Kalfus v Cassis
[2005] FMCA 143
•8 March 2005
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| KALFUS v CASSIS | [2005] FMCA 143 |
| BANKRUPTCY – Application to set aside bankruptcy notice and for an extension of time for compliance – extension of time application based upon special leave application to the High Court – whether a special leave application is a proceeding to set aside the judgment or order supporting the bankruptcy notice considered – bankruptcy notice claiming interest within 21 days of Supreme Court judgment – whether the bankruptcy notice is invalid considered. |
| Bankruptcy Act 1966 (Cth), ss.30, 41 Supreme Court Act 1970 (NSW), ss.92, 95 |
| Bryant v Commonwealth Bank of Australia (9 November 1994) Byron v Southern Star Group Pty Ltd (1997) 73 FCR 264 Carson v John Fairfax & Sons Ltd (1991) 173 CLR 217 Collins (alias Hass) v the Queen (1975) 133 CLR 120 Conway v Jackson (2001) 107 FCR 201 Elliott v Water Wheel Holdings Ltd & Water Wheel Mills Pty Ltd [2004] FMCA 37 Forrest v Kelly (1991) 105 ALR 397 Harrison v Schipp [2001] FMCA 70 Herchenroder & Anor v Smith [2003] FMCA 96 Jenkins v NAB [1999] FCA 1758 Jennings Construction Limited v Burgundy Royale Investments Pty Ltd (1986) 161 CLR 681 O’Loughlin v Glenmont Investments Pty Ltd (2002) 191 ALR 336 Rahme v Commonwealth Bank of Australia (1993) 117 ALR 618 Re Baker; ex parte Baker v Staples (4 September 1995) Re Briggs; ex parte Briggs v DCT (WA) (1986) 75 ALR 554 Re Coldham; ex parte BLF (1986) 64 ALR 215 Re Simanovich’s Application (2001) 180 ALR 448 Re Sterling; ex parte Esanda Pty Ltd (1980) 30 ALR 77 Walsh v Deputy Commissioner of Taxation (1984) 53 ALR 606 |
| Applicant: | MARCEL ISADOR KALFUS |
| Respondent: | SAMI ALFRED CASSIS |
| File Number: | SYG3330 of 2004 |
| Judgment of: | Driver FM |
| Hearing date: | 18 February 2005 |
| Delivered at: | Sydney |
| Delivered on: | 8 March 2005 |
REPRESENTATION
| Counsel for the Applicant: | Mr G George |
| Solicitors for the Applicant: | Pateman Solicitors |
| Counsel for the Respondent: | Mr P Roberts SC |
| Solicitors for the Respondent: | Levitt Robinson |
ORDERS
Bankruptcy notice NN2576 of 2004 is set aside.
The respondent shall pay the applicant’s costs of these proceedings.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG3330 of 2004
| MARCEL ISADOR KALFUS |
Applicant
And
| SAMI ALFRED CASSIS |
Respondent
REASONS FOR JUDGMENT
Introduction and background
By application filed on 12 November 2004, Marcel Kalfus seeks an order setting aside bankruptcy notice number NN2576/2004, which was issued on 1 October 2004 and served on Mr Kalfus on 21 October 2004. He also seeks costs. In addition, Mr Kalfus seeks an order pursuant to s.41(6A) of the Bankruptcy Act 1966 (Cth) (“the Bankruptcy Act”) that the time for compliance with the bankruptcy notice be extended to the date being 28 days after delivery of judgment by the High Court of Australia in respect to an application for special leave to appeal filed on 18 October 2004. Mr Kalfus seeks the same relief in the alternative, pursuant to s.30(1)(a) of the Bankruptcy Act. The application is opposed by Mr Cassis upon the basis that there is no reason to set aside the bankruptcy notice. The extension of time is opposed on the basis that the Court has no power to extend time by reference to the special leave application and, even if it does, it should not do so.
The present proceedings arise out of a somewhat complex history of litigation between the parties. Mr Kalfus and Mr Cassis were in business together importing and distributing French gas hot water systems. The business, which was conducted through a company, failed. Mr Cassis instituted proceedings against Mr Kalfus in the NSW Supreme Court in about June 1996 claiming damages for asserted negligence and breach of fiduciary duty as a joint venturer. On 22 June 2001 Dowd J dismissed those proceedings.
Mr Cassis appealed against that decision and, on 11 December 2001, the Court of Appeal set aside the orders made by Dowd J and ordered a retrial. On 25 July 2003, after the second trial, Cripps AJ dismissed the proceedings brought by Mr Cassis (although he found in favour of Mr Cassis’ wife, who was also a party to the proceedings).
On 19 August 2003 Mr Cassis appealed against the dismissal of his proceedings. On 20 September 2004 the Court of Appeal set aside the orders made by Cripps AJ in the second trial in respect of the claim by Mr Cassis and ordered Mr Kalfus to pay equitable damages. That is the judgment supporting the bankruptcy notice. Judgment was entered on 24 September 2004 in the sum of $385,649, plus costs.
On 18 October 2004 Mr Kalfus filed an application for special leave to appeal against the decision of the Court of Appeal in the High Court. The bankruptcy notice was issued on 1 October 2004 and served on
21 October 2004.
Time to comply with the bankruptcy notice expired on 11 November 2004 but has been extended on several occasions by this Court, most recently until 8 March 2005, upon the basis that the Court has power to grant the extension pursuant to s.41(6A) of the Bankruptcy Act. In granting those extensions, I made clear that if I ultimately found that I had no power to grant the extensions, they would be ineffective.
The evidence
Mr Kalfus relies upon three affidavits made on 11 November 2004, 29 November 2004 and 17 February 2005. He was cross-examined on those affidavits. Mr Kalfus deposes as to the history of the dealings between the parties, including the litigation up to the special leave application. His second affidavit annexes a summary of argument in the special leave application. In that affidavit Mr Kalfus also offers an undertaking to the Court that he will not dispose of any of his assets, other than in the ordinary course of business, pending the hearing and determination of his application for special leave. In his third affidavit, Mr Kalfus deposes as to his present financial circumstances.
I permitted Mr George to lead short additional oral evidence from Mr Kalfus concerning his employment. He stated that he is employed by Holding Redlich on a salary of $190,000 per annum before tax. He is a special counsel.
Under cross-examination Mr Kalfus conceded that, after the second Court of Appeal hearing, he had indicated that he was unable to pay any significant part of the judgment debt. He denied that he is a man of straw. He stated that he had purchased a property in Liverpool Street, Sydney for a price of approximately $460,000. That is approximately the same amount as is outstanding on the mortgage over the property. He conceded that he has not been making regular payments to his mother in respect of a family debt (but said under re‑examination that he was under no obligation to do so). His special leave application has been funded to date by Law Cover. He conceded that he could not pay the judgment debt and fund his proceedings in the High Court but added that he was under no current obligation to pay for the proceedings in the High Court.
Mr Kalfus was asked about family law property proceedings between him and his second wife. The couple are now divorced. He stated that there had been a property settlement between the two which had resulted in consent orders being made by the Family Court. He stated that a mistake had been made in relation to order 1 of those consent orders and, in order to correct the mistake, he was now in the process of transferring real estate to his former wife. In re-examination he explained that the mistake had arisen because order 1 of the orders made by the Family Court had required him to transfer to his former wife property at 2A Mona Road, Darling Point by reference to a certificate of title. He stated that it was intended by the parties that all of his real estate at that location would be transferred but the parties had overlooked the fact that there was an interest in a basement apartment at that location under a second certificate of title. He is now transferring that interest in conformity with the mutual intention of the parties. The orders of the Family Court were tendered: exhibit A1. Also tendered was a letter dated 4 February 2005 from the solicitors for Mr Kalfus’ former wife to his solicitors in relation to that order: exhibit A2.
The evidence of Mr Kalfus was completed by the tender of the further amended statement of claim in the Supreme Court by Mr and Mrs Cassis against Mr Kalfus: exhibit A3. The point of that tender was to establish that the proceedings were in the common law division of the Supreme Court.
Mr Cassis relies upon the affidavit of his solicitor Brett Imlay made on 26 November 2004. Mr Imlay deposes as to the history of the litigation between the parties, the service of the bankruptcy notice and the special leave application. He was not required for cross‑examination. Exhibited to that affidavit are the second judgment of the NSW Court of Appeal given on 20 September 2004 and the first judgment of the NSW Court of Appeal given on 11 December 2001. Annexed to the affidavit is Mr Cassis’ summary of argument in the special leave application.
Submissions
Both counsel prepared a written outline of submissions and also made oral submissions.
Mr George submits that the bankruptcy notice is a nullity because the asserted debt includes interest on the judgment awarded by the Court of Appeal. The Court of Appeal made no order for interest and the only entitlement to interest comes from s.95 of the Supreme Court Act 1970 (NSW) (“the Supreme Court Act”). Mr George submits that, pursuant to s.95(2) of the Supreme Court Act, no interest is payable for 21 days after the judgment of the Court of Appeal. He submits that, because the bankruptcy notice was issued before the expiry of that 21 day period and claimed interest, the bankruptcy notice is invalid. There was, in his submission, no debt in the form of interest that could be claimed at that time.
Further, or in the alternative, Mr George submits that the bankruptcy notice should be set aside as an abuse of process. He submits that the purpose of the bankruptcy notice is to put pressure on Mr Kalfus to pay the debt rather than to invoke the Court’s insolvency jurisdiction.
Mr George submits that the Court should exercise its discretion to extend time for compliance with the bankruptcy notice until the special leave application in the High Court has been dealt with by that Court. He submits that there is no real doubt that the Court has power to extend time and that the discretion should be exercised in favour of Mr Kalfus, having regard to the factors that:
a)this is the first appeal against the judgment supporting the bankruptcy notice;
b)there are serious issues raised in the special leave application and the decision of the Court of Appeal was not unanimous, and followed two trials in which Mr Kalfus had been successful;
c)save for the judgment debt, Mr Kalfus is solvent;
d)there is no evidence that Mr Kalfus is seeking to take advantage of an extension of time to defeat his creditors and he has offered an undertaking to preserve his assets pending the resolution of the special leave application.
Mr Roberts submits that it is clear that the bankruptcy notice is not an abuse of process. He points to the admitted inability of Mr Kalfus to pay the judgment debt at the time the judgment was made by the Court of Appeal. Secondly, he asserts that there is no defect in the bankruptcy notice. The judgment debt was due on the order of the Court of Appeal and Mr Cassis was entitled to interest on the judgment from the date of that order. He submits that it does not matter that interest could have been avoided if the judgment debt had been paid within 21 days of the date of the judgment. The judgment debt was not paid and, in consequence, Mr Cassis was always entitled to the interest he claims. Further, Mr Roberts submits that the bankruptcy notice could not be misleading noting, in particular, that by the time it was served on Mr Kalfus, there was no longer any opportunity to avoid payment of the interest.
Mr Roberts submits that the Court has no power to extend time for compliance with the bankruptcy notice. The present application before the Court was filed the day after the due date for payment on the bankruptcy notice and, accordingly, there is no power to extend time by reference to the application to set aside the bankruptcy notice. It is not disputed that the special leave application was filed well before the last day for compliance with the bankruptcy notice but Mr Roberts submits that the special leave application is not a proceeding to set aside the judgment and orders of the Court of Appeal, for the purposes of s.41(6A) of the Bankruptcy Act. Mr Roberts accepts that in Conway v Jackson (2001) 107 FCR 201 the Full Federal Court established conclusively that an appeal was a proceeding to set aside a judgment or order supporting a bankruptcy notice but submits that a special leave application is not an appeal. He submits that, with one exception, all of the cases dealing with an extension of time in relation to a special leave application have assumed power without deciding if there is power. The exception is O’Loughlin v GlenmontInvestments Pty Ltd (2002) 191 ALR 336 per Mansfield J at [4]. Mr Roberts submits that that decision is wrong because a special leave application is different in character from an appeal and cannot constitute the institution of an appeal[1].
[1] Collins (alias Hass) v the Queen (1975) 133 CLR 120 at pages 122-3; Jennings Construction Limited v Burgundy Royale Investments Pty Ltd (1986) 161 CLR 681 at page 683; Rahme v Commonwealth Bank of Australia (1993) 117 ALR 618 at page 620
Mr Roberts submits that the institution of an application for special leave to appeal to the High Court does not constitute “proceedings to set aside” a judgment of the Court of Appeal. This is because, unless and until special leave to appeal is granted, the applicant for special leave “is no more than an applicant desiring to obtain the Court’s leave to commence proceedings”[2] in the High Court[3].
[2] emphasis in Mr Roberts’ submissions retained
[3]Collins (alias Hass) v the Queen
Mr Roberts submits that even if the Court does have power to extend time for compliance with the bankruptcy notice it should, in the exercise of discretion, refuse to extend time. He draws attention to the facts that no application has been made by Mr Kalfus to obtain a stay of the operation of the judgment or orders of the Court of Appeal. Secondly, he draws attention to the prejudice, or potential prejudice, that creditors will suffer as a result of the granting of an extension of time, by reason of delaying the date of the act of bankruptcy. Thirdly, Mr Roberts submits that the present action by Mr Kalfus to transfer real estate to his former wife establishes that he is attempting to divest himself of assets that would otherwise be available to his creditors. He submits that Mr Kalfus is insolvent and that Mr Cassis should gain the benefit of the act of bankruptcy. Mr Roberts notes authority that a bankruptcy notice is of a different character to a creditor’s petition and a court should be less ready to extend time to comply with the bankruptcy notice than it might be to adjourn on a creditor’s petition, pending the resolution of court action challenging the judgment debt[4].
Reasoning
[4] Byron v Southern Star Group Pty Ltd (1997) 73 FCR 264
Does the Court have the power to extend time for compliance with the bankruptcy notice?
The only source of power available to the Court to extend time for compliance with the bankruptcy notice is s.41(6A) of the Bankruptcy Act: Harrison v Schipp [2001] FMCA 70 at [26]. That section requires, as a pre-condition to the exercise of power, that the applicant for an extension of time either commence proceedings to set aside the judgment or order supporting the bankruptcy notice or institute an application in the Court to set aside the bankruptcy notice before time for compliance with the bankruptcy notice expires. The time for compliance with the bankruptcy notice in this case had expired prior to the application made to the Court to set aside the bankruptcy notice, so the Court’s power to extend time for compliance with the bankruptcy notice depends upon the application for special leave made to the High Court.
Surprisingly, the question of whether a special leave application to the High Court is a proceeding to set a side a judgment or order supporting a bankruptcy notice appears not to have been conclusively decided previously. The authority cited by the learned authors of Butterworth’s Bankruptcy Law and Practice Service[5] is Jenkins v NAB [1999] FCA 1758. However, the Court in that case did not make a clear finding. Ryan J made an assumption at paragraph 3. Several other decisions, both of the Federal Court and this Court, have been based upon an assumption that a special leave application fits the description of a proceeding to set aside a judgment or order, without deciding the issue. In Byron v Southern Star Group Pty Ltd Lehane J declined to grant an extension of time in the exercise of discretion where an application for special leave to the High Court had been made. His Honour questioned whether a special leave application should be regarded as a proceeding to set aside a judgment or order and said that he should so regard it, based upon two unreported decisions of the Federal Court[6]. However, as is pointed out by Mr Roberts in his submissions, neither of the cases referred to by Lehane J involved a special leave application.
[5] at page 10,200
[6] Bryant v Commonwealth Bank of Australia (9 November 1994); Re Baker; ex parte Baker v Staples (4 September 1995)
In O’Loughlin v Glenmont Investments Pty Ltd at [4] Mansfield J said:
This application that is now before the Court was made on 19 April 2001, before the expiration of the time fixed for compliance with the requirements of the bankruptcy notice. Also within that time, the application for special leave to appeal to the High Court was instituted. In the light of the decision in Conway v Jackson (2001) 182 ALR 185, in my view it is clear that the application for special leave to appeal to the High Court from the decision of the Full Court of the Supreme Court of South Australia does constitute proceedings to set aside the judgment of that Court in respect of which the bankruptcy notice was issued. It is not suggested by the respondent that s.41(6C) of the Act applies to any of the matters. Consequently, the Court has a discretion to extend the time for compliance with the bankruptcy notice.
The decision by Mansfield J is authority for the proposition that the Court does have the power to extend time in the present circumstances. As a decision of a single judge of the Federal Court not on appeal from this Court, it is not strictly binding upon me, however, it is a highly persuasive authority. The difficulty I have with that decision is that it depends upon the decision in Conway v Jackson which did not involve an application for special leave. That case establishes conclusively that an appeal against a judgment or order is a proceeding to set aside that judgment or order, provided that that is the object of the appeal. However, as is pointed out by Mr Roberts in his submissions, a special leave application to the High Court is not an appeal[7].
[7] see Collins (alias Hass) v the Queen (supra); Jennings Construction Limited v Burgundy Royale Investments Pty Ltd (supra); Rahme v Commonwealth Bank of Australia (supra)
While I accept that a special leave application to the High Court is not an appeal (and to that extent I must disagree with Mansfield J) it does not follow that a special leave application is not a proceeding. A proceeding is a word of broad meaning not limited to a judicial proceeding: Forrest v Kelly (1991) 105 ALR 397 at 408. It includes an application for an extension of time to institute an appeal: Re Coldham; ex parte BLF (1986) 64 ALR 215 at 219. If there were any doubt whether a special leave application is a proceeding that doubt was removed by the High Court in Re Simanovich’s Application (2001) 180 ALR 448. In that case, at paragraph 7, Kirby J said:
A decision on a special leave application is not res judicata as between the parties, equivalent to a judgment that finally decides a legal dispute between them. The application is in the nature of an interlocutory proceeding by which a party seeks to engage the jurisdiction of this Court. As a general rule, interlocutory orders may be varied or set aside in appropriate circumstances where the interests of justice so require. At the stage of the special leave application, it has been said, the appellate jurisdiction of this Court has not been engaged, it is simply a process by which a party seeks to persuade the Court to enter upon that jurisdiction. I shall assume that this is a valid distinction, compatible with the Constitution.
His Honour’s analysis is consistent with that of the whole Court in Carson v John Fairfax & Sons Ltd (1991) 173 CLR at 217-218.
Accepting, as I do, that a special leave application is a proceeding, the question then is whether it is a proceeding to set aside the judgment and orders of the Court of Appeal, for the purposes of s.41(6A)? I find that it is. It is the process by which Mr Kalfus seeks to engage the jurisdiction of the High Court to overturn the judgment and orders of the Court of Appeal. It is the only process which is available to him. It would be an absurd and unjust result if the Court were prevented from entertaining an application for an extension of time in circumstances where the applicant is pursuing the only avenue leading to an appeal that is open to him. The absurdity and injustice would be particularly acute where, as here, the applicant is pursuing a proceeding leading to the first and only appeal that is possible. I find that the expression proceedings to set aside a judgment or order in s.41(6A) of the Bankruptcy Act includes a proceeding taken by an applicant to satisfy a jurisdictional pre-requisite to such a proceeding. It follows that a special leave application in the High Court is a proceeding to set aside a judgment or order supporting a bankruptcy notice. I so find.
Should time be extended in the exercise of discretion?
The general principles guiding the Court in the exercise of its discretion have been stated many times and I do not need to repeat them. I have regard, in particular, to the observation by McInnis FM in Elliott v Water Wheel Holdings Ltd & Water Wheel Mills Pty Ltd [2004] FMCA 37 at [17]-[20]. The considerations of particular relevance in this case have been identified by counsel in their submissions.
It is obvious from the summary of arguments in the special leave application in evidence before me that the special leave application is not a sham or a device to seek to delay the commission of an act of bankruptcy. There is no question of the application of s.41(6C) of the Bankruptcy Act. The special leave application is a bona fide one seeking to agitate a real and substantial legal dispute. The Court of Appeal in the decision supporting the bankruptcy notice was divided on the question as to whether it should order a new trial. The majority decided that it should not. That issue is the main issue sought to be agitated further in the High Court.
Secondly, it is relevant that the appeal in the High Court, if permitted, would be the first appeal against the judgment or order supporting the bankruptcy notice. This case is clearly distinguishable from decisions of this Court and the Federal Court where a special leave application 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]
The matters advanced by Mr Roberts as weighing against the exercise of discretion are also relevant and I take them into account. They are, however, not determinative. Mr Kalfus has offered an undertaking not to dispose of his assets, except in the ordinary course of business, pending the outcome of the special leave application. He is not presently required to fund the special leave application himself and so it is not a drain upon his financial resources. There is no persuasive evidence that Mr Kalfus is seeking to defeat his creditors by delay. His action in transferring a relatively incidental interest in real estate to his wife is a bona fide attempt to comply with what he sees as his obligations pursuant to consent orders made by the Family Court. Further, Mr Kalfus is not a man of straw. He holds a responsible job and earns a substantial income. The evidence as to his financial circumstances is equivocal and not comprehensive but, on the state of the evidence before me, I am unable to find that he is insolvent, except by reference to the judgment debt, which is disputed.
The failure by Mr Kalfus to seek a stay of the operation of the Court of Appeal orders is relevant, but not fatal. It would be unreasonable to expect a litigant to seek a stay in circumstances where, by clear authority, such an application would be a waste of time and money. That is the position here: Rahme v Commonwealth Bank of Australia (supra) at 620.
In all the circumstances of this matter, I would be prepared to exercise my discretion to grant an extension of time for compliance with the bankruptcy notice until the special leave application to the High Court is heard and determined. However, for reasons which follow, it is unnecessary for me to exercise that discretion.
Is the bankruptcy notice invalid?
The Court’s power to set aside a bankruptcy notice derives from s.30(1) of the Bankruptcy Act. The grounds on which a bankruptcy notice may be set aside are not at large. They must relate to the form or content of the notice, the existence of the debt upon which it is based, service of the notice or abuse of process: Re Briggs; ex parte Briggs v DCT (WA) (1986) 75 ALR 554 at 556; Re Sterling; ex parte Esanda Pty Ltd (1980) 30 ALR 77. In this case, the bankruptcy notice is challenged on the basis that it is an abuse of process and that there was no interest debt due and payable at the time the bankruptcy notice was issued.
I reject the contention that the bankruptcy notice is an abuse of process. The extensive litigation between the parties has been hard fought but it has been properly fought. Mr Cassis would probably like to see an end to it but I am not persuaded on the evidence that the bankruptcy notice served the purpose of seeking to pressure Mr Kalfus, either to pay the debt or to frustrate the special leave application. Mr Kalfus admitted telling his legal advisers, following the second judgment of the Court of Appeal, that he was unable to pay any significant part of the judgment debt. It is probable that that information found its way to Mr Cassis in response to an enquiry about payment of the judgment debt. Mr Cassis probably formed the view that the judgment debt was unlikely to be paid. In the circumstances, while Mr Cassis acted remarkably quickly in securing the issue of a bankruptcy notice, the bankruptcy notice is not an abuse of process.
There is force in the other challenge to the bankruptcy notice. A bankruptcy notice is a nullity if it fails to meet a requirement made essential by the Bankruptcy Act. It is an essential requirement of s.41 of the Act that, at the time a bankruptcy notice is issued, the debt or debts claimed in it are due and payable. Section 95 of the Supreme Court Act provides as follows:
(1)Where judgment is given or an order is made for the payment of money, interest shall, unless the Court otherwise orders, be payable at the prescribed rate from the date when the judgment or order takes effect on so much of the money as is from time to time unpaid.
(2)Notwithstanding subsection (1), where, in proceedings on a common law claim the Court gives judgment for damages and the damages are paid within 21 days after the date when the judgment takes effect, interest on the judgment debt is not to be payable under subsection (1) unless the Court otherwise orders.
(3)Notwithstanding subsection (1), where, in proceedings for damages on a common law claim, the Court makes an order for the payment of costs and the costs are paid within twenty-one days after ascertainment of the amount of the costs by assessment under Division 6 of Part 11 of the Legal Profession Act 1987 or otherwise, interest on the costs shall not be payable under subsection (1) unless the Court otherwise orders.
(4)If an order is made for the payment of costs, the Court may order that interest is to be paid on the amount so ordered, at the prescribed rate referred to in subsection (1), from the date or dates when the amount in respect of costs was duly paid.
There was no order for interest made by the Court of Appeal. Accordingly, the only entitlement Mr Cassis had to interest was pursuant to s.95 of the Supreme Court Act. The proceedings instituted by Mr Cassis in the Supreme Court were in the common law division of the Court and sought damages for negligence and breach of fiduciary duties. The statement of claim was amended at least four times and, in its first judgment in 2001, the Court of Appeal treated the claim as, at least in part, an equitable claim. The proceedings included a claim for equitable compensation. Nevertheless, the statement of claim in its final form in 2002 remained predominantly a common law claim in the common law division of the Supreme Court. The statement of claim sought both common law damages and (further or in the alternative) equitable compensation. The relief ultimately granted by the Court of Appeal in its second judgment in 2004 was an award of damages in the form of equitable compensation. In my view, the award of equitable damages on a common law claim is caught by s.95(2) of the Supreme Court Act. I find that the proceedings were common law proceedings and that s.92(2) applied to the payment of the judgment sum.
Pursuant to s.95(2) of the Supreme Court Act, Mr Cassis had no entitlement to interest for a period of 21 days after the orders of the Court of Appeal were made. If, at the end of that period, the judgment debt was not paid, Mr Cassis became entitled to interest from the date of the judgment. A bankruptcy notice speaks as at the date of its issue and its validity must be determined as at that date: Walsh v Deputy Commissioner of Taxation (1984) 53 ALR 606. The bankruptcy notice in this case was issued on 1 October 2004, a mere 11 days after the judgment of the Court of Appeal. This was well within the period of grace provided by s.95(2) and, at the time the bankruptcy notice was issued, there was no entitlement to claim interest. Interest was claimed in the bankruptcy notice from the date of the judgment of the Court of Appeal. There was no interest debt due and payable at that time and it follows that there is an irremediable defect in the bankruptcy notice.
I find that the bankruptcy notice is invalid and should be set aside.
Costs should follow the event in this case.
I certify that the preceding thirty-eight (38) paragraphs are a true copy of the reasons for judgment of Driver FM
Associate:
Date: 8 March 2005
5
13
2