Brien v P & E Phontos Pty Ltd (In the matter of Estate of Metchler) [1999] FCA 1072

FEDERAL COURT OF AUSTRALIA

Brien v P & E Phontos Pty Ltd (In the matter of Estate of Metchler) [1999] FCA 1072 BANKRUPTCY – application by trustee in bankruptcy to extend time to elect to prosecute legal proceedings commenced by bankrupt – whether time may be extended after assignment of the right to bring the action – whether adequate grounds for the court to exercise its discretion to extend time Bankruptcy Act (Cth) 1966, ss 33(c), 60(2), 60(3) Re Faulkner; Ex parte Official Receiver (1981) 52 FCR 109, followed Ryan v Hopkinson (1993) 16 FAMLR 659, followed Stobbart v Mocnaj (1996) 16 WAR 318, distinguished Temsign v Biscen (1998) 157 ALR 83, distinguised

IN THE MATTER OF ESTATE OF ANTON EDWIN METCHLER;

RICHARD C BRIEN v P & E PHONTOS PTY LTD NG 8201 of 1998 MADGWICK J SYDNEY 6 AUGUST 1999

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NG 8201 OF 1998

BETWEEN: RICHARD C BRIEN

Applicant

AND: P & E PHONTOS PTY LTD

Respondent

JUDGE: MADGWICK J

DATE: 6 AUGUST 1999

PLACE: SYDNEY

REASONS FOR JUDGMENT HIS HONOUR: 1 This is an application to extend the time in which a trustee, pursuant to a Deed of Arrangement made under Part X of the Bankruptcy Act (Cth) 1966 (the Act), may elect to prosecute certain legal proceedings commenced by the debtor. 2 The applicant, Mr Richard Brien, was appointed trustee of the estate of Dr Anton Metchler (the debtor) on 8 February 1993. In 1991 the debtor had sued P & E Phontos Pty Ltd and others (by consent made the respondents to this notice of motion) in the Supreme Court of New South Wales. The action was current when the applicant was appointed as trustee. However, the trustee did not become aware of the Supreme Court action until 9 February 1998. The debtor had apparently regarded himself as no more than his father's nominee in the Supreme Court action and in the underlying transaction which gave rise to it. The evidence is that, on the trustee's appointment, he forgot to inform the trustee of the action. The respondents only become aware of the trustee's appointment much later, and they then served the trustee with notice of the action. The applicant trustee did not elect to prosecute the action, begun by the debtor, within 28 days of being served with the notice. Unless that time be now extended then, according to s 60(3) of the Act, the action would be deemed to have been abandoned. 3 After the expiry of the 28 day limit, on 20 May 1998, the applicant assigned his right, title and interest in the causes of action, described in the Statement of Claim in the Supreme Court proceeding, to the debtor's father, Mr Leslie Metchler (the assignee). The applicant now seeks in this Court to extend the 28 day limitation, imposed by s 60 of the Act, in which he may elect to prosecute the legal proceedings before the Supreme Court.