Muttukumaru, A.V. v Watson-Paul, R.S

[1995] FCA 352

CATCHWORDS

BANKRUPTCY - s 139ZQ notice requiring payment of money not a valid notice - the Deputy Official Receiver having no statutory authority to issue such notice.

Bankruptcy Act 1966 (Cth) - ss 139ZQ, 139ZT

Re Anton Visantha Muttukumaru (a bankrupt)
QB 1615 of 1994

Drummond J
Brisbane
29 May, 1995

IN THE FEDERAL COURT OF AUSTRALIA   )     No. QB 1615 of 1994
GENERAL DIVISION                   )
BANKRUPTCY DISTRICT OF             )
THE STATE OF QUEENSLAND            )

RE:ANTON VISANTHA MUTTUKUMARU (a bankrupt)

BETWEEN:ROBIN DESMOND WATSON-PAUL AND ELIZABETH JANE WATSON-PAUL

Applicants

AND:JAY ARSCOTT STEVENSON AND PHILIP GREGORY JEFFERSON

First Respondents

AND:OFFICIAL RECEIVER

Second Respondent

MINUTES OF ORDER

JUDGE MAKING ORDER:                Drummond J
DATE OF ORDER:  29 May, 1995
WHERE MADE:  Brisbane

THE COURT ORDERS THAT:

1. The "Notice under s. 139ZQ" given to the applicants by the Deputy Official Receiver is set aside.

1. The respondent trustees, Jay Arscott Stevenson and Philip Gregory Jefferson, pay the applicants' costs of and incidental to this application on an indemnity basis.

NOTE:Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules.

IN THE FEDERAL COURT OF AUSTRALIA   )    No. QB 1615 of 1994
GENERAL DIVISION                   )
BANKRUPTCY DISTRICT OF             )
THE STATE OF QUEENSLAND            )

RE:ANTON VISANTHA MUTTUKUMARU (a bankrupt)

BETWEEN:ROBIN DESMOND WATSON-PAUL AND ELIZABETH JANE WATSON-PAUL

Applicants

AND:JAY ARSCOTT STEVENSON AND PHILIP GREGORY JEFFERSON

First Respondents

AND:OFFICIAL RECEIVER

Second Respondent

CORAM:    Drummond J
PLACE:    Brisbane
DATE:     29 May, 1995

REASONS FOR JUDGMENT

This is an application on behalf of two persons who have received a notice issued in the bankruptcy of Anton Visantha Muttukumaru under s. 139ZQ the Bankruptcy Act 1966 (Cth) ("the Act").  The notice is issued by a person the subscription to whose signature describes him as a "Deputy Official Receiver".  The section in terms allows only an Official Receiver to issue such a notice.   The section indicates that the Official Receiver can act on his own initiative in issuing such a notice if the Official Trustee is the trustee or, whereas in a case like the present, where the registered trustees are the trustees of the estate, the Official Receiver is empowered only to act on application by the trustee.

The evidence reveals that the registered trustees made application for the issue of the notice. But, as I say, the notice is issued not by anyone who holds the office of Official Receiver, but only by another official who describes himself as "Deputy Official Receiver". I have not been directed to any provisions of the Act which empower such a subordinate official to exercise the powers vested in the Official Receiver by s. 139ZQ. The matter is of some importance because, under s. 139ZT, a failure to comply with such a notice as we are concerned with here is a criminal offence which exposes the non-complying recipient to a penalty of up to six months imprisonment.

I gather from the submissions made by the solicitor for the Official Receiver that it was to be argued that on general legal principles the Official Receiver should be taken to have power to delegate his power to issue a notice under s. 139ZQ. But whether or not that submission is well founded does not matter in this case because the only evidence of any attempt by the Official Receiver to exercise any power of delegation which he may have - and I express no conclusion on whether there is such a power - was only attempted to be exercised after the issue of a notice in this case.

It seems to me that that is an insuperable obstacle to the notice being regarded as a valid one and, indeed, counsel for the trustees did not seek to address any submissions to the contrary to me.   I will therefore make an order in terms of paragraph 1 of the application.

The applicants, who have been successful in obtaining an order setting aside the s. 139ZQ notice on the ground that it was issued without the necessary statutory authority and was thus plainly bad, now apply for costs on an indemnity basis against the trustees.

The respondents to the application are the trustees and also the Official Receiver.  A letter has been tendered from the solicitors for the applicants to the trustees dated 5 April - i.e., a month before the application was filed - in which, among other asserted defects in the action commenced by the issue of the notice, the point is taken that the signatory of the notice had no power to issue it.  Notwithstanding that intimation, so far as the material before me indicates, the trustees took no action but allowed the matter to proceed, forcing, as I put it, the applicants to bring matters to a head by instituting proceedings in which they have been successful on that very ground.

There is no evidence before me to indicate that the Official Receiver was made aware by anyone, either applicant or the respondent trustees, of the concern raised by the applicants as to the authority of the person issuing the notice to follow that course.  It seems to me that this is one of those relatively rare cases where a party has been forced to go to court to obtain relief in circumstances where that party succeeded on a ground to which the attention of the respondents had been drawn prior to the institution of the proceedings, a ground, moreover, to which the respondents had no answer.

I will therefore order that the respondent trustees, Messrs. Stevenson and Jefferson, pay the applicants' costs of and incidental to this application on an indemnity basis, i.e., to the intent that the applicant shall recover all the costs they have incurred in connection with this application, save such costs, if any, as may have been unreasonably incurred.

I certify that this and the preceding
three pages are a true copy of the
reasons for judgment herein of the
Honourable Justice Drummond.

Associate:

Date:             29 May, 1995

Counsel for the applicants:          Mr. P.E. Hack

Solicitors for the applicants:       Jeff Thomas &

Associates

Counsel for the first respondents:    Mr. P.P. McQuade

Solicitors for the first

respondents:Lees Marshall Warnick

Solicitors for the second            Australian Government
  respondent:  Solicitor

Date of Hearing:  29 May, 1995