Chidgey v Commonwealth of Australia - [2010] FMCA 978

FEDERAL MAGISTRATES COURT OF AUSTRALIA

CHIDGEY v COMMONWEALTH OF AUSTRALIA

[2010] FMCA 978

BANKRUPTCY – Application for extension of time for compliance with bankruptcy notice – s.41(6A) Bankruptcy Act – filing of notice of appeal after time for compliance with bankruptcy notice passed.

Bankruptcy Act 1966

James v Abrahams (1981) 52 FLR 15
Thorpe v Bristle Ltd (1997) 80 FCR 330

Applicant:

DAVID STANLEY CHIDGEY

Respondent:

COMMONWEALTH OF AUSTRALIA

File Number:

BRG 1124 of 2010

Judgment of:

Burnett FM

Hearing date:

17 November 2010

Date of Last Submission:

17 November 2010

Delivered at:

Brisbane

Delivered on:

17 November 2010

REPRESENTATION

The Applicant appeared on his own behalf

Solicitors for the Respondent:

Australian Government Solicitor

ORDERS

That the application filed 5 November 2010 be dismissed.
That the applicant pay the respondent’s costs of and incidental to the application, to be assessed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT BRISBANE

BRG 1124 of 2010

DAVID STANLEY CHIDGEY

Applicant

And

COMMONWEALTH OF AUSTRALIA

Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

The applicant makes application seeking orders that bankruptcy notice number QM 1173 of 2010 which was served upon him on 16 October 2010 be set aside. He also seeks an order that time for compliance for the bankruptcy notice be extended up to and including the hearing date of the application.
The bankruptcy notice has its genesis in a judgment entered against the applicant on 15 July 2010 in the Magistrates Court at Cleveland. The application which resulted in the judgment itself had a fairly lengthy history. Initially judgment was entered against the applicant. Subsequently the judgment was set aside on appeal by the District Court because of a first instance failure by the magistrate to afford procedural fairness to the applicant at that first hearing. The matter was then returned to the Magistrates Court where at the second hearing, the judgment which is now before me was entered.
Although not expressed in the application, it appears to be an application pursuant of s.41(6A) of the Act, which requires:
“Where before the expiration of the time fixed for compliance of the requirements of a bankruptcy notice:
(a) proceedings to set aside a judgment or order in respect to which the bankruptcy notice was issued have been instituted by the debtor; or
(b) an application has been made with the court to set aside that the bankruptcy notice.”
In which event:
“The court may, subject to subsection 6(C), extend the time for compliance for the bankruptcy notice.”
I note in passing that there does not appear to be any basis advanced to suggest that the applicant is otherwise seeking relief such as pursuant to s.40(1)(g) on the basis that it is a s.41 due debt in respect to which he has a counterclaim, set-off or cross demand which could not have been sought in the action concerning the judgment debt.
The authorities properly observe that where there is, in fact, no true judgment, a basis for setting aside or going behind the judgment exists in the Court, and that of itself would enliven the applicant’s rights under s.41(6A). The applicant has not addressed that matter specifically as is required by Bankruptcy Rule 3.02 and/or 3.03. In particular, the rule requires that the applicant in his application to set aside the bankruptcy notice accompany the application with a copy of the bankruptcy notice, which he has done in this instance, but also an affidavit stating the grounds in support of the application. In his affidavit, he simply noted:
“This judgment from the Cleveland Magistrates Court number 577 of ‘08 relates to a family tax benefit (pro rata) rightly claimed by the applicant over a period of two years at that time. The applicant claims that he has done nothing wrong in claiming family tax benefit (pro rata).”
It does not provide a particularly expansive explanation as to why it is that the judgment itself upon which the creditor relies is one which the court ought go behind. While I accept the authorities also permit further material to be filed in respect of matters required by r 3.02, there was no further material forthcoming. The applicant himself made submissions, but the submissions do not really explain what it is he says justifies the interpretation that he applies to the family tax benefit and which supports his contention. I assume that there was a similar failing in the court below, and for that reason he suffered judgment on the occasion that he did.
Obviously, if there were to be demonstrated some basis for going behind the judgment, his application could then be more favourably entertained, but in any event, there are other difficulties with the application even before we get to that point.
First, there is the need for an application of the kind which I have addressed. There is need for that kind of application to be brought before the time fixed for compliance with the requirements of the bankruptcy notice. The applicant has informed me today that he has today sought to file a notice of appeal in the District Court in respect of the judgment upon which the creditor relies upon.
However it is simply too late as failure to do so within time is fatal: James v Abrahams (1981) 52 FLR 15 at 521; Thorpe v Bristle Ltd (1997) 80 FCR 330 at 339. Although it is accepted by authority that a notice of appeal in respect of the relevant judgment constitutes an action to set aside the judgment, the fact remains that the appeal ought to have been commenced before the expiration of the date fixed for compliance as provided for in the notice.
Alternatively, before that date there ought to have an application made to the court to set aside the bankruptcy notice. That was done today. The application needs to be one relying upon there being no proper judgment. As I have noted, there was at least an application brought today to set aside the bankruptcy notice. However for reasons I have earlier noted, there does not appear to be any basis advanced to support the prospect of the judgment being ultimately set aside as not being a proper judgment, as the material which is relied upon now appears to be no better than that which was before the court at first instance and in respect of which there has already been a ruling.
I note that there were some other complaints made by the applicant concerning the form of the material that was placed before the court at first instance. One relates to the absence of a sealing stamp on one of the documents relied upon the court at first instance; another relates to the absence of a date in an affidavit. They were matters which were clearly open to be agitated before the court at first instance. They are matters of form which it is well recognised courts have the power to waive, and one assumes by reason of the first judgment ultimately was entered, those defects on form were waived. From my review of the material, it seems they were matters that were appropriately waived and certainly, in my view, would not lend support to any reasonable prospects on an appeal.
In result, I am of the view that in this application, there has been a failure by the applicant to demonstrate there is no true judgment upon which the bankruptcy notice was founded, and accordingly, it was a proper notice. There has been no application brought to set aside the judgment or the order in respect of which the notice was issued prior to the expiration of the time fixed for compliance with the requirements of the bankruptcy notice, and it follows that the application ought be dismissed. I dismiss the application.
Costs should follow the event. There is no reason why the usual order in relation to costs should not prevail in this instance. The applicant has been unsuccessful in the application. The applicant should pay the respondent’s costs of and incidental to the application, to be assessed.

I certify that the preceding twelve (12) paragraphs are a true copy of the reasons for judgment of Burnett FM

Date: 13 December 2010