Khadpekar v Official Trustee in Bankruptcy

REASONS FOR JUDGMENT 1 This is an application to extend the time within which to file and serve a notice of appeal against the decision of a Federal Magistrate which was delivered on 23 May 2008 in the Queensland Registry of the Federal Magistrates Court. 2 The applicant, who is resident in Western Australia, filed the appeal in the Western Australia Registry of this Court. The appeal was filed in time, but the applicant did not serve the respondent in Queensland within the prescribed time limit. The respondent alleged that the applicant was 13 days late in effecting service. The applicant brought an application to extend the time within which to file and serve the notice of appeal in the Queensland Registry of this Court. The application was transferred to the Western Australian Registry. 3 In the decision from which the applicant seeks to appeal, the Federal Magistrate dismissed the applicant's application for relief under s 178 of the Bankruptcy Act 1966 (Cth) (the Act). This application was made to the Federal Magistrate because the respondent had previously declined the applicant's request that the respondent appeal on the applicant's behalf, against a judgment made against the applicant in 1997 in the Magistrates Court in Cairns. This judgment is important to the applicant because it was this judgment which was the basis on which the bankruptcy notice was issued against the applicant and which in turn led to the issue of a creditor's petition which resulted in a sequestration order being made by Federal Magistrate Coker on 3 February 2004. 4 At the commencement of the hearing of the application for relief under s 178 of the Act before the Federal Magistrate on 23 May 2008, the applicant applied for an adjournment of the hearing to give her more time to file further evidence in relation to her medical and mental state at the time of the judgment in the Cairns Magistrates Court. This, said the applicant, was relevant to explaining the delay in taking steps to appeal against the 1997 judgment. The Federal Magistrate declined the adjournment application. The Federal Magistrate then proceeded to hear the application for relief under s 178 shortly after having refused the adjournment application. 5 In considering whether to extend time, the Court takes into account the length of the delay, the explanation for the delay and whether there is any arguable merit in the appeal itself. 6 The delay in this case is relatively short. The explanation given by the applicant is reasonable in the sense that the judgment had been given in Queensland, the applicant was based in Perth, was unrepresented and had to deal with the intricacies of the national court system. The respondent has suffered no prejudice and, in my view, correctly does not take serious issue with the delay and the explanation for the delay but concentrates mainly on the merits of the appeal. 7 As to the merits, I propose to say little at this stage. However, I am persuaded that it is at least arguable that the discretion of the Federal Magistrate miscarried. This is so, particularly in relation to the way in which the Federal Magistrate addressed the ambit of s 178 of the Act. The Federal Magistrate seemed to proceed, particularly at [26] and [27] of his judgment, on the basis that it would be a proper exercise of the respondent's powers to refuse the applicant's application simply on the basis that the applicant, being a bankrupt, had no standing herself to bring the appeal. It is at least arguable that the exercise of the discretion under s 178 required consideration of whether the fact that the applicant did not have standing to bring an appeal in her own name, may be the very reason that the respondent would consider lending his name to such an appeal or for the court to require him to do so. It seems to me that it is arguable that the Federal Magistrate may have misapprehended the scope of s 178 of the Act. 8 Accordingly, I will extend the time within which the applicant is permitted to file and serve the notice of appeal against the judgment of the Federal Magistrate so as to permit the appeal to proceed. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis.