Outridge, Re I.a. Outridge, Ex Parte I. v Qld Druggists Ltd

[1986] FCA 659

Not for distribution

IN THE FEOEF.FL COURT OF AUSTR-ALII?	1
)
GENEPAL DIVISION	) QLD. No.1303 of 1986
BFNKRUPTCY DISTF.ICT OF THE SOUTHERN 1
)
DISTRICT OF THE STATE OF O~_rEEi'lSL.AND )

P,E?SONS FOP. JUDGMENT

This 1s m epplicatlon by a debtor, Ian Alexander

Outridge, for a number of orders. He seeks:-

1. "That the time for compllance with a Bankruptcy Notice

issued on the 24th September 1986 be extended.

2. That the Bankruptcy Order (sic) issued on the 24th

September 1986 be set aslde.

3 . That the Judgment Debtor be granted leave to pay the

judgment debt bg Instalments of TEN THOUSAND DOLLARS ($10,000) payable monthly together with interest at the

rate of DELVE per cent (12%) per annum under the

provisions of the	Common Law Act	(sic) 1867-1981
Queensland.
...

5. That. the Judgment Creditor do pay the Judgment Debtors (sic) costs."

2.

On 20 August 1986, Master Weld in the Supreme Court of

Queensland in Wrlt Mo.2409 of 1986, after a defended appllcatlon

for summary judgment, gave judgment to Queensland Drugqists

Limited against Mr. Outridge in the sum of $63,169.75, and

ordered that Mr. Outridge pay the plaintiff's costs, including

reserved costs, to be taxed.

A bmkruptcy notice in respect of the judcrment amount, of

$63,169.75 was filed on 26 September 1386, and Mr. Outridge was

served with the bankruptcy notice on 9 October 1986.

The bankruptcy notice was a 14 day notice, and therefore

the perlod for compliance with the requlrements of the bankruptcy

notlie expired 14 days after the day of servlce.

It was not until 3 November 1986 that the appllcation to

which I have referred was filed In this court. Section 41!6P.1 of

I	the	Bankruptcy	Act	1966	provides	:-
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"Where, before the expiration of the time fixed by

the Court or the Registrar for compliance with the

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(a)	proceedings to set aside the pdgment or
order in respect of which the bankruptcy
notice was issued have been instituted by

the debtor; or

(b) an application to set aside the bankruptcy

notice has been filed with the Registrar,

the Court may, subject to sub-section (6C), extend

the time for compliance with the bankruptcy

notice. "

I

In the circumstances of this case, the application was

not filed before the expiration of the time fixed by the

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Registrar for compliance with the requirements of the bankruptcy notice. Therefore it is not competent f o r me to extend the time

for compllance with the bankruptcy notice.

Since the various requirements of the bankruptcy notice

which are referred to in 41(2) of the Bankruptcxr Act 1966 have not been complied with within the time fixed in the bankruptcy

notice, an act of bankruptcy has already been committed.

Therefore, there is no polnt in setting aside the bankruptcy

notice, unless it be that in some way the issue and =ervice of the bankruptcy notice constitutes an abuse of the process of the court.

The question of abuse of process was referred to by the

High Court in Kozenbes i Ors. v . Kronhlll E; Anor. !1?56) 95

C . L . R . 407, vkre the High Court considered t'ne questlon of

extortion in the context of bankruptcy proceedings.

In this matter the mlterial indicates thar. Mr. nutridge

has offered, but the creditor has not accepted, that regular

payment be made at the rate of $10,000 per month with Interest at

the rate of 1 3 per cent per annurn. The creditor has accepted

various payments in the sum of $10,000 which have beer. forwarded,

but there has not been any agreement, nor has there been any

attempt to provide security for any payment by instalments.

I It seems that there is a dispute as to accountancy fees.

Queensland Druqqists Limited refers to an accountancy fee of 1.75

per cent per month on any outstanding amounts. Mr. Outridge has

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indicated that he is prepared to pay interest as ordered by the

Supreme Court, although there is no reference to any such

component for interest in the ~udgment of Master Weld, where the

amount ~t7as fixed at $63,169.75, plus costs, including reserve

costs, to be taxed. At present, there is no judgment debt in

respect of any such interest component either at the rate

calculated under the Common Law Practlce Act 1867-1981 Queensland

or under the contractual rate that may have been applicable to

the debtor and the creditor.

Independently of 8 dispute concerning what interest

should be paid and, if any, the appropriate rate, Mr. Outridge

has Indicated that he is in a position to mamtain regular

monthly payments of $10,000 per month, and he further swears that

he 1 s able to pay all hls debts a s they fall due, but chooses to

pay this partlcular debt by instalments.

Candidly deposed to by Queensland Druggists Limited is

the concern that, In the absence of bankruptcy proceedlngs, the

prospect of it receiving the amount	of	the judgment debt is
slight.

These considerations do not amount to extortion, in

accordance with the authorities, nor to an abuse of process of

the Bankruptcy jurisdiction of this Court and	I	dismiss the
application in all its respects.

The creditor may, provided it receives the sum of

$10,000 per month, abstain from issuing any creditor's petition

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on the act of bankruptcy which has already been committed, but

that is a matter for the creditor.

I dismiss the application filed on 3 November 1986.

I think, consistent with the ordlnary rule as to costs,

the debtor shcruld pay the creditor’s costs, to be taxed if not

agreed.

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