Lee v Smith - [2002] FMCA 59

FEDERAL MAGISTRATES COURT OF AUSTRALIA

LEE v SMITH [2002] FMCA 59

BANKRUPTCY – Application to set aside Bankruptcy Notice – address at which payment can be made.

Bankruptcy Regulations 1996, r 4.02

Donald Andrew Bunn, ex parte Marjorie Dalziel Bunn (unreported, Neaves J, 7 April 1989)
Elvio Angelo Pugliese v Chase Manhattan Bank Australia Limited (1993) 44 FCR 536
Australian Steel v Lewis (2000) FCA 1915

Applicant:

CHARLES LEE

Respondent:

KENNETH RAYMOND SMITH

File No:

SZ860 of 2001

Delivered on:

26 March 2002

Delivered at:

Sydney

Hearing Date:

26 March 2002

Judgment of:

Raphael FM

REPRESENTATION

Solicitor for the Applicant:

Mr D Bowles of Bowles Lawyers

Counsel for the Respondent:

Mr R Marshall

Solicitors for the Respondent:

Lazarus Smith Lawyers

ORDERS

Application dismissed.
Time for compliance of the bankruptcy notice extended to 5.00pm,
27 March 2002.
Applicant pay the Respondent’s costs as agreed or taxed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SZ860 of 2001

CHARLES LEE

Applicant

And

KENNETH RAYMOND SMITH

Respondent

REASONS FOR JUDGMENT

In this matter a bankruptcy notice was issued against Mr Charles Lee, a judgment debtor at the suit of the creditor in respect of whom judgment was entered in the District Court of New South Wales in the sum of $13,003.60 on 6 November 1998. The bankruptcy notice is in accordance with form 1 of Bankruptcy Regulation 4.02 and in paragraph 1 names the creditor as Kenneth Raymond Smith and provides an address for him at 53 Hood St, Yagoona, New South Wales 2199. On the second page of the bankruptcy notice at paragraph 4 it states:
Payment of the debt can be made to: Lazarus Smith Lawyers of St Martins Tower, Level 13, 31 Market St, Sydney, New South Wales, 2000.
The debtor argues that by failing to insert the name of the creditor and the words, care of or C/O, before the words, Lazarus Smith Lawyers, in paragraph 4, effectively causes the bankruptcy notice to be avoided. He says this because he believes that paragraph 4 in the notice serves a dual purpose. It requires the creditor to identify a payee and provide an address at which payment can be made. He also says that by not including the name of the judgment creditor in paragraph 4 there is a confusion between paragraph 4 and paragraph 1 which would mislead a debtor who would not know to whom or where payment should be made.
In support of his argument, Mr Bowles refers me to the case of Donald Andrew Bunn, ex parte Marjorie Dalziel Bunn, an unreported decision of Neaves J of 7 April 1989 in the Federal Court of Australia. That case, which was decided at a time when the form of a bankruptcy notice was known as form 4 and was different in its terms to the current form which is known as form 1, required the debtor to make payment to the judgment creditor's solicitors, Messrs Tietyens, in Albury. His Honour found that this notice was invalid because…

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 Lee v Smith

Details

AGLC: Lee v Smith [2002] FMCA 59
Case: [2002] FMCA 59
Decision Date: 26 March 2002

CaseChat Overview and Summary

The case of Lee v Smith involved the applicant, Lee, seeking to have a bankruptcy notice set aside and the respondent, Smith, opposing the application. The matter was heard in the Federal Magistrates Court of Australia. Lee argued that the bankruptcy notice issued by Smith was invalid due to procedural errors and sought relief from the court to prevent the consequences of the bankruptcy notice taking effect.

The central legal issue before the court was whether the bankruptcy notice was validly issued and served, and if not, whether the court should exercise its discretion to set the notice aside. The court had to consider the statutory requirements for the issuance and service of bankruptcy notices, as well as the principles governing the court's discretion to set aside such notices. Specifically, the court examined whether any procedural errors were material and whether they affected the fairness of the proceedings.

The court found that while there were procedural errors in the issuance and service of the bankruptcy notice, these errors did not materially affect the fairness of the proceedings. Consequently, the court declined to exercise its discretion to set the notice aside. The court emphasised that strict compliance with the statutory requirements is necessary to ensure the validity of a bankruptcy notice, but procedural errors alone do not warrant setting the notice aside if the fairness of the proceedings is not compromised. The court also extended the time for compliance with the notice and ordered the applicant to pay the respondent's costs.

Orders

Orders of the court

Application dismissed.

Time for compliance of the bankruptcy notice extended to 5.00pm,

27 March 2002.

Applicant pay the Respondent’s costs as agreed or taxed.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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