Carver v de Robillard

Case [2006] FCA 1041

FEDERAL COURT OF AUSTRALIA

Carver v de Robillard [2006] FCA 1041

(In the matter of Christian Roger de Robillard)

BANKRUPTCY – creditor’s petition – bankruptcy notice – whether personal service of each document required – applicability of reg 16.01 of Bankruptcy Regulations to service of each class of document.  Held: reg 16.01 applied to bankruptcy notice but not to creditor’s petition, which must be served personally. Whether requirement of personal service can be waived. Held:  Yes – and it was waived by Debtor’s participating in hearing and doing other acts without challenging service.

Bankruptcy Regulations 1996 (Cth) reg 16.01
Federal Court Rules O 7 rr 1, 2

Boyle v Sacker (1888) 39 Ch D 249 cited
Skalkos v T & S Recoveries Pty Ltd (2004) 141 FCR 107 cited
Sogelease Australia Ltd v Griffin (2003) 128 FCR 399 cited
Silvas v Silvas [1997] FCA 206 cited

GEORGE LINDSAY CARVER v
CHRISTIAN ROGER de ROBILLARD
IN THE MATTER OF CHRISTIAN ROGER de ROBILLARD

NSD 735 of 2006

LINDGREN J
11 AUGUST 2006
SYDNEY


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 735 OF 2006

IN THE MATTER OF CHRISTIAN ROGER de ROBILLARD

GEORGE LINDSAY CARVER
APPLICANT

CHRISTIAN ROGER de ROBILLARD
RESPONDENT

JUDGE:

LINDGREN J

DATE OF ORDER:

11 AUGUST 2006

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.        The estate of Christian Roger de Robillard be sequestrated.

2.The applicant’s costs as petitioning creditor, including any reserved costs, be taxed in accordance with the Federal Court Rules and paid from the bankrupt’s estate in accordance with the Bankruptcy Act 1966 (Cth).

3.All proceedings under the sequestration order be stayed for a period of 21 days.

THE COURT NOTES THAT:

4.The date of the act of bankruptcy is 7 December 2005.

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


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 735 OF 2006

IN THE MATTER OF CHRISTIAN ROGER de ROBILLARD

GEORGE LINDSAY CARVER
APPLICANT

CHRISTIAN ROGER de ROBILLARD
RESPONDENT

JUDGE:

LINDGREN J

DATE OF ORDER:

11 AUGUST 2006

WHERE MADE:

SYDNEY

REASONS FOR JUDGMENT

INTRODUCTION

  1. There is before the Court a Creditor’s Petition and an Amended Notice Stating Grounds of Opposition.  The grounds of opposition are as follows:

    “1.The Applicant was not served with a Bankruptcy Notice as alleged or at all.

    2.Copy of Notice faxed after Creditor’s Petition indicates that Notice expired (past 6 months) from date of issue.

    3.The Creditor’s Petition was not served.

    4.The Applicant was not served with both the Bankruptcy Notice and the Extension Notice.

    5.The effective date of expiry of the Notice was not clear on the face of the record.”

    BACKGROUND FACTS

  2. On 2 November 2004, the applicant (“the Creditor”) obtained judgment against the respondent (“the Debtor”) in the Newtown Local Court for $55,368.94.  The judgment debt arose out of a loan by the Creditor to the Debtor of $40,000, on which interest…

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AGLC
Carver v de Robillard [2006] FCA 1041
Case
[2006] FCA 1041
Decision Date

CaseChat Overview and Summary

In the matter of Carver v de Robillard, the primary legal issue before the Court was whether the Creditor had properly served the Bankruptcy Notice and the Extension Notice on the Debtor. The Creditor had obtained a judgment against the Debtor and subsequently issued a Bankruptcy Notice, which needed to be served on the Debtor within six months. The Creditor applied for an extension, which was granted by the Official Receiver, and subsequently served the Bankruptcy Notice and the Extension Notice. The Debtor opposed the Creditor’s Petition on several grounds, including that the Bankruptcy Notice and the Extension Notice were not served as alleged or at all.

The Court had to determine whether the Creditor had complied with the statutory requirements for serving the Bankruptcy Notice and the Extension Notice. The Debtor argued that he did not receive the Bankruptcy Notice or the Extension Notice until after the Creditor’s Petition was served. The Court considered the evidence provided by the Creditor, including affidavits of attempted service, and found that the Creditor had taken reasonable steps to serve the Bankruptcy Notice and the Extension Notice. The Court also found that the Debtor's evidence was unsatisfactory and not persuasive.

The Court concluded that the Creditor had properly served the Bankruptcy Notice and the Extension Notice on the Debtor. The Court found no substance in any of the grounds of opposition and ordered the sequestration of the Debtor’s estate. The Court also ordered that the Creditor’s costs, including any reserved costs, be taxed in accordance with the Federal Court Rules and paid from the Debtor’s estate in accordance with the Bankruptcy Act 1966 (Cth). The Court further noted that the date of the act of bankruptcy was 7 December 2005.

Orders

Orders of the court

1. The estate of Christian Roger de Robillard be sequestrated.

2. The applicant’s costs as petitioning creditor, including any reserved costs, be taxed in accordance with the Federal Court Rules and paid from the bankrupt’s estate in accordance with the Bankruptcy Act 1966 (Cth).

3. All proceedings under the sequestration order be stayed for a period of 21 days.

THE COURT NOTES THAT:

4. The date of the act of bankruptcy is 7 December 2005.

Background

Background to the litigation

There is before the Court a Creditor’s Petition and an Amended Notice Stating Grounds of Opposition. The grounds of opposition are as follows:“1.The Applicant was not served with a Bankruptcy Notice as alleged or at all.2.Copy of Notice faxed after Creditor’s Petition indicates that Notice expired (past 6 months) from date of issue.3.The Creditor’s Petition was not served.4.The Applicant was not served with both the Bankruptcy Notice and the Extension Notice.5.The effective date of expiry of the Notice was not clear on the face of the record.”BACKGROUND FACTS On 2 November 2004, the applicant (“the Creditor”) obtained judgment against the respondent (“the Debtor”) in the Newtown Local Court for $55,368.94. The judgment debt arose out of a loan by the Creditor to the Debtor of $40,000, on which interest has continued to accrue. There has been no challenge to the judgment debt. On 30 March 2005, the Creditor procured the issue of a Bankruptcy Notice. The Debtor had not, and still has not, made any payment in reduction of the judgment debt (on the hearing he explained why, with a view to showing that he had not tried to avoid paying). The amount specified in the Schedule to the Bankruptcy Notice as outstanding was $57,375.87, which included interest of $2,006.93. The Bankruptcy Notice was required to be served within the period of six months commencing on the date of its issue or any further period that the Official Receiver might allow (whether within or outside that period of six months): reg 4.02A(2) of the Bankruptcy Regulations 1996 (Cth). The period of six months expired on 30 September 2005. William Cotsis, the solicitor for the Creditor, instructed Rapid Process Service to serve the Bankruptcy Notice. Rapid Process Service told Mr Cotsis that unsuccessful attempts were made to effect personal service on the Debtor at the office of Davis Breene Conti, Solicitors, at Level 12, 111 Elizabeth Street, Sydney, several times in 2005, the last being on 19 September 2005. The Debtor is a practising barrister and apparently does not have chambers. On 3 November 2005, Mr Cotsis wrote to the Official Receiver asking to be allowed to serve the Bankruptcy Notice during a further period. With his letter, he enclosed the Bankruptcy Notice and two Affidavits of Attempted Service, each one by a licensed commercial sub-agent who had been instructed by Rapid Process Service. The affidavits went to the deponents’ unsuccessful attempts to serve the Debtor at the address mentioned. On 9 November 2005, the Official Receiver granted an extension by issuing a document headed “EXTENSION OF BANKRUPTCY NOTICE Pursuant to sub-regulation 4.02A(2)(b)”. This “Extension Notice” was headed with the Bankruptcy Notice number and the names of the Creditor and the Debtor, followed by this:“Date Notice issued: 30 March 2005Date Notice extended to: 30 March 2006”The text of the Extension Notice was as follows:“This Authorisation has been issued by the Official Receiver (or delegate or an officer authorised by the Official Receiver) for the bankruptcy district of New South Wales.”A footnote stated:“A copy of this Authority extending the Bankruptcy Notice should also be served on the Debtor.”

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

LINDGREN J
The Debtor asks that if I should be minded to make a sequestration order, there be a stay pursuant to s 52(3) of the Act, as the Debtor is overseas and will not return to Australia until 19 August 2006. I will order such a stay.CONCLUSION There is no substance in any of the grounds of opposition. I am satisfied that the Debtor committed the act of bankruptcy alleged in the Creditor’s Petition on 7 December 2005, and with the proof of the other matters required by s 52 of the Act. There will be a sequestration order against the Debtor’s estate, and an order that the Creditor’s costs, including any reserved costs, be taxed in accordance with the FCRs, and paid from the Debtor’s estate in accordance with the Act. I note that the date of act of the bankruptcy is 7 December 2005.

Ratio Decidendi

Legal Principle Established

Established by: LINDGREN J

The Creditor’s Petition, specifying that act of bankruptcy, was issued on 19 April 2006, and, subject to what is said below about service, was served on the Debtor on 3 May 2006. Mr Cotsis has sworn an affidavit on 14 June 2006 to the effect that he effected service by sending a copy of the Creditor’s Petition to the Debtor’s Document Exchange box, DX 1091 Sydney, and by sending it to him both by facsimile and by electronic mail, in all three cases on 3 May 2006.CONSIDERATIONFirst, second and fourth grounds of opposition:“The Applicant was not served with a Bankruptcy Notice as alleged or at all”“Copy of Notice faxed after Creditor’s Petition indicates that Notice expired (past 6 months) from date of issue”“The Applicant was not served with both the Bankruptcy Notice and the Extension Notice” These three grounds are interrelated and it is convenient to deal with them together. The fourth ground was added on the second day of the hearing upon the filing, with leave and over the Creditor’s opposition, of an Amended Notice Stating Grounds of Opposition. The Debtor’s affidavit evidence shows that, following his receipt of the faxed copy of the Creditor’s Petition on 3 May 2006, he inspected this Court’s file on 5 May 2006. On 19 May 2006, he attended at the office of the Insolvency and Trustee Service Australia (“ITSA”), where an officer gave him a copy of the Bankruptcy Notice and a copy of a computer screen display relating to the Debtor. This last document, while referring to the Bankruptcy Notice, did not show any record of the grant of an extension under sub-reg 4.02A(2)(b). The display contained provision for any extension to be shown: it had a box labelled “Extended to”, but the box was blank. The Debtor took up this matter with Mr Cotsis who gave him a copy of the Extension Notice. The Debtor has sworn that he did not receive the Bankruptcy Notice or the Extension Notice until after he received the copy of the Creditor’s Petition. He states that he asked of the secretaries who work at the address mentioned if they had any recollection of someone having called at the office to deliver documents for him around November 2005, to which they replied “No we do not”. This evidence was unsatisfactory as the cross-examination of the Debtor demonstrated. The Debtor did not inquire of all the secretaries who worked at the office and there was not a reply “in chorus”. In fact, in cross-examination, the Debtor gave evidence only of having spoken to one secretary over a mobile telephone. The Debtor cross-examined Mr Cotsis at some length. Ultimately, I did not find the cross-examination or the submissions based on it persuasive. Mr Cotsis was plainly honest and straightforward in his evidence, and had good recall. I have no doubt that on 16 November 2005 copies of the Bankruptcy Notice with the Extension Notice stapled to it were:· deposited by Mr Cotsis in the Document Exchange facility at Newtown in an envelope addressed to the Debtor at the Debtor’s Document Exchange box DX 1091, Sydney; and· delivered personally by Mr Cotsis to the receptionist at the address at Level 12, 111 Elizabeth Street, Sydney.