Ferris v Bilic
[2014] FCCA 781
•24 March 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FERRIS v BILIC | [2014] FCCA 781 |
| Catchwords: BANKRUTPCY – Bankruptcy notice – s.41 Bankruptcy Act 1966 (Cth) – whether there was a fatal defect in the judgment supporting the notice – authentication of judgment supporting the notice – absence of signature of a court officer authenticating judgment – judgment not properly certified – order not final – notice defective – notice set aside – no order as to costs. |
| Legislation: Bankruptcy Act 1966 (Cth), ss.41, 306 |
| Adams v Northern Plumbing (NQ) Pty Ltd (2010) 245 FLR 359 |
| Applicant: | PAUL PHILIP FERRIS |
| Respondent: | IVAN BILIC ATF THE BILIC TRUST TRADING AS IBS INTERIOR LININGS |
| File Number: | BRG 166 of 2014 |
| Judgment of: | Judge Burnett |
| Hearing date: | 19 March 2014 |
| Date of Last Submission: | 19 March 2014 |
| Delivered at: | Brisbane |
| Delivered on: | 24 March 2014 |
REPRESENTATION
| Counsel for the Applicant: | Mr S. Fisher |
| Solicitors for the Applicant: | Romans & Romans Lawyers |
| Solicitors for the Respondent: | McLaughlins Lawyers |
ORDERS
The Application filed on 26 February 2014 be allowed.
The Bankruptcy Notice BN 165562 issued 27 September 2013 be set aside.
No order as to costs.
| FEDERAL CIRCUIT COURT AT BRISBANE |
BRG 166 of 2014
| PAUL PHILIP FERRIS |
Applicant
And
| IVAN BILIC ATF THE BILIC TRUST TRADING AS IBS INTERIOR LININGS |
Respondent
REASONS FOR JUDGMENT
The applicant applies to set aside Bankruptcy Notice 165562 issued 27 September 2013. The application is opposed. In his written submissions, counsel for the applicant advanced two grounds. The first was that there was a fatal defect in the judgment supporting the notice, and the second related to defects in the affidavit attesting to service. The applicant has appropriately abandoned the second ground, and now pursues relief solely in respect of the first ground. The supporting judgment was purportedly entered by the creditor following a successful adjudication decision made under the Building and Construction Industry Payments Act 2004 (Qld) (“BCIPA”).
The issue in this instance is whether the judgment entered is a proper judgment being compliant with the Uniform Civil Procedure Rules 1999 (Qld) (“UCPR”). The applicant debtor contends that it is not. He contends that its form does not satisfy the mandatory requirements provided for in s.41(2) Bankruptcy Act 1966 (Cth), which requires that the notice comply with the form provided for in the Bankruptcy Regulations 1996 (Cth). They in turn require a copy of the final judgment to be attached. In any event, s.41(1) also provides that the notice can only issue upon the creditor having a final judgment.
It is accepted that non-compliance with the mandatory requirements of the form is fatal to the efficacy of a notice. The issue here concerns the efficacy of the judgment. The applicant contends that it is not an efficacious judgment as it does not comply with the requirements of the UCPR. That matter is in contention. Specifically, the judgment itself is one purportedly entered pursuant to s.31 BCIPA. Relevantly, that section provides:
“Filing of adjudication certificate as judgment debt
(1) An adjudication certificate may be filed as a judgment for a debt, and may be enforced, in a court of competent jurisdiction.
(2) An adjudication certificate can not be filed under this section unless it is accompanied by an affidavit by the claimant stating that the whole or a part of the adjudicated amount has not been paid at the time the certificate is filed.”
Mr Fisher for the applicant contends that the purported final order attached to the bankruptcy notice is of no effect because of r.978 UCPR, which provides:
“Issue of Documents
(1) Each document issued by the court must be signed by the appropriate officer for the court and stamped with the court seal.
(2) If a document to be stamped with a court seal has 2 or more pages, only 1 page of the document is required to be stamped.”
The certificate was submitted to the Registrar of the Queensland Magistrates Court by the creditor personally. Its form bears the seal of the court, but the document itself, being that attached to the bankruptcy notice as the final order or judgment, does not bear any signature of a court officer. In my view, for reasons that follow, the absence of a signature of a relevant officer of the Court is significant and determinative.
The presence of a signature serves to confirm and authenticate the matters required by s.31(1). That is, the adjudication certificate has been filed as a judgment consistent with s.31(2). As I have noted, s.31(2) requires that the certificate be accompanied by an affidavit stating that the whole or part of the adjudicated amount has not been paid at the time the certificate is filed. Upon the filing of the affidavit and the certificate an important assessment must take place, that is, that those matters are assessed as correct.
In my view, that assessment is no trifling issue. That matter is fundamental to the efficacy of the final order or judgment. It is on the strength of that assessment that the certificate may be “filed as a judgment,” as referred to in s.31(1). Significantly, s.31(1) appears to be in two parts. The first is that part I have just mentioned, namely, the certificate being “filed as a judgment for a debt,” and the second is that the judgment “may be enforced” in a court of competent jurisdiction.
It follows on that view that the filing itself is inchoate, and that further action must follow to enforce the certificate filed as a judgment. This is, in essence, the point made by Mr Fisher, and a point that he contends, and I accept, distinguishes this case from the decision in Adams v Northern Plumbing (NQ) Pty Ltd,[1] where, although the question of the filing of the judgment was considered, the issue of whether or not a judgment was inefficacious for the absence of a signature was not.
[1] (2010) 245 FLR 359.
The significance of these matters is reinforced by reference to the UCPR. Rule 661 UCPR deals with the filing of an order. It provides:
“Filing an order
(1) If a judge or judge's associate, magistrate, judicial registrar or registrar writes the date and terms of an order on a file or on a document on the file, then, unless or until the order is filed, the writing is sufficient proof of the making of the order, its date and terms.
(2) An order of a court is filed in the court if a document embodying the order and the date the order was made is drawn up by a party and signed by the registrar.
(3) An order must be filed if—
(a) the court directs it to be filed; or
(b) a party asks for it to be filed.
(4) Unless an order is filed—
(a) the order may not be enforced under chapter 19 or by other process; and
(b) no appeal may be brought against the order without the leave of the court to which the appeal would be made.
(5) However—
(a) an order appropriate on default of an earlier order may be made without the earlier order being filed; and
(b) costs payable under an order may be assessed without the order being filed.”
Rule 658 UCPR provides that:
“General
(1) The court may, at any stage of a proceeding, on the application of a party, make any order, including a judgment, that the nature of the case requires.
…”
In this instance, the order which is relied upon is an order following a filing. But, importantly, given the significance of Chapter 19 UCPR in terms of enforcement, it seems that the simple act of filing of a document does not of itself give rise to an order which is enforceable; something further is required. It follows that to be enforceable a judgment arising from an adjudication certificate filed pursuant to s.31(2) requires the issue of a document from the court in the nature of an order, for only a “money order” as defined in r.793 UCPR is capable of enforcement pursuant to Chapter 19.
Relevantly, for these purposes s.41 requires a final order. An inchoate right requiring some further administrative action is not of itself sufficient. The administrative process serves to authenticate what has occurred before it; in this instance, the compliance with s.31(2). Implicit in the form of final order relied upon by the creditor is, in my view, an acknowledgement of the process I have just referred to. For instance, the final order itself is a document which has a court heading. It bears a court file reference and a court seal and is authenticated in the manner required by r.661 UCPR. In particular, the adjudication certificate attached to it noted that it is issued in accordance with ss.30 and 31 BCIPA. Within its body, it provided:
“TAKE NOTICE that:
(1) This Adjudication Certificate has been issued at the request of the plaintiff (referred to below as the claimant), on 15/01/2013.
(2) This Adjudication Certificate is made under the Building and Construction Industry Payments Act 2004 (the Act).
(3) The plaintiff attaches this Adjudication Certificate as Exhibit A, to an affidavit to be filed in Court as a judgment for a debt owing to the plaintiff, as a result of an Adjudication Decision made under the Act.
(4) The plaintiff shall seek that the Court enforce payment by the defendant (referred to below as the respondent) of the unpaid part of the ‘Total Adjudicated Amount’ as detailed below.
…”
It then set out the adjudication decision so far as is relevant for this purpose. If the filing of an affidavit in court with the adjudication certificate alone was sufficient to constitute a final order, one wonders why the creditor in this instance went to the trouble of preparing a form and detailing matters that I have earlier noted, which were included in the form. Respectfully, it appears that the satisfaction of s.31(2) elevates the status of an adjudication certificate to that of a judgment, but until some evidence of that matter is produced it cannot be enforced in accordance with Chapter 19, or, indeed, pursuant to the Bankruptcy Act 1966 (Cth). That is, until there is an authentication in satisfaction of the statutory requirements.
Of course, that authentication occurs in accordance with r.978 UCPR, when the court issues a document that not only bears the court seal but is also signed by an appropriate officer of the court. As I have observed, this is not a trifling matter. In this instance, the purported final order has not been authenticated in a manner required by the UCPR. It follows that it is not a final order. The requirements of s.41 are mandatory. In my view, it is not for this court to interfere with the processes of other courts. If the form is wanting, as I consider it to be, then the defect must be waived in the Magistrates Court. It is not open for this court to do so. It is not a final judgment.
It has also been suggested that this court might exercise its powers under s.306 Bankruptcy Act 1966 (Cth). However, as I have earlier noted, because it is well accepted that the requirements of s.41 are mandatory, it is not open for this court to waive any defect or irregularity, even if it had the power to do so. It follows that the application should be allowed, and that orders ought be made setting aside the bankruptcy notice.
In the application, the applicant seeks costs against the respondent. The respondent contends correctly that this is a point which was raised only early in the course of the application and was not a substantive point raised any time prior to the hearing of the application. Indeed, the body of the material, which was quite voluminous, was directed to issues which concerned the merits of the judgment and a prospective counter claim; all matters which ordinarily would not have persuaded me to allow the application. They are matters that are better left to be dealt with on the hearing of the creditor’s petition.
I am also mindful, however, that some of the difficulty in this instance has arisen because the creditor took matters into his own hands. However, it was an unusual point. It raised itself late on the day, probably, I think, because of something that fell from my lips following an exchange with Mr Fisher about another matter in the material.
In the circumstances, the fairest order is that there be no order as to costs.
I certify that the preceding seventeen (17) paragraphs are a true copy of the reasons for judgment of Judge Burnett
Associate:
Date: 24 March 2014
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