FEDERAL COURT OF AUSTRALIA

Flint v Richard Busuttil & Co Pty Ltd [2013] FCA 925

Solicitor for the Respondent:     Rod J Barnett & Associates Pty Ltd

Solicitor for the Trustee:    Bradley Allen Love Lawyers

THE COURT ORDERS THAT:

1.    Time within which to file a notice of appeal be extended until 20 September 2013.

2.    The applicant pay the respondent’s and the trustee’s costs of this application.

3.    Costs be taxed and paid out of the bankrupt estate in accordance with s 109(1)(a) of the Bankruptcy Act 1966 (Cth).

4.    The hearing of the appeal be expedited.

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

REASONS FOR JUDGMENT

1    On 7 June 2013 the primary judge made a sequestration order against the estate of Denise Flint, a Canberra real estate agent. The sequestration order was founded on a creditor’s petition filed in the Federal Magistrates Court (now the Federal Circuit Court of Australia) on 24 November 2011 but later transferred to this court. The petitioning creditor is a firm of solicitors which had formerly acted for Ms Flint. The act of bankruptcy upon which the petition was based was Ms Flint’s failure to comply with a bankruptcy notice issued on 3 March 2011 and served upon her on 4 April 2011. In the notice, the firm of solicitors claimed the total sum of $11,206.86. That sum comprised the total of two judgment debts in the Local Court of New South Wales together with post-judgment interest.

2    The petition expired on 23 November 2012. By order dated 7 December 2012, the federal magistrate purported to extend it, relying on the “slip rule”.

3    The time in which to appeal the sequestration order expired on 28 June 2013. No appeal was lodged. But by application filed on 30 July 2013, Ms Flint sought an extension of time in which to appeal. The application was supported by an affidavit sworn by Ms Flint on 29 July 2013. In substance the point Ms Flint wants to agitate on appeal is that the federal magistrate had no power to extend the creditor’s petition after it had lapsed and therefore the primary judge had no power to make the sequestration order.

The decision below

4    The primary judge held that he was bound by the judgment of the Full Court in Griffiths v Boral Resources (Qld) Pty Ltd (2006) 154 FCR 554 (“Griffiths”) to accept that the slip rule was available in an appropriate case to support an extension of a creditor’s petition after it had expired and that this case fell squarely within the circumstances which the Full Court considered would attract the operation of the rule.

5    His Honour considered that the failure on the part of the petitioning creditor to ensure that the federal magistrate covered the question of the expiration of the petition in the orders of 29 August 2013 is properly characterised as an accidental slip or omission which attracts the operation of the slip rule. His Honour said that, had the federal magistrate’s attention been drawn specifically to the impending expiration of the petition, he undoubtedly would have extended it on that day. He said this was so because the need for an extension arose from the multiple applications Ms Flint had made to have the bankruptcy notice set aside, a course she was still pursuing in August 2012. As a result he rejected Ms Flint’s argument.

The application to extend time

6    A notice of appeal must be filed within 21 days after the date on which the judgment appealed from was pronounced or the order was made: Federal Court Rules 2011 (Cth) r 36.03. The application to extend the time to appeal was therefore brought just over a month after the notice of appeal should have been filed.

The explanation for the delay

7    In her affidavit in support of the application Ms Flint states that she has been advised by counsel (Mr J T Johnson), who appeared for her at the hearing before me, that the appeal has reasonable prospects of success. She said that the reason the appeal was not filed within the prescribed time was that she was “taking advice as to the filing of the appeal”.

Background

8    This matter has a long and sorry history. It began with Ms Flint’s refusal to pay legal fees of less than $6,000. With interest on the judgment debts and legal costs the evidence suggests that she now owes the petitioning creditor at least ten times that amount. The relevant history appears in the federal magistrate’s judgment in Flint v Richard Busuttil & Co Pty Ltd; Richard Busuttil & Co Pty Ltd v Flint [2012] FMCA 1158 and to some extent in the primary judge’s reasons. It is unnecessary to repeat that history here but it is important to put the present application into context so some reference to the background is required.

9    The bankruptcy notice was served on Ms Flint on 4 April 2011. On 27 April 2011 Ms Flint filed an application to set aside the bankruptcy notice. On 19 October 2011 the registrar dismissed the application with costs. On 10 November 2011 Ms Flint filed an application (out of time) to review the registrar’s decision.

10    The creditor’s petition was filed in the Federal Magistrates Court on 24 November 2011. It was first returnable before a registrar on 15 December 2011. On that occasion it was adjourned to the federal magistrate’s docket on 20 February 2012. On 20 February 2012 the federal magistrate made timetabling orders including an order fixing the hearing of the petition for 8 May 2012. The hearing fixed for 8 May 2012 was vacated at Ms Flint’s request, who cited ill health amongst other reasons. On the same occasion the matter was relisted for 13 June 2012. On 13 June 2012 the hearing was again adjourned at Ms Flint’s request, this time to enable her to instruct Sydney solicitors, after her previous lawyers had apparently indicated their intention to withdraw. On 29 August 2012 the federal magistrate made the following order:

Written submissions of no more than 3 pages, for both CAG20/2011 and CAG61/2011, be filed by the respondent within 21 days. The matter will then be determined in Chambers based on the Affidavit material and Submissions of each party.

11    CAG20/2011 was the review application. CAG61/2011 the creditor’s petition. It seems that the federal magistrate’s intention was to determine both the review application and what I gather was a further application by Ms Flint to adjourn the hearing of the creditor’s petition.

12    Submissions were not forthcoming until 28 September 2012 at which time Ms Flint sought additional time to “properly instruct a legal adviser”.

13    The federal magistrate did not deliver his judgment until 7 December 2012. In the meantime two important events occurred.

14    First, on 22 October 2012 the solicitors for the petitioning creditor wrote to the federal magistrate’s associate. In that letter they noted that they had not received any submissions from Ms Flint in accordance with the 29 August order and sought confirmation that she had made no further submissions since they had served theirs. They also inquired as to whether it might be appropriate for the matter to be relisted for the purpose of “bringing down that decision, and discussing the question of costs (if they should apply)”. The letter concluded as follows.

Undoubtedly his Honour is aware, a petition for the bankruptcy of Ms Flint, was stayed as a result of her application to review. The writer is concerned with time running, to the extent that it has that the validity of both the original bankruptcy notice and the petition which relies upon the bankruptcy, is maintained.

Thank you for your assistance with regard to these issues.

15    Secondly, on 23 November 2012 the creditor’s petition expired. The creditor did not apply for an extension and the federal magistrate made no such order before the petition expired.

16    On 7 December 2012 the federal magistrate dismissed the review application and ordered, subject to further order of the court, that the creditor’s petition expire not before 23 November 2013. In making the order extending the life of the petition his Honour noted that an order had been made on 29 August 2012 and that the authorities (such as Griffiths) confirm that there is power under the rules of court to amend such orders retrospectively. He referred to the solicitors letter of 22 October 2012 and at [94] of his reasons he said:

In the circumstances where (a) the petition was founded upon and continues to rely upon the bankruptcy notice, (b) that bankruptcy notice was the subject of review by the Registrar, (c) the Registrar’s decision was itself the subject of review to this Court, and (d) orders were made on 29th August 2011, and a letter received from the legal representatives for the petitioning creditor seeking to have the matter re-listed and the same letter expressing concern about the possible expiry of the petition, in my view, the Court should order, pursuant to rule 16.05 of this Court’s rules, and in the light of the authorities mentioned, that the time for the life of the petition should be extended until 23rd November 2013.

17    On 1 February 2013, Ms Flint applied to this Court for an extension of time to appeal the federal magistrate’s decision of 7 December 2012. That application was dismissed by the primary judge on 25 March 2013: Flint v Busuttil & Co Pty Limited [2013] FCA 258.

18    On 7 February 2013 a registrar ordered that the petition file be transferred to this Court. The hearing of the petition began on 12 April 2013 but, in order to allow Ms Flint one last opportunity to pay the debt she owed to the petitioning creditor, the primary judge stood over the hearing until 6 June 2013. On that day Ms Flint’s then solicitor applied for yet a further adjournment for a period of four weeks. His Honour refused her application but adjourned the matter to 2.30 pm the following day when he heard and determined the petitioning creditor’s application. I mentioned at the outset the grounds of opposition. There was no dispute that the power to make the sequestration order was enlivened on the evidence proffered by the petitioning creditor. Ms Flint made no attempt to prove that she was solvent or to show that there was some other sufficient reason for the Court to decline to exercise it.

The relevant statutory provisions

19    Section 33(1)(c) of the Bankruptcy Act 1966 (Cth) (“Bankruptcy Act”) gives the Court the power to:

extend before its expiration of, if this Act does not expressly provide to the contrary, after its expiration, any time limited by this Act … for doing an act or thing …

(Emphasis added.)

20    Section 52(4) provides that a creditor’s petition lapses 12 months after the date the petition is presented or, if the Court makes an order under subs (5) extending the time, the time fixed by the order. Section 52(5) is in the following terms:

The Court may, at any time before the expiration of the period of 12 months commencing on the date of presentation of a creditor’s petition, if it considers it just and equitable to do so, upon such terms and conditions as it thinks fit, order that the period at the expiration of which the petition will lapse be such period, being a period exceeding 12 months and not exceeding 24 months, commencing on the date of presentation of the petition as is specified in the order.

(Emphasis added.)

21    In the Federal Magistrates Court the slip rule was contained in r 16.05 of the Federal Magistrates Court Rules 2001 (Cth) (now the Federal Circuit Court Rules 2001):

(1)    The Court may vary or set aside its judgment or order before it has been entered.

(2)    The Court may vary or set aside its judgment or order after it has been entered if:

(a)    the order is made in the absence of a party; or

(b)    the order is obtained by fraud; or

(c)    the order is interlocutory; or

(d)    the order is an injunction or for the appointment of a receiver; or

(e)    the order does not reflect the intention of the Court; or

(f)    the party in whose favour the order is made consents.

(3)    This rule does not affect the power of the Court to vary or terminate the operation of an order by a further order.

22    The orders the federal magistrate made on 29 August 2012 were entered the same day. None of the matters mentioned in subrule (2) appears to capture what occurred in the present case. But r 1.05(2) provided that, to the extent that the Federal Magistrates Rules were insufficient or inappropriate, the court could apply the Federal Court Rules 2011 (Cth). Rule 39.05 of those rules provides that the Court may vary or set aside a judgment or order after it has been entered, amongst other reasons, if “(h) there is an error arising in a judgment or order from an accidental slip or omission”.

23    In the present case the federal magistrate did not actually correct any order. He referred to the August order and to the judgment in Griffiths (as well as the judgment of Graham J in Boumelhem v Commonwealth Bank of Australia (2008) 171 FCR 462 which followed Griffiths), but the order he made extending the petition did not in its terms vary the August order. Nevertheless, Mr Johnson accepted for the purposes of this case that the order was an order varying the August order and that if the federal magistrate had the power to extend the life of the petition retrospectively by invoking the slip rule then the order was valid and the sequestration order must stand.

Submissions

24    Ms Flint submitted that, having regard to the provisions of the Bankruptcy Act, and in particular ss 33(1)(c), 52(4) and 52(5), the federal magistrate had no power to extend the life of the creditor’s petition.

25    Ms Flint pointed out that the Federal Magistrates Court had no inherent jurisdiction as it was not a superior court of record. She contended that the rules of court cannot authorise a course of conduct prohibited by the Act and, in effect, that Griffiths either left the door open or ought not be followed.

26    The petitioning creditor submitted that the primary judge simply followed the decision in Griffiths and there was no error in so doing. It also submitted that Ms Flint has not provided a reasonable explanation for her delay in filing the appeal.

27    Neither party referred to the power contained in s 37 of the Bankruptcy Act which provides that, subject to subs (2) (which is presently irrelevant), the Court may “rescind, vary or discharge” an order made by it under the Act.

Should an extension of time be granted?

28    Rule 1.39 of the Federal Court Rules gives the Court a discretion to extend the time fixed by the rules before or after the time expires and regardless of whether an application for extension is made before the time expires. In Dunlop v Fishburn (No 3) [2012] FCA 315 at [9] and [10] I set out some principles that generally guide the exercise of the discretion to grant an extension of time. It is sufficient to observe here that the discretion is wide and constrained only by the interests of justice and the subject-matter and purpose of the legislation. But an applicant is required to give an explanation for the delay. Time limits are not to be ignored. The absence of an acceptable explanation will militate against the grant of an extension, so, too, any prejudice to the respondent caused by the delay. The merits of the proposed appeal are also relevant. Undoubtedly, as Griffiths J observed in SZQZR v Minister for Immigration and Citizenship (2013) 133 ALD 355 at [31], the length of any relevant delay is also important, as is the nature of the rights and interests with which the proceeding is concerned.

29    I have real misgivings about the explanation proffered by Ms Flint. Significantly, she does not state when it was that she first sought legal advice, when the advice was provided, how the taking of that advice caused or contributed to the delay nor, if she delayed in seeking advice, the reasons for that delay. It would be unacceptable to wait until the time had expired before seeking legal advice unless, for example, that delay was occasioned by illness, accident or some other good reason. Further, Ms Flint must have been alive to the need to act swiftly because she had fallen foul of time limits in the past. Only three months earlier the primary judge had refused her application for an extension of time within which to appeal the federal magistrate’s judgment on the review application. Mr Johnson did not try to persuade me that her explanation was satisfactory. It was not.

30    But the statute imposes no fetters on the exercise of the discretion. Consequently, although the Court will normally require an acceptable explanation for the delay, the failure to offer one is not fatal. The Full Court has rejected the notion that the provision of an acceptable explanation is “an essential precondition” for the grant of an extension: Comcare v A’Hearn (1993) 45 FCR 441 at 444. Where the discretion is unconfined, the Court may not impose an arbitrary limitation not expressly imposed by the statute itself: Dix v Crimes Compensation Tribunal [1993] 1 VR 297 at 302.

31    As Wilson J said in FAI General Insurance Co Ltd v Southern Cross Exploration NL (1987) 165 CLR 268 at 283 (Brennan, Deane and Dawson JJ agreeing) of a similarly unrestricted rule permitting the NSW Supreme Court to extend the time fixed by the rules (pt 2, r 3 of the Supreme Court Rules 1970 (NSW)):

The plain meaning of these words is very wide. The court may extend “any time” fixed by “any … order” and may do so as well after as before the time expires and even though the application to extend is not made until after the time has expired. As Baggallay LJ said in Carter v Stubbs (1880) 6 QBD of the analogous English rule, it gives “very full discretionary power; indeed, I can hardly imagine a more extended discretion” (at 120). It is a remedial provision which confers on a court a broad power to relieve against injustice. The discretion so conferred is not readily to be limited by judicial fiat. The fact that it manifestly is a power to be exercised with caution and, in the case of conditional orders, with due regard to the public policy centred in the finality of litigation does not warrant an arbitrary limitation of the power itself, not expressed in the words of the rule ...

32    Thus, while the limited explanation weighs against the grant of an extension, it is not determinative.

33    In this case, despite my misgivings about the adequacy of Ms Flint’s explanation, I am satisfied that it would be just to grant an extension of time.

34    It is true that to succeed on any appeal Ms Flint would have to demonstrate error: Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424 and it is hard to see how it could be said that either the federal magistrate or the primary judge fell into error by following Griffiths. But Ms Flint wants to challenge the principle accepted in Griffiths. What is more, as French J explained in Seiler v Minister for Immigration, Local Government and Ethnic Affairs (1994) 48 FCR 83 at 98, in an application of this kind “the question of merits must be approached with some caution”. As his Honour went on to explain:

If an application has no reasonable prospect of success, then the discretion to refuse an extension on that basis reduces to a decision to strike it out. To say a substantive application has a reasonable prospect of success is to say no more than that there is a finite non-trivial probability that it will succeed. The statement of its merits is then stochastic. It is based upon necessarily incomplete evidence or consideration of the case. It is difficult to imagine any case which appeared weak but not hopeless in which it would be proper to refuse an extension on that account. On the other hand, the stronger the case appears to be, the higher may be the probability that an injustice will be done if an extension is refused. So a strong case may be a positive factor in favour of the grant of extension, but an apparently weak case cannot be treated as a factor weighing against it.

35    In Griffiths the Full Court relied on Elyard Corp Pty Ltd v DDB Needham Sydney Pty Ltd (1995) 61 FCR 385 (“Elyard”). Elyard was not concerned with a creditor’s petition but with an application to wind up a company in insolvency. Section 459R of the Corporations Law (now s 459R of the Corporations Act 2001 (Cth)) required that an application to wind up a company in insolvency is to be determined within six months after it is made. Section 459R(2) gave the Court a discretion to make an order extending the period in which the application must be determined but only in special circumstances and, relevantly, only where the order was made within the six month period, or as last extended under the subsection. Section 459R(3) provided that an application was dismissed if not determined as required by the section. In substance the same argument Ms Flint wishes to run on appeal in the present case was put and rejected in Elyard. Lockhart J said at 391-3 (Black CJ agreeing) that the argument was based on a misconception about how the slip rule operates:

In my opinion, the argument rests on a misconception of the nature and operation of the slip rule. This is the case because the later order corrects the earlier order, and speaks from the date of the earlier order, which then operates with full force as corrected…The slip rule, with retrospective operation, corrected the earlier order. …The essential purpose of the slip rule is to give effect to the intention which the Court would have had, if it were not for the failure which led to the accidental slip or omission.

…It is irrelevant that the later order of Sheppard J, which corrected the earlier order, was made after the expiration of the statutory time limit…

36    Lindgren J (with whom the Chief Justice also agreed) expressed the same view at 401-2. At 405 his Honour referred to the opinion of Heerey J in Re Agushi; Ex parte Farrow Mortgage Services Pty Ltd (In liq) (1994) 126 ALR 704 that in enacting s 52(5) of the Bankruptcy Act Parliament must be taken to have contemplated that there would be human oversight and inadvertence, implying that Parliament must have intended that the section prevails over the slip rule. But Lindgren J said that the view was “equally tenable” that Parliament, being taken to have contemplated such behaviour, “readily accepted that such a mechanism as the slip rule would co-exist, within its limited area of operation, with the statutory provision”.

37    There is obvious force in these remarks. Moreover, in Elyard Lockhart J observed at 391 that that the rule “extends to permit the correction of an order or decree where the omission results from the inadvertence of a party’s legal representative”, the situation presenting itself in this case.

38    In Griffiths, however, the Full Court expressed disquiet about the notion that the slip rule may be used to extend the life of a creditor’s petition after the statutory period has expired. It observed that there were potentially significant differences between s 52 of the Bankruptcy Act and s 459R of the Corporations Law. At [30]-[31] the Court said:

With all respect, we are a little uncomfortable with the view, inherent in Elyard, that the slip rule may be used to extend time notwithstanding the statutory requirement that such order be made within a period of time which has elapsed. However Elyard concerns the practice of the Court and has now stood for over 10 years without legislative intervention. We are reluctant to reconsider it. Although it does not directly bind us in applying s 52 of the Bankruptcy Act, to take a different approach would cause substantial confusion in insolvency practice.

We wish to stress, however, the importance of the policy, evidenced in both the Corporations Act and the Bankruptcy Act, that insolvency proceedings be speedily resolved, presumably for commercial reasons and for reasons of fairness. Courts exercising jurisdiction in insolvency must recognise this policy by giving priority to the hearing and determination of such matters. The parties and their legal advisers, particularly those advising petitioning creditors, must be aware of the potential problem. The decision in Elyard should not be taken as establishing an unlimited power to avoid this statutory policy.

39    In Re Young; Ex parte Smith (1985) 5 FCR 204 (“Re Young”) another Full Court (Bowen CJ, Sweeney and Lockhart JJ) held that there was no power to extend the life of a creditor’s petition after the statutory period had expired. The Court in that case said it was unnecessary to consider whether the slip rule could apply because on the facts it could have no application. But at 208 it pointed to the potentially serious consequences and the prospect of “considerable uncertainty and confusion” if a court were to extend the petition’s life outside the statutory period.

40    The petitioning creditor, however, submitted that s 33(1)(c) of the Bankruptcy Act gave the Court the power to extend the life of a creditor’s petition and submitted that s 52(5) did not expressly provide that the Court could not exercise that discretion more than 12 months after the petition had lapsed. For this reason it contended that there was no conflict between the terms of the Act and the slip rule, and that Griffiths (where there was no mention of s 33(1)(c)) was correctly decided. Yet, in Re Young, to which the petitioning creditor did not refer, the Full Court held that s 33(1)(c) does not empower the court to extend the period if the period has expired before the court is asked to make an order extending it.

41    Before Elyard there was a difference of opinion among judges of this Court about whether the slip rule could be used in the present circumstances. Some of the cases are mentioned in Elyard itself. Since then, echoing what was said in Re Young, Kiefel J said in Re Langridge; Ex parte Bennett Carroll & Gibbons [1998] FCA 879 at [2]:

The object of provisions such as s 52(4) is finality in commercial dealings. Moreover, I have considerable difficulty with the notion that the slip-rule is, in reality, to be extended to correct a party’s error and not the Court’s own unintended error.

42    In Davidova v Murphy [2009] FCA 601 at [82] Flick J expressed reservations about the use of the slip rule for this purpose but felt constrained to follow Griffiths.

43    In Elyard Lockhart J observed at 389 that O 35 r 7 of the former rules (now r 39.05 of the Federal Court Rules 2011) reflects the inherent power of a superior court of record to correct an error in a decree or order. But Elyard was an appeal from a decision of a judge of this Court. The rule with which it was concerned was a rule of this Court. In Griffiths (at [14]) the Full Court referred to authority suggesting that inferior courts have no such power but said that the question was an open one. Absent an inherent power, the Full Court went on to say (at [15]) that “there may be doubt as to whether, in the absence of express statutory authority, an inferior court may acquire it by making a rule of court to that effect”. In the present case, the petitioning creditor did not argue that s 43 of the Federal Circuit Court Act 1999 (Cth), which the Full Court in Griffiths mentioned as a possible source of power, had any application.

44    In these circumstances I am not convinced that the argument Ms Flint wishes to run on appeal is doomed to fail.

45    The reluctance expressed by the Full Court in Griffiths to reconsider Elyard might readily be explained by the fact that it was unnecessary for it to do so because the circumstances for the application of the slip rule were adjudged not to arise. Its remarks about its application to creditors’ petitions were therefore strictly obiter. In the present case, however, the issue the Full Court avoided confronting in Griffiths squarely arises for consideration. The proposed appeal provides a suitable vehicle for resolving it.

46    Moreover, the making of a sequestration order is a serious matter with serious consequences. The proposed appeal raises issues of general importance. The period of delay is not inordinately long. Although prima facie there is prejudice to the petitioning creditor and, indeed, to other creditors, their position is protected. The sequestration order has not been stayed. Indeed, Ms Flint did not ask for a stay. A trustee has been appointed and has taken control of the bankrupt estate. Ms Flint lodged a statement of affairs with the Official Receiver on 31 July 2013 which discloses assets that greatly exceed the value of her debts. On 8 August 2013 the trustee reported to creditors that he has now received $462,884.19 from the sale of a property which “may be sufficient” to pay Ms Flint’s debts in full. He foreshadowed the possibility of an annulment of the bankruptcy pursuant to s 153A of the Act.

47    At the conclusion of the hearing I granted the trustee leave to file evidence and submissions. He then submitted he would suffer prejudice if an extension of time was granted. He proffered evidence of the activities he has undertaken since the making of the sequestration order and the time and effort involved. He complained of a lack of cooperation on Ms Flint’s part. He referred to additional work and additional costs this behaviour had allegedly caused. He contended that, had Ms Flint brought her appeal within the prescribed time and/or co-operated with the trustee, his costs would have been significantly less than they are. He also contended that, unless orders are made to protect his costs, he is at risk of being “statutorily bound to continue to act as trustee while the sequestration order remains in force”. If the sequestration order were to be set aside, he submitted, he may not be able to recover his costs.

48    Unsurprisingly the petitioning creditor supported the trustee’s submissions. It contended that, if the appeal had been filed within time, “the value of the trustee’s work at risk would be reduced by the value of that work undertaken after the expiry of the 21 day period”. I note, too, that the report to creditors implies that at any time before then Ms Flint did not inform the trustee that she was intending to appeal or, indeed, that she had applied for an extension of time to do so.

49    The trustee’s complaints seem to me to be unrelated to the delay in filing a notice of appeal. Absent a stay of the sequestration order, the trustee would have been bound to perform or to continue to perform his duties regardless of whether the notice of appeal had been filed within time. In so doing he would have incurred costs. With the exception of the costs of this application, there is no reason to conclude that the costs are any greater than they otherwise would have been because Ms Flint did not file her notice of appeal within the prescribed time. I do not see why any lack of cooperation by the bankrupt with the trustee, though unfortunate, has any bearing upon the exercise of the discretion to grant or refuse an extension of time to appeal.

Conclusion

50    On balance, therefore, I am persuaded that this is a proper case to exercise the Court’s discretion in favour of extending the time to appeal. As her counsel acknowledged, however, Ms Flint should nevertheless pay the petitioning creditor’s costs of the application. She should also pay the costs of the trustee on this application. Costs should be paid out of the bankrupt estate in accordance with s 109(1)(a) of the Bankruptcy Act.

51    I will order that the hearing of the appeal be expedited. In the result, the appeal is likely to be heard no later than it would have been if the notice of appeal had been filed within the prescribed time. This may go at least part of the way to alleviating some of the trustee’s concerns.

Associate:

Dated:    13 September 2011