FEDERAL COURT OF AUSTRALIA

Williamson v Bond, in the matter of an authority under section 188 of the Bankruptcy Act 1966 (Cth) signed by Craig David Bond [2013] FCA 828

IN THE MATTER OF AN AUTHORITY UNDER SECTION 188 OF THE BANKRUPTCY ACT 1966 (CTH) SIGNED BY cRAIG dAVID BOND

THE COURT ORDERS THAT:

1.    The time limited by s 189(1A)(d) of the Bankruptcy Act 1966 (Cth) for the continuation of control of the property of the Respondent under Division 2 of Part X of the Bankruptcy Act 1966 (Cth) be extended to a date that is two calendar months after the date that Dianne Elizabeth Beaman’s application under s 208 of the Bankruptcy Act 1966 (Cth) is determined by the WA Family Court in matter PTW3223/2013 of the Family Court of Western Australia.

2.    There be liberty to apply.

3.    The Applicant’s costs of the application be fixed in the amount of $2,975.00 and paid out of the assets of the property of the Respondent.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE MATTER OF AN AUTHORITY UNDER SECTION 188 OF THE BANKRUPTCY ACT 1966 (CTH) SIGNED BY cRAIG dAVID BOND

REASONS FOR JUDGMENT

1    These are brief reasons for orders made on 9 August 2013 extending time for the exercise of control by the applicant trustees of the property of the respondent, Mr Bond under Division 2 of Part X of the Bankruptcy Act 1966 (Cth) (BA). Ordinarily s 189(1A)(d) provides that the control of the property of a debtor who has given authority under s 188 continues for four months after the authority under s 188 becomes effective.

2    It is unnecessary to descend to detail as to the merits. The application is unopposed and there is no doubt on the supporting affidavit material as to the appropriateness of the extension of time insofar as the exercise of discretion is concerned.

3    At the first return of the application I did raise with counsel the question of whether the Full Court decision in Nilant v Macchia (1997) 78 FCR 419 posed a difficulty. In that decision the Full Court reluctantly held that time could only abridged or extended under s 33(1)(c) of the BA for the ‘doing of an act or thing’. The abridgment sought in that case was not for the doing of an act or thing but rather, the abridgment of the period of bankruptcy. The Full Court held that the Court did not have the power under s 33(c) to abridge the time which Parliament had provided for the automatic discharge of a bankrupt under s 149(3) of the BA. The reason for this was that it was not a time limited by the BA for ‘doing an act or thing’. The Full Court recommended that an amendment to the section should be considered. No amendment has occurred.

4    The question is whether ‘control’ under Division 2 of Part X of the BA is in a different category from the time limit under consideration in Nilant. If ‘control’ is understood as being the active verb of the trustees’ controlling the property rather than ‘control’ as a noun, then the order sought is for an extension of time under which the trustees will continue to exercise over control the property of the debtor. Of course the controlling trustees’ powers are prescribed under s 190(2) of the BA while additional duties are set out under s 190A.

5    This is the approach that has been taken in two cases in what was formerly the Federal Magistrates Court. The first was in a decision of Phipps FM (as his Honour then was) in Horne in the Matter of Peter Wyss [2003] FMCA 214 (at [11]) followed by Lucev FM (as his Honour then was), in Trinick & Piggott as Controlling Trustees of the Estate of Lam [2011] FMCA 70 (at [9]). The Federal Circuit Court, formerly the Federal Magistrates Court, has co-ordinate and concurrent jurisdiction in bankruptcy with this Court.

6    It seems to me that the reasoning in Re Horne, followed in Re Lam, is, with respect, in a practical sense correct as control in the orders which I make is to be understood as being the act of controlling the property by the trustees. Thus, it is the doing of an act which is being extended. On one view this approach might be seen as somewhat expedient or convenient, the same result could have been achieved by varying the order to extend the time for the trustees to do various things. Perhaps more importantly, there is no doubt that the act of controlling the property can certainly be contrasted with the automatic time limit for bankruptcy discharge in Nilant which was clearly a legal effect rather than the doing of any act or thing.

7    For those reasons the orders were made.

Associate:

Dated:    15 August 2013