McLeod v Falvey [1995] FCA 775

McLeod v Falvey [1995] FCA 775

Although the appeal was not shown to be other than bona fide and there was no suggestion it was not being prosecuted with due diligence, the applicants' prospects on appeal were not good and extending time could prejudice creditors by placing potentially recoverable mortgage transactions beyond the reach of s.122. The respondents' undertaking not to progress any petition to obtain sequestration pending the appeal gave limited protection against prejudice to the applicants, so the discretion should be exercised against extending time.

Jurisdiction
Australia
Judgment Date
20 September 1995
Procedural Posture
Bankruptcy Application to Extend Time for Compliance With a Bankruptcy Notice / Application Pending Appeal to the Court of Appeal of the Supreme Court of Queensland From a District Court Judgment
Outcome
Application dismissed.
Legal Topics
['extension of Time for Compliance With Bankruptcy Notice' 'bankruptcy Notice' 'appeal Against Judgment Debt' 'discretion Under S.41(6 C) of the Bankruptcy Act 1966 (cth)' 'voidable Preferences Under S.122 of the Bankruptcy Act 1966 (cth)' 'prejudice to Creditors']
['bankruptcy' 'insolvency' 'civil Procedure'] ['extension of Time for Compliance With Bankruptcy Notice' 'bankruptcy Notice' 'appeal Against Judgment Debt' 'discretion Under S.41(6 C) of the Bankruptcy Act 1966 (cth)' 'voidable Preferences Under S.122 of the Bankruptcy Act 1966 (cth)' 'prejudice to Creditors']

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Procedural Posture

Bankruptcy Application to Extend Time for Compliance With a Bankruptcy Notice / Application Pending Appeal to the Court of Appeal of the Supreme Court of Queensland From a District Court Judgment

Legal Issues

  1. 1 ['Whether the filing of the appeal was the institution of proceedings to set aside the judgment for the purposes of s.41(6A)(a) of the Bankruptcy Act 1966 (Cth).' 'Whether the Court should exercise its discretion to extend the time for compliance with the bankruptcy notice until after the hearing and determination of the appeal.' 'Whether the prospects of success on appeal and possible prejudice to creditors under s.122 of the Bankruptcy Act 1966 (Cth) were relevant considerations.']

Ratio Decidendi

Although the appeal was not shown to be other than bona fide and there was no suggestion it was not being prosecuted with due diligence, the applicants' prospects on appeal were not good and extending time could prejudice creditors by placing potentially recoverable mortgage transactions beyond the reach of s.122. The respondents' undertaking not to progress any petition to obtain sequestration pending the appeal gave limited protection against prejudice to the applicants, so the discretion should be exercised against extending time.

Court Disposition

Application dismissed.

Orders

  • ['Upon the undertaking of the respondents that they will not in the event that they present a petition based upon non-compliance with the bankruptcy notice filed 31 August 1995, seek to progress the petition to obtain an order for sequestration pending the outcome of an appeal instituted by the applicants in the...