Browne v Wright - [2007] FMCA 699

FEDERAL MAGISTRATES COURT OF AUSTRALIA

BROWNE v WRIGHT

[2007] FMCA 699

BANKRUPTCY – Application to set aside bankruptcy notice – omission of address of Official Receiver – attachment of original judgment – calculation of interest.

Bankruptcy Act 1966; ss.30, 41(6A), 306
Bankruptcy Regulations; 4.01, 4.02, 4.02A, 4.03, Form 1
Supreme Court (Qld) Act 1995; ss.48

Adams v Lambert (2006) 80 ALJR 679
St. George Bank Ltd v Klintworth (1998) 86 FCR 240
P. Aker Flowerbulbs Pty Ltd v Coulter (2004) 212 ALR 606

Applicant:

MICHAEL JOSEPH BROWNE

Respondent:

WENDY ANNE WRIGHT

File number:

BRG 308 of 2007

Judgment of:

Wilson FM

Hearing date:

27 April 2007

Date of last submission:

27 April 2007

Delivered at:

Brisbane

Delivered on:

27 April 2007

REPRESENTATION

Counsel for the Applicant:

Mr Dahl

Solicitors for the Applicant:

Colwell Wright Solicitors

Counsel for the Respondent:

Mr Brady

Solicitors for the Respondent:

Barry & Nilsson Lawyers

ORDERS

That the application filed 23 April 2007 be dismissed.
That the applicant debtor pay the respondent’s costs of and incidental to the application.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
BRISBANE

BRG 308 of 2007

MICHAEL JOSEPH BROWNE

Applicant

And

WENDY ANNE WRIGHT

Respondent

REASONS FOR JUDGMENT

This is an application by the debtor to set aside a bankruptcy notice served on him on 7 April 2007. The applicant debtor therefore brings this application within the time permitted for that purpose: ss.30 and 41(6)A Bankruptcy Act 1966 (“the Act”).
Three bases are relied upon as supporting the application to set aside the bankruptcy notice. The first of those is that the bankruptcy notice - although in Form 1 to the Bankruptcy Regulations, as required by regulation 4.02(1) of the Bankruptcy Regulations - omits the address of the Official Receiver on page 8. The debtor submits that such an omission is a substantial as opposed to a formal defect essentially because it deprives him of the opportunity to inspect documents lodged with the Official Receiver under Regulation 4.03.
The object of a bankruptcy notice has been stated many times. It is to give the debtor an opportunity to pay an outstanding amount to a creditor failing which he will commit an act of bankruptcy. The fact that the bankruptcy notice omits the address of the Official Receiver, a matter that is easily ascertainable, cannot, in my view, constitute a substantive matter, as opposed to a formal defect or irregularity.
The rights of the debtor are not affected by the omission. In my view, Regulation 4.03 is directed more to preserving the privacy of persons involved in bankruptcy proceedings by limiting the types of persons who are entitled to inspect documents lodged with the Official Receiver. The debtor would have the right to inspect the bankruptcy notice lodged with the Official Receiver in this case, but he already has a copy of the bankruptcy notice served on him.
The debtor may wish to inspect the copy held by the Official Receiver to see if it contains all of the documents required by Regulation 4.01, a matter to which I will shortly return, but, in my view, the omission of the address of the Official Receiver cannot be a substantive impediment to that right.
Having concluded that the omission of the address is a formal matter, it is necessary to see whether it can be excused under s.306 of the Act. The principles attendant upon that section were recently discussed by the High Court of Australia in Adams v Lambert (2006) 80 ALJR 679.
The question which I must ask is whether the insertion of the address of the Official Receiver is a matter made essential by the Act, and whether, by omitting that address, the debtor is likely to have suffered substantial injustice. In my view, both of those questions must be answered in the negative. In those circumstances, the omission of the address of the Official Receiver is a matter that can be excused under section 306 of the Act, and I would be prepared to make an order in those terms.
The second basis of attack relates to the document attached to the bankruptcy notice. Regulation 4.01 requires the applicant for a bankruptcy notice to lodge with the Official Receiver certain documents, one of which is that identified in regulation 4.01B(i): a sealed or certified copy of the judgment or order. There is no evidence in the present case that that obligation has not been complied with.
The complaint made by the applicant here is that the judgment attached to the bankruptcy notice is not a sealed or certified copy of the judgment or order. It is, in fact, sealed but it is a photocopy only. The rules pertaining to the service of bankruptcy notices are dealt with in Regulation 4.02A of the Bankruptcy Regulations. There is nothing set out therein which requires the original sealed or certified copy of the judgment to be served on the debtor.
The annotations to Regulation 4.03 in McDonald, Henry and Meek: Australian Bankruptcy Law and Practice, at paragraph [RE4.02.15], state that:
A computer-generated document which contains particulars of the judgment, and is created by a procedure of the relevant court, can be an appropriate copy of the judgment or order to attach to the bankruptcy notice and to satisfy Regulation 4.02 Form 1 and section 41 subsection (2).
Reference is there made to St George Bank Limited v Klintworth (1998) 86 FCR 240. There is nothing here to suggest that the photocopy document attached to the bankruptcy notice is not accurate. There is nothing here to suggest that the document attached is neither a copy of the judgment, nor a document recording the judgment, and therefore, in my view, it satisfies the requirements of Regulation 4.02 Form 1 and s.41(2) of the Act.
As the cases referred to in the said annotations make clear, the purpose of attaching the copy judgment is to provide to the debtor with the source of the obligation to pay the judgment debt. In my view, that has been achieved in the present case. There is nothing in the second ground of opposition.
The third ground of opposition relates to the claiming of interest by the creditor during the period that the judgment was stayed. The judgment provides that it was stayed for 28 days. However, in the bankruptcy notice interest is claimed from 3 April, being the date judgment was entered. In my view, there is nothing in the terms of the judgment which expressly provides that interest is not to run until 28 days after entry of the judgment so as to amount to an order under s.48 Supreme Court (Qld) Act 1995 that interest runs otherwise than from the date of the order.
That section provides that, unless otherwise ordered, interest runs from the date of the judgment. In this case that was 3 April 2006. Lest there be any doubt, the matter seems to be expressly covered by the decision of Weinberg J in P. Aker Flowerbulbs Proprietary Limited v Coulter (2004) 212 ALR 606 at paras [35] and following. There, in summary, his Honour said at para [36] that he:
…could see no reason in principle why a judgment creditor should be deprived of interest that would otherwise automatically accrue from the time that judgment is entered merely because the judgment debtor has been granted the indulgence of a stay of execution.
His Honour there referred to the relevant statute under which interest runs. I have already referred to s.48 of the Supreme Court Act. Because no order was made in this case that interest not run from the date of judgment, in my view, the plain effect of s.48 is that interest runs from 3 April. Accordingly, in my view, the third ground of attack fails.
In those circumstances, each of the grounds of attack upon the bankruptcy notice having failed, I dismiss the application.
I order:
a)That the application to set aside the bankruptcy notice be dismissed;
b)that the applicant debtor pay the respondent’s costs of and incidental to the application, to be taxed.

I certify that the preceding seventeen (17) paragraphs are a true copy of the reasons for judgment of Wilson FM

Associate: Lynnette Chin

Date: 10 May 2007