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[2010] FCA 1024
procedural. The applicant's motion, notice of which was given on 30 August 2010, was refused. The respondent was granted liberty to apply within three days for costs orders relating to the motion.
2 cited instruments linked from this judgment.
Tracey J refused Mr Kakavas' request for more time to comply with Paradise Enterprises Limited's bankruptcy notice. The request depended on what might happen in a separate proceeding involving another creditor, including a possible further appeal. The Court considered those future events uncertain and said that even a successful appeal in the separate matter would not change Mr Kakavas' position in this case. The Court also said that granting the extension on those assumptions would circumvent the legislative policy reflected in s 33(4B)(a) of the Federal Court of Australia Act 1976 (Cth).
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2,257 words · generated 02/10/2026
This was a short procedural judgment about a request for more time to comply with a bankruptcy notice. It was not a decision determining whether the underlying debt was owed, whether the bankruptcy notice was otherwise valid, or whether Mr Kakavas was bankrupt. The motion concerned whether time to comply with one particular notice should be extended again while events unfolded in another proceeding.
The applicant, Harry Kakavas, had previously sought leave to appeal a Federal Magistrates Court decision that refused an extension of time to comply with a bankruptcy notice served by Paradise Enterprises Limited. Tracey J had dismissed that leave application in Kakavas v Paradise Enterprises Limited [2010] FCA 915. The judgment explains that the original extension had been sought to last through the hearing and determination of an appeal to the Victorian Court of Appeal from the judgment underlying Paradise's bankruptcy notice ([1]).
When the earlier judgment was delivered, Mr Kakavas' counsel asked for more time to allow an application for special leave to appeal to the High Court to be filed. The Court extended compliance time to 4:45 pm on 8 September 2010, and directed that any further extension application be made by notice of motion supported by affidavit by 30 August 2010 ([2]). Mr Kakavas filed such a motion on 30 August. He sought an extension until 4:30 pm on the day a Federal Magistrate delivered judgment in another proceeding, MLG 880/2010 ([3]).
That separate proceeding concerned a bankruptcy notice served by Crown Melbourne Limited. The judgment records that an application for an extension in that matter had been refused by a Registrar, followed by an appeal to the Federal Magistrates Court. The Federal Magistrate had adjourned the matter to 10 September 2010 pending Tracey J's earlier decision on the leave application in the Paradise proceeding ([4]).
Mr Kakavas anticipated that the Federal Magistrate would dismiss his application in the Crown matter because it relied on arguments rejected in the Paradise proceeding. He said that he would then seek to appeal and ask the Chief Justice to convene a Full Court ([5]). Paradise opposed the further extension, arguing that it was an abuse of process and incompetent ([6]). The Court refused the motion. It also granted Paradise liberty to apply within three days for costs orders relating to the motion ([13]-[14]).
The Court's central concern was the connection between the requested extension and the separate Crown proceeding. The extension was sought in the Paradise matter, but its proposed endpoint depended on a decision in the Crown matter and possible further appellate steps there. Tracey J treated the proposed sequence as uncertain. It depended on the anticipated Federal Magistrate's decision, an application for leave to appeal, the possibility that the Chief Justice would convene a Full Court, and the possibility that the Full Court would grant leave and allow an appeal ([10]-[11]).
The Court identified a more basic problem with relying on that sequence: even if the proposed Full Court were convened and the appeal in the Crown matter succeeded, that result would have no bearing on Mr Kakavas' legal position in the Paradise matter ([10]). The two matters involved different creditors and different debts. The judgment also notes that the factual and legal findings, and the discretionary considerations, in the other proceeding could differ ([8]). It therefore did not treat a hoped-for outcome in one case as a reason to keep the compliance period open in the other.
At paragraph [11], counsel argued that if the Full Court found solvency was not a relevant issue, that might persuade Tracey J to extend time in the Paradise proceeding until the Court of Appeal appeal had been determined. The judge described that submission as resting on “many assumptions”. Those assumptions included whether the facts in the proceedings were relevantly the same, whether the Federal Magistrate would apply the same discretionary considerations, and whether the Full Court would decide the solvency point as proposed.
Tracey J then gave the key discretionary reason: “It would not be appropriate to exercise my discretion again to extend the time for compliance on the basis of many assumptions” ([12]). The judge added that such an extension would involve circumventing the legislative policy reflected in s 33(4B)(a) of the Federal Court of Australia Act 1976 (Cth). The judgment does not provide a broader exposition of that provision. Its point is specific: in the circumstances presented, a further extension based on the uncertain appellate path in another proceeding would bypass the policy the judge understood the provision to reflect.
The judgment also states that the earlier refusal of leave brought the statutory processes concerning this particular bankruptcy notice to an end. If Mr Kakavas failed to comply within the required or extended time, it would be open to Paradise to take further steps under the Bankruptcy Act 1966 (Cth), though the respondent might or might not do so ([9]). The Court did not decide whether Paradise would take those steps or what their result might be.
The respondent had additionally argued that the Court's jurisdiction was spent and that Tracey J was functus officio, relying on ss 25(2) and 33(4B)(a) of the Federal Court of Australia Act 1976 (Cth) ([7]). The reasons do not expressly determine that objection as an independent legal holding. Instead, the judge refused the motion because the requested extension lacked utility and because granting it on the proposed basis would circumvent legislative policy ([12]-[13]). It is important not to treat the respondent's submissions as findings adopted by the Court.
This judgment does not purport to change or comprehensively state the law governing bankruptcy notices, extensions of time, or appeals. Its contribution is a fact-specific application of discretion in a procedural setting. Before the motion, the earlier refusal of leave had left Mr Kakavas with the compliance period set by the notice, as extended by the Court to 4:45 pm on 8 September 2010 ([2], [9]). The new motion sought to tie a further extension to a decision in a different proceeding.
After the decision, the requested extension was refused. The Court's formal order did not itself declare Mr Kakavas bankrupt or order Paradise to take any further step. The reasons say only that failure to comply within the required or extended time would leave it open to the respondent to take further steps under the Bankruptcy Act, and that it might or might not do so ([9]). The Court also allowed Paradise to apply within three days for costs orders connected with this motion ([14]).
The judgment cites s 33(4B)(a) as reflecting legislative policy relevant to the proposed exercise of discretion, and refers to s 25(2) in recording the respondent's submission and discussing the possibility of a Full Court being convened ([7], [10], [12]). It does not set out the text of either provision or decide a general question about their operation. Nor does it establish that an extension can never be linked to events in another proceeding. Its narrower reasoning is that this proposed extension depended on several contingencies and a result in the other case would not affect the applicant's position in the Paradise case.
At [9], the judge said the earlier refusal of leave brought “an end to the statutory processes” relating to the obligation to comply with this bankruptcy notice. In context, this describes the procedural position following the unsuccessful leave application. It does not say that no further steps of any kind could occur: the same paragraph says the respondent could take further steps under the Bankruptcy Act if the notice was not complied with, while noting that it might choose not to do so.
At [10], Tracey J said that even if a Full Court were assembled and allowed an appeal in the Crown proceeding, that outcome “would have no bearing” on Mr Kakavas' legal position in the Paradise proceeding. In plain English, success in the separate creditor's case would not resolve or change the procedural position concerning Paradise's notice.
At [11], the judge identified the uncertain steps on which counsel's proposed reasoning depended. A possible finding in the Crown case about solvency did not, by itself, establish that the same facts, discretionary considerations, or outcome applied in the Paradise proceeding. The passage is an assessment of the particular submission, not a general rule that solvency can never matter in a bankruptcy-related application.
At [12], the judge stated that it was inappropriate to grant another extension on the basis of “many assumptions”, especially where doing so would circumvent the policy reflected in s 33(4B)(a). This is the judgment's clearest statement of its reasoning. The phrase describes why this particular extension request was not granted; the judgment does not define a general test for all extension applications.
At [13], the judge concluded there was “no utility” in further extending time and formally refused the motion. The operative order appears at the beginning of the supplied judgment and is consistent with this conclusion.
The reasoning is most relevant as an analogy where a party seeks a procedural extension in one matter, but the requested timing or justification depends on possible outcomes in another matter. The features that mattered here were that the other proceeding concerned a different creditor and debt ([4], [8]); the anticipated outcome was uncertain ([10]-[11]); and the Court considered that even success in the other proceeding would not affect the applicant's legal position in the current one ([10]).
The reasoning may also be relevant where a party relies on a chain of future events, such as an expected adverse decision, a proposed appeal, a possible decision to convene a larger court, and a hoped-for ruling on an issue. Tracey J treated those contingencies as insufficient grounds for the requested extension in the circumstances of this case ([10]-[12]).
The judgment is less directly informative where the other proceeding concerns the same debt, the same parties, materially identical facts, or an issue that would directly determine the applicant's position in the proceeding for which an extension is sought. Tracey J expressly identified differences between the matters and possible differences in factual findings and discretionary considerations ([8], [11]). The reasons do not decide how a materially different case should be resolved.
The decision should also be kept within its procedural limits. It is not a ruling on the merits of Mr Kakavas' appeal to the Victorian Court of Appeal, the validity of either bankruptcy notice, or whether any creditor would ultimately take further steps under the Bankruptcy Act. Those matters are not determined in these reasons.
The supplied judgment does not identify any later judicial treatment of Kakavas v Paradise Enterprises Limited (No 2) [2010] FCA 1024. It therefore provides no basis to say that a later court followed, distinguished, approved, questioned, or overruled this decision.
The reasons refer to two earlier proceedings: Kakavas v Paradise Enterprises Limited [2010] FCA 915, which dealt with the leave application, and Kakavas v Paradise Enterprises Limited [2010] FMCA 574, the Federal Magistrates Court decision underlying that procedural history ([1]). Those are earlier decisions, not later treatment of this judgment. The reasons also discuss the separate Crown Melbourne proceeding, but do not give a reported citation for a later decision in that matter.
Any account of subsequent treatment would need to be checked against later judgments or an authoritative case-law database. No such material is included in the judgment provided here, so no claim about later treatment can be made on this source alone.
Several questions are left unresolved because they were unnecessary to the result. First, the Court did not expressly decide whether it was functus officio or whether the further motion was incompetent. Those were arguments advanced by Paradise ([7]). The stated basis for refusal was lack of utility and the concern that the proposed course would circumvent legislative policy ([12]-[13]).
Second, the judge said it “may be doubted” whether the Chief Justice could convene a Full Court consistently with s 25(2) ([10]). That is expressly tentative, and the Court did not decide the issue. It should not be presented as a definitive ruling about the Chief Justice's power.
Third, the judgment does not explain the full operation of s 33(4B)(a), or formulate a general test for when a discretionary extension would circumvent its legislative policy. The provision is applied only in the context of the proposed further extension and the appeal process described in the reasons ([12]).
Fourth, the Court did not determine what would happen if the Crown proceeding produced a finding directly relevant to the Paradise proceeding. It reasoned that the proposed outcome in the Crown case would not affect Mr Kakavas' position in the case before it, while also noting possible differences in debts, facts, findings, and discretionary considerations ([8], [10]-[11]). A different relationship between proceedings could present a different question.
Finally, the reasons do not determine whether Paradise would take further steps under the Bankruptcy Act if Mr Kakavas did not comply with the notice. The judge expressly left that open ([9]). The judgment is therefore best understood as a narrow decision refusing a further procedural extension, rather than a final determination of the parties' broader bankruptcy-related positions.
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REASONS FOR JUDGMENT 1 In Kakavas v Paradise Enterprises Limited [2010] FCA 915 I dismissed an application by Mr Kakavas for leave to appeal against a decision of the Federal Magistrates Court to the extent that it had refused an application by him for an extension of time within which he was required to comply with a bankruptcy notice. The extension was sought up to and including the hearing and determination of an appeal to the Victorian Court of Appeal from the judgment on which the bankruptcy notice was based: see Kakavas v Paradise Enterprises Limited [2010] FMCA 574. 2 When I pronounced judgment counsel for Mr Kakavas sought a further extension of time for compliance with the bankruptcy notice so that an application for special leave to appeal to the High Court might be filed. Because of the late hour I extended time for compliance until 4:45 pm on 8 September 2010 and directed that any application for a further extension of time for compliance be made by notice of motion supported by affidavit on or before 30 August 2010. 3 By notice of motion dated 30 August 2010 and filed on that day Mr Kakavas seeks an order extending the time within which he must comply with the notice "until 4:30 pm on the day on which the judgment of Federal Magistrate Riethmuller is delivered in Federal Magistrates Court proceeding number MLG 880/2010." 4 The background to the present application is set out in my earlier judgment: see Kakavas at [1]-[6]. I do not repeat it. In those reasons, at [9] I referred to another judgment which had been obtained against Mr Kakavas in the Victorian Supreme Court and which was also subject to appeal. The party which obtained judgment against Mr Kakavas in that proceeding was Crown Melbourne Limited. That company has also filed and served a bankruptcy notice on Mr Kakavas. Thereafter that proceeding has followed the same procedural course as was followed in the present case. An application was made to a Registrar for an extension of time in which Mr Kakavas was required to comply with the bankruptcy notice. The application was refused. An appeal was lodged to the Federal Magistrates Court. It came on for hearing on 4 August 2010 before the same Federal Magistrate who made the decision from which leave to appeal was sought in the present proceeding. His Honour adjourned the hearing of the application until 10 September 2010 pending delivery of my judgment on the application for leave to appeal. 5 Mr Kakavas anticipates that, when the matter comes on before the Federal Magistrate later this week, he will dismiss the application. This is because it is based on the same arguments which the Federal Magistrate rejected in the present proceeding. Mr Kakavas foreshadows that, in that event, he will again appeal to this Court and make a request that the Chief Justice convene a full bench to hear and determine that appeal. 6 The Respondent opposes the application for a further extension of time. It objects that the application is an abuse of process and is incompetent. 7 The Respondent contends that the abuse of process arises because the extension of time is sought on the same basis and for the same purpose as the application which has already been refused. No appeal lies from that decision: see ss 25(2) and 33(4B)(a) of the Federal Court of Australia Act 1976 (Cth). The exercise of the Court's jurisdiction is spent and, it is submitted, I am functus officio. 8 Further objection is taken that the order is sought on the ground of the likely developments in another proceeding in which the pending appeal decision will be based on a different debt and different findings of fact and law. It may also be made having regard to different discretionary considerations. 9 My decision refusing leave to appeal from the Federal Magistrates Court in the present proceeding brings an end to the statutory processes relating to Mr Kakavas' obligation to comply with the bankruptcy notice which has been served on him. If Mr Kakavas fails to comply with the notice within the required or extended time, it will be open to the Respondent to take further steps under the Bankruptcy Act 1966 (Cth). It may or may not take those steps. 10 Mr Kakavas seeks a further extension until such time as a Federal Magistrate rules on another extension application in another proceeding. If that decision is, as he anticipates, detrimental to his interests, he proposes to seek leave to appeal before a Full Court. He hopes to persuade the Chief Justice to convene a Full Court for this purpose. It may be doubted that the Chief Justice could so act consistently with s 25(2) of the Federal Court of Australia Act 1976 (Cth). Even if it be assumed that a Full Court was assembled and that Full Court was prepared to grant leave and allow an appeal in the other proceeding, that outcome would have no bearing on Mr Kakavas' legal position in the present proceeding. 11 Counsel for Mr Kakavas submitted that, if the Full Court found that solvency was not a relevant issue, I might then be persuaded further to extend time for compliance with the bankruptcy notice until the appeal to the Court of Appeal has been heard and determined. This submission is based on many assumptions. They include that the facts in the two proceedings, that is in this case and the Crown case, are not relevantly different; that the Federal Magistrate will act on the same discretionary considerations as he did on the previous occasion, and that the Full Court would allow the appeal on the relevancy of the solvency point. These are but some of the possible variables. 12 It would not be appropriate to exercise my discretion again to extend the time for compliance on the basis of many assumptions, and particularly in circumstances in which to do so would involve circumventing the legislative policy reflected in s 33(4B)(a) of the Federal Court of Australia Act. 13 There is no utility in further extending the time within which Mr Kakavas is obliged to comply with the bankruptcy notice. His application will therefore be refused. The formal order that I make will be that the Applicant's motion, notice of which was given on 30 August 2010, be refused. 14 Liberty is granted to the Respondent to apply within three days for costs orders relating to the motion. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey.
Kakavas
Paradise Enterprises Limited
[2010] FMCA 574
The applicant's motion, notice of which was given on 30 August 2010, was refused. The respondent was granted liberty to apply within three days for costs orders relating to the motion.