Monk, S.R. Australia and New Zealand Banking Group Limited

[1994] FCA 335

JUDGMENT Na ~ . ~ ~ . . / 3-

THE FEDERAL COURT OF AUSTRAt 19 ) )

DISTRICT REG-	)	No.G 988 of 1993
)

- )

QN APPEAL FROM A JUDCF OF THE F E D E C Q U R T

AUSTRAL=

BETWEEN: SCOTT RONALD MONK

Appellant

AND: ILUSTRAtIA AND NEW ZEALAND

-

Respondent

!x!uM:	BEAUMONT, HILL AND HEEREY JJ.
!~~~L~UMADE:	SYDNEY
l2&rI%:	31 MAY 1994
:	-

Appeal dismissed, with costs.

Order 36 of the Federal Court Rules.

Settlement and entry of orders is dealt with in

THE FEDERAL COURT OF AUSTRALIA )

1

M W SOUTH W&ES DISTRICT REGISTRY )

)

DIVISION 1

DN APPEAL FROM A JUDGE OF THE F E D E W COURT

gF AUSTRALIA

BETWEEN: =OTT RONALD MONK

Appellant

AND: AUSTRALIA AND NEW ZEALAND

BANKING GROUP LIMITED

Respondent

!x!l3AN:	BEAUMONT, HILL AND HEEREY JJ.
4?m%:	31 MAY 1994

REASONS FOR JUDGMENT

2uluxmu

This is an appeal from an order made by Lockhart J. dismissing an application by the appellant, the judgment debtor, for various orders relating to a bankruptcy notice lssued at the request of the respondent, the judgment

creditor.

The bankruptcy notice was based on a judgment obtained by the respondent in the Supreme Court of New South Wales on 10 February 1992 in the sum of $100,000. The notice, which was in the usual statutory form, inter alia, required payment of the sum of $100,000 plus interest within 14 days after 4 August 1993, excluding that day.

On 17 September 1993, the appellant filed an application seeking an order setting aside the notice or alternatively extending time for compliance with it. On 25 October 1993, a Registrar dismissed the application for extension of the time to comply with the notice on the grounds that the application itself was out of time.

On 3 November 1993, an application was made to the Court to review that decision. Application was then also made to the Court to extend time for compliance with the provisions of s.41(5) of the Bankru~tcv Act 1966 ("the Act"). The application was made under s.33(l)(c) of the Act.

By s.41(5) it is provided as follows:

" 4 1 ( 5 ) A bankruptcy notice is not invalidated by

reason only that the sum specified in the notice as the amount due to the creditor exceeds the amount in fact due, ynless the debtor, within the time allowed for Davment. aives notice to the creditor that he

~ ~ s D u ~ € ? s the validitv of the notice on the around of

&he mis-statement . " (Emphasis adaed)

On 30 November 1993, Lockhart J., after referring to the authorities (see Re Lentini (1991) 29 FCR 363 per Neaves J. at 372; Streimer v (1981) 54 FLR 253; Thuraood v National Bank of Australia Limited (1981) 53 FLR 51; Re Conte (1990) 27 FCR 120; Van Reesema v Australian Growth Resources

Cor~oration Ptv Limited (1987) 75 ALR 311 at 320 and 321;

Blever: Ex Darte TCN Channel 9 Ptv Limited, unreported, Gummow J., 2 March 1993), declined to set aside the Registrar's

order.

However, as has been noted, his Honour was also asked, under s . 3 3 ( l ) ( c ) o f the Act, t o extend time for the giving o f notice under s.41(5) that the appellant disputed the val id i ty o f the bankruptcy notice on the ground that there was a misstatement i n the notice. There was before his Honour an

a f f i d a v i t sworn by the appellant on 30 November 1 9 9 3 , being

the date o f the hearing, which relevantly was i n these terms:

" I say that the judgment debt amount referred t o i n

that Bankruptcy Notice overstated. The following payments were made i n reduction o f the judgment debt and have not been taken in to account by the Judgment Credi tor:

Lockhart J . , noting that these facts were common

ground, said:

i n the notice o f the amount i n fact due by the	"There i s , therefore, an overstatement o f the amount
applicant to the credl tor. The consequence under the general l a w - I put aside for the moment s.41(5) - o f overstatement i n a bankruptcy notice o f amounts due by a debtor to a creditor i s serious and it i s su f f i c i en t for present purposes i f I r e f e r to the principle expounded by Clyne J i n Re Prossimo: E x
parte D e Marco (1952) 16 ABC 86 a t 88. . . "

After referring t o the provisions o f s .41(5) , his

Honour said:

"Therefore, unless the Court allows the notice o f d i s p u t e to be given out of tune, the bankruptcy

n o t i c e cannot be i n v a l i d a t e d by reason o f the $500

misstatement by way o f o v e r s t a t e m e n t .

There i s n o e v i d e n c e b e f o r e the Court a s t o why i t

i s t h a t the a p p l i c a n t d i d n o t r a i s e the q u e s t i o n o f

i n v a l i d i t y o f the bankrup t cy n o t i c e o r ove r s ta t emen t

o f the amount c la imed i n i t u n t i l 25 October 1993

b e f o r e the r e g i s t r a r . That seems to be the first

d a t e on which t h a t p o i n t was r a i s e d .

The t i m e t h a t e l apsed between the f a i l u r e t o comply

wr th the n o t i c e and the h e a r i n g b e f o r e the r e g i s t r a r

was a l i t t l e o v e r two months . I f the a p p l i c a t i o n to

e x t e n d t i m e i s granted i t w i l l mean t h a t the d a t e o f

the commission o f the r e l e v a n t a c t o f bankrup t cy and

f a i l u r e t o comply w i t h t h e r equ i r emen t s o f the

n o t i c e i n t h i s c a s e would be postponed f o r a pe r iod

o f i n excess o f three months.

I t a k e i n to account the f a c t t h a t there h a s been a

l o n g s t a n d i n g d i s p u t e between the p a r t i e s i n th is

c a s e which h a s r e s u l t e d i n extensive l i t i g a t i o n

between them.	Overa l l	I	am n o t persuaded	t h a t th is
i s a proper	c a s e for	the Court	t o exercise	i t s

d i s c r e t i o n i n favour o f the a p p l i c a n t under

s . 3 3 ( 1 ) ( c ) by e x t e n d i n g the t i m e w i t h i n w h i c h the

a p p l i c a n t may d i s p u t e the v a l i d i t y o f the bankrup t cy

n o t i c e under S . 41 ( 5 ) . According1 y, the n o t i c e

s t a n d s a s a good n o t i c e and the a p p l i c a t i o n o f 3

November i s d i sm i s sed . "

Upon the appeal being called on before us, counsel

for the appellant foreshadowed an application to call fresh

evidence.

In support of this application, which was opposed by the respondent, counsel for the appellant read an affidavit sworn by the appellant on 26 May 1994. That affidavit sought to address two issues: (1) a claim under s.41(7) of the Act, which was only formally pressed before us, and which we have already dlsposed of, and need not be further considered; and (2) the claim under s.41(5). In his affidavit, the appellant

stated that on 4 August 1993, he had instructed a previous

solicitor to act in these proceedings; and that on 14 September 1993, the appellant had conferred with his previous counsel on the claim under s.41(7). With respect to the claim under s.41(5), the appellant stated the following in his affidavit:

"15. On Saturday, 16 October 1993 I conducted some legal research of my own concerning the law of bankruptcy. Having done so, on Monday 18 October 1994 [sic] I instructed M Dunn to prepare affidavits from both myself and from Mr Dunn setting out the circumstances relating to the failure to file with the Registrar, within the time limited for compliance with the Bankruptcy Notice, an affidavit under sub- section 41 (7) of the Bankruptcy Act 1966, and as to the failure to give notice under sub- section 41(5) of the said Act within the time limited for compliance with the Bankruptcy Notice. Further, on 18 October 1993, I myself prepared a draft affidavit relating to the issue of overstatement under sub-section 41 (5) of the said Act, and a draft notice in accordance with that sub-section and sent the same to Mr Dunn by facsimile transmission. True copies of the draft affidavit, draft notice and a covering letter to Mr Dunn, all as prepared by me, are annexed hereto and marked

respectively "B", "C" and "D". "

Annexures "B" , "C" and "D" there mentioned are

annexed to these reasons. In essence, the appellant says that the reason for the s.41(5) notice not being given within time was the neglect of his solicltor. The appellant says that "on or around 17 August 1993" he informed his solicitor that he (the appellant) believed the amount stated in the bankruptcy

notlce was in fact overstated.

In his affidavit, the appellant went on to say:

"16 . Upon a t t e n d i n g b e f o r e R e g i s t r a r Lane on 25

October	1993	a t the	h e a r i n g o f	the	a p p l i c a t i o n
r e f e r r e d	t o i n paragraph	14,	I	became	aware

t h a t my i n s t r u c t i o n s r e f e r r e d t o i n paragraph

15 had n o t been compl ied w i t h . I n r e l a t i o n t o

the	i s s u e o f o v e r s t a t e m e n t ,	i t	was	n o t	u n t i l	30
November	1993	t h a t	an	a f f i d a v i t	r e l a t i n g	to
t h a t	i s s u e	was	sworn,	b e i n g m y	a f f i d a v i t	o f
t h a t	d a t e	f i l e d	i n the	proceed ings	below.	I n

r e l a t i o n t o the m a t t e r o f a f f i d a v i t s from both

M r	Dunn	and	m y s e l f	s e t t i n g	o u t	the
c i r cums tances	r e l a t i n g	t o	the	f a i l u r e	t o	f i l e

w i t h i n	t i m e	an	a f f i d a v i t	under	s u b - s e c t i o n
4 1 ( 7 ) o f	the s a i d Act	or	t o g i v e	w i t h i n	t i m e a
n o t i c e	under	s u b - s e c t i o n	41 ( 5 )	thereof,	m y

i n s t r u c t i o n s w e r e never compl ied w i t h .

18. I was p re sen t i n the p r e c i n c t s o f the Court on

30 November 1993 for the purpose of a t t e n d i n g

the	h e a r i n g	before	h i s	Honour	m.	J u s t i c e
Lockhar t	on	t h a t	d a t e .	Immedia te ly	p r i o r	t o

the commencement o f the h e a r i n g I was handed by

my then s o l i c i t o r ' s s e c r e t a r y the a f f i d a v i t o f

30 November 1993 r e f e r r e d t o i n paragraph 16 .

I swore the same on the s p o t , a s the h e a r i n g .

was about t o commence. However, I observed

t h a t the a f f i d a v i t d i d n o t addre s s the

c i r cums tances r e l a t ~ n g t o the f a i l u r e t o g i v e

w i t h i n t i m e a n o t i c e under s u b - s e c t i o n 4 1 ( 5 ) o f

the	s a i d	A c t ,	n o r	the	c i r cums tances	r e l a t i n g	t o
the	f a i l u r e	t o	f i l e	w i t h i n	t i m e	an	a f f i d a v i t

under s u b - s e c t i o n 41 ( 7 ) o f the A c t . During the

h e a r i n g I became aware t h a t n o a f f i d a v i t by M r

Dunn d e a l i n g w i t h those i s s u e s was r e l i e d on.

To my knowledge, no such a f f i d a v i t was ever

prepared o r sworn. M r Dunn was n o t p re sen t i n

Court d u r i n g the e a r l i e r par t o f the h e a r i n g ,

and I was unab le t o r a i s e w i t h h im m y

concerns . "

In our opinion, the application to adduce this fresh

evidence should be refused.

It is well settled that, ordinarily, the discretion
In favour of admitting fresh evidence in an appeal should be
refused to be granted where it appears that the defeated party

failed to exercise reasonable diligence to procure and adduce

the evidence at first instance (see Q-eater W~ll~na~nCl

v Cowan (1955) 93 CLR 435 at 444).

On behalf of the appellant, reliance is placed upon the approach taken by the Full Court in m v (1986) 12

FCR 187. It was there held that default on the part of a solicitor for a party seeking leave tp appeal out of time constituted "special reasons" justifying the grant of leave to appeal out of time for the purposes of 0.52 r.15(2) but we think that the present case arises in a very different context. In the first place, as Dixon C.J. pointed out in Cowan's Casg (at 444), the principles with respect to the reception of fresh evidence in an appeal depend upon "the rule that the verdict, regularly obtained, must not be disturbed without some insistent demand of justice". Secondly, in Jess v m, there was no suggestion that the client was himself aware of the failure to lodge the notice of appeal in time.

In our view, the evidence here fails to demonstrate that the appellant exercised the degree of diligence demanded in the present kind of situation. On the contrary, that material indicates that, by October 1993 at least, the appellant was himself conscious of the need to adduce evidence on the issue of failure to comply with s.41(5) within time. Moreover, the appellant, who was present in Court at the time of the hearing before Lockhart J., was aware of the defect in

hls case but took no steps to draw the attention of his counsel to the matter. In those circumstances, the case is not one where we need further examine, as we were invited to do, the relationship between the appellant and his previous solicitor.

Counsel for the appellant properly acknowledged that, unless the appellant could rely on the fresh material, the appeal must fail since the position before us was the same as before Lockhart J., namely, in the absence of evidence explaining why the requisite notice was not given within time, there was no basis upon which the Court could exercise its discretion to extend time.

In the result, the appeal must be dismissed, with I certify that this and the preceding seven (7) pages are a true copy of the Reasons for Judgment herein of the Court.

costs.

p- &a 'gtML.	..----
Dated: 31 May 1994

Counsel and Solicitors	Mr. G.K. Burton instructed by
for Appellant:	Messrs Tzovaras and Co.
Counsel and Solicitors	Ms. C.E. Adamson instructed by
for Respondent:	Messrs Norton Smith & Co.
Date of hearing:	31 May 1994
Date Judgment delivered:	31 May 1994

AFFIDAVIT

Ra~rX~-rrplq~. Act

BANKRUPTCY DISTRICT OF THE

STATE O F NEW SOUTH WALES

RE	SCOTT RONALD MONK of
1 lnnes Road. Manly Vale,
New South Wales, 2093 Judgment Debtor

EX PARTE AUSTRALIA AND NEW
ZEALAND BANKING
GROUP LIMITED of 20
Martin Place, Sydney, New
South Wales, 2000

Judgment Creditor

On 19 October, 1993, I, SCOTT RONALD MONK of 1 Innes Road Manly Vale in the

State of New South Wales, make oath and say

1 I am the Judgment Debtor referred to in Bankruptcy Not~ce No 203 of 1993 issued on

behalf of Austral~a and New Zealand Banking Group Llmrted

2 On or around 17 August. 1993, I informed my sol~citor Jeff Dunn that I believed the

amount stated in the Bankruptcy Not~ce was overstated and asked h ~ m	to take
appropnate steps

1. On 17 October, 1993. 1 was able to venfy that the amount stated in the Bankruptcy Notice was in fact overstated

Sworn at

before me

Justice of the PeacdSolicitor

..

18 October 1993

Messrs Norton Smith & CO
Sol~citors

DX 119

SM)NEY

Dear Slrs.

RE:  MONK ats AUSTRALIA AND NEW ZEALAND B A M G GROW
LIMITED

It has come to our attention that the amount clalrned as due to your cllent in Bankruptcy

Notice No 203 of 1993 has been overstated

In accordance w t h Sect~on 41(5) of the Bankruptcy Act we now glve you and your client

notlce that our cllent dlsputes the valtdlty of the notlce on the ground of the m~s-statement

Yours fa~thhlly,

COMINO & DUNN

Scott R Monk
PO Box 222

Pyrmont 2009

Fax [phone]

Jeff Dunn

Com~no Rr Dunn

Fax [phone]

18 October 1993

Dear Jeff.

I t has come to my attention that Rule 8 of the Bankruptcy Rules provides that a

Bankruptcy Not~ce	must bc in the form of "Form 4" In Schedule I of the Bankruptcy Rules
If any of the elements are missing. the Not~ce	is llkely to be struck down by the Court

In particular, the firrt line of "Form 4" is as follows

To (rmnre, address arid occirpa(rort ofjfrdgnieri~ debtor)

Comnientanes I have read have ~ndtcated that in order for a Not~ce to be valid, the occupation of the Debtor must be shown or, if the occupatton is unknown, theNotice should

show "Occupat~on	Unknown"
Since the Bankruptcy Not~cc	1 have received mahes no reference to my occupation, 11 would

appear that the Notice is not val~d
Please dlscuqc wth me as soon as posstble

Yours Fatthfully,

Scott R Monk