Re Kleiss, C.A. v Ex parte Commonwealth Bank of Australia [1995] FCA 408

Federal Court of Australia

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CATCHWORDS BANKRUPTCY - affidavit filed under s41(7) - whether affidavit had effect of extending time - affidavit not in conformity with s41(7) Bankruptcy Act 1966, ss 40(1)(g), 41(7) Biztole Developments Pty Ltd v McLean, 5 May 1995, unreported, Full Court of the Federal Court Re Ryan; Ex parte Ryan v Jupiters Management Ltd (1992) 38 FCR 127 Bryant v Commonwealth Bank of Australia, 9 November 1994, unreported, Full Court of the Federal Court Re Brink; Ex parte The Commercial Banking Co of Sydney Limited (1980) 44 FLR 135 Re McKechnie; Ex parte Weir (1991) 27 FCR 515 Re Laybut; Ex parte Robinson, 26 June 1985, unreported, Beaumont J Re Willats; Ex parte Nissan Finance Corporation Ltd (1991) 31 FCR 206 Re James; Ex parte Carter Holt Harvey Roofing (Aust) Pty Ltd (1993) 46 FCR 183 Re Adami; Ex parte Queensland Country Credit Union Ltd, 6 June 1995, unreported, Kiefel J Re James; Ex parte Carter Holt Harvey Roofing (Australia) Pty Ltd (No 2) (1994) 51 FCR 14 No. NN 3656 of 1994 RE CHRISTOPHORUS ANTONIUS KLEISS; EX PARTE COMMONWEALTH BANK OF AUSTRALIA

MOORE J SYDNEY 23 JUNE 1995

IN THE FEDERAL COURT OF AUSTRALIA) GENERAL DIVISION ) No. NN 3656 of 1994 BANKRUPTCY DISTRICT OF THE ) STATE OF NEW SOUTH WALES ) RE: CHRISTOPHORUS ANTONIUS KLEISS EX PARTE: COMMONWEALTH BANK OF AUSTRALIA JUDGE: Moore J PLACE: Sydney DATE: 23 June 1995 ORDER OF THE COURT THE COURT ORDERS THAT: 1. The matter is adjourned to enable the parties to bring in short minutes. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA) GENERAL DIVISION ) No. NN 3656 of 1994 BANKRUPTCY DISTRICT OF THE ) STATE OF NEW SOUTH WALES ) RE: CHRISTOPHORUS ANTONIUS KLEISS EX PARTE: COMMONWEALTH BANK OF AUSTRALIA JUDGE: Moore J PLACE: Sydney DATE: 23 June 1995 REASONS FOR JUDGMENT On 8 December 1994 an affidavit of Mr Christophorus Kleiss was filed in bankruptcy proceedings arising from a judgment debt payable by Mr Kleiss to the Commonwealth Bank of Australia ("the Bank") in the sum, including interest, of $273,441.56. Judgment had been obtained in the Supreme Court of New South Wales. On 26 October 1994 a bankruptcy notice based on that judgment debt had been issued by the Registrar in Bankruptcy and served on Mr Kleiss on 17 November 1994. The notice demanded payment within twenty eight days of the date of service viz by 15 December 1994. Provision for the filing of such an affidavit is found in Rule 10 of the Bankruptcy Rules. That rule together with s41(7) of the Bankruptcy Act 1966 ("the Act") establishes a procedure which enables a person on whom a bankruptcy notice has been served to file an affidavit with the result, ordinarily, that the Court then considers the matters referred to in s40(1)(g) of the Act. This procedure was discussed and explained by Foster J in Re McKechnie; Ex parte Weir (1991) 27 FCR 515. Section 40(1)(g) provides: "(1) A debtor commits an act of bankruptcy in each of the following cases: (a) ... (g) if a creditor who has obtained against the debtor a final judgment or final order, being a judgment or order the execution of which has not been stayed, has served on the debtor in Australia or, by leave of the Court, elsewhere, a bankruptcy notice under this Act and the debtor does not: (i) where the notice was served in Australia - within the time fixed by the Registrar by whom the notice was issued; or (ii) where the notice was served elsewhere - within the time fixed for the purpose by the order giving leave to effect the service; comply with the requirements of the notice or satisfy the Court that he has a counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt or sum payable under the final order, as the case may be, being a counter-claim, set-off or cross demand that he could not have set up in the action or proceeding in which the judgment or order was obtained;" and s41(7) provides: "(7) Where, before the expiration of the time fixed for compliance with the requirements of a bankruptcy notice, the debtor has filed with the Registrar an affidavit to the effect that he has such a counter-claim, set-off or cross demand as is referred to in paragraph 40(1)(g), and the Court has not, before the expiration of that time, determined whether it is satisfied that the debtor has such a counter-claim, set-off or cross demand, that time shall be deemed to have been extended, immediately before its expiration, until and including the day on which the Court determines whether it is so satisfied."

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MOORE J SYDNEY 23 JUNE 1995

IN THE FEDERAL COURT OF AUSTRALIA) GENERAL DIVISION ) No. NN 3656 of 1994 BANKRUPTCY DISTRICT OF THE ) STATE OF NEW SOUTH WALES ) RE: CHRISTOPHORUS ANTONIUS KLEISS EX PARTE: COMMONWEALTH BANK OF AUSTRALIA JUDGE: Moore J PLACE: Sydney DATE: 23 June 1995 ORDER OF THE COURT THE COURT ORDERS THAT: 1. The matter is adjourned to enable the parties to bring in short minutes. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA) GENERAL DIVISION ) No. NN 3656 of 1994 BANKRUPTCY DISTRICT OF THE ) STATE OF NEW SOUTH WALES ) RE: CHRISTOPHORUS ANTONIUS KLEISS EX PARTE: COMMONWEALTH BANK OF AUSTRALIA JUDGE: Moore J PLACE: Sydney DATE: 23 June 1995 REASONS FOR JUDGMENT On 8 December 1994 an affidavit of Mr Christophorus Kleiss was filed in bankruptcy proceedings arising from a judgment debt payable by Mr Kleiss to the Commonwealth Bank of Australia ("the Bank") in the sum, including interest, of $273,441.56. Judgment had been obtained in the Supreme Court of New South Wales. On 26 October 1994 a bankruptcy notice based on that judgment debt had been issued by the Registrar in Bankruptcy and served on Mr Kleiss on 17 November 1994. The notice demanded payment within twenty eight days of the date of service viz by 15 December 1994. Provision for the filing of such an affidavit is found in Rule 10 of the Bankruptcy Rules. That rule together with s41(7) of the Bankruptcy Act 1966 ("the Act") establishes a procedure which enables a person on whom a bankruptcy notice has been served to file an affidavit with the result, ordinarily, that the Court then considers the matters referred to in s40(1)(g) of the Act. This procedure was discussed and explained by Foster J in Re McKechnie; Ex parte Weir (1991) 27 FCR 515. Section 40(1)(g) provides: "(1) A debtor commits an act of bankruptcy in each of the following cases: (a) ... (g) if a creditor who has obtained against the debtor a final judgment or final order, being a judgment or order the execution of which has not been stayed, has served on the debtor in Australia or, by leave of the Court, elsewhere, a bankruptcy notice under this Act and the debtor does not: (i) where the notice was served in Australia - within the time fixed by the Registrar by whom the notice was issued; or (ii) where the notice was served elsewhere - within the time fixed for the purpose by the order giving leave to effect the service; comply with the requirements of the notice or satisfy the Court that he has a counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt or sum payable under the final order, as the case may be, being a counter-claim, set-off or cross demand that he could not have set up in the action or proceeding in which the judgment or order was obtained;" and s41(7) provides: "(7) Where, before the expiration of the time fixed for compliance with the requirements of a bankruptcy notice, the debtor has filed with the Registrar an affidavit to the effect that he has such a counter-claim, set-off or cross demand as is referred to in paragraph 40(1)(g), and the Court has not, before the expiration of that time, determined whether it is satisfied that the debtor has such a counter-claim, set-off or cross demand, that time shall be deemed to have been extended, immediately before its expiration, until and including the day on which the Court determines whether it is so satisfied."

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