Grant v Green & Associates Pty Ltd - [2021] FCA 934

FEDERAL COURT OF AUSTRALIA
Grant v Green & Associates Pty Ltd [2021] FCA 934

File number: NSD 518 of 2021

Judgment of: WIGNEY J

Date of publication of judgment: 10 August 2021

Catchwords: BANKRUPTCY – application to set aside bankruptcy notice on the grounds of defects – whether defects in bankruptcy notice were merely formal defects – where debt specified in notice overstated the amount owing – where wrong address of creditor appeared in notice – where wrong address for service of documents on the creditor appeared in notice – where overstatement of debt not merely a formal defect for purposes of s 306 of the Bankruptcy Act 1966 (Cth) because notice of the overstatement was given in accordance with s 41(5) of the Bankruptcy Act – where other errors immaterial to validity of notice – notice set aside

Legislation: Bankruptcy Act 1966 (Cth), ss 41(5), 41(6A), 306

Cases cited:
Adams v Lambert (2006) 228 CLR 409; [2006] HCA 10

Bonds Industries Ltd v Sing [1999] FCA 1055

Croker v Commissioner of Taxation (2005) 145 FCR 150; [2005] FCA 127

Foote v Mid-West Finances Pty Ltd (1997) 78 FCR 306

Hussain v King Investment Solutions Pty Ltd (2006) 153 FCR 428; [2006] FCA 905

Kleinwort Benson Australia Ltd v Crowl (1988) 165 CLR 71

Menniti v ACN 116 746 859 Pty Ltd [2019] FCCA 1856

Re Florance, Ex Parte Turimetta Properties Pty Ltd (1979) 28 ALR 403

Re Wimbourne; Ex parte the Debtor (1979) 24 ALR 494

Seovic Civil Engineering Pty Ltd v Groeneveld (1999) 87 FCR 120

Skouloudis v St George Bank Ltd (2008) 173 FCR 236; [2008] FCA 1765

Walsh v Deputy Commissioner of Taxation (1984) 156 CLR 337

Division: General Division

National Practice Area: Commercial and Corporations

Sub-area: General and Personal Insolvency

Registry: New South Wales

Number of paragraphs: 34

Date of hearing: 2 August 2021

Counsel for the Applicant: The applicant appeared in person

Solicitor for the Respondent: Mr D Green of Green & Associates Solicitors

ORDERS

NSD 518 of 2021

BETWEEN:
NEREZ GWYNNETH GRANT

Applicant

AND:
GREEN & ASSOCIATES PTY LTD

Respondent

ORDER MADE BY:

WIGNEY J

DATE OF ORDER:

10 AUGUST 2021

THE COURT ORDERS THAT:
1.Bankruptcy notice 252687 issued on 29 April 2021 and served on the applicant be set aside.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT
(Delivered ex tempore, revised from transcript)
WIGNEY J:

The applicant in this matter, Ms Nerez Grant, has applied to set aside a bankruptcy notice which was served on her by the respondent, Green & Associates Pty Ltd. The basis of the application is that the bankruptcy notice has three defects. For its part, Green concedes that the notice contained those three defects. It submits, however, that they are formal defects that do not invalidate the notice by reason of the operation of s 306 of the Bankruptcy Act 1966 (Cth).
It is necessary, before addressing the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] FCA 934
Decision Date: 10 AUGUST 2021

CaseChat Overview and Summary

In the Federal Court of Australia, the matter of Grant v Green & Associates Pty Ltd involved an application by Ms Grant to set aside a bankruptcy notice on several grounds, including defects in the notice. The dispute centred on whether the defects in the bankruptcy notice were sufficient to warrant its setting aside under the provisions of the Bankruptcy Act 1966 (Cth). The key legal issues that the court had to determine included whether the overstatement of the debt in the notice and the incorrect address details were formal defects that could be overlooked or if they substantively affected the validity of the notice.

The court examined the statutory requirements under section 306 of the Bankruptcy Act, which provides for the setting aside of a bankruptcy notice where it contains formal defects. However, the court found that the overstatement of the debt in the notice was not merely a formal defect, as it had been brought to the attention of the debtor in accordance with section 41(5) of the Act. This meant that the overstatement was a material defect that affected the validity of the notice. Additionally, while there were errors in the address details, the court determined that these were not likely to mislead the debtor and were therefore not grounds for setting aside the notice.

Ultimately, the court concluded that the bankruptcy notice had to be set aside due to the overstatement of the debt, which was not a formal defect for the purposes of section 306. The incorrect address details were considered immaterial to the validity of the notice. The court ordered that the bankruptcy notice issued and served on Ms Grant be set aside, reflecting the court's determination that the substantive defect in the notice warranted its annulment.

Orders

Orders of the court

1. Bankruptcy notice 252687 issued on 29 April 2021 and served on the applicant be set aside.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

As important as the specification of the correct address at which the debt could be paid may be, I am unable to accept that the incorrect address details in the bankruptcy notice in this case were objectively capable of misleading the debtor, Ms Grant, about what was necessary in terms of complying with the bankruptcy notice. As I have said, the errors were fairly obvious, and Ms Grant could readily have been able to ascertain Green’s correct address from earlier in the bankruptcy notice, and from the annexure to the bankruptcy notice, had she wished to comply with the notice or serve any legal documents.CONCLUSION AND DISPOSITION It follows that, but for the defect relating to the overstatement of the debt in the bankruptcy notice, I would not have set aside the bankruptcy notice and would have applied s 306 of the Bankruptcy Act. The notice must, however, be set aside by reason of the overstatement of the debt and the fact that Ms Grant gave notice of that overstatement in accordance with s 41(5) of the Act.

Ratio Decidendi

Legal Principle Established

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File number:	NSD 518 of 2021
Judgment of:	WIGNEY J
Date of publication of judgment:	10 August 2021
Catchwords:	BANKRUPTCY – application to set aside bankruptcy notice on the grounds of defects – whether defects in bankruptcy notice were merely formal defects – where debt specified in notice overstated the amount owing – where wrong address of creditor appeared in notice – where wrong address for service of documents on the creditor appeared in notice – where overstatement of debt not merely a formal defect for purposes of s 306 of the Bankruptcy Act 1966 (Cth) because notice of the overstatement was given in accordance with s 41(5) of the Bankruptcy Act – where other errors immaterial to validity of notice – notice set aside
Legislation:	Bankruptcy Act 1966 (Cth), ss 41(5), 41(6A), 306
Cases cited:	Adams v Lambert (2006) 228 CLR 409; [2006] HCA 10 Bonds Industries Ltd v Sing [1999] FCA 1055 Croker v Commissioner of Taxation (2005) 145 FCR 150; [2005] FCA 127 Foote v Mid-West Finances Pty Ltd (1997) 78 FCR 306 Hussain v King Investment Solutions Pty Ltd (2006) 153 FCR 428; [2006] FCA 905 Kleinwort Benson Australia Ltd v Crowl (1988) 165 CLR 71 Menniti v ACN 116 746 859 Pty Ltd [2019] FCCA 1856 Re Florance, Ex Parte Turimetta Properties Pty Ltd (1979) 28 ALR 403 Re Wimbourne; Ex parte the Debtor (1979) 24 ALR 494 Seovic Civil Engineering Pty Ltd v Groeneveld (1999) 87 FCR 120 Skouloudis v St George Bank Ltd (2008) 173 FCR 236; [2008] FCA 1765 Walsh v Deputy Commissioner of Taxation (1984) 156 CLR 337
Division:	General Division
National Practice Area:	Commercial and Corporations
Sub-area:	General and Personal Insolvency
Registry:	New South Wales
Number of paragraphs:	34
Date of hearing:	2 August 2021
Counsel for the Applicant:	The applicant appeared in person
Solicitor for the Respondent:	Mr D Green of Green & Associates Solicitors

ORDER MADE BY:	WIGNEY J
DATE OF ORDER:	10 AUGUST 2021