Dib v Yasmin Products Pty Ltd

[1997] FCA 1615

JUDGMENT No. ~ ~ C Z J E&?

IN THE FEDERAL COURT OF AUSTRALIA )

NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 7722 of 1997

GENERAL DIVISION 1 NO. NG 7723 of 1997

Between: MOHAMMED (AKA MICHAEL

DIB) DIB

Applicant

And: YASMIN PRODUCTS PTY

LIMITED

Respondent

REASONS FOR JUDGMENT

EINFELD J SYDNEY 27 OCTOBER 1997

This is an application for a review of a decision of a Registrar given on 30 April 1997. The facts are adequately set out in that decision and there is no point in repeating them again. The circumstances are unusual but the result seems to me to be clear. The first bankruptcy notice, which came something of the order of two and a half years after the final instalment of the judgment debt had been paid, did not contain and was not based

on a valid debt. The evidence is that all the payments under the agreement to pay by instalments were made and there is no contrary evidence.

If there had been evidence that they had been paid late, as arises from some comments by the Registrar in her judgment, then it seems to me that the applicant's default had been waived by

the respondent creditor because nothing at all was done to enforce the instalment payment regime and additional goods were supplied on credit subsequently. In my view, the creditor had waived whatever breaches there might have been in the instalment payment regime. But it is important to emphasise that, on the evidence in these proceedings, there is nothing to suggest that payments were made late at all.

That means that the first bankruptcy notice had no significance at all and did not contain a debt. I know of no case in which a bankruptcy notice alleging a debt which was paid either before

or after its issue has been set aside and I cannot imagine now why it would be. All bankruptcy notices are designed to attract payment. When they achieve this result, there is no call to set them aside, they just lapse or do not provide the basis for the issuing of a petition. The application to set aside the first

bankruptcy notice should be dismissed.

The first debt having been previously paid, it is clear that the payment after the issue of the first bankruptcy notice was made in the belief that it was a payment off the debt that was the

subject of the second notice, with the debtor intending to take advantage of what he perceived to be a mistake on the part of the creditor. It had the effect of substantially reducing the debt payable, and should have been credited against the debt

contained in the second notice.

As it was not, the second notice substantially overstates the amount of the debt which the debtor disputed by a notice under section 41(5) of the Bankruptcy Act on 21 November 1996. Pursuant to that section, where a sum specified in a bankruptcy notice exceeds the amount in fact due and the debtor gives a notice disputing its validity, the bankruptcy notice is invalid. The second bankruptcy notice in the circumstances must therefore be set aside.

In what is now matter number 7722 of 1997 which relates to the bankruptcy notice number 3190 of 1996, I order that the

bankruptcy notice be set aside. In respect of matter number

7723 of 1997 which relates to the bankruptcy notice number 2612 of 1996, the application for review of and to set aside the bankruptcy notice is dismissed.

[After discussion]

I do not find a lot of creditable conduct on the part of either of the parties here such as to deserve any particular additional consideration so far as the Court is concerned. There will be no order as to the costs of the proceedings before the Registrar or in this Court.

I certify that this and the TWO

preceding pages are a true copy of the

Reasons for' Judgment herein of his Honour

Justice Einfeld

Dated: 6 - \ \ . v . ;- Lcx , . -. 3

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