Federal Court of Australia

Van Eps v Child Support Registrar (No 2) [2023] FCA 1204

ORDERS

THE COURT ORDERS THAT:

1.    The oral application for an adjournment of the proceedings be refused.

2.    The application to set aside the Bankruptcy Notice be dismissed.

3.    The applicant pay the respondent’s costs to be taxed if not otherwise agreed.

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

REASONS FOR JUDGMENT

MEAGHER J

INTRODUCTION

1    This is an application to set aside Bankruptcy Notice Number BN 259346, which expires on 24 October 2023, on the basis that the applicant has a cross-demand exceeding the amount of the final judgment claimed under the Bankruptcy Notice.

2    On 11 September 2023, Collier J handed down judgment which determined that the application was not filed before the expiration of the time fixed for compliance with the Bankruptcy Notice for the purposes of s 41(7) of the Bankruptcy Act 1966 (Cth): Van Eps v Child Support Registrar [2023] FCA 1068 at [35].

3    As her Honour noted, the Court has no jurisdiction to extend the time fixed for compliance with the Bankruptcy Notice in circumstances where the application was filed after the expiration of the date for compliance. Accordingly, the Court has no jurisdiction to set aside the Bankruptcy Notice.

4    The matter was brought before me in my capacity as duty judge on 5 October 2023. The respondent sought the proceeding be dismissed, as a natural consequence of Collier J’s judgment. The applicant read an affidavit sworn by him on 3 October 2023, which annexed a notice of appeal of Collier J’s judgment, which was lodged through the online portal on 19 September 2023 but is yet to be accepted for filing. There is a question as to whether Collier J’s judgment is interlocutory in nature and therefore requires that leave to appeal be sought pursuant to s 24(1A) of the Federal Court of Australia Act 1976 (Cth). Such a question is not relevant to determining whether the proceeding ought to be dismissed or adjourned.

5    The applicant sought an adjournment of the proceeding to a date to be fixed pending determination of the appeal, submitting that to dismiss this proceeding would render the appeal futile. Furthermore, the applicant submitted that he is unable to seek a stay as Collier J made a declaration which is not amenable to a stay of execution.

6    The respondent opposed granting the adjournment on the basis that it has until 24 October 2023 to file a Creditor’s Petition, the date of which cannot be extended, and if the adjournment is granted it is likely that the respondent will be unable to file a Creditor’s Petition in time and therefore render the bankruptcy proceedings nugatory.

7    At the hearing, I ordered that the proceeding be dismissed. These are my reasons for doing so.

consideration

8    In determining whether or not to grant an adjournment, Burley J in Zetta Jet Pte. Ltd v The Ship "Dragon Pearl" [2018] FCA 878 at [37]-[38] noted the following relevant considerations:

As the High Court made clear in Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175 (AON), the types of matters that should be considered in the context of an adjournment application include: (a) the explanation for the adjournment; (b) the detriment to other parties; (c) the detriment to the court and other litigants, and; (d) the choices made by the parties as to the claims to be made and how they are to be framed. That, of course, is not an exhaustive list.

In the current context it is also apposite to note that in the exercise of its discretion it is appropriate for the Court also to consider the position of other litigants and confidence in the judicial system generally: AON at [5] (French CJ) and [111] (Gummow, Hayne, Crennan, Kiefel and Bell JJ). It is for the plaintiffs to persuade the Court, on sufficient material, that an adjournment is appropriate. As the plurality in AON said at [103], [106], [107], if an application that would result in an adjournment is sought and no, or no sufficient explanation is given then the application should be refused. French CJ said (at [4]) that where an application is made “late in the day”, without adequate explanation and necessitating the vacation of a trial date, the applicant bears a heavy burden to show that the exercise of the Court’s discretion should be in its favour.

9    I consider that the detriment faced by the respondent far outweighs any countervailing considerations. Collier J’s judgment determined that this proceeding was filed after the expiry of the time for compliance, and the Court has no power to extend the date for compliance. Accordingly, once the date for compliance has lapsed, the applicant has committed an act of bankruptcy in accordance with s 40(1)(g) of the Act, and the Bankruptcy Notice is therefore available for use by creditors for the purpose of presenting a Creditor’s Petition: Hubner v ANZ Banking Group Ltd [1998] FCA 1779 (Dowsett J). The creditors are entitled to the benefit of Collier J’s judgment and are required to obtain any petitions by 24 October 2023. The Court has no jurisdiction to extend this timeframe. Given those reasons, I am not satisfied that the applicant’s explanation is sufficient to warrant adjournment of the proceeding.

10    A further implication of Collier J’s judgment is that it has rendered this proceeding incompetent, in circumstances where the Court has no jurisdiction to set aside the Bankruptcy Notice. Although the applicant seeks to appeal against that judgment, this proceeding ought to presume that the judgment is correct unless the Court orders otherwise. Accordingly, this proceeding must be dismissed.

CONCLUSION

11    I am not satisfied that the proceedings ought to be adjourned pending the outcome of the appeal against Collier J’s judgment. Therefore, as the proceeding is incompetent, it must be dismissed. The applicant must pay the respondent’s costs to be taxed if not otherwise agreed.

Associate:

Dated:    9 October 2023