Andrews Advertising Pty Limited v Andrews

[2014] FCCA 2545

FEDERAL CIRCUIT COURT OF AUSTRALIA

ANDREWS ADVERTISING PTY LIMITED v ANDREWS [2014] FCCA 2545

Catchwords:
BANKRUPTCY – Creditor’s petition – application for a Sequestration Order – whether creditor’s petition was properly served – Sequestration Order made.

Legislation:

Bankruptcy Act 1966 (Cth), s.40
Bankruptcy Regulations 1996 (Cth), r.16.01

Applicant: ANDREWS ADVERTISING PTY LIMITED (ACN 001 788 594)

Respondent: DEAN ANDREWS

File Number: SYG 2144 of 2014

Judgment of: Judge Emmett

Hearing date: 29 October 2014

Date of Last Submission: 29 October 2014

Delivered at: Sydney

Delivered on: 29 October 2014

REPRESENTATION

Solicitors for the Applicant: Ms M. Skinner (Gadens)

Counsel for the Respondent: Mr G. McDonald

FEDERAL CIRCUIT COURT
OF AUSTRALIA

AT SYDNEY

SYG 2144 of 2014

ANDREWS ADVERTISING PTY LIMITED (ACN 001 788 594)

Applicant

And

DEAN ANDREWS

Respondent

EX TEMPORE

REASONS FOR JUDGMENT

1. This is an application for a Sequestration Order against the respondent’s estate by the applicant. The applicant is the judgment creditor of the respondent. Judgment was entered against the respondent on 16 May 2014 in an amount of $663,491.91.

2. On 2 July 2014, the applicant purported to serve on the respondent a Bankruptcy Notice, issued on 23 June 2014 pursuant to s.40(1)(g) of the Bankruptcy Act 1966 (Cth) (“the Act”). The Bankruptcy Notice included a copy of the judgment debt. A copy of the judgment debt was annexed to the affidavit of Melanie Louise Skinner, sworn 1 October 2014. The Bankruptcy Notice was annexed to the affidavit of Kris Sabatino, sworn 6 July 2014.

3. In considering whether a Sequestration Order should be made, it is common ground between the parties that the only issue before the Court is whether or not service was effected upon the respondent in accordance with the requirements of the Act. Relevantly, regulation 16.01 of the Bankruptcy Regulations 1996 (Cth) requires service of documents in the following terms:

   “Service of documents

   (1) Unless the contrary intention appears, where a document is required or permitted by the Act or these Regulations to be given or sent to, or served on, a person (other than a person mentioned in regulation 16.02), the document may be:

   …

   (c) left, in an envelope or similar packaging marked with the person's name, at the last-known address of the person; or

   …

   (2) A document given or sent to, or served on, a person in accordance with subregulation (1) is taken, in the absence of proof to the contrary, to have been received by, or served on, the person:

   …

   (b) in the case of service in accordance with paragraph (1)(c), (d) or (e)--when the document is left, delivered or transmitted, as the case requires.”

4. It is common ground between the parties that a failure to attach a copy of the final judgment to the Bankruptcy Notice is a fatal defect in respect of proving whether the respondent has committed an act of bankruptcy.

5. In order to prove due service, the applicant called the process server, Kris Sabatino, who gave evidence before me this morning and was cross-examined. While Ms Sabatino may have from time to time corrected her evidence as matters came to her recall, I do not regard any of those recollections as anything other than genuine. Ms Sabatino presented as an honest witness whose evidence I accept.

6. The substance of Ms Sabatino’s evidence was to the effect that she attended the office of the applicant’s solicitors where she was provided with documents for service upon the respondent. When she collected the documents from the mailroom at Gadens she was given two copies of the documents. Both had yellow stickers on them. One was the document for service and the other was the documents for her to keep to prepare her affidavit of service.

7. Ms Sabatino gave evidence that it was her practice to check that those documents were the same by checking the number of pages and the headings. Ms Sabatino presented as an experienced process server of some 20 years with some lengthy history with the applicant’s solicitors, and I accept her evidence that she regarded the Bankruptcy Notice as, invariably, including a copy of the final judgment.

8. Ms Sabatino then gave evidence that she attempted to effect service upon the respondent personally, but was unable to do so. Her evidence was that on 2 July 2014, she placed the documents in an envelope that she then sealed, and upon which she wrote the name of the respondent and word “Private”. Ms Sabatino said that she folded the envelope to fit it in the letter box. She then recorded in loose leaf form her conduct in relation to service of those documents and used that report as the basis of her affidavit.

9. However, I accept both the evidence of Ms Sabatino deposed to in her affidavits, sworn 6 July 2014 and 27 July 2014, and her oral evidence today that she delivered by leaving in a sealed envelope addressed to the respondent in his letterbox at 31 Wyong Street, Oatley the documents attached to her affidavit of service sworn on 6 July 2014 and filed in the Court on 30 July 2014. Those documents were a letter addressed to the applicant notifying him of enclosure of the Bankruptcy Notice by way of service and the Bankruptcy Notice, together with a copy of the judgment as annexed to her affidavit.

10. In the circumstances, the act of bankruptcy relied upon by the applicant in the Creditor’s Petition, presented on 30 July 2014 and served on 11 September 2014, is the failure of the respondent debtor to comply on or before 23 July 2014 with the requirements of the Bankruptcy Notice.

11. Service having been duly effected, it is common ground that a Sequestration Order can be properly made against the applicant’s estate.

I certify that the preceding eleven (11) paragraphs are a true copy of the reasons for judgment of Judge Emmett

Associate:  

Date:  6 November 2014