Blueprint Printing Pty Ltd v Winn

[2010] FMCA 391

FEDERAL MAGISTRATES COURT OF AUSTRALIA

BLUEPRINT PRINTING PTY LTD v WINN [2010] FMCA 391

BANKRUPTCY – Application to set aside service following order for substituted service – application dismissed.

Bankruptcy Act 1966, ss.41, 41(7)

Applicant: BLUEPRINT PRINTING PTY LTD

Respondent: JULENE MARGUERITE WINN

File Number: MLG 95 of 2010

Judgment of: Burchardt FM

Hearing date: 17 May 2010

Date of Last Submission: 17 May 2010

Delivered at: Melbourne

Delivered on: 17 May 2010

REPRESENTATION

Counsel for the Applicant: Mr T. Scotter

Solicitors for the Applicant: Herbert Geer Lawyers

The Respondent
 (Review Applicant): In person (by telephone link)

ORDERS

1. The application for review filed 4 May 2010 be dismissed. 

2. The Review Applicant pay Blueprint Printing Pty Ltd’s costs of the application.

3. The proceeding be otherwise adjourned to hearing before a Federal Magistrate on 8 June 2010 at 9.30 am. 

4. The application for stay of this order be refused.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MLG 95 of 2010

BLUEPRINT PRINTING PTY LTD

Applicant

And

JULENE MARGUERITE WINN

Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

1. On 13 April 2010, Registrar Pringle made orders for substituted service in this matter.  That was the subject of an application for review filed by Ms Winn on 4 May 2010, in which what was sought was first, that the service of the Creditor’s Petition be set aside; second, that the Petition be dismissed and third, costs.  It is, however, apparent as counsel for the respondent submits that service has indeed actually occurred.  As things presently stand, following several – what appear to be administrative adjournments in the registry – the matter is due to be heard on 8 June 2010. 

2. In her oral submissions made, Ms Winn’s primary position is that the issue and service of the Creditor’s Petition constitutes contempt of Court and/or abuse of process.  That is primarily advanced on the basis that an appeal has been heard before Ryan J as to the validity of the Bankruptcy Notice upon which the Creditor’s Petition is based.  The decision of Ryan J is presently reserved, although I have no doubt his Honour would be attending to it. 

3. The reality is, however, that last year – I think on 30 October – Phipps FM dismissed an application by Ms Winn to set aside the Bankruptcy Notice.  Ms Winn has made reference to a possible counterclaim but has confirmed today, in her oral submissions, that that matter was ventilated before his Honour, Phipps FM.  Although I do not have Phipps FM’s Reasons for Judgment before me, it is plain – from the order that his Honour made – that he must have rejected any suggestion that there was an effective counterclaim to come within the terms of section 41(7) of the Bankruptcy Act 1966 (“the Act”).  It is also plain that his Honour rejected any other criticisms made in respect of the Bankruptcy Notice.  

4. There is a further point made by Ms Winn to the effect that, in some fashion, the failure of the creditor to attend upon a return date in May invalidates the proceeding.  Even if there has been some technical failure to comply with the Court’s rules, it is apparent that no steps have taken place that could in any sense prejudice Ms Winn, because the matter has not proceeded to any form of judicial determination on either of the two dates to which the matter was administratively adjourned.  Indeed it seems to me that by the very fact of making the adjournment to June, the relevant and proper officers of the Court have felt that to be an appropriate way to proceed.  If any form of exemption and compliance with the rules were necessary, I would grant it. 

5. That then brings us back to the substantive point that Ms Winn presses. I accept that s.41 of the Act requires a final order in order for the Bankruptcy Notice to be validly based. There is a live issue before Ryan J as to that, and his Honour will no doubt determine it. However, that does not mean in my view that a petitioning creditor must await the outcome of all or any appeal proceedings before issuing the petition. An order such as that of Phipps FM is a final order; it determines the matters conclusively, subject to any appeal, and of course subject to any stay. There is no suggestion that the orders of the Court made thus far have been in any way stayed and the Bankruptcy Notice will, therefore, be valid, until and unless his Honour, Ryan J sets it aside.

6. I do not believe that it can be said properly in any way to constitute an abuse of process, still less a contempt of Court, for a creditor who has obtained judgment in a contested matter to do with a Bankruptcy Notice, such that the end result is that the Bankruptcy Notice is held valid, then proceeding to file a Creditor’s Petition.  Matters would, obviously, be very much otherwise if a stay had been obtained, but that is not the case.  I have to say that I think the ground of objection is completely misconceived, and I do not propose, therefore, to set the Petition aside, which is the ancillary relief sought. 

7. I accept the submission of counsel for the respondent that issues as to the validity of the Petition and the like are still alive and may be ventilated in June when the matter is properly heard.  In order to avoid any apprehension, in particular on the part of Ms Winn, I will ensure it is not heard by me; it will be heard by another Federal Magistrate. 

I certify that the preceding seven (7) paragraphs are a true copy of the reasons for judgment of Burchardt FM

Associate:  Ms B. Evans

Date:  17 May 2010