Re Warren Jacobs; Ex Parte: GEC Australia Ltd [1997] FCA 36 (7 February 1997)

CATCHWORDS

BANKRUPTCY - Bankrupt delivers statement of affairs to Official Receiver as his trustee in bankruptcy but does not file it in office of Registrar of Bankruptcy as required by para 54 (1) (a) of Bankruptcy Act 1966 - Official Receiver does not file it in office of Registrar either - oversight discovered more than three years later when statement filed with Registrar - three year period for discharge by operation of law provided for in sub-s 149 (4) of Act runs from date of filing - application by Bankrupt for orders and declaration directed to achieving result that he has been discharged although period of filing with Registrar has only just commenced to run - amendment to para 54 (1) (a) by Bankruptcy Legislation Amendment Act 1996 (Act No 44 of 1996) to require filing in office of Official Receiver rather than in office of Registrar in Bankruptcy - whether original delivery of statement of affairs to Official Receiver in his capacity as trustee in bankruptcy is, retrospectively, a filing which activates sub-s 149 (4) rendering present application by bankrupt otiose.

Bankruptcy Act 1966 , sub-ss 54 (1), 149 (4)

Re Rohde (1993) 42 FCR 149

Re Khoo, unreported, 16 August 1995, Lindgren J (NB 1273/90)

Re: WARREN JACOBS

Ex parte: GEC AUSTRALIA LTD

No NB 1429 of 1993

Lindgren J

Sydney

7 February 1997

BANKRUPTCY ACT

IN THE FEDERAL COURT OF AUSTRALIA )

EXERCISING FEDERAL JURISDICTION )

IN BANKRUPTCY ) No NB 1429 of 1993

GENERAL DIVISION )

Re: WARREN JACOBS

Ex parte: GEC AUSTRALIA LTD

CORAM: Lindgren J

PLACE: Sydney

DATE: 7 February 1997

MINUTE OF ORDERS

THE COURT:

1. ORDERS that the time provided by sub-s 54 (1) of the Bankruptcy Act 1966 for the filing of the Bankrupt's statement of affairs be enlarged to a time expiring on 11 October 1996.

2. ORDERS that the time provided by s 149 (4) of the Bankruptcy Act 1966 be abridged to a period of three days from the date (11 October 1996) on which the Bankrupt filed his statement of affairs.

3. DECLARES that the filing by the Bankrupt of his statement of affairs on 11 October 1996 is an effective filing for the purpose of sub-s 149 (4) of the Bankruptcy Act 1966.

4. DECLARES that consequential upon the making of orders 1 and 2 and declaration 3 above, the Bankrupt was discharged from bankruptcy by the operation of sub-s 149 (4) of the Bankruptcy Act 1966 at the end of the period of three days from 11 October 1996.

5. ORDERS that the Bankrupt pay the Official Trustee's costs.

NOTE: Settlement and entry of orders is dealt with in rule 124 of the Bankruptcy Rules.

BANKRUPTCY ACT

IN THE FEDERAL COURT OF AUSTRALIA )

EXERCISING FEDERAL JURISDICTION )

IN BANKRUPTCY ) No NB 1429 of 1993

GENERAL DIVISION )

Re: WARREN JACOBS

Ex parte: GEC AUSTRALIA LTD

CORAM: Lindgren J

PLACE: Sydney

DATE: 7 February 1997

REASONS FOR JUDGMENT

On 4 June 1993, a sequestration order was made against the estate of the Bankrupt. The Official Trustee then became, and he still is, the trustee of his estate. At that time sub-s 54 (1) of the Bankruptcy Act 1966 ("the Act") provided as follows:

"54(1) Where a sequestration order is made, the person against whose estate it is made shall, within 14 days from the day on which he is notified of the bankruptcy:

(a) make out and file in the office of the Registrar for the district in which the sequestration order was made a statement of his affairs; and

(b) furnish a copy of the statement to the trustee." (underlining supplied)

It is common ground between the Bankrupt and the Official Trustee that the Bankrupt made out a statement of his affairs and delivered it to the Official Trustee on 14 July 1993 and that the Official Trustee did not file it in the office of the Registrar. The Bankrupt has stated in support of his present application, shortly to be described:

"I did everything that I was told to do by my trustee. After my 3 years was up I rang my trustee to see what I had to do next. He told me to apply to the court for my certificate of discharge. They in turn told me I was not eligible for discharge because they had not received my statement of affairs. ... "

Sub-section 149 (4) of the Act provides as follows:

"149(4) If the bankrupt becomes a bankrupt after the commencement of section 27 of the Bankruptcy Amendment Act 1991 , the bankrupt is discharged at the end of the period of 3 years from the date on which the bankrupt filed his or her statement of affairs."

In the present case, the Bankrupt's statement of affairs was not filed in the office of the Registrar until 11 October 1996. Thereupon, the three year period referred to in sub-s 149 (4) commenced to run. It will end on 11 October 1999. Subject to the issue addressed I say below, when, but not before, it ends, the Bankrupt will be discharged by the operation of sub-s 149 (4). Perhaps not unnaturally in the circumstances already mentioned, the Bankrupt regards the prospect of waiting until then to be discharged as unsatisfactory.

By an application filed on 11 December 1996, the Bankrupt, who appears for himself, seeks, in substance, immediate discharge from bankruptcy.

The problem posed is, unfortunately, not uncommon. In Re Rohde (1993) 42 FCR 149, Burchett J concluded (at 150) that it was open to the Court "though by a somewhat curious route, to cure the quite Draconian effect which the amendments to the Act, recently made, seem to have brought about." That route involves exercise of the powers given by paras 30 (1) (b) and 33 (1) (c) of the Act. Not thinking that his Honour was clearly wrong in his view that those powers were available and apt to afford a remedy, I followed him in Re Khoo, unreported, 16 August 1995 (NB 1273/90). Other Judges addressing situations in which a bankrupt's statement of affairs was filed in the office of the Registrar long after the period of 14 days referred to in para 54 (1) (a) have also made orders and declarations granting relief generally to the same effect as that granted in Re Rohde and Re Khoo; cf Re Neal, unreported, Hill J, 2 May 1995 (NB 1965/92) and Re Calvino, unreported, Tamberlin J, 30 July 1996 (NB 1547/93). In Re Menere, unreported, 3 September 1996 (NB 1415/93), Burchett J again granted relief in circumstances of the kind in contemplation.

The Bankruptcy Legislation Amendment Act 1996 , (Act No 44 of 1996), which commenced to operate on 16 December 1996, gives rise to a further issue. That Act amended para 54 (1) (a) of the Act by omitting "Registrar" and substituting "Official Receiver". Accordingly, as from 16 December 1996, para 54 (1) (a) has required a person against whose estate a sequestration order is made, within 14 days from notification of the bankruptcy to make out and "file in the office of the Official Receiver for the District in which the sequestration order was made a statement of his affairs". Sub-section 149 (4) has not been amended: it still provides simply that " ... the bankrupt is discharged at the end of the period of three years from the date on which the bankrupt filed his or her statement of affairs". The subsection does not add the words "in the office of the Registrar ...". This has given rise to a suggestion that perhaps sub-s 149 (4) has been activated by the Bankrupt's delivery of his statement of affairs to the Official Receiver, even though that event occurred prior to 16 December 1996. If the suggestion is to be accepted, sub-s 149 (4) has, at least as from 16 December 1996 when the amendment to para 54 (1) (a) commenced, operated to discharge the Bankrupt on 15 July 1996, and renders the present application by the Bankrupt otiose. Ms Nash, the solicitor who appeared for the Official Trustee, properly raised this possibility on the hearing, making it clear that she did not seek to support it, and that if I should not accept it her client would consent to the granting of appropriate relief. Apparently the issue for decision has generated discussion among insolvency practitioners and is likely to arise in other cases.

For the reasons set out below, I have concluded that the Bankrupt did not "file his statement of affairs" on 14 July 1993 for the purpose of sub-s 149 (4).

1. The reference in sub-s 149 (4) to "the date on which the bankrupt filed his or her statement of affairs" is a reference to the date on which the bankrupt filed his or her statement of affairs in para 54 (1) (a). In the case of the sequestration order made in this case, that was a filing in the office of the Registrar and in the case of a sequestration order made on or after 16 December 1996, it is a filing in the office of the Official Receiver. (I need not discuss in this case the special position of a sequestration order made before 16 December 1996 where the Bankrupt's statement of affairs was not filed in the Registrar's office before that date.)

2. As a matter of construction, the Bankrupt's delivery on 14 July 1993 of his statement of affairs to the Official Receiver in his capacity as trustee of the Bankrupt's estate was not a "filing" of it "in the office of the Official Receiver". A "filing", whether in the office of the Registrar or of the Official Receiver, necessarily involves an intention to file on the part of the bankrupt and an intention to receive as filed on the part of the Registrar or the Official Receiver, as the case may be. It is distinct from mere physical delivery. Sub-section 54 (4) itself distinguishes between the obligation to "file" a statement of affairs in the office of the Registrar (since 16 December 1996, in the office of the Official Receiver), and the obligation to "furnish" a copy of the statement to the trustee in bankruptcy. The fact that delivery was to the Official Receiver in his capacity as trustee of the Bankrupt's estate also demonstrates that the delivery did not constitute a filing in the office of the Official Receiver.

3. It is extremely improbable that the legislature intended the construction which has been raised for consideration. According to that construction, there have been, in the present case, two "filings" which have activated sub-s 149 (4); one in the Official Receiver's office on 14 July 1993 and one in the Registrar's office on 11 October 1996. According to that construction, the three year period commenced to run when the Bankrupt filed his statement of affairs in the Registrar's office on 11 October 1996 and had been running for just over two months when, on 16 December 1996, the amendment to para 54 (1) (a), read in conjunction with sub-s 149 (4), retrospectively caused the period of three years to commence on 14 July 1993, and, indeed, to expire on 14 July 1996 - prior to the very filing (on 11 October 1996) in the Registrar's office for which the Act required at that time. I cannot accept that Parliament intended the amendment to para 54 (1) (a) to produce such capricious and bizarre results.

The Bankrupt has satisfactorily explained the failure to file his statement of affairs in the office of the Registrar within 14 days from the day on which he was notified of the bankruptcy, as required by para 54 (1) (a) in the form in which it stood in 1993. The Official Trustee consents to the making of orders and declarations appropriate to achieve the result that the Bankrupt has been discharged by the operation of sub-s 149 (4) of the Act. In the present case, the discovery of the oversight and the subsequent filing with the Registrar occurred after the date (14 July 1996) on which a period of three years from the date on which delivery of the statement of affairs to the Official Receiver as trustee of the Bankrupt's estate occurred. If that filing had occurred before that date, I would have thought it appropriate to abridge the time referred to in sub-s 149 (4) to a period expiring on 14 July 1996. But the discharge effected by sub-s 149 (4) cannot be made to occur earlier than the date of the filing with the Registrar (11 October 1996). It is, however, appropriate that I choose any date after that date. I choose 14 October 1996, that is to say, a period of three days (instead of three years) from the date on which the Bankrupt filed his statement of affairs in the office of the Registrar. I think it appropriate to make orders accordingly.

The Court:

1. Orders that the time provided by sub-s 54 (1) of the Bankruptcy Act 1966 for the filing of the Bankrupt's statement of affairs be enlarged to a time expiring on 11 October 1996.

2. Orders that the time provided by s 149 (4) of the Bankruptcy Act 1966 be abridged to a period of three days from the date (11 October 1996) on which the Bankrupt filed his statement of affairs.

3. Declares that the filing by the Bankrupt of his statement of affairs on 11 October 1996 is an effective filing for the purpose of sub-s 149 (4) of the Bankruptcy Act 1966.

4. Declares that consequential upon the making of orders 1 and 2 and declaration 3 above, the Bankrupt was discharged from bankruptcy by the operation of sub-s 149 (4) of the Bankruptcy Act 1966 at the end of the period of three days from 11 October 1996.

5. Orders that the Bankrupt pay the Official Trustee's costs.

I certify that this and the preceding 8 pages are a true copy of the Reasons for Judgment of the Honourable Justice Lindgren.

Associate:

Dated: 7 February 1997

Heard: 4 February 1997

Place: Sydney

Decision: 7 February 1997

Appearances: The Bankrupt appeared in person.

Ms Sally Nash, solicitor, appeared for the Official Trustee as respondent to the Bankrupt's application.