Kimber v The Owners Strata Plan No 48216

background 6 The following summary is taken from my reasons in Kimber No 2. 7 Ms Kimber is the registered proprietor of lot 110 in strata plan no. 48216. The Bankruptcy Notice required payment of $12,369.48 to the Owners Corporation for a judgment entered in the Local Court of New South Wales in proceeding 2009/00359785 on 7 May 2014 for $10,767.00 and interest thereon of $1,602.48. 8 On 5 April 2016 Ms Kimber lodged an application with the Court seeking a number of orders including an order that the Bankruptcy Notice be set aside. Because of an error in the title to the proceeding that application was only accepted for filing on 20 April 2016. 9 On 20 April 2016 the Court made an order pursuant to s 41(6A) of the Bankruptcy Act 1966 (Cth) (Act) and r 3.03 of the Federal Circuit Court (Bankruptcy) Rules 2006 (Cth) extending the time for compliance with the requirements of the Bankruptcy Notice up to and including 4 May 2016. 10 On 18 April 2016, unaware that Ms Kimber had lodged her application to set aside the Bankruptcy Notice and before the orders were made on 20 April 2016 extending the time for compliance with the Bankruptcy Notice, Grace Lawyers, the solicitors for the Owners Corporation, lodged a creditor's petition online with the Federal Circuit Court of Australia (Federal Circuit Court). The creditor's petition was accepted for filing on 19 April 2016. 11 On 4 May 2016 Ms Kimber's application to set aside the Bankruptcy Notice was listed before the Court. The registrar made orders that: 1. The application filed on 20 April 2016 be dismissed. 2. The order made on 20 April be discharged. 3. The applicant pay the respondent's costs. 12 On 20 May 2016 Ms Kimber filed her application for review of the registrar's orders. The history of the proceeding following the filing of that application is set out in Kimber No 2 at [11]-[15].

Ms kimber's submissions 13 Ms Kimber did not rely on any evidence in support of her application but she made a number of submissions that, to the extent they concerned or touched upon her application for a stay or a further extension of time to comply with the Bankruptcy Notice, I summarise below. 14 Ms Kimber submitted that, after the judgment in Kimber No 2 had been given on 27 March 2018, on the following day, 28 March 2018, she appeared in the Federal Circuit Court where the creditor's petition that had been filed in April 2016 by the Owners Corporation was dismissed; and that, because of the intervening Easter long weekend, she was only left with two days to comply with the Bankruptcy Notice. 15 Ms Kimber further submitted that it was unfortunate that a decision was handed down two years after the registrar's orders had been made and that she believed that the proceedings had been unnecessarily protracted. She informed the Court that she had no other choice but to sell her apartment and that she wanted the Owners Corporation to give her that opportunity so that she could meet its debt and so that she could put into place a flexible payment plan for repayment of the amount owing. 16 Ms Kimber submitted that she had limited funds and that she was prepared to provide a specified amount, rather than paying for legal advice, to "start the process of payment". She contended that her flexible payment plan would require time for a general meeting of the Owners Corporation to be called because the Owners Corporation was being controlled by the strata manager and a committee who were not prepared to speak with her and who referred her to their solicitors who also would not speak with her. 17 Ms Kimber explained that she was seeking a stay of the enforcement of the orders made in Kimber No 2 or alternatively an extension of time within which to comply with the Bankruptcy Notice beyond the extension the subject of Order 2 in Kimber No 2 so that a vote could be held at a meeting of her body corporate as to whether the proceeding should settle or continue on appeal. 18 In support of her application Ms Kimber sought to rely on s 67 of the Civil Procedure Act 2005 (NSW) (Civil Procedure Act) in relation to a stay of proceedings and s 78B(5) of the Judiciary Act 1903 (Cth) (Judiciary Act). Ms Kimber alleged that there was an error in Kimber No 2 concerning whether she in fact owed any money at the time that a default judgment was entered against her. She also referred to the Strata Schemes Management Act 2015 (NSW) and what she considered to be unauthorised spend by the Owners Corporation on legal costs.

consideration 19 Ms Kimber's application concerned the operation of Order 2 made in Kimber No 2. She required further time to put in place a payment plan and was concerned that without further time she would commit an act of bankruptcy. 20 Pursuant to r 36.08 of the Federal Court Rules 2011 (Cth) an appellant may apply to the Court for an order to stay the execution of a proceeding until their appeal is heard and determined. In order to grant a stay the Court must be satisfied that there is a reason or an appropriate case to warrant the exercise of discretion in the appellant's favour: see Powerflex Services Pty Ltd v Data Access Corp (1996) 67 FCR 65 at 66. The Civil Procedure Act and s 78B of the Judiciary Act have no role to play. 21 I was not satisfied that Ms Kimber had demonstrated that there was a reason or that this was an appropriate case in which the Court would exercise its discretion in her favour for a number of reasons. 22 First, the matter was not an appropriate one for a grant of a stay. That is a stay of Order 2 made in Kimber No 2 would not achieve Ms Kimber's desired outcome. Indeed it may have had the somewhat strange outcome of putting Ms Kimber in the position of having until 4 May 2016 to comply with the Bankruptcy Notice and thus having committed an act of bankruptcy at a much earlier date. 23 Secondly, this is not a matter where, in the absence of a stay, the appeal will be rendered nugatory. Without wishing to foreclose on what may in fact occur, there are several possible outcomes of an appeal including that Ms Kimber may be entirely successful on appeal or, if not successful, that she may nonetheless be able to seek a further order extending time for compliance with the Bankruptcy Notice from a Full Court of this Court. 24 Thirdly, while the commission of an act of bankruptcy is a serious matter and one which understandably Ms Kimber wishes to avoid, she has not provided the Court with a sufficient reason as to why the Court would exercise its discretion and order a stay, beyond the assertion that she now, two years after the service of the Bankruptcy Notice, wishes to reach a settlement with the Owners Corporation. 25 Fourthly, while of lower order, it was also relevant that the solicitor for the Owners Corporation informed the Court that, although he had no instructions and gave no undertaking, he would strongly advise his client not to file a creditor's petition in circumstances where Ms Kimber had filed a notice of appeal seeking to appeal from the orders made in Kimber No 2. 26 In the alternative Ms Kimber seeks a further extension of time within which to comply with the Bankruptcy Notice. The power to extend time to comply with a bankruptcy notice is found in ss 41(6A) and 41(7) of the Act. As submitted by the Owners Corporation, at the time of Ms Kimber's application, the preconditions for the exercise of the power to extend time under s 41(6A) or for the deemed extension under s 41(7) to operate simply did not exist. They could not given that Ms Kimber's application for a review of the registrar's orders had been dealt with by the judgment in Kimber No 2. At the time of Ms Kimber's application for a further extension of time: (1) no proceeding had been instituted by Ms Kimber to set aside the judgment or order in respect of which the Bankruptcy Notice was issued as required by s 41(6A)(a) of the Act; (2) there was no extant application to set aside the Bankruptcy Notice before the Court as required by s 41(6A)(b) of the Act; and (3) there was no extant application before the Court pursuant to s 41(7) for an order setting aside the Bankruptcy Notice on the basis that Ms Kimber had a counter-claim, set-off or cross demand in relation to which the Court had not made a determination.

conclusion 27 For those reasons I dismissed Ms Kimber's application and ordered that the costs of the application be the Owners Corporation's costs in the cause. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Markovic.