Webb, L.M. v Hunter, L. [1995] FCA 609

CATCHWORDS BANKRUPTCY - affidavit filed in reliance on s.41(7) but plainly not complying with the subsection - effect - operation of subsection Bankruptcy Act 1966, ss.40(1)(g), 41(7) Bankruptcy Rules, r.10 LUCI MARY WEBB v. LINDSAY HUNTER No. WAG 66 of 1995 BURCHETT, CARR and TAMBERLIN JJ PERTH 10 AUGUST 1995

IN THE FEDERAL COURT ) OF AUSTRALIA ) WESTERN AUSTRALIA ) DISTRICT REGISTRY ) No. WAG 66 of 1995 GENERAL DIVISION ) On appeal from a Judge of the Federal Court of Australia B E T W E E N: LUCI MARY WEBB Appellant and LINDSAY HUNTER Respondent CORAM: BURCHETT, CARR and TAMBERLIN JJ. PLACE: PERTH DATE: 10 AUGUST 1995 MINUTE OF ORDERS THE COURT ORDERS THAT: 1. The appeal be allowed with costs, to include the costs of the application for leave to file and serve the notice of appeal and the costs of the motions brought by the respondent which have been dismissed. 2. The second of the two orders made by the judge at first instance on 26 May 1995 be set aside. 3. In lieu of the order set aside, it be declared that the time for compliance with the bankruptcy notice the subject of this proceeding expired in accordance with its terms and was not extended by any affidavit filed under s.41(7) of the Bankruptcy Act 1966. 4. The appellant be granted a costs certificate under s.7(1) of the Federal Proceedings (Costs) Act 1981 in respect of the whole of the costs referred to in paragraph 1 above. NOTE: Settlement and entry of Orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT ) OF AUSTRALIA ) WESTERN AUSTRALIA ) DISTRICT REGISTRY ) No. WAG 66 of 1995 GENERAL DIVISION ) On appeal from a Judge of the Federal Court of Australia B E T W E E N: LUCI MARY WEBB Appellant and LINDSAY HUNTER Respondent CORAM: BURCHETT, CARR and TAMBERLIN JJ. PLACE: PERTH DATE: 10 AUGUST 1995 REASONS FOR JUDGMENT THE COURT: Introduction This is an appeal brought out of time by leave against an order made in respect of an affidavit that a debtor had filed, in answer to a bankruptcy notice, pursuant to s.41(7) of the Bankruptcy Act 1966. The principal underlying issue is whether, at the time the order was made, the time for compliance with the bankruptcy notice had already expired. Factual Background On 21 April 1994 the appellant, Ms Luci Mary Webb obtained the issue of a bankruptcy notice directed to the respondent Mr Lindsay Hunter. The bankruptcy notice was served on Mr Hunter on 18 October 1994, and unless it was extended, the time for compliance with it expired on 1 November 1994. On that date Mr Hunter filed two documents which, on their face, were described in the following terms: . Notice of Intention of Debtor to Oppose Bankruptcy Notice and Notice of Counter-claim, Set-off and Cross demand; and . Affidavit of [respondent] in Opposition to Notice of Bankruptcy, Setting out Grounds of Counter-claim, Set-off and Cross demand. On 16 December 1994 Mr Hunter filed at the District Registry in Perth a document which, although headed "Counter claim, set-off and cross-demand", was in the form of an application to the Court seeking various orders including an order that "the Bankruptcy Notice be declared no application" (sic). This was in similar terms to the affidavit which Mr Hunter had filed on 1 November 1994. The Deputy Registrar considered the affidavit and the "application", and advised Mr Hunter, by letter dated 20 January 1995, that the application had been "rejected" under sub-rule 10(5) of the Bankruptcy Rules ("the Rules"). The letter included a statement of the Deputy Registrar's reasons for her decision. On 10 February 1995 Mr Hunter applied to have the Deputy Registrar's direction reviewed under s.14(5) of the Act. Other relevant sections of the Act, namely s.40(1)(g) and s.41(7), and rule 10 read as follows: "40.(1) A debtor commits an act of bankruptcy in each of the following cases:- ... (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 -