Federal Magistrates Court of Australia

    Practice Directions and Notices

    Bankruptcy Matters

    Notice to Practitioners in NSW Only

    PDF Version

    Introduction

    1. This Notice deals with practice issues in proceedings under the Bankruptcy Act 1966 that are listed before a Registrar in the New South Wales District Registry of the Federal Court of Australia and in the Sydney Registry of the Federal Magistrates Court of Australia.  This Notice replaces all previous Notices to Litigants and Practitioners on Bankruptcy Practice Sydney: namely, "Unserved creditors petitions" (NSW 2001/3) and "Advice of Adjournments to party or solicitor" (issued 14 February 2000)."

    Adjournments

    2. Where an application is made to adjourn the hearing of a petition at or after the first appearance the Court may order the parties to file an affidavit that sets out the facts and grounds relied upon for any further adjournment.  An affidavit may be required whether or not the application for the adjournment is opposed.

    Written notice of adjournment to non-appearing parties

    3. When a Registrar makes an order for adjournment in the absence of a party, the Registrar may also make the “usual order for notification.”

    This order means that:

            (a) Where the absent party is self represented:

    By the close of business on the next working day, the party or the party’s solicitor must send a letter to the absent party by ordinary prepaid post to his/her last known address.  This letter must inform the absent party of the details of the adjourned date, time and place (including address) of the next Court date and of any other orders made by the Registrar.  An Affidavit of Service of the letter of notification must be filed either in the Registry or in Court on the next court date;

    (b) Where the absent party is represented by a legal practitioner:

    By the close of business on the next working day, the party or the party’s solicitor must send a letter to the absent legal practitioner by DX, by fax or by ordinary prepaid post to the legal practitioner’s PO Box or street address.  This letter must inform the absent legal practitioner of the details of the adjourned date, time and place (including address) of the Court date and of any other orders made by the Registrar.  An Affidavit of Service of the letter of notification must be filed either in the Registry or in Court on the next court date.

    Unserved Creditor’s Petitions

    4. Where a creditor's petition has not been served on the Respondent, and is likely to remain unserved on the scheduled hearing date, the Applicant may approach the Registry to have the scheduled hearing date vacated and a new hearing date fixed.  This will avoid an unnecessary appearance in Court by the Applicant at which the Court will do no more than note that the creditor’s petition has not yet been served.

    5. The following procedure applies for approaching the registry to vacate the hearing date for an unserved petition:

    (a) Upon the Applicant’s written request received no later than 2.30 pm on the working day before the scheduled hearing date, the Registry will arrange to vacate the scheduled hearing date.  The request should be faxed to 9230 8535 or emailed to nsw.registrars.list@fedcourt.gov.au

    (b) Once the service copies of the creditor's petition are returned to the Registry, the Registry will fix a new hearing date and endorse the new date on the original and each service copy of the creditor’s petition.

    (c) The altered service copies of the creditor's petition may, if the Applicant wishes, be collected from the Registry or otherwise will be returned to the Applicant by DX or ordinary mail.

    Substituted service applications

    6. The Court expects that the all evidence in support of an application for substituted service will be in affidavit form.  Where a party relies on a report of a process server, the author of the report should be the deponent of an affidavit that sets out the contents of the report.

    7. To enable the Registrar to read the evidence in advance of the hearing, the affidavit(s) in support of the application should be filed no later than 3 days before the scheduled hearing date.  This does not preclude recent supplementary affidavit evidence being filed in Court on the hearing date.

    8. The Court expects than an applicant will not bring on an application for hearing if it is unlikely that the evidence will be sufficient to support a substituted service order.  Where an application is brought on for hearing and the evidence is insufficient, the Registrar may grant an adjournment of the hearing to enable further evidence to be presented at an adjourned hearing.  Normally, the Court will not allow repeated adjournments and if the evidence remains insufficient at an adjourned hearing, the Court may decide to dismiss the application.

    9. Applicants are referred to the Court’s Guide to applications for substituted service on the courts web site at: http://www.fedcourt.gov.au/how/substituted_service.html

    Fixing costs in Court

    10. If the Court orders that costs be paid at the finalisation of a creditors petition, the Registrar will generally require the parties to be in a position to have the costs of the petition fixed in court.  Part 13 of the Bankruptcy Rules provides that the Court has discretion to fix the amount of those costs rather than leave the setting of the amount to a later process of taxation.

    Sequestration Order

    10.1. If the Court makes a sequestration order, the Applicant is to provide the Court with a summary schedule setting out a claim for legal costs and disbursements.  The claim for legal costs must be for an amount that is no more than the amount (applying on the date when the creditor’s petition was presented) as stated in item 43B of Schedule 2 to the Federal Court Rules and an amount in accordance with item 36 for any adjournments for which costs were reserved.  The claim for disbursements may cover reasonable expenses for searches, the fee for the issue of a bankruptcy notice, Court filing fees and service of documents.  Receipts for searches and service should be available if required by the Court.

    Dismissal of a creditor’s petition

    10.2. n If the Court dismisses a creditor’s petition and the Applicant seeks a costs order, the Applicant will be expected to have evidence that they have given prior written notice to the party against whom the costs order is sought that they will be seeking a costs order and details of the costs being sought.  The Applicant needs to provide the Court with a summary schedule setting out the claim for legal costs and disbursements.  The claim for legal costs must be for an amount that is no more than the amount (applying on the date when the creditor’s petition was presented) in item 43C of Schedule 2 to the Federal Court Rules and an amount in accordance with item 36 for any adjournments for which costs were reserved. The claim for disbursements may cover reasonable expenses for searches, the fee for the issue of a bankruptcy notice, Court filing fees and service of documents.  Receipts for searches and service should be available if required by the Court.

    Entry of orders in court

    11. In Creditor’s Petitions before a Registrar, the Court will prepare and seal orders for sequestration, dismissal of a Creditor’s Petition and for substituted service orders.  Copies of these Orders may, if the Applicant requests (when in Court before the Registrar), be collected from the Registry after 3.00pm or otherwise will be sent to the Applicant by DX or ordinary mail.

    For other Orders made by a Registrar in a Bankruptcy List, a party may follow the “request for entered orders” procedure outlined in paragraph 2 of the Notice to practitioners issued by the NSW District Registrar entitled “ORDERS – Entry (NSW 2007/1)”

    Michael Wall
    District Registrar & Registrar
    29th August 2007

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