Cook v Tagamilitsky - [2001] FMCA 117

FEDERAL MAGISTRATES COURT OF AUSTRALIA

COOK v TAGAMILITSKY

[2001] FMCA 117

BANKRUPTCY – Application for order to vacate premises – where failure to conform precisely to order for substituted service because not sent by registered post until two days after date ordered – where respondent did receive documents by personal service – procedural defect excused – application granted.

Bankruptcy Act 1966 (Cth), ss.30, 58, 77G, 78, 129, 306(1)
Federal Court Rules, O 37, r 7

Applicant:

PAUL JOHN COOK

Respondent:

VERA TAGAMILITSKY

File No:

SZ505 of 2001

Delivered on:

13 November 2001

Delivered at:

Sydney

Hearing date:

13 November 2001

Judgment of:

Raphael FM

REPRESENTATION

Counsel for the Applicant:

A. Fernon

Solicitors for the Applicant:

Kemp Strang Solicitors

ORDERS

The respondent vacate the property, described as Lot 1 in Strata Plan 8878 at Lidcombe and having a street address of Unit 1, 17-19 Mary Street, Lidcombe, New South Wales, within 14 days of this order.
In the event that the respondent fails to give vacant possession of the property in accordance with order 1, a writ of possession may issue forthwith.
Service of this order be effected by placing the same in a sealed envelope and putting it under the door of Unit 1 on the date that this order is taken out and by placing a copy of this order on the door utilising an adhesive to prevent the order from being torn off the door.
The applicant's costs of the proceedings be paid in priority out of the property of the bankrupt estate of the respondent.
Liberty to apply on two days notice.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SZ 71 of 2001

PAUL JOHN COOK

Applicant

And

VERA TAGAMILITSKY

Respondent

REASONS FOR JUDGMENT

In this matter by way of an application dated 28 August 2001, Paul John Cook, the trustee of the bankrupt estate of Vera Tagamilitsky, sought orders from the court pursuant to sections 30, 58, 77(G) and 78 of the Bankruptcy Act and Order 37 rule 7 of the Federal Court Rules, requiring the bankrupt respondent to vacate her property, Unit 1, 17-19 Mary Street, Lidcombe in the state of New South Wales which the trustee proposed thereafter to sell in accordance with his powers under section 129 of the Bankruptcy Act to realise the assets of the debtor.
That application was required to be served personally on the bankrupt and in his affidavit of 23 October 2001, Salvatore Roppolo, deposes to placing the order, the application and the affidavit in support under the front door of the premises on 22 October 2001. This form of service was permitted pursuant to an order of Registrar Quinn of this court made following an application for substituted service on 16 October 2001. Prior to that date, Darryl Arnolda, who swore an affidavit date 5 October 2001, had made several attempts to serve the application personally. In particular, at paragraph 15 of his affidavit, he deposes to the fact that on 16 September 2001, he attended the unit and he placed the documents under the door, when he observed at approximately 10:27 a.m., that the documents were pulled under the door. He then heard someone he identifies as the debtor make a noise and he yelled out to her but there was no response. The order for substituted service given by Registrar Quinn also required that service be effected by sending the documents by pre-paid registered post addressed to the respondent at the unit on or before 23 October, 2001.
The first matter with which I have to deal in respect of this application is, in effect, an application by the trustee to exercise my powers under section 306(1) of the Bankruptcy Act to excuse what is alleged to be the formal defect, admitted by the applicant’s solicitors in an affidavit dated 6 November 2001 sworn by Matthew Gregory King, of not posting the letter by pre-paid registered mail until 25 October 2001, two days after the date required by the order of Registrar Quinn.
Failure to comply with the precise terms of an order for substituted service was considered by Burchett J in Rey McCormac: ex parte Taylor (1985) 10 FCR 162. His Honour considered that this was a defect not of form but of procedure which amounted to an irregularity within the meaning of the expression in section 306(1) "a formal defect or an irregularity". In this case it is my view that the irregularity is slightly more serious than that which occurred in Rey McCormac where the personal service side of the order was incapable of being complied with because there was no one at the house to receive the document before the date of the order, whereas the registered post side of the McCormac order had been complied with.
In the case before me the personal service side of the order was complied with by putting the documents under the door but the registered post side was not. It seems to me, however, that the ratio of McCormac is that the benefit of section 306 should be given where there is no evidence of prejudice or injustice suffered by the respondent because of defective service. I think that in reality there is little doubt that the respondent received both the documents that were put under the door on 22 October and those that were put under the door by Mr Daryl Arnolda on 16 September, 2001. I have little doubt that the respondent was well aware of these proceedings.
In those circumstances I am prepared to excuse the defective procedure pursuant to my powers under section 306(1) of the Bankruptcy Act.
The next matter with which I have to deal is whether or not this order should be made. In the details of claim five orders are requested.
1An order that the respondent vacate the property defined in the schedule within 14 days of the courts order.
2 In the event that the respondent fails to give vacant possession of the property in accordance with order 1, a writ of possession issued forthwith.
3 Further or in the alternative, in the event of default of order 1, a warrant issue forthwith for the arrest of the respondent and (I think Vera is a woman, so it is obviously a mistake where it says “he”, it should be “her”) committed to such jail as the court appoints.
4An order that the applicant’s costs of the proceedings be paid.
5 Such further order of relief.
Order number 3 was not pressed before me this morning.
It is interesting that although recovery of the assets of a debtor frequently involves the sale of the debtor’s property and therefore the necessity to require a debtor to vacate possession of that property, there is no specific section in the Bankruptcy Act dealing with this matter in a codified form. Reference has to be made to a number of sections of the Act. However, it is obvious from cases such as Dixon v Ly Ty Tran Cao and Ors, a decision of Beazley J as she then was, unreported

23 June 1995 in the Federal Court and White (as trustee of the bankrupt estate of Lyn) v Lyn [1999] FCA 841 a decision of Finkelstein J, that the Court has power to make such orders and indeed to stay those orders on terms.
In this case the respondent is not present and has made no request for a stay of any order which I might make. It is my view that a combination of section 77G and section 30 of the Bankruptcy Act is sufficient to ground the jurisdiction for the orders that I propose to make.
I do believe that in the particular circumstances of this case some orders should be made in respect of service of the orders and I propose to do that. The orders I would make are as follows:
(1)
The respondent vacate the property, described as Lot 1 in Strata Plan 8878 at Lidcombe and having a street address of Unit 1,

17-19 Mary Street, Lidcombe, New South Wales, within 14 days of this order.
(2)In the event that the respondent fails to give vacant possession of the property in accordance with order 1, a writ of possession may issue forthwith.
(3)Service of this order be effected by placing the same in a sealed envelope and putting it under the door of Unit 1 on the date that this order is taken out and by placing a copy of this order on the door utilising an adhesive to prevent the order from being torn off the door.
I order that the applicant's costs of the proceedings be paid in priority out of the property of the bankrupt estate of the respondent and I grant liberty to apply on two days notice.

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

Associate:

Date: 29 November 2001