HUDSON TIMBER and Hardware Ltd v Mudge
[2003] FMCA 298
•17 June 2003
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| HUDSON TIMBER & HARDWARE LTD v MUDGE | [2003] FMCA 298 |
| BANKRUPTCY – Creditor’s petition – service of the creditor’s petition and bankruptcy notice – whether the debtor served personally – dispute of fact – whether personal service of the creditor’s petition required whether the debtor appears in the bankruptcy proceedings. |
Bankruptcy Act 1966 (Cth), s.52(1)
Bankruptcy Regulations
| Applicant: | HUDSON TIMBER & HARDWARE LTD ACN 081 809 814 |
| Respondent: | RONALD ANTHONY MUDGE |
| File No: | SZ297 of 2003 |
| Delivered on: | 17 June 2003 |
| Delivered at: | Sydney |
| Hearing date: | 17 June 2003 |
| Judgment of: | Driver FM |
REPRESENTATION
| Counsel for the Applicant: | Mr J Johnson |
| Solicitors for the Applicant: | Jones King Lawyers |
| Solicitors for the Respondent: | Ms L Simons as agent Alroe & O’Sullivans |
THE COURT ORDERS THAT
A sequestration order be made against the estate of Ronald Anthony Mudge.
The petitioning creditor’s costs, including any reserved costs, be paid in accordance with the Bankruptcy Act 1966 (Cth).
The Court notes that the date of bankruptcy is 24 October 2002.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SZ297 of 2003
| HUDSON TIMBER & HARDWARE LTD ACN 081 809 814 |
Applicant
And
| RONALD ANTHONY MUDGE |
Respondent
REASONS FOR JUDGMENT
(Revised from transcript)
I have before me for ex tempore judgment a creditor's petition in this matter filed on 6 March 2003. The petition asserts that the respondent debtor, Ronald Mudge, owes the applicant creditor the amount of $53,451.35 due pursuant to a final judgment obtained in the District Court of New South Wales on 30 August 2002. The petition alleges an act of bankruptcy on 24 October 2002, being failure to comply with a bankruptcy notice served on the respondent debtor on 3 October 2002.
The petitioning creditor relies upon affidavits of debt which have been updated today and affidavits verifying the petition and also affidavits of search which have been updated. In addition, the petitioning creditor relies upon affidavits of service personally upon the debtor both of the bankruptcy notice and the creditor's petition. The only matter disputed is service of the bankruptcy notice and the creditor’s petition. Subject to that issue, the petitioning creditor is entitled to receive a sequestration order.
The contest between the parties on the issue of service is a simple factual dispute. The petitioning creditor, relying upon two affidavits by Robert Joseph Donnelly, asserts that the debtor was personally served with the bankruptcy notice on 3 October 2002 and with the creditor’s petition on 3 April 2003. Mr Mudge, relying upon his own affidavits and affidavits by his partner, Michelle Terese Courtney, asserts that he was not at home on either of these occasions and that the bankruptcy notice and creditor’s petition only came to his attention subsequently when brought to his attention by Ms Courtney.
Both Mr Donnelly and Mr Mudge and Ms Courtney were cross examined today on their affidavits. Both held firm to the accounts they gave of the relevant facts. Obviously the evidence of either Mr Donnelly or Mr Mudge and Ms Courtney must be incorrect. Having read the relevant affidavits and having observed the deponents and heard their evidence in cross-examination, I prefer the evidence of Mr Donnelly to that of Mr Mudge and Ms Courtney.
Mr Donnelly knows Mr Mudge personally, as was confirmed by Mr Mudge, and he has been to Mr Mudge's home on a number of occasions. He has had dealings with Mr Mudge prior to the present bankruptcy matter. I am satisfied and I accept that Mr Donnelly was well aware of where Mr Mudge could be found, where his home was located and what Mr Mudge looked like. I accept Mr Donnelly's evidence of personal service of the bankruptcy notice on 3 October 2002 and of the creditor's petition on 3 April 2003. It follows that I reject the evidence of Mr Mudge and Ms Courtney on that issue.
During the course of argument, Mr Johnson, for the petitioning creditor, made a number of submissions to me relating to the issue of service. Mr Johnson submitted, and I accept, that even if there had been no service of the creditor's petition as alleged, it would not matter because Mr Mudge filed a notice of appearance in the present proceedings on 9 April 2003 and also filed a notice of intention to oppose the creditor’s petition on the same day.
Although a creditor's petition is required to be served personally, and it is an originating process in this Court, where a party files a notice of appearance and participates in the proceedings of the Court, I accept that no issue of personal service of the originating process remains. Mr Johnson also submitted to me that even if there had been no personal service on Mr Mudge of the bankruptcy notice on 3 October 2002, the evidence of Mr Mudge and Ms Courtney would establish that the bankruptcy notice came to Mr Mudge's attention on 3 October 2002 and the act of bankruptcy would remain upon the expiry of the bankruptcy notice.
There is authority in the Federal Court that where a bankruptcy notice is served upon a relative of the debtor and promptly comes to the attention of the debtor that sufficient service has been proved. There is also contrary authority specifically that service on a spouse of the debtor is not sufficient. That authority predates the Bankruptcy Regulations (“the Bankruptcy Regulations”) which provide in regulation 16.01 for alternative methods of service of a bankruptcy notice. Personal service is now one of a range of methods by which service of a bankruptcy notice can be effected.
In this matter, however, personal service pursuant to regulation 16.01(d) is the form of service relied upon by the petitioning creditor. The affidavit of Mr Donnelly specifically asserts that personal service was effected. While, in my view, there is much to be said for the view that sufficient service of a bankruptcy notice could be proved on the evidence of Mr Mudge and Ms Courtney, in the circumstances of this matter, if I had been persuaded that Mr Donnelly's affidavit was false, I would not have permitted a sequestration order to be made on the basis of that false evidence.
However, I have accepted Mr Donnelly's affidavit. Accordingly, I find that service of the bankruptcy notice was effected in accordance with regulation 16.01(d) of the Bankruptcy Regulations, as asserted by the petitioning creditor. As I have already noted, there is no other opposition to the creditor's petition. I am satisfied that the petitioning creditor is entitled to a sequestration order. I am satisfied that the debtor committed the act of bankruptcy alleged in the petition and I am satisfied with the proof of the other matters of which s.52(1) of the Bankruptcy Act 1966 (Cth) (“the Bankruptcy Act”) requires proof.
I therefore make a sequestration order against the estate of Ronald Anthony Mudge. I order that the petitioning creditor's costs, including any reserved costs, be taxed and paid in accordance with the Bankruptcy Act. The Court notes that the date of the act of bankruptcy was 24 October 2002.
I certify that the preceding eleven (11) paragraphs are a true copy of the reasons for judgment of Driver FM
Associate:
Date: 18 July 2003
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