Application by Benjamin Peter Piggott [2010] FMCA 23 (14 January 2010)

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Application by Benjamin Peter Piggott [2010] FMCA 23 (14 January 2010)

Last Updated: 19 January 2010

FEDERAL MAGISTRATES COURT OF AUSTRALIA

APPLICATION BY BENJAMIN PETER PIGGOTT

[2010] FMCA 23

BANKRUPTCY – Extension of time for holding of creditors meeting – power to extend time – exercise of discretion – factors.

Bankruptcy Act 1966, ss.33(1)(c), 194

Application by Benjamin Peter Piggott [2009] FMCA 1061 Application of Malcolm Melvyn Posner [2007] FMCA 610 Council of the New South Wales Bar Association v Eddy (2006) 151 FCR 34; [2006] FCA 254 Hunter Valley Developments Pty Ltd v Cohen [1984] FCA 176; (1984) 3 FCR 344 Pretorius v Daltons Carpet Tiles Pty Ltd (1984) 1 FCR 346 Re Gowing; Ex parte Deputy Registrar in Bankruptcy (1985) 11 FCR 111

Applicant:

APPLICATION BY BENJAMIN PETER PIGGOTT AS CONTROLLING TRUSTEE OF THE ESTATE OF DAVID JOHN POKE

File Number:

PEG 5 of 2010

Judgment of:

Lucev FM

Hearing date:

14 January 2010

Date of Last Submission:

14 January 2010

Delivered at:

Perth

Delivered on:

14 January 2010

REPRESENTATION

Counsel for the Applicant:

Mr P D'Angelo

Solicitors for the Applicant:

D'Angelo Legal

ORDERS

(1) This application be made returnable instanter.
(2) The time for holding of the Meeting of Creditors pursuant to Section 194 of the Bankruptcy Act 1966 (Cth) be extended from 27 January 2010 to 17 February 2010.

FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PERTH

PEG 5 of 2010

APPLICATION BY BENJAMIN PETER PIGGOTT AS CONTROLLING TRUSTEE OF THE ESTATE OF DAVID JOHN POKE

Applicant

REASONS FOR JUDGMENT

(Edited ex tempore reasons)

1. This is an application under s.33 of the Bankruptcy Act 1966 (Cth)[1] to extend the time set by s.194(1) of the Bankruptcy Act, in which the controlling trustee must call a meeting of creditors. The application seeks to be made returnable instanter and the Court is prepared to deal with it on that basis.
2. The controlling trustee has filed an affidavit, sworn on 12 January 2010.[2]
3. The Affidavit deposes to the following:
   1. that there was a requirement to hold a meeting of creditors by 27 January 2010 by giving notice by 14 January 2010;[3]
   2. the circumstances of the investigation into the Debtor’s affairs including:
      • (i) the debtor’s legal and beneficial ownership of hay stock and cattle situated at some eleven various leasehold farming properties in Western Australia;
      • (ii) the debtor’s disposal of and/or dealings with cattle the subject of separate Bills of Sale with Landmark Operations Limited and Landmark Financial Services Limited;
      • (iii) the veracity of creditors’ claims against the Debtor or alternatively hay or cattle of the Debtor which were purportedly sold by the debtor to the creditors concerned pursuant to various arrangements, some of which still remain in the possession of the debtor;
      • (iv) the debtor’s conduct generally, in particular his dealings with customer prepayment funds (for hay and cattle agistment) as well as cattle subject to Bills of Sale; and
      • (v) whether the debtor’s proposed Personal Insolvency Agreement (or variation thereof) is in creditors’ interests as compared against bankruptcy or ending the controlling trustee’s control over the debtor’s property;[4]
   100. given the nature and structure of the debtor’s business (farming) operations, the following issues which have resulted in a significant amount of time being applied by the controlling trustee towards dealing with the continuity of the debtor’s business operations in the interests of creditors:
        1. liaising with and negotiating continuity or vacation of various leased properties with the three separate landowners concerned;
        2. arranging fire break compliance;
        3. arranging completion of the debtor’s remaining hay production; and
        4. liaising with and assessing the viability of the debtor’s existing cattle agistment arrangements with clients,

which, in addition to:

5. third party delays in responding to or providing information given the festive season and public holidays; and
6. various intermittently imposed property use (i.e. prohibited operation of machinery or vehicles) or access bans attributable to fire risks,

have resulted in the controlling trustee’s investigations being delayed.[5]

Grounds for extension of time application

4. The grounds for the extension of time application are set out in the Affidavit as follows:
   • I seek an extension of time for the holding of the first Meeting of Creditors to enable me to:
     • (a) Make such enquiries and investigation in connection with the Debtor’s property and examinable affairs as I consider necessary (Section 190(2)(b)) and in accordance with my duties as Controlling Trustee (Section 190A(f)); and
     • (b) Deal with the Debtor’s property in any way that will, in my opinion, be in the interests of creditors (Section 190(2)(d)),
     • given the number of issues and complexities concerning the Debtor’s affairs in this regard .[6]

Power to extend time

5. The power to extend time vested in this Court is a power under s.33(1)(c) of the Bankruptcy Act to extend time for purposes including the s.194 meeting of creditors; that power has been referred to and upheld in Re Gowing; Ex parte Deputy Registrar in Bankruptcy,[7] Application of Malcolm Melvyn Posner[8] and Application by Benjamin Peter Piggott.[9]
6. As Pretorius v Daltons Carpet Tiles Pty Ltd,[10] Council of the New South Wales Bar Association v Eddy[11] and Piggott make clear, it is only under s.33(1)(c) that time for a meeting of creditors under s.194 can be validly extended.

Exercise of discretion

7. In terms of the exercise of the discretion to extend time, no criteria for extending the time for a meeting of creditors under s.194 is set out in the Bankruptcy Act.
8. In the Court’s view, it is appropriate to apply principles similar to those ordinarily applied by courts in determining whether to extend time, namely to have regard to:
   1. the fact that relevant time limits ought not be lightly ignored;
   2. the length of the delay and whether there is an acceptable reason for the delay;
   100. the merit of the substantive matter; and
   4. whether there is prejudice suffered by an affected party.[12]
9. In this case the relevant time limits have not been ignored at all. The controlling trustee promptly and properly made application in the circumstances outlined for an extension of time.
10. The length of the delay in holding the meeting of creditors will be small: three weeks. There is no undue delay, given the effect of the facts outlined in support of the application for an extension of time and the time of year during which matters have had to be pursued.
11. There appears to be merit in the substantive matter, as confirmed by the various papers including the Debtors Form 3 Statement of Affairs and the Debtors proposed Personal Insolvency Agreement.
12. No party affected seems to oppose the application for an extension of time. None appears and the Court can infer that no prejudice is suffered by any affected party.
13. In conclusion, therefore, and in the circumstances the Court considers that it is appropriate to extend time for the holding of the creditors meeting from 27 January 2010 to 17 February 2010. There will be orders in terms of paragraphs 1 and 2 of Part A of the application.

I certify that the preceding 13Error! Style not defined.!Syntax Error, !Error! Style not defined.Error! Style not defined.!Syntax Error, !thirteenthirteen (13) paragraphs are a true copy of the reasons for judgment of Lucev FM

Associate: S. Gough

Date: 15 January 2010

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[1] “Bankruptcy Act”.
[2] Affidavit of Benjamin Peter Piggott, sworn 12 January 2010 (“Affidavit”).
[3] Affidavit, para.5.
[4] Affidavit, para.12.
[5] Affidavit, para.13.
[6] Affidavit, para.9.
[7] (1985) 11 FCR 111 at 112 and 113 per Beaumont J.
[8] [2007] FMCA 610 at paras.5-8 per Lucev FM.
[9] [2009] FMCA 1061 at paras.6-10 (“Piggott”).
[10] (1984) 1 FCR 346 at 352 and 353.
[11] [2006] FCA 254; (2006) 151 FCR 34 at 39-40 per Edmonds J; [2006] FCA 254 at para.30 per Edmonds J.
[12] Hunter Valley Developments Pty Ltd v Cohen [1984] FCA 176; (1984) 3 FCR 344 at 348-349 per Wilcox J.