Penrith Waste Services Pty Ltd v Brown

FEDERAL COURT OF AUSTRALIA

Penrith Waste Services Pty Ltd v Brown [2005] FCA 781

PENRITH WASTE SERVICES PTY LTD v DAVID ALISTAIR BROWN

NSD597 OF 2005

EMMETT J
31 MAY 2005
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD597 OF 2005

BETWEEN:	PENRITH WASTE SERVICES PTY LTD APPLICANT CREDITOR
AND:	DAVID ALISTAIR BROWN RESPONDENT DEBTOR
JUDGE:	EMMETT J
DATE OF ORDER:	31 MAY 2005
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.the estate of the respondent debtor, David Alistair Brown, be sequestrated;

2.the Official Receiver in Bankruptcy be appointed the trustee in bankruptcy of the estate;

3.that the applicant creditor’s costs of the creditor’s petition be paid out of the estate,

4.notes that the relevant act of bankruptcy occurred on 17 March 2005,

5.upon terms that the debtor file a statement of affairs pursuant to section 54 of the Bankruptcy Act no later than 20 June 2004,

6.all proceedings under the sequestration order be stayed for the period of 21 days.

Note:   Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD597 OF 2005

BETWEEN:	PENRITH WASTE SERVICES PTY LTD APPLICANT CREDITOR
AND:	DAVID ALISTAIR BROWN RESPONDENT DEBTOR

JUDGE:	EMMETT J
DATE:	31 MAY 2005
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. I have before me a petition for a sequestration order under the Bankruptcy Act 1966 (Cth) (‘the Act’) in respect of the estate of David Alistair Brown (‘the Debtor’).  The applicant creditor is Penrith Waste Services Pty Ltd (‘the Creditor’).  The Creditor’s petition is based on the act of bankruptcy of failing to comply with a bankruptcy notice dated 17 February 2005.  The bankruptcy notice was served on the Debtor on 24 February 2005. 

2. The bankruptcy notice was not complied with. The issue before me is whether or not the bankruptcy notice could be complied with. The Debtor says that the bankruptcy notice was a nullity and that, accordingly, there was no act of bankruptcy, because failure to comply with a nullity does not constitute an act of bankruptcy. Section 40(1)(g) of the Act provides that a debtor commits an act of bankruptcy if a creditor who has obtained against the debtor a final judgment, has served on the debtor a bankruptcy notice and the debtor does not, within the time specified in the notice,

3. comply with the requirements of the notice or satisfy the Court that he has a counter claim, set-off or cross demand equal to or exceeding the amount of the judgment debt.

4. On 6 December 2004, the Supreme Court of New South Wales ordered that judgment be entered in favour of the Creditor against the Debtor in the sum of $300,000. It is common ground that that order is a final judgment within the meaning of s 40(1)(g). Section 41(1) provides:

   ‘An official receiver may issue a bankruptcy notice on the application of a creditor who has obtained against a debtor a final…