" a fone ee ee CATCHWORDS BANKRUPTCY - costs, of creditor's petition - ex parte order for extension of .time to comply - failure to inform petitioning creditor - search of file by petitioning creditor - petition dismissed - fault by both parties - practice as to service of ex parte orders. Re: Paul Desmond Forsyth Ex parte: Cobport Pty. Ltd. Qld. P504 of 1987 PINCUS J. BRISBANE 19 JUNE 1987 er a con ada IN THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISION BANKRUPTCY DISTRICT OF THE SOUTHERN ) DISTRICT OF THE STATE OF QUEENSLAND ) QLD P504 of 1987 ~~ RE: PAUL DESMOND FORSYTH Debtor EX PARTE: COBPORT PTY. LTD. Creditor MINUTES OF ORDER JUDGE MAKING ORDER: PINCUS J. DATE, OF ORDER: BRISBANE WHERE MADE: 19 JUNE 1987 THE COURT ORDERS THAT: 1. There be no order for costs in relation to the creditor's petition filed 3 April 1987 and supporting documents. Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules. rs oper bot pete aa ee = wy . eeriem aenaenel —-— —-, - - a — we oe mnt ote "4 IN THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISION ) QLD P504 of 1987 BANKRUPTCY DISTRICT OF THE SOUTHERN ) DISTRICT OF THE STATE OF QUEENSLAND ) RE: PAUL DESMOND FORSYTH Debtor EX PARTE: COBPORT PTY. LTD. Creditor PINCUS J. 19 JUNE 1987 REASONS FOR JUDGMENT This is a creditor's petition for a sequestration order. It is conceded that the petition should be dismissed. Mr. Templeton for the debtor says that it should be dismissed with costs, whereas Mr. O'Donnell for the creditor says the debtor should pay the creditor's costs. The creditor obtained a judgment in the District Court of Queensland on 13 February 1987 and caused a bankruptcy notice based upon it to be served on 13 March 1987. On 27 March 1987 an application was made for an extension of time for compliance with the notice. That application, which was made ex parte, was granted by a Deputy Registrar "until the Court determines this application". wares ere ia ieaieielllient ii inated . ® "This application" was an application to extend the time for compliance until the determination of an appeal to the Full Court of the Supreme Court against the judgment of the District Court. It appears that the debtor did not inform the creditor of the order obtained. However, on 1 April 1987 the creditor caused a search to be made of the proceedings under the bankruptcy notice and an affidavit was filed on that date on behalf of the creditor saying that no application had been made to the Court to set aside the notice. That was true, but there was then on file the application to extend time which I have mentioned and that should have been noticed by the person searching. There was also an affidavit 1n support of the application to extend time on the file, and that also should have been noticed. The ex parte order referred to was noted on the papers. I say these documents should have been noticed because they were two of only four documents then on the file; it would have been difficult to do any sort of search of the file without observing them. On the other hand, the debtor should in my opinion have taken the obvious step of promptly advising the creditor that it had obtained an order ex parte. In ignorance of the step which the debtor had taken, the creditor presented a petition for sequestration on the erroneous assumption that an act of bankruptcy had been committed and filed $F in support of it an affidavit of service of the bankruptcy notice and an affidavit deposing to the search just mentioned. Later documents were filed relating to the application to extend time for compliance; that came on before me on 28 April and was dismissed with costs. On 22 May the Deputy Registrar issued a certificate under r.22 setting out the circumstances mentioned above. When the matter came on for hearing on 25 May the parties advanced the submissions I have referred to. I was told that the debt was paid on the morning of the hearing. I have not found any provision in the rules which requires that an ex parte order be notified promptly to the other side. Here it was not notified at all. The case was argued before me on 28 April on the assumption that no extension of time had been obtained. There may be a gap in the rules in not specifically requiring service of orders taken out. Nevertheless, in accordance with the ordinary practice of the profession, the obtaining of the order ex parte should have been promptly notified, especially since it was got on the last day for compliance; it was quite predictable that a petition would be issued promptly unless notice of the order was given. On the other hand, as I have said, the creditor caused the file to be searched on 1 April, when the presence of the | relevant documents was very plain. : wt. Fee ec rp eee ws rc wey ae ree ee ee - nary Y In my opinion the fairer course is not to make an order for costs in favour of either side. The petition will be dismissed. : certify that this and dho S preceding aia) Eases are Bir ts cuny et inc recsans for Gresjar ir t Pwoent becca of His Honeur Associate ee tee one een een a