Farrugia v Farrugia

FEDERAL COURT OF AUSTRALIA

Farrugia v Farrugia [2000] FCA 129

BANKRUPTCY – whether bankruptcy notice contained an overstatement – whether relevant date for calculating “amount in fact due” for notice is date of application for bankruptcy notice or date of its issue – whether the Bankruptcy Act requires inclusion in the notice of the correct provision under which interest is claimed – whether failure to indicate provision under which interest is claimed is misleading – whether stating that interest is continuing to accrue is misleading.

WORDS & PHRASES – “amount in fact due”

Acts Interpretation Act 1901 (Cth), ss 25C, 46(1)(a)
Bankruptcy Act 1966 (Cth), ss 41(2), 41(5), 41(6), 306
Bankruptcy Regulations (Cth), r 4.02, Form 1
Local Courts (Civil Claims) Act 1970 (NSW), s 39

Bendigo Bank v Scerri [1999] FCA 1215, applied
Glass v Demarco [1999] FCA 481, applied
Kirk v Ashdown [1999] FCA 1664, applied
Kleinwort Benson v Crowl (1988) 165 CLR 71, applied
Meekin v Commonwealth Bank of Australia [1999] FCA 682, applied
Re Cooper [1911] 2 KB 550, applied
Re Davis (1963) 19 ABC 100, applied
Re Wimborne (1979) 24 ALR 494, applied
Thorpe v Bristile [1997] FCA 1369, applied
Walsh v Deputy Commissioner of Taxation (1984) 156 CLR 337, applied

ALFRED FARRUGIA v JOSEPH FARRUGIA
N 7443 of 1999

MADGWICK J
2 MARCH 1999
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 7443 OF 1999

BETWEEN:	ALFRED FARRUGIA Applicant
AND:	JOSEPH FARRUGIA Respondent
JUDGE:	MADGWICK J
DATE OF ORDER:	2 MARCH 1999
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

The bankruptcy notice is set aside.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 7443 OF 1999

BETWEEN:	ALFRED FARRUGIA Applicant
AND:	JOSEPH FARRUGIA Respondent

JUDGE:	MADGWICK J
DATE:	2 MARCH 1999
PLACE:	SYDNEY

REASONS FOR JUDGMENT

HIS HONOUR:

1. In this case the debtor applies to set aside a bankruptcy notice as invalid principally on three grounds:  firstly, it contains an overstatement of the amount in fact due; secondly, for being misleading as to the amount due, and; thirdly, for non-compliance with the requirement in prescribed form (and for being misleading) in relation to the statement of the provision under which interest on the judgment debt was claimed.

   Overstatement of amount in fact due

2. The source of the dispute is two-fold.  In the first place, the interest claimed was over-calculated, on one view, by 90 cents, and on another view (and in my opinion the better) by 7 cents.  The interest due was admittedly well over $15,000.  The total amount shown as due was $45,861.17.  In the second place, however, the calculations were made to 1 March 1999, as the bankruptcy notice advised the debtor, but the bankruptcy notice was issued by the Official Receiver on 3 March 1999.  If the creditor can rely on the latter date for calculation of the amount in fact due, then there is a mere underestimate of the amount due and…