Donkin, C.J. v AGC (Advances) Ltd
[1994] FCA 170
•29 Mar 1994
JUDGMENT No. ........ ........ . .......- 170 J q't
| UJ THE FEP&RAL COURT OF AUSTRALIA | ) | ||
| GENERAL D I V I S U |
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| BANKRUPTCY D I S W C T OF THE STATE OF OUEENSLAND |
RE : Colin John DONKIN and HEATHER KAYE DONKIN EX PARTE: colin John DONKIN
Applicant
AGC (ADVANCES) LTD Respondent
13 APR 1994
Spender J EoERAL OOURT OF 29 March 1994
| WHERE: | Rockhampton |
COURT ORDERS THAT:
the judgment creditor pay to the judgment debtor the costs of and incidental to the hearing today, to be taxed if not agreed and, in addition, pay in respect of earlier costs a sum which I fix at $100.00.
COURT DECLARES THAT:
personal service of Bankruptcy Notice 1048 of 1993 has not
| m: | Settlement and entry of orders is dealt with in Rule 124 | |
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| ||
| EX PARTE: colin John DONKIN |
been effected on the judgment debtor, Colin John Donkin.
Applicant
F. GC IADV- Respondent
CORAM: Spender J.
m: 29 March 1994
U: Rockhampton
REASONS FOR JUDGMENX
This is the return of a S. 41(7) af fidavit, filed by Colin John Donkin ( 'Mr Donkin' ) on 17 September 1993 in response
to Bankruptcy Notice No. 1048 of 1993 issued at the request of AGC (Advances) Ltd ('AGC') on 6 August 1993. Section 41(7) of
the B n k r u ~ t c v Act 1966 ('the Act') provides:
" Where, before the e x p i r a t i o n o f the time f i x e d
for compl iance w i t h the requ i r emen t s o f a
b a n k r u p t c y n o t i c e , the d e b t o r h a s f i l e d w i t h the
R e g i s t r a r an a f f i d a v i t t o the e f f ec t t h a t he h a s
such a coun ter -c la im, se t -of f or c r o s s demand a s i s r e f e r r e d t o i n paragraph 4 0 ( 1 ) ( g ) and the
Cour t h a s not, b e f o r e the e x p i r a t i o n o f t h a t
t i m e , de termined whether i t i s s a t i s f i e d t h a t
the d e b t o r h a s such a coun ter -c la im, set-off or
cross demand, t h a t time s h a l l be deemed t o have been ex t ended immed ia t e l y b e f o r e i t s e x p i r a t i o n ,
u n t i l and i n c l u d i n g the d a y on which the Cour t
d e t e r m i n e s whether i t i s so s a t i s f i e d . "
The bankruptcy notice is founded on a judgment obtained by AGC against and Mrs Donkin on 24 December 1991 for $3,008,640.84 in the Federal Court of Australia. The bankruptcy
I
notice claims $1,201,674.45 as the balance due under that
judgment. The bankruptcy notice indicates that the net proceedsof the sale of the Heritage Tavern, including the Flamingo Nightclub and the Crown Hotel, amounting to $1,973,692.34, had been taken into account in reduction of the judgment amount, and interest, pursuant to the Common Law Practice Act, at 10 per cent from 25 December 1991 to 5 August 1993 (588 daye) amounting to $166,725.95 had been included.
The bankruptcy notice was a 28-day notice, and in an af f idavit filed on 1 October 1993, one Trevor Leslie Edwards ( 'Mr
Edwards') swears that he served a true copy of the bankruptcy notice, signed and stamped by the Registrar, on Mr Donkin personally at Pink Lily, Rockhampton, on Thursday, 19 Auguet 1993, at 3.30 pm. He also swears in that affidavit that he effected personal service on Mrs Donkin at the same time and place. In an undated outline of submissions forwarded to the Federal Court Registry on 21 December 1993, the question of the truth of the contents of Mr Edwards' affidavit is put in issue.
The act of bankruptcy on which the judgment creditor
wishes to rely is that specified in paragraph 40(l) (g) of the
Act:
" A d e b t o r commits an a c t o f bankruptcy i n each o f
t h e fo l lowing c a s e s :
. . .
( g ) i f a c r e d i t o r , who has ob ta ined aga ins t t h e
d e b t o r a f i n a l judgment o r f ina l o rder , b e i n g a judgment o r o r d e r t h e execut ion o f which has n o t been s t a y e d , has served on the
debtor in Australia [my emphasis] - o r by
l e a v e of t h e Court e l sewhere , a bankruptcy
n o t i c e under t h i s A c t , and t h e d e b t o r does n o t : (i) where the notice was served in Australia - within the time fixed by the Registrar by whom the notice was issued;
. . .
comply with the requirements of the notice or satisfy the court that he has a counter- claim, set-off or cross demand equal to or exceeding the amount of the judgment debt or sum payable under the final order, as the case may be, being a counter-claim, set-off or cross demand that he could not have set up in the action or proceeding in which the
judgment or order was obtained. "
The act of bankruptcy provided for by S. 40(l) (g)
requires as an essential element service of the bankruptcy notice. Rule 15 of the Bankru~tcv Rules ('the Rules1) requires personal service of a bankruptcy notice on the debtor. A failure to serve a bankruptcy notice personally is not a formal defect or irregularitywhichmight be excused pursuant to the provisions of S. 306 of the Act.
The first and most important question of these
proceedings, for the purposes of oral evidence in any event, is
| the question of whether personal service was effected on Mr | Donkin. The matter was adjourned to Rockhampton to permit oral |
| evidence to be given on that question. After hearing oral evidence from the relevant parties on the question of service, | |
| I am not satisfied that service was effected as sworn to by Mr | |
| Edwards in his affidavit and in his oral evidence before me. There is a serious conflict as to what occurred between Mr Edwards and Mr Donkin on the afternoon of 19 August 1993. However, Mr Edwards' account suffers from the serious embarrassment that he swore an affidavit on 30 August last year |
as to personal service on Mrs Donkin, an event, he now swears in
hie oral evidence before me today, that did not occur.His report to Messrs Clayton Utz which is dated 19 August 1993 and signed by Mr Edwards, in relation to the events with which the oral evidence today is concerned, says:
" We wish to advise that on 19 August 1993 at 3.30
pn the bankruptcy notices were served on Colin
John and Heather Kay Donkin at Pink Lily via
Rockhampton . "
The report then outlined Mr Edwards' name, address and occupation, the date and time of service (stated to be 3.30 pm on 19.8.1993). In respect of service on Mr Donkin, the report states that the place of service was Pink Lily, Rockhampton, and that the conversation occurred in these terms:
" Are you Colin John Donkin?
Yes.
Are you the person referred to in the document
I have just handed to you?
Yes. "
In respect of service on Mrs Donkin, the report specifies the same place of service and continues:
" Are you Heather Kay Donkin?
Yes.
Are you the person referred to in this document
I have just handed to you?
Yes.
Fee for personal service is $70. Thanking you
for your favour. "
The account in the report (and the account in Mr Edwards' affidavit which is identical in all material respects) in relation to Mrs Donkin is simply false.
Mr Eliadis for AGC says that notwithstanding that the report and the sworn affidavit as to service on Mrs Donkin is quite insupportable and in fact is a lie, I should nonetheless be satisfied on the balance of probabilities that service was effected on Mr Donkin as m Edwards has said.
There is no explanation for the egregious falsity of his sworn affidavit in respect of service on Mrs Donkin. Mr Edwards, on being advised by me as to his rights to claim privilege against self-incrimination, declined to answer any question relating to the alleged service on Mrs Donkin. However, the fact is he swears in his affidavit that he personally served Mrs Donkin at Pink Lily at 3.30 pm on 19 August 1993. He now admits that that is not true, as clearly he had to in the face of the evidence of Mrs Donkin in her affidavit filed in these proceedings which outlines her movements on that afternoon, and is both detailed and convincing.
Mr Edwards has clearly sworn a false affidavit. How relation to service on Mr Donkin? It is brave to submit that
then, I ask myself, can I seriously prefer his account in
notwithstanding the account of personal service on Mrs Donkin is a fabrication, yet nonetheless in the face of contradictory evidence from Mr Donkin, I should be satisfied and prefer Mr Edwards' account.
Mr Donkin does not dispute that he met Mr Edwards on the relevant afternoon. However, one of the many differences between Mr Edwards' account of events and Mr Donkin's account involves the time at which these two met. On the evidence, I think it more likely that the meeting occurred at the time Mr Donkin alleged (aroung 4 p.m.) rather than at the time Mr Edwards alleged (3.30 p.m.). My initial view was that this simply went to the question of the reliability of Mr Edwards' account of his personal service on Mr Donkin, but it goes a bit further than that. In his oral evidence before me today he referred to looking at his watch at the relevant time. This was clearly meant to bolster the truth of his statement that service occurred at 3.30. It was not simply a question of a matter of peripheral significance: it was directed to the truth of when the time of service was effected, and I am satisfied on the evidence that it was not effected at the time Mr Edwards swears, and that his attempt to bolster his version of the timing of the meeting with
Mr Donkin was made for the purpose of supporting his account and is not only an unreliable attempt to do so, but also a dishonest
one.
That aspect of the matter gains further support from the his actual evidence as to the time at which he looked at his
discrepancy between the opening of Mr Edwards' evidence and to
watch. It was opened that he looked at his watch on the way in and the time was 3.25 pm, from which he inferred that service had occurred at 3.30 pm. In his oral evidence he said that he looked at his watch after having effected personal service on Mr Donkin, and that at that time the time was 3.30 pm.
I do have some misgivings in respect of my rejection of the evidence of Mr Edwards. There are some matters which inherently support his account. Included in those circumstances
is the presence of at least the alsatian dog. However, having regard to all the other matters which, where there is possible to be corroboration, corroborate the account of Mr Donkin, and having regard to the fact that in respect of the very events which are central to the question of service on Mr Donkin, Mr Edwards has lied, the conclusion I come to is that I am not satisfied that service was effected as sworn to by Mr Edwards in his affidavit and in his oral evidence.
It was submitted by Mr Eliadis on behalf of AGC that even if I were to reject Mr Edwards' account of his personal service on Mr Donkin, nonetheless personal service as required by r. 15 of the Rules has been effected. In my opinion, paragraph 4 of Mr Donkin's affidavit does not constitute proof of personal service.
The consequence of all this is that, in my opinion, AGC
has engaged a process server who is both dishonest in respect of
what happened concerning Mrs Donkin and unreliable, at the very least, concerningthe events which occurred concerning Mr Donkin. As a consequence I am not satisfied of personal service which is an essential precondition to consider before embarking on a consideration of the merits of what is relied on as a "S. 41(7) affidavit" filed by Mr Donkin.
In the circumstances, I declare that personal service of Bankruptcy Notice 1048 of 1993 has not been effected on the judgment debtor, Colin John Donkin. In those circumstances it
is unnecessary to consider the question of a S. 4 1 ( 7 ) affidavit filed by Mr Donkin. I t may very well be that this is simply postponing matters for judgment until another occasion, but if that is the consequence of Mr Edwards' conduct then that is what has to occur.
As far as costs are concerned, the order that I make is that the judgment creditor pay to the judgment debtor the costs of and incidental to the hearing today, to be taxed if not agreed, and in addition, pay in respect of earlier costs, a sum which I fix at $100.
I certify that this and the preceding
7 (seven) pages are a true copy of the reasons for judgment herein of the Honourable Mr Justice Spendeq,.
Associate H%dL
Date: 29 March 1994
Counsel for the judgment creditor:Mr M. Eliadis instructed by: Clayton Utz Counsel for the debtor: Mr R. Lo Monarco instructed by: Paul Watts & Assoc. Date of Hearing: 29 March 1994
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