Bendigo Bank Ltd v Scerri

FEDERAL COURT OF AUSTRALIA

Bendigo Bank Ltd v Scerri [1999] FCA 1215

BANKRUPTCY – notice – formal defect or irregularity – amount due on judgment debt – notice referring to total debt owing comprising both judgment debt and interest 

Bankruptcy Act 1966 (Cth) – s 40(1)(g) and s 41(2)

Kleinwort Benson Australia Ltd v Crowl (1988) 165 CLR 71 applied
James v Federal Commissioner of Taxation (1955) 93 CLR 631 applied

BENDIGO BANK LTD V JOSEPH ANTHONY SCERRI

V 7329 OF 1999

JUDGE:         FINKELSTEIN J

PLACE:         MELBOURNE
DATE:           3 SEPTEMBER 1999

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 7329 OF 1999

BETWEEN:	BENDIGO BANK LIMITED Applicant
AND:	JOSEPH ANTHONY SCERRI Respondent
JUDGE:	FINKELSTEIN J
DATE OF ORDER:	3 SEPTEMBER 1999
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

The petition be dismissed.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 7329 OF 1999

BETWEEN:	BENDIGO BANK LIMITED Applicant
AND:	JOSEPH ANTHONY SCERRI Respondent

JUDGE:	FINKELSTEIN J
DATE:	3 SEPTEMBER 1999
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1. Bendigo Bank Limited petitions for a sequestration order against the estate of Joseph Anthony Scerri. The act of bankruptcy upon which the petition is based is the failure to comply with a bankruptcy notice that was founded on a judgment debt: s 40(1)(g) of the Bankruptcy Act 1966 (Cth).

2. The petition, which is not opposed, was returnable before a registrar of the Court.  However the registrar was of the view that the bankruptcy notice might be defective and referred the petition to a judge. 

3. The bankruptcy notice is in the form prescribed by reg 4.02 of the Bankruptcy Regulations.  It states (in par 1) that the petitioner claims that the debtor “owe[s] a debt of 20,088.71 as shown in the Schedule” and (in par 2) that “the debt is due and payable”.  The notice requires (in par 3) the debtor to pay “to the creditor the amount of the debt or to make an arrangement to the creditor’s satisfaction for settlement of the debt” within 21 days after the service of the notice.  A place for payment is nominated in par 4.  The notice warns (in par 5) that if the debt is not paid or settled, bankruptcy proceedings may be taken against the debtor.

4. Paragraph 7 of the notice is important.  It provides:

   “In addition, within the time specified in paragraph 3 above, you may file an application to the Federal Court of Australia for an order to set aside this Bankruptcy Notice on the specific grounds that:

   (a)      you have a counterclaim, set-off or cross demand equal to or exceeding the sum specified in this Bankruptcy Notice as owing to the judgment creditor; and

   (b)      in the action or proceeding in which the judgment or order mentioned in paragraph 2 of this Bankruptcy Notice was obtained, you could not have set up that counterclaim, set-off or cross demand*.

   *         This means that,…