEXANDER ARMIT EX PARTE: PATRICK DANIEL SAVAGE and ~. we KE DONALD ALEXANDER ARMIT itr Applicants CASTLEMAINE TOOHEYS LIMITED Respondent SPENDER J. BRISBANE 18 November, 1986. REASONS FOR JUDGMENT The applicant debtors have applied for an order that the time for compliance with the requirements of Bankruptcy Notice No.1780 of 1986 served on each of them be extended pending the hearing of the notice of appeal lodged by them in Action No.2931 of 1984 in the Supreme Court of Queensland. It is the judgment in that action that founds the bankruptcy notice. On 7 August 1986, his Honour, Mr. Justice Matthews, in the Supreme Court of Queensland gave judgment to Castlemaine Tooheys Limited, who was ae he the plaintiff in that Supreme Court action. The nature of that action was proceedings on a guarantee. A Notice of Appeal dated 9 September 19986 has been filed in the Supreme Court of Queensland against that order. The grounds of the appeal seek ta challenge findings of fact and assessments of credibility which his Honour made. Notwithstanding that appeals on that basis face greater difficulties than appeals which are founded on questions of law, or which do not involve assessments of a subjective kind by the trial judge who has the opportunity of observing the witnesses give oral evidence, or against findings of fact based on oral evidence, it is not right to regard those appeals as inherently doomed to failure. Counsel for the debtors who appeared in the trial before Mr. Justice Matthews has, according to an affidavit filed by the solicitors for the debtors, advised there are reasonable prospects of success on the appeal. A point of criticism by counsel for the creditor was that the debtors do not themselves depose to the fact they have reasonable prespects of success. However, I am prepared to accept that where counsel, particularly counsel who appeared in the trial, has advised that there are reasonable prospects of success, and where there is nothing in the material filed which suggests that that is a wholly erroneous assessment, I proceed on the basis that the debtors have shown, on a proper basis, that there are some prospects of success in their appeal. This is not a case such as Re Taylor; Ex parte Deputy Commissioner of Taxation (1983) 74 F.L.R. 377. In that case, there is no evidence either from counsel, solicitors, or the debtors themselves concerning the prospects of success other than the notice of appeal which was exhibited before the trial judge hearing the application for an extension of time. In that case, Mr. Justice Sheppard, invidiously as he commented, was obliged to view the prospects of success simply on his perusal of the notice of appeal, and concluded that there was no real basis for a successful challenge to the judgment the subject of the bankruptcy notice. The notice of appeal seeks an order that the whole of the judgment of Mr. Justice Matthews given on 7 August 1985 be set aside and in lieu thereof there be judgment for the appellants against the respondent with costs to be taxed. The proceedings therefore satisfy the requirements that they are proceedings to set aside the judgment or order in respect of which the bankruptcy notice was issued. In Lipov v. Alexander Fraser & Son Ltd. & Anor. (1978) 36 F.L.R. 126, Sweeney J. said at 130:- "It is for the Supreme Court to decide whether it will make such an order. (i.e. ai stay or execution). It is for this Court to say whether the time for compliance with a bankruptcy notice will be extended. It has been held that the institution of an appeal, which appears to be bona fide, 13 a good reason for adjourning the hearing of a bankruptcy petition based upon the judgment subject to the appeal (Ex parte Heyworth: In re Rhodes (1684) 14 9.B.D. 49: Union Bank of Australia Ltd. (No.4) v. Dean (1898) 24 V.L.R. 453. The courts have had regard to the grave consequences which flow from the effluxion of the time fixed for compliance with a bankruptcy notice. Judgment has been obtained against the applicant, who has regularly instituted an appeal against it. He has sworn that he believes that he has proper grounds of appeal against it. He has not been cross-examined. The creditors have not offered any evidence in opposition." He then proceeded to grant an extension of time to enable the applicant, should his appeal succeed, to avoid the commisszon of an act of bankruptcy. The point taken by the creditor in this case was that there was no power in the court after the expiration of the time fixed for compliance with the bankruptcy notice to extend time. In the light of the judgment of the Full Court of the Federal Court in Streimer v. Tamas (1981) 37 A.L.R. 211, particularly the observations at 215, it was properly accepted that I am bound by that judgment. In any event, I amof the view that I am empowered by §.41(6A) of the Bankruptcy Act 1966 to grant the extension sought in this application. Before the time fixed by the Registrar for compliance with the bankruptcy notice in respect of which an extension is sought, proceedings to set aside the judgment or order were instituted by the debtors. I therefore hold, consistent with the judgments in Streimer v. Tamas, that I have power to extend the time for compliance. There is nothing to suggest that the appeal is other than bona fide, and I am prepared to accept that there are some ' ode 4 prospects of success. The order of the court is that the time for compliance with the bankruptcy notice be extended until further order, liberty being reserved to either party to apply to the Registrar for relisting of the application on a day which will permit the giving of seven days' notice to the other party. Tcertify that this aid the 4 preceding pages are a st ccc of the recsons for ¢ fuder eit hoewin of cue Co. rt \\. (MerDenrot Associate ated 18 /ujerG