Anne v Ask Funding Ltd (No.2)
[2014] FCCA 1840
•15 August 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| ANNE v ASK FUNDING LTD (No.2) | [2014] FCCA 1840 |
| Catchwords: BANKRUPTCY – Application to set aside bankruptcy notice – bankruptcy notice reliant upon judgment – where bankruptcy notice followed judgment – where judgment and bankruptcy notice named the debtor using a name she had changed prior to the proceedings leading to the judgment – whether bankruptcy notice defective because debtor’s current name not used to describe her in the notice – whether service irregular – whether execution of judgment stayed because bankruptcy notice and judgment in old name – whether execution of judgment stayed because of order of Supreme Court establishing a trust for the proceeds of sale of certain property – bankruptcy notice valid – application dismissed. |
| Legislation: Bankruptcy Act 1966, ss.33(1)(c), 41(1)(g), 41(3)(b), 41(6A), 52(1), 306(1) Bankruptcy Regulations 1996, reg.16.01, 16.01(c)(ii), 16.02(b) |
| Anne v Ask Funding Ltd [2013] FCCA 1271 Re Brownbank and Miller; Ex parte Loniplus Pty Ltd (1985) 12 FCR 254 |
| Applicant: | PATRICIA ANNE |
| Respondent: | ASK FUNDING LTD |
| File Number: | BRG 164 of 2014 |
| Judgment of: | Judge Jarrett |
| Hearing date: | 16 May 2014 |
| Date of Last Submission: | 16 May 2014 |
| Delivered at: | Brisbane |
| Delivered on: | 15 August 2014 |
REPRESENTATION
| The Applicant appeared in person |
| Solicitor for the Respondent: | Ms Williamson |
| Solicitors for the Respondent: | Dibbs Barker |
ORDERS
The application filed 26 February, 2014 be dismissed.
The applicant pay the respondent’s costs of and incidental to the application, including reserved costs, as agreed or taxed pursuant to the Federal Circuit Court (Bankruptcy) Rules 2006.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRG 164 of 2014
| PATRICIA ANNE |
Applicant
And
| ASK FUNDING LTD |
Respondent
REASONS FOR JUDGMENT
On 7 November, 2012 the District Court of Queensland gave judgment against Patricia Ann McBride at the suit of Ask Funding Ltd for $150,552.49 plus costs of the action on the indemnity basis.
On 10 May, 2013 Ask Funding procured the issue of a bankruptcy notice against Patricia Ann McBride relying upon the judgment.
On 13 May, 2013 the bankruptcy notice was served upon the applicant in these proceedings, Patricia Anne. There is no dispute that until 23 July, 2009 the applicant was known as Patricia Anne McBride but on that day she changed her name to Patricia Anne. Her change of name was recorded by the Registry of Births, Deaths and Marriages in New South Wales pursuant to the Births, Deaths and Marriages Registration Act 1995 (NSW).
On 3 June, 2013 Ms Anne commenced an application to set aside that bankruptcy notice. In that application she particularised the grounds upon which she said that bankruptcy notice ought to have be set aside as follows:
(a) the Notice in the name of Patricia Ann McBride and my name is Patricia Anne and thus fails to meet a requirement made essential by the Bankruptcy Act;
(b) the Notice is attached to a judgment which was stayed or otherwise not able to be immediately executed at the date the Notice was issued and the date the Notice was served;
(c) the Judgment which the Notice follows has been gained via fraud and misconduct on the petitioning creditor;
(d) the Judgment which the Notice follows is not in reality a real debt to found a Bankruptcy Notice;
(e) As an alternative Patricia Anne has a Court Order imposed on her property, which is sufficient in quantum to satisfy such a judgment, which would effectively restrain her from paying the alleged debt.
In addition to those grounds, Ms Anne also argued that the bankruptcy notice was irregularly served upon her.
I determined that application by dismissing Ms Anne’s application. My reasons for doing so can be found in Anne v Ask Funding Ltd [2013] FCCA 1271.
On 16 October, 2013 the respondent issued a further bankruptcy notice against Ms Anne (bankruptcy notice BN 166251). By this application filed on 26 February, 2014 Ms Anne asks for the following orders:
1.that the bankruptcy notice be set aside pursuant to s.33(1)(c); s.41(1)(g); s.41(6A) and s.52(1) of the Bankruptcy Act 1966;
2.an order to strike out the bankruptcy notice on the basis that it is an abuse of process;
3.in the alternative an order to set aside the bankruptcy notice on the basis that:
(a) the Notice in the name of Patricia Ann McBride and my name is Patricia Anne and thus fails to meet a requirement made essential by the Bankruptcy Act;
(b) or in the alternative, that I am not properly identified in the said Bankruptcy Notice BN166251;
(b) the original Judgment which the Notice follows has been gained via fraud and misconduct on the part of the petitioning creditor;
(c) the Judgment which the Notice is said to follow is not in reality a real debt to found a Bankruptcy Notice, or in the alternative not a real debt owing to the petitioning creditor to found a Bankruptcy Notice from the petitioning creditor;
(d) in the alternative, the bankruptcy Notice does not follow the judgment;
(e) in the further alternative, Patricia Anne has a Court Order imposed on her property, which is sufficient in quantum to satisfy such a judgment, would effectively restrain her from paying the alleged debt;
4.costs.
The respondent opposes the application. By an amended notice stating the grounds of opposition to the application, the respondent asserts that:
a)the bankruptcy notice is supported by a final order of the District Court of Queensland made on 7 November, 2012 and an order for costs of the District Court of Queensland made on 13 September, 2013;
b)the applicant has failed to file the application before the expiration of the time fixed for compliance with the bankruptcy notice and the applicant committed an act of bankruptcy on 24 February, 2014. Accordingly, the Court does not have power to extend the time for compliance;
c)the bankruptcy notice was served in accordance with regulation 16.01 of the Bankruptcy Regulations 1996;
d)the bankruptcy notice is not an abuse of process;
e)the bankruptcy notice is not otherwise liable to be set aside for the reasons relied upon by the applicant.
Service
Regulation 16.01 of the Bankruptcy Regulations 1996 is in the following terms:
16.01 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:
(a) sent by post, or by a courier service, to the person at his or her last‑known address; or
(b) left, in an envelope or similar packaging marked with the person’s name and any relevant document exchange number, at a document exchange where the person maintains a document exchange facility; or
(c) left, in an envelope or similar packaging marked with the person’s name, at the last‑known address of the person; or
(d) personally delivered to the person; or
(e) sent by facsimile transmission or another mode of electronic transmission:
(i) to a facility maintained by the person for receipt of electronically transmitted documents; or
(ii) in such a manner (for example, by electronic mail) that the document should, in the ordinary course of events, be received by the person.
(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:
(a) in the case of service in accordance with paragraph (1)(a) or (b)—when the document would, in the due course of post or business practice, as the case requires, be delivered to the person’s address or document exchange facility; and
(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.
The evidence shows that the respondent had difficulty serving the applicant with a bankruptcy notice in this case. The respondent made an application for substituted service of the bankruptcy notice upon the applicant, but that application was unsuccessful. The Registrar who dealt with the application suggested that the bankruptcy notice could be properly served according to regulation 16.01 (set out above).
Mr Paul Hampford is a licensed commercial agent engaged by the respondent to serve the bankruptcy notice in this matter upon the applicant. Mr Hampford has deposed two affidavits, one filed on 25 March, 2014 and the other on 27 March, 2014. In her affidavit filed on 9 May, 2014 Ms Anne confirms that she has seen each of those affidavits. She responds to parts of them in her own affidavit.
In his affidavit filed on 27 March, 2014 Mr Hampford deposes that on or about 7 November, 2013 he placed a call to mobile telephone number 0407 171 316. He says that the call was answered and the person that he spoke to confirmed that her name was Patricia McBride. Whilst Ms Anne does not dispute that there was a telephone conversation between she and Mr Hampford, she disputes that she told him her name was Patricia McBride. However nothing turns on that.
Mr Hampford says that she confirmed that she resided at 25 Cherry Lane, Gisborne VIC 3437 but that she was currently in Queensland and was unsure when she might return to Gisborne. Ms Anne takes no issue with that evidence. Mr Hampford told the person he spoke to that he had documents for her. She requested that he leave the documents in her mailbox and she would get them on her return. She refused to tell him where she was in Queensland. She takes no issue with that evidence.
On 3 February, 2014 Stephanie Williamson, a solicitor employed by the respondent’s solicitors, placed a letter from the firm for which she worked dated 3 February, 2014 and a copy of the bankruptcy notice in an envelope. The envelope was addressed to Ms Patricia Ann McBride at 25 Cherry Lane, Gisborne VIC 3437. It was imprinted with a prepaid postage stamping to the value of $0.60. At about 5:40pm on that day she attended at the Australia Post post-box located at 99 Creek Street, Brisbane. She posted the envelope containing the letter and the documents.
Having regard to the evidence of Mr Hampford and Ms Williamson, I am satisfied that the bankruptcy notice was sent by prepaid post to the applicant at her last known place of address. Were matters left there, I would be satisfied that she had been served with the bankruptcy notice according to the requirements of reg.16.01 of the Bankruptcy Regulations.
However, Ms Williamson swears that on or about 19 February, 2014 the envelope and its contents that she posted on 3 February were received by ordinary post marked “return to sender”. In those circumstances, notwithstanding compliance with reg.16.01 of the Bankruptcy Regulations, I am unable to be satisfied that the bankruptcy notice was served upon the applicant because the evidence that it was returned might amount to proof that the correspondence, was not received by, or served on, the applicant.
However, also on 3 February, 2014 at approximately 4:37pm, Ms Williamson also caused an email addressed to Ms Patricia Ann McBride to be sent to the email address of “[email protected]” attaching a copy of the covering correspondence from her firm dated 3 February, 2014 and a copy of the bankruptcy notice. Ms Williamson deposes that she used that address because the last email correspondence between the applicant and her firm which occurred on 25 July, 2013 was an email received from the applicant from the email address I have just set out.
That evidence is not challenged by Ms Anne. In those circumstances, I am satisfied that the respondent sent a copy of the bankruptcy notice to the applicant in accordance with reg.16.01(e)(ii) of the Bankruptcy Regulations. By operation of regulation 16.02(b), Ms Anne is taken to have been served with the bankruptcy notice when it was transmitted to her by Ms Williamson on 3 February, 2014.
I am satisfied that the bankruptcy notice has been properly served upon Ms Anne having regard to reg.16.01 of the Bankruptcy Regulations. Ms Anne was required to comply with its terms on or before 24 February, 2014.
Setting aside on other grounds and abuse of process
In my reasons for decision in Anne v Ask Funding Ltd [2013] FCCA 1271, I set out in some detail the history of the litigation between the applicant and the respondent leading to the bankruptcy notice which was dealt with in that case. I repeat here, what I said there:
7. These proceedings had their origin in an action in the District Court of Queensland and a summary judgment application by Ask Funding. In those proceedings the defendant’s name was Patricia Ann McBride. She was named as the defendant in that way consistently with her name as it appeared in the contractual documents between her and Ask Funding and upon which Ask Funding sued.
8. It is not clear if Ms Anne filed a defence in the District Court proceedings. If she did, a copy of it is not in the material before me. In any event, it does not appear from any of the material that is before me, or the arguments that were made before me, that one of the bases upon which Ms Anne sought to defend the proceedings was that she was not the person that had contracted with Ask Funding.
9. The reasons for judgment of the District Court are before me. It is clear from those reasons that Ms Anne appeared at the summary judgment application and cross applied to have Ask Funding’s application summarily dismissed. The application for summary judgment was determined against Ms Anne resulting in the judgment now attached to the bankruptcy notice.
10. Subsequently, Ms Anne sought to appeal the decision of the District Court. That is to say, notwithstanding that the judgment was given against Patricia Ann McBride, Ms Anne prosecuted an appeal. Her appeal was out of time, but the Court of Appeal ultimately granted an extension of time within which she could bring her appeal.
11. A copy of the notice of appeal is in evidence. The appeal was filed with the name “Patricia Ann McBride” as the appellant. However, the notice of appeal also contains details under the heading “PARTICULARS OF THE APPELLANT”. Under that heading, the appellant’s name is recorded as “Patricia Anne”. The notice of appeal appears to be signed:
Signed: T (or P) Anne
Description: Appellant.
12. Of all of the grounds of appeal specified in the notice of appeal, only one touches directly upon the issue of the appellant’s name. Another may touch indirectly upon that issue, but for present purposes it is not relevant.
13. Specifically, one of the grounds of appeal was that the primary judge was wrong in law:
(iv) In failing to determine that the Defendant in the original proceedings (Appellant in the instant proceedings) was a non-existent person, or as an alternative, a misnomer;
14. At the appeal Ms Anne appeared for the appellant. She is recorded in the reasons for judgment of the Court of Appeal (McBride v Ask Funding Limited [2013] QCA 130) as appearing for herself. That must be a correct description because in her affidavit filed in these proceedings on 3 June, 2013 she gives evidence that:
4. On 13 May 2013 the appeal of the summary judgment in the matter DC 2628/09 was heard.
5. On 13 May 2013 in the late afternoon after court had risen for the day, I was troublingly being followed by someone from the District and Supreme Court complex Brisbane. I had just represented myself, with the assistance of a friend, in the Court of Appeal. I was seeking to have the summary judgment and Costs Orders which were entered in the District Court of Queensland in Brisbane, set aside”
15. Ultimately Ms Anne’s appeal was unsuccessful except insofar as the indemnity costs order was concerned. The Full Court set aside that order and in its stead ordered that Ms Anne pay Ask Funding’s costs of the proceeding on the standard basis. She was also ordered to pay Ask Funding’s costs of her application for an extension of time within which to appeal and the appeal.
I concluded that there was no doubt that Ms Anne was the same person as Patricia Ann McBride who entered into the relevant loan agreements with Ask Funding, was the defendant in the District Court proceedings referred to above, and was the appellant in the Court of Appeal proceedings. I did not then understand her, nor do I understand her now, to contend to the contrary.
To the extent then that Ms Anne seeks to have the current bankruptcy notice set aside on the basis that she has changed her name and the bankruptcy notice is issued in her now discarded name, her application must fail. As I said in my earlier reasons for judgment:
17. Ms Anne’s argument, however, appears to be that:
(a) Patricia Ann McBride is a non-existent person and so, presumably, cannot be the subject of the District Court judgment or a bankruptcy notice;
(b) service of the bankruptcy notice addressed to Patricia Ann McBride upon the person formerly known as Patricia Ann McBride but now known as Patricia Anne is not good service of the bankruptcy notice; and
(c) the judgment of the District Court is not able to be enforced without Ask Funding taking steps to correct the name of the defendant and therefore, given that Ask Funding has no immediate right to execution of the judgment, the bankruptcy notice is not valid.
18. The evidence reveals that there has never been any doubt about the identity of the defendant named in the District Court judgment or the bankruptcy notice. Ms Anne was the defendant in those proceedings. She appeared and sought to defend them. She was the appellant in the Court of Appeal. Whilst Ms Anne raised issues going to her liability to Ask Funding for its claim, her personal liability to Ask Funding was adjudicated upon by the District Court and then by the Court of Appeal. Indeed, the Court of Appeal thought that the District Court judge’s reasons for judgment were inadequate and so embarked upon its own consideration of the relevant issues. After that consideration, the Court of Appeal (Jackson J with whom Muir and Gotterson JJA agreed) concluded:
[59) The inevitable conclusion of the foregoing analysis is that there is no real prospect of the appellant successfully defending any part of the claim or that there is a need for a trial as provided under UCPR 292(2).
(footnotes omitted)
19. It is necessary for the bankruptcy notice to follow the judgment upon which it relies. That includes the description of the parties to the judgment: Swart v Carr (No.2) [2008] FMCA 1204 at [14].
20. Whilst the proper identification of the creditor to a bankruptcy notice might be said to be an essential requirement of a bankruptcy notice (see for example, Re Hansen; Ex parte Hansen (1985) 4 FCR 590), formal errors in a bankruptcy notice do not result in its invalidity unless they cause “substantial injustice”: Kyriackou v Shield Mercantile Pty Ltd (2004) 138 FCR 324 at 336. “The touchstone of invalidity is thus whether any error is “capable of misleading” a debtor in a manner that results in “substantial injustice” ”: Yang v Mead [2009] FCA 1202 at [15].
21. Thus, in Re McSwiney; Ex parte Davies (unreported, FCA, Beaumont J, P1611 of 1986, 24 November 1986) the Federal Court concluded that a bankruptcy notice was not defective by reason of the debtor being identified as “Trevor John McSwiney” rather than “Trevor Peter McSwiney”. The apparent defect was cured by s.306(1) of the Bankruptcy Act.
22. In Matheson v Scottish Pacific Business Finance Pty Ltd [2005] FCA 670 Kiefel J, when her Honour was a judge of the Federal Court of Australia, said:
[10] Mr Matheson has referred me to the definition of ‘legal name’ in Black’s Law Dictionary, 8th edn, ed BA Garner, West Pub Co, USA (2004) pg 1048 as ‘a person’s full name as recognised in law’. That does not however mean that a court document such as a bankruptcy notice or petition is void if the full legal name of the person is not provided. There is no doubt that Mr Matheson is the person named in the District Court proceedings and in these proceedings and that he has understood that to be the case. He has represented himself and appeared. There was no ambiguity created by the bankruptcy notice or petition. In any event if there was an irregularity in the mode of description, it is of a formal nature and one that can be validated by s 306(1) of the Bankruptcy Act: Re Draper; Ex parte Australian Society of Accountants (1989) 154 FCR 41. A ‘formal defect or an irregularity’ within the meaning of that section is one that could not reasonably mislead the debtor: Re Wimbourne; Ex parte The Debtor (1979) 24 ALR 494. In my opinion, the petition notice does not cause any injustice as it was not likely to mislead the debtor.
23. Here there is no doubt that Ms Anne is the person named in the District Court proceedings, the Court of Appeal proceedings, the bankruptcy notice and in these proceedings. She has always understood that to be the case. She has represented herself and appeared in each place. She does not suggest that there is any ambiguity created by the District Court judgment, the Court of Appeal judgment or the bankruptcy notice.
24. I accept Ask Funding’s submission that Ms Anne, or a debtor in her position, could not have been reasonably misled as to what was necessary to comply with the bankruptcy notice. There is no suggestion that this case involves mistaken identity. There is no doubt that Ms Anne is the person named in the judgment and in the bankruptcy notice and that she has always understood that to be the case.
As was the case with the previous bankruptcy notice issued in this matter, Ms Anne argues that execution of the judgment of the District Court is constructively stayed:
a)because of the misdescription of her name in the District Court judgment, and so it is not a judgment “the execution of which have not been stayed” is for the purposes of s.41(3)(b) of the Bankruptcy Act; and
b)because there is in existence a court order imposed on her property, or part of it, which has the effect of removing her ability to make payment of the judgment debt claimed in the bankruptcy notice.
As to the first matter, in my earlier reasons for judgment I said:
29. Ms Anne also draws my attention to the judgment of the Federal Court in Re Brownbank and Miller; Ex parte Loniplus Pty Ltd (1985) 12 FCR 254. She argues that the District Court judgment is irregular and that Ask Funding is not in a position to issue immediate execution on the judgment. I disagree. The judgment is not irregular, either in substance or in form. Whilst execution of the judgment might not be as straightforward as might otherwise be the case if Ms Anne’s name appears on the judgment in the way in which she says it should, there is nothing to prevent the issue of execution proceedings on the judgment as it presently stands.
30. In my view, this ground has no merit.
As to the second matter, I said:
35. Ms Anne further argues that because there is in existence a court order imposed on her property, or part of it, which has the effect of removing her ability to make payment of the judgment debt claimed in the bankruptcy notice, execution of the judgment is effectively stayed. She relies upon Wiltshire-Smith v Mellor Olsson (1995) 57 FCR 572.
36. Wiltshire-Smith v Mellor Olsson establishes a line of authority to the effect of that argued by Ms Anne. She points to an order of the Supreme Court of Queensland made on 18 May, 2007 appointing the Public Trustee of Queensland as statutory trustee for sale of 8 parcels of real property named in the order. The order provides that the balance of the proceeds of sale of those parcels (after the payment of secured liabilities and the costs and expenses of sale) be invested by the trustee until further order of the Court.
37. In paragraph 17 of her affidavit filed on 3 June, 2013 Ms Anne describes that real property as “my assets”. But there is no evidence that the parcels of land were indeed her assets. From the context, it appears that the parcels of land may have been jointly owned by her and her former partner, the defendant to the proceedings in the Supreme Court. In any event, Ms Anne argues that the effect of the order is to vest “my assets in this trust and I am restrained from thus dealing with the cash asset held in the trust”.
38. Ms Anne does not suggest that it was the act or omission of Ask Funding, as judgment creditor, that removed from her control assets which she could otherwise have used to pay the subject debt. Indeed, her evidence is that: “In May 2007, in frustration at the lack of cooperation of my former de facto partner to deal in a constructive fashion with joint property, I was steered by [my former lawyers] to apply to the Supreme Court to have a number of blocks of subdivided land and the proceeds from the sale of our former dwelling placed in trust with the Public Trustee of Queensland.” Thus, it appears that the order was made at Ms Anne’s instigation.
39. Ms Anne does not give evidence that she cannot apply to the Supreme Court for an order to release funds to pay Ask Funding’s debt. She produces no evidence that she has taken any steps at all to seek a release of funds that are presently the subject of that order. She does give evidence that over time, there have been “raids for cash” on the fund of money established by the order. That suggests that it is entirely within her power to access the funds that are now subject of that order.
40. Moreover, the order in question only relates to the particular real property listed in the order. That property may not be all of the property that Ms Anne owns. She gives no evidence that the funds which are now the subject of the Supreme Court order are her only property.
41. I accept Ask Funding’s submission that the operation of the Supreme Court order made on 18 May, 2007 does not stay the execution of the order which is the subject of the bankruptcy notice or preclude Ask Funding exercising its rights against Ms Anne pursuant to the Bankruptcy Act.
Nothing in the argument before me on this application advances Ms Anne’s position in respect of this ground any further. It has no merit.
Once again, Ms Anne argues that I should go behind the judgment of the District Court and determine that the judgment has been obtained by misconduct or fraud perpetrated by Ask Funding or its lawyers. As to that matter, I have previously recorded:
32. In Wren v Mahony (1972) 126 CLR 212 Barwick CJ discussed whether a court was bound to accept a judgment of another court as satisfactory proof of a petitioning creditor’s debt. At [224] his Honour said:
But the Bankruptcy Court may accept the judgment as satisfactory proof of the petitioning creditor’s debt. In that sense that court has a discretion. It may or may not so accept the judgment. But it has been made quite clear by the decisions of the past that where reason is shown for questioning whether behind the judgment or as it is said, as the consideration for it, there was in truth and reality a debt due to the petitioning creditor, the Court of Bankruptcy can no longer accept the judgment as such satisfactory proof. It must then exercise its power, or if you will, its discretion to look at what is behind the judgment: to what is its consideration. It is not the law, in my opinion, that whether in any case the Court of Bankruptcy will consider whether there is satisfactory proof of the petitioning creditor’s debt is a mere matter of its own discretion. Nothing in Corney v Brien (1951) 84 CLR 343 lends support for such a view. Rather the emphasis is upon the paramount need to have satisfactory proof of the petitioning creditor’s debt. The Court’s discretion in my opinion is a discretion to accept the judgment as satisfactory proof of that debt. That discretion is not well exercised where substantial reasons are given for questioning whether behind that judgment there was in truth and reality a debt due to the petitioner.
33. Whilst Wren concerned the consideration of a creditor’s petition, it is clear that the relevant enquiry can also be made in the context of an application to set aside a bankruptcy notice.
34. However, I decline to enquire beyond the judgment of the District Court. The issues raised by Ms Anne in this regard have been considered in the District Court and again in the Court of Appeal. In particular, her complaints about Ask Funding’s failure to properly discharge its disclosure obligations and her allegations of misconducted directed toward Ask Funding’s solicitors and Counsel were fully considered by the Court of Appeal. Those claims were rejected.
35. Her claim that no true debt was owed by her to Ask Funding was also considered by the Court of Appeal and rejected. The Court of Appeal carefully, and with respect thoroughly, considered Ms Anne’s arguments about that matter (see paragraphs [34] – [59] of the Court of Appeal’s reasons for decision). Her claims were rejected in each case. There is no reason to think that the judgment does not reflect a genuine debt owed to Ask Funding. There is no merit in this ground.
Nothing in the argument before me on this application advances Ms Anne’s position in respect of this ground any further. It too, has no merit.
In any event, for the reasons that follow, Ms Anne’s application to set aside the bankruptcy notice was made after the time for compliance with the bankruptcy notice had passed and an act of bankruptcy was committed. In those circumstances, the issue of whether to go behind the judgment might more properly be raised by Ms Anne on the hearing of any creditor’s petition presented by the respondent: In Re Vella; Ex parte Seymour (1983) 48 ALR 420.
Extension of Time
As an alternative, Ms Anne seeks to extend the time for compliance with the bankruptcy notice. I accept the respondent’s proposition that s.41(6A) of the Bankruptcy Act is the sole source of power in the Court to extend the time for compliance with the requirements of a bankruptcy notice: James v Abraham (1981) 34 ALR 657 at 662. In Seller v Deputy Commissioner of Taxation [2011] FCA 865 Flick J applied that authority and summarised the position as follows:
[38] Section 41(6A), it will be noticed, sets forth in paras (a) and (b) the conditions precedent that must be satisfied before the discretion is thereafter called upon to be exercised. An applicant who seeks to invoke s 41(6A) must bring himself within either s 41(6A)(a) or (b) before any question arises as to the manner in which the discretion may be exercised. Other than pursuant to s 41(6A), there is no statutory grant of power and no general inherent power in the court to extend time for compliance with a bankruptcy notice: James v Abrahams (1981) 51 FLR 16 at 22 per Deane and Lockhart JJ. Section 41(6A) is thus the “sole source of power in the court to extend the time for compliance with the requirements of a bankruptcy notice”: Re Dalco; Ex parte Dalco v DCT (1986) 67 ALR 605 at 613 per Neaves J.
[39] The “power to extend time for compliance is in aid of the power to set aside the notice itself”: Re Sterling (1980) 44 FLR 125 at 130; Byron (1997) 73 FCR 264 at 268. And, “[o]nce the application to set aside the judgment or the bankruptcy notice has been finally determined … there is no aid which the power to extend time for compliance can give to the determined application”: Shephard v Chiquita Brands (South Pacific) Ltd [2004] FCAFC 76 at [40] per Hill and Marshall JJ.
Further, once an act of bankruptcy occurs, there is no power to extend the time for compliance: Singh v New Zealand Breweries Limited (No2) [2009] FMCA 1281 at [38] and the authorities there cited.
As I have set out above, service of the bankruptcy notice upon Ms Anne occurred on 3 February, 2014. The date of the act of bankruptcy is 24 February, 2014. The application was filed on 26 February, 2014.
Accordingly, the Court does not have power to extend the time for compliance with the bankruptcy notice.
Conclusion
The bankruptcy notice in this case follows the judgments upon which it is based. Notwithstanding that this is the second bankruptcy notice issued on the basis of the judgment of the District Court of Queensland given on 7 November, 2012, that of itself is insufficient to lead to a conclusion that the bankruptcy notice is an abuse of process: Re Fredericke and Whitworth; Ex parte Hibbard [1927] 1 Ch 253; Re Grahame; Ex parte White (1940) 11 ABC 141.
Ms Anne does not establish any basis upon which the bankruptcy notice ought to be set aside.
Her application must be dismissed with costs.
I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of Judge Jarrett delivered on 15 August, 2014
Associate:
Date: 15 August, 2014
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