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Herchenroder & Anor v Smith

Herchenroder & Anor v Smith

Case [2003] FMCA 96 4 March 2003

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FEDERAL MAGISTRATES COURT OF AUSTRALIA

HERCHENRODER & ANOR v SMITH

[2003] FMCA 96

BANKRUPTCY – Application to set aside a bankruptcy notice – where there is a claim for a debt due under judgment of District Court – where this judgment appealed – where application for special leave to appeal to High Court – whether the reference to payment of the debt being made to an address given as a PO Box invalidates the notice – whether the debtor would be confused – whether the error is one which can be rectified under s.360(1) of the Bankruptcy Act – whether time for compliance should be extended.

Federal Court of Australia Act 1976 (Cth)
Bankruptcy Act 1966 (Cth), ss.41(2), 360(1)

Boorowa Shire Council v Stuart Edgar John Booth [2001] FMCA 31
Re Pugliese; Ex parte Chase Manhattan Bank of Australia Limited (1993) 44 FCR 536
Bank of Melbourne Limited v Hannon (Unreported) FCA, Northrop ACJ,
5 September 1997.
Sarikay v Victorian WorkCover Authority (1997) FCA 1372
Eastern Pastoral Company Pty Ltd v MacFarlane [1999] FCA 172
Bonds Industries Ltd v Sing [1999] FCA 1055
Lui v Schnabel [2002] FMCA 274
Ahearn v Deputy Commissioner of Taxation (Qld) [1987] 76 ALR 137
Byron v Southern Star Group Pty Ltd [1997] 73 FCR 264

Applicant:

HERCHENRODER & ANOR

Respondent:

PHILLIP GORDON SMITH

File No:

SZ 68 of 2003

Delivered on:

4 March 2003

Delivered at:

Sydney

Hearing date:

4 March 2003

Judgment of:

Raphael FM

REPRESENTATION

Counsel for the Applicant:

Mr K P Smark

Solicitors for the Applicant:

Hertzberg Heydon

Counsel for the Respondent:

Mr D L Warren

Solicitors for the Respondent:

Brian M Bigelow

ORDERS

Application to set aside bankruptcy notice dismissed.
Time for compliance with bankruptcy notice extended until 7 March 2003.
Applicant to pay the respondent’s costs to be taxed if not agreed under the Federal Court of Australia Act 1976 (Cth) and pursuant to the Federal Court Rules.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SZ 68 of 2003

HERCHENRODER & ANOR

Applicant

And

PHILLIP GORDON SMITH

Respondent

REASONS FOR JUDGMENT

In this matter the applicant seeks the setting aside of a bankruptcy notice issued at the request of the respondent on 12 December 2002. The bankruptcy notice makes a claim for a debt due under a judgment of the District Court of New South Wales which was obtained against the debtors by confession.
Although the judgment was so obtained, it was the subject of an appeal to Sidis J who set it aside. That decision of Sidis J was itself appealed to the Court of Appeal which the court, constituted by Mason P, Bealey and Campbell JJA reversed the decision of Sidis J and left the judgment standing. The decision of the Court of Appeal is itself the subject of an application for special leave to appeal to the High Court of Australia.
There are two legs to the application before me today. The first is an attack upon the validity of the bankruptcy notice itself. The second…

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.

Continue reading Herchenroder & Anor v Smith

Details

AGLC: Herchenroder & Anor v Smith [2003] FMCA 96
Case: [2003] FMCA 96
Decision Date: 4 March 2003

CaseChat Overview and Summary

The case of Herchenroder & Anor v Smith involved a dispute where the applicants sought to set aside a bankruptcy notice issued against them by the respondent. The matter was heard in the Federal Court of Australia. The applicants, Herchenroder and another party, contested the validity of the bankruptcy notice and sought its cancellation. The legal issues before the court revolved around the procedural fairness and correctness of the notice, and whether there were grounds for setting it aside.

The court examined the requirements under the Bankruptcy Act 1966 (Cth) for issuing a valid bankruptcy notice, and whether the notice complied with these statutory provisions. The applicants argued that the notice was defective, lacking essential details and procedural fairness. However, the court found that while there were minor procedural irregularities, these did not render the notice invalid or warrant its setting aside. The court held that the notice was generally valid and complied with the statutory requirements, but the applicants had not demonstrated sufficient grounds to set it aside.

Consequently, the application to set aside the bankruptcy notice was dismissed. The court did, however, deem it appropriate to extend the time for compliance with the notice to ensure fairness to the applicants. The extension was set until 7 March 2003. Furthermore, the court ordered that the applicants pay the respondent's costs, which were to be taxed if not agreed upon, in accordance with the Federal Court of Australia Act 1976 (Cth) and the Federal Court Rules. This decision underscored the importance of procedural compliance while also providing a measure of leniency to the applicants.

Orders

Orders of the court

Application to set aside bankruptcy notice dismissed.

Time for compliance with bankruptcy notice extended until 7 March 2003.

Applicant to pay the respondent’s costs to be taxed if not agreed under the Federal Court of Australia Act 1976 (Cth) and pursuant to the Federal Court Rules.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Citations

AGLC Citation

Herchenroder & Anor v Smith [2003] FMCA 96

Most Recent Citation

Kalfus v Cassis [2005] FMCA 143

Cases citing this decision · 5 of 5 shown

MENNITI v ACN 116 746 859 Pty Ltd
[2019] FCCA 1856 Para 2

…In my view, the answer to this issue is provided by Herchenroder v Smith [2003] FMCA 96 where Raphael FM discussed the authorities: 7. The providing of a solicitor’s address as the address at which payment can be made is permitted. Re Pugliese; Ex parte Chase Manhattan Bank Australia Limited (1993) 44 FCR 536; Ba…
Zdrilic v Hickie
[2014] FCCA 1593 Para 1

…In Herchenroder v Smith [2003] FMCA 96 Raphael FM stated at [16]: 16. The Court have long held that the issuing of a bankruptcy notice is only a step along the road to sequestration and that there are matters which may not persuade a Court to grant an extension of time for compliance with the terms of a bankruptc…
Jones v Verity
[2007] FMCA 1108 Para 4

…Reference was made to decisions of Raphael FM in Boorowa Shire Council v Booth [2001] FMCA 31 (Boorowa Shire) and Herchenroder & Anor v Smith [2003] FMCA 96 (Herchenroder). It was submitted by counsel for the Respondent Debtor that the facts in each of the Federal Magistrates Court cases are "slightly different b…
O'Farrell v Network Entertainment Pty Ltd
[2005] FMCA 1936 Para 6

…is not a very long way away. The difficulty I have with acceding to his request is that I previously expressed a view in Herchenroder & Anor v Smith [2003] FMCA 96 that these extensions should not be given where the appeal involved is an appeal to the High Court by way of an application for special leave unless…
Kalfus v Cassis
[2005] FMCA 143 Para 3

…ication was made by the applicant as a “last gasp” after several earlier unsuccessful appeals[8]. [8] see for example Herchenroder & Anor v Smith [2003] FMCA 96 at [13]…

View all 5 citing cases →

Cases cited in this decision · 7 of 7 shown

Lui v Schnabel
[2002] FMCA 274 Para 1

…ce on the grounds that an appeal is pending is one which frequently comes before the court. I dealt with such applications recently in Lui v Schnabel [2002] FMCA 274. In that case I considered the authorities and in particular the decision of Ahearn v Deputy Commissioner of Taxation (Qld) [1987] 76ALR 137 and an i…
Boorowa Shire Council v Booth
[2001] FMCA 31 Para 3

…I dealt with a matter very similar to this in Boorowa Shire Council v Stuart Edgar John Booth [2001] FMCA 31. In that case the name of the creditor in paragraph 1 was the Boorowa Council and the place at which payment of the debt could be made was the Council, care of a post office box and then an address. On pag…
Bonds Industries Ltd v Sing
[1999] FCA 1055 Para 5

…In Bonds Industries Limited v Singh [1999] FCA 1055, Emmett J described it at [13] in the following manner: “A judgment creditor in a bankruptcy notice must give an address or addresses where he may be found. The address stated must be one at which the debtor may, during the currency of a notice, make payment of t…
Eastern Pastoral Co Pty Ltd v McFarlane
[1999] FCA 172 Para 4

…rity (1997) FCA 1372. The purpose of the address has been considered in a number of cases including Eastern Pastoral Company Pty Limited v MacFarlane [1999] FCA 172 where it was described as an address: “… at which the creditor can be found in order, among other things, to notify the debtors where the documents m…
Foote v Mid-West Finance Pty Ltd
[1997] FCA 990 Para 6

…The question of the appropriate address is also discussed by Foster J in Foot v Midwest Finance Pty Limited (1997) 78 FCR 306 at 307 where His Honour said: “Clearly, the underlying rationale of these cases is that the bankruptcy notice must make clear to the debtor what he or she must do to comply with its requireme…
[1987] FCA 504
[1987] FCA 504

…rlane [1999] FCA 172 Bonds Industries Ltd v Sing [1999] FCA 1055 Lui v Schnabel [2002] FMCA 274 Ahearn v Deputy Commissioner of Taxation (Qld) [1987] 76 ALR 137 Byron v Southern Star Group Pty Ltd [1997] 73 FCR 264…
[1993] FCA 733
[1993] FCA 733 Para 4

…iding of a solicitor's address as the address at which payment can be made is permitted. Re Pugliese; Ex parte Chase Manhattan Bank Australia Limited (1993) 44 FCR 536; Bank of Melbourne Limited v Hannon (Unreported) FCA, Northrop ACJ, 5 September 1997. It is also clear that a post office box cannot constitute an ad…

Legislation cited in this decision · 2

Bankruptcy Act 1966 (Cth)
360(1), 41(2) 3 mentions (from Para 1)
Federal Court of Australia Act 1976 (Cth)
1 mention (from Para 3)