Case: Roskell v Snelgrove [2008] FCA 427
Outcome: applied
to the first limb, it is to be noted that s 52(4) and (5) of the Bankruptcy Act 1966 (Cth) provide as follows: (4) A creditor's petition lapses at the expiration of: (a) subject to paragraph (b), the period of 12 months commencing on the date of presentation of the petition; or (b) if the Court makes an order under subsection (5) in relation to the petition &#8212; the period fixed by the order; unless, before the expiration of whichever of those periods is applicable, a sequestration order is made on the petition or the petition is dismissed or withdrawn. (5) The Court may, at any time before the expiration of the period of 12 months commencing on the date of presentation of a creditor's petition, if it considers it just and equitable to do so, upon such terms and conditions as it thinks fit, order that the period at the expiration of which the petition will lapse be such period, being a period exceeding 12 months and not exceeding 24 months, commencing on the date of presentation of the petition as is specified in the order. Order 35 r 7(3) of the Federal Court Rules provides as follows: A clerical mistake in a judgment or order, or an error arising in a judgment order from an accidental slip or omission, may at any time be corrected by the Court. Rule 1.05 of the Federal Magistrates Court Rules 2001 (Cth), it may be noted, provides that the Federal Magistrates Court may apply the Federal Court Rules where, in a particular case, the 2001 Rules are " insufficient or inappropriate ". By reason of the terms of Rule 1.05 of the Federal Magistrates Court Rules , no question arises as to a Federal Magistrate not being clothed with authority to invoke O 35 r 7: Roskell v Snelgrove [2008] FCA 427 at [37] to [41] [2008] FCA 427 ; , 246 ALR 175 at 181 to 182 per Lindgren J. Section 52(5), it has been observed, is in some ways comparable to the statutory requirement that a company be wound up within six months of an application being made. And in Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1995) 61 FCR 385 consideration was given to whether that statutory requirement displaced the " slip rule ". That decision has since been applied in the context of bankruptcy proceedings in Griffiths v Boral Resources (Qld) Pty Ltd [2006] FCAFC 149 , 154 FCR 554. Spender ACJ, Dowsett and Collier JJ there observed as follows: [29] The decision of the Full Court in Re Young; ex parte Smith (1985) 5 FCR 204 establishes that there can be no extension pursuant to s 52 of the Bankruptcy Act once the petition has lapsed. However the Court (of which Lockhart J was a member) considered that there was no question of applying the slip rule in that case (at 209). In Elyard the Court addressed the slip rule, but in the context of winding up rather than bankruptcy. Although s 52 of the Bankruptcy Act serves substantially the same purpose as s 459R of the Corporations Act , there are potentially significant differences between the two sections. [30] With all respect, we are a little uncomfortable with the view, inherent in Elyard , that the slip rule may be used to extend time notwithstanding the statutory requirement that such order be made within a period of time which has elapsed. However Elyard concerns the practice of the Court and has now stood for over ten years without legislative intervention. We are reluctant to reconsider it. Although it does not directly bind us in applying s 52 of the Bankruptcy Act , to take a different approach would cause substantial confusion in insolvency practice. [31] We wish to stress, however, the importance of the policy, evidenced in both the Corporations Act and the Bankruptcy Act , that insolvency proceedings be speedily resolved, presumably for commercial reasons and for reasons of fairness. Courts exercising jurisdiction in insolvency must recognise this policy by giving priority to the hearing and determination of such matters. The parties and their legal advisers, particularly those advising petitioning creditors, must be aware of the potential problem. The decision in Elyard should not be taken as establishing an unlimited power to avoid this statutory policy. As also noted by their Honours, the question as to whether there was any " error " which attracted the power to invoke the " slip rule " is a question of fact: [2006] FCAFC 149 at [68] . With respect, the same reservation is also expressed as to ability to correct an " error " pursuant to O 35 r 7 by extending the duration of a petition in the face of the express statutory terms of s 52(5). Notwithstanding that reservation, it is the case that other authorities have endorsed the existence of a power to extend time after the initial 12 month period has expired and where there has been an accidental slip or omission in failing to make an application within the time prescribed by s 52(5): Matthews v Collett [2000] FCA 224 ; Bankstown Grammar School Ltd v Park [2000] FCA 1205 ; Roskell v Snelgrove [2008] FCA 427 , 246 ALR 175 ; Boumelhem v Commonwealth Bank of Australia [2008] FCA 1568 , 171 FCR 462.