MENNITI v ACN 116 746 859 Pty Ltd
[2019] FCCA 1856
•4 July 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MENNITI v ACN 116 746 859 PTY LTD | [2019] FCCA 1856 |
| Catchwords: BANKRUPTCY – Proceedings in connection with sequestration – Bankruptcy notice – Form and contents of bankruptcy notice – Compliance with prescribed form. BANKRUPTCY – Proceedings in connection with sequestration – Bankruptcy notice – Form and contents of bankruptcy notice – Potential to mislead. |
| Legislation: Bankruptcy Act 1966 (Cth), s.306 |
| Cases cited: Fuller v Alford [2017] FCA 782 |
| Applicant: | LUCIANO MENNITI |
| Respondent: | ACN 116 746 859 PTY LTD |
| File Number: | BRG 490 of 2019 |
| Judgment of: | Judge Jarrett |
| Hearing date: | 3 July 2019 |
| Date of Last Submission: | 3 July 2019 |
| Delivered at: | Brisbane |
| Delivered on: | 4 July 2019 |
REPRESENTATION
| Counsel for the Applicant: | Mr Jurth |
| Solicitors for the Applicant: | Jason Nott Solicitors |
| Solicitors for the Respondent: | CJM Lawyers |
ORDERS
The order made on 23 May, 2019 be set aside;
Bankruptcy notice BN232901 issued on 6 March, 2019 be set aside;
Reserve the question of the costs of the application.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRG 490 of 2019
| LUCIANO MENNITI |
Applicant
And
| ACN 116 746 859 PTY LTD |
Respondent
REASONS FOR JUDGMENT
This is an application for the review of a registrar’s decision which dismissed an application by the debtor to set aside bankruptcy notice that was issued on 6 March, 2019.
There are two defects that the applicant argues causes substantial injustice and which are not formal defects that might be cured pursuant to s.306 of the Bankruptcy Act 1966 (Cth).
The first is that the name of the respondent creditor is different as between the two judgments issued by the New South Wales Supreme Court (upon which the bankruptcy notice is based) and the name of the creditor as set out in the bankruptcy notice. The judgments are given in favour of Palermo Seafoods Pty Ltd. No ACN accompanies the description of the judgement creditor in the judgments. The bankruptcy notice has been issued in the name of ACN 116 746 859 Pty Ltd. Palermo Seafoods Pty Ltd changed its name to ACN 116 746 859 Pty Ltd on 21 November 2016. The judgments attached to the bankruptcy notice were given on 26 September, 2014 and 11 December, 2017. Whilst the respondent continued to exist as at the date of the second judgment, it was no longer known by the name Palermo Seafoods Pty Ltd.
The second defect is in the address for payment and the address for service provided for in the bankruptcy notice. The bankruptcy notice provides that payment of the debt can be made to
CJM Lawyers
PO Box 8378, GCMC, QLD 4217
Phone: +61 07 56314430Email: EBA & CJ M lawyers.com.au
The place for service of legal documents is described in the same way.
A bankruptcy notice is a nullity in two circumstances, namely, “if it fails to meet a requirement made essential by the Act, or if it could reasonably mislead a debtor as to what is necessary to comply with the notice”: Kleinwort Benson Australia v Crowl (1988) 165 CLR 71 at 79.
The question raised by the argument in this case is whether either defect could reasonably mislead the applicant as to what is necessary to comply with the notice. In that respect, a few propositions are uncontroversial. First, in cases where the notice could reasonably mislead the debtor as to what is required, “the notice is a nullity whether or not the debtor is in fact misled”: Kleinwort at 80. Second, whether the debtor was in fact misled is not the question. It is the capacity of the bankruptcy notice to mislead the debtor as to what is required that is important: Kleinwort at 80; James v Federal Commissioner of Taxation (1955) 93 CLR 631 at 644 and Re Wimborne; Ex parte The Debtor (1979) 24 ALR 494 at 500. Third, the Court may have regard to facts extraneous to the notice itself, including the surrounding circumstances from the perspective of the actual debtor served with the notice as opposed to a hypothetical debtor: Re Crisafulli; ex parte National Commercial Banking Corporation of Australia Ltd (1985) 11 FCR 272; Fuller v Alford [2017] FCA 782 at [64].
The Creditor’s name
There is an obvious difference between the name of the creditor as it appears in the judgments which support the bankruptcy notice and the bankruptcy notice itself. There is no obvious connection. The company number, by which the company is now known, does not appear in the judgments.
The respondent says that there is no defect or if there is it is a formal defect capable of cure because served with the bankruptcy notice was an extract from the Australian Securities and Investment Commission records which demonstrates that ACN 116 746 859 Pty Ltd was formerly known as Palermo Seafoods Pty Ltd. The date of the change of name is not apparent from the extract.
The position in this case is not unlike that in Re Hansen; ex parte Hansen (1995) 4 FCR 590 where Beaumont J described the appropriate course where the creditor company had changed its name between the giving of the a judgment upon which a bankruptcy notice was based and the issue of the bankruptcy notice (at 593-594):
... the correct manner of description of the judgment creditor for the purposes of the bankruptcy notice is “M.G.I.C.A. Limited (formerly known as Mortgage Guaranty Insurance Corporation of Australia Limited)” or words to that effect (cf. Re Wheelahan; Ex parte Commissioners of the State Bank of Victoria [1982] FCA 41; (1981) 58 FLR 91 at p 95). Unless some such description of the judgment creditor were made in the bankruptcy notice, the judgment debtor could, in my view, be misled as to the identity of the judgment creditor for the purposes of complying with the requirements of the notice.
Here, the former name and the present name of the creditor recorded in the judgments and on the bankruptcy notice are not at all similar. To conclude that the creditor named in the bankruptcy notice is the same as the judgment creditor requires the applicant “… to decipher it. The recipient should not have to search the document and its attachments, decide whether particular information disclosed is relevant to an issue and then apply a particular chain of reasoning to reach a conclusion about” the identity of the creditor: National Australia Bank Ltd v Westbrook, in the matter of Westbrook [2000] FCA 246 at [14].
In my view, the form of the bankruptcy notice is apt to mislead the applicant. The provision of the ASIC record with the bankruptcy notice when it was served does not cure the difficulty because, for example, there is nothing in the letter accompanying the bankruptcy notice that draws attention to the change in name of the creditor, or the ASIC extract. The extract did not form part of the notice and the debtor was entitled, I think, to disregard it.
The PO Box
There can be no doubt that the omission of an address for payment of the debt in a bankruptcy notice is a defect: St Leon; ex parte National Bank of Australia Ltd (1994) 54 FCR 371. In that case there was no address at all given in the bankruptcy notice at where the debt might paid.
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; 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 address for service for the purposes of order 7, rule 6(1) of the Federal Court Rules. Sarikay v Victorian WorkCover Authority (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 might be served and where the debt might be paid.”
8. 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 the amount claimed in the notice or, one where he may make arrangements to secure or compound the debt. The test for adequacy of such an address must satisfy the demands of commonsense in the highly ordered and busy world in which we live, tempered by a consideration of the implications of a bankruptcy notice and the serious consequences that can flow from non-compliance with its requirements.”
9. 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 requirements. It must avoid the consequences of committing an act of bankruptcy. If he or she is left uncertain in this regard then the notice is rendered invalid and non-compliance with it does not have that serious result.”
10. I would have had no difficulty in agreeing with Mr Smark that the notice was invalid if Mr Bigelow’s address for service given on page 7 of the notice had been in the same form as the address noted in paragraph 4 or, for example, if he had added his DX number and had not set out the actual street address.
Here the address specified as the address at which the debt could be paid was not an address at which the applicant could have, during the currency of a notice, made payment of the amount claimed in the notice or, one where he could have made arrangements to secure or compound the debt.
Conclusion
The defects identified by the applicant in the bankruptcy notice are defects which could reasonably mislead him as to what is necessary to comply with the notice. They were not formal defects that might be cured pursuant to s.306 of the Act. In those circumstances, the bankruptcy notice must be set aside.
I will hear the parties as to costs.
I certify that the preceding seventeen (17) paragraphs are a true copy of the reasons for judgment of Judge Jarrett delivered on 4 July, 2019.
Date: 4 July, 2019
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