Perkins v Harris - [2001] FMCA 19

FEDERAL MAGISTRATES COURT OF AUSTRALIA

Kevin Perkins v Arthur Harris [2001] FMCA 19

BANKRUPTCY – Bankruptcy Notice – Notice under s.41(5) – Adequacy of Wording – Requirement for both orders for costs and Certificate of Taxation to be annexed – Set Off – Calculation of Interest – Mis-statement – Section 306(1)

Bankruptcy Act 1966 ss41(5), s41(6A), s41(7), s306(1)

Legal Profession Act 1987 (NSW) s208J(2), s208JA(4),

Federal Magistrates Act 1999 Cwth s3(2)(a), (b)

CASES REFERRED TO Lang v Kirkness SCNSW 110 69/97 Harrison M, Seovic Civil Engineering Pty Ltd v Groeneveld [1999] FCA 255, re Brink; ex-parte Commercial Banking Co of Sydney Limited (1980) 44 FLR 135 at 142, re Scerri (1998) 82 FCR 146, Commonwealth Bank of Australia v Horvath [1999] FCA 143, re Crump; ex-parte Crump (1891) 64 LT 799, Re Cartwright; ex-parte Cartwright v Barker (1975) 1 WLR 573, Wilmot v Buckley (1984) 2 FCR 540, American Express International Inc. v Held (1999) 87 FCR 583.

ApplicantKevin Perkins
Respondent:  Arthur Harris
File No:SZ165 of 2000
Delivered on:  20 March 2001
Delivered at:  Sydney
Hearing Date:  19 March 2001
Judgment of:
REPRESENTATION:
Solicitors for the Applicant:             Douglas Knaggs
Counsel for the Respondent:       Paul Bolster
Solicitors for the Respondent:        Verekers

ORDERS:

The Bankruptcy Notice dated 10 August 2000 be set aside.
The Respondent pay the Applicant’s costs.

IN THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

REGISTRY

No SZ165 of 2000

Kevin Perkins

Applicant
and

Arthur Harris

Respondent

REASONS FOR JUDGMENT

This application is only the latest in a series of skirmishes between the applicant and the respondent which commenced well over a decade ago when the applicant published a book entitled "The Gambling Man". Parts of that book were the subject of legal proceedings between the parties and awards of damages and costs were made against the applicant in favour of the respondent.
On 10 August 2000 Mr Harris, the respondent creditor, issued a Bankruptcy Notice against Mr Perkins, the applicant debtor. It was served on 28 October 2000. Paragraph 1 of the Notice claims that the debtor owes the creditor the sum of $14,917.73 as shown in the schedule. Paragraph 2 states:
“The creditor claims that the debt is due and payable by you. A copy of the judgment or order relied upon by the creditor is attached. At the time of applying for this Notice, execution of the judgment or order had not been stayed.”
The schedule is in the following form:

Column 1	Column 2
1. Amount of judgment or order	$22,199.35
plus 2. Legal costs if ordered to be paid and a specific amount was not included in the judgment or order (see Note 1, below)	NIL
Plus 3. If claimed in this Bankruptcy Notice, interest accrued since the date of judgment or order (see Note 2, below)	$7,145.15
4. Subtotal	$29,344.50
Less 5. Payments made and/or creditors allowed since date of judgment or order	$14,426.77
6. Total debt owing	$14,917.73

(NB: Amounts, where applicable, are to be inserted in Column 2.)

Note…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Perkins v Harris

Details

AGLC: Perkins v Harris [2001] FMCA 19
Case: [2001] FMCA 19
Decision Date: 20 March 2001

CaseChat Overview and Summary

The Federal Magistrates Court of Australia heard an application by Kevin Perkins to set aside a bankruptcy notice issued by Arthur Harris. The application arose from a long-standing dispute between the parties, which began with the publication of a book by Perkins, "The Gambling Man," parts of which were subject to legal proceedings. Harris had previously been awarded damages and costs against Perkins. On 10 August 2000, Harris issued a bankruptcy notice against Perkins, claiming a debt of $14,917.73, including interest and costs. Perkins contested the validity of the notice, arguing that Harris had misstated the amount due. Perkins filed an application to set aside the bankruptcy notice, citing grounds under sections 41(5) and 41(7) of the Bankruptcy Act 1966.

The legal issues before the court included whether the bankruptcy notice was correctly issued and whether Perkins' application to set it aside was valid. Specifically, the court had to determine whether the notice correctly stated the amount of the debt, whether Perkins had grounds to dispute the validity of the notice, and whether Perkins' application was appropriately filed. The court also considered whether Perkins had a setoff in relation to a defamation proceeding he had commenced against Harris.

The court found that the bankruptcy notice incorrectly stated the amount of the debt due to Perkins' failure to attach a certificate of taxed or assessed costs. Additionally, the court determined that Perkins' application to set aside the bankruptcy notice was valid as he had a setoff in relation to the defamation proceedings. Consequently, the court set aside the bankruptcy notice and ordered Harris to pay Perkins' costs. The court's decision was based on the misstatement of the debt amount and Perkins' valid grounds for disputing the notice. The court's ruling highlighted the importance of accurately stating the debt in a bankruptcy notice and recognized Perkins' right to setoff in relation to his defamation proceedings against Harris.

Orders

Orders of the court

The Bankruptcy Notice dated 10 August 2000 be set aside.

The Respondent pay the Applicant’s costs.

IN THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

REGISTRY

No SZ165 of 2000

Kevin Perkins

Applicant

and

Arthur Harris

Respondent

REASONS FOR JUDGMENT

This application is only the latest in a series of skirmishes between the applicant and the respondent which commenced well over a decade ago when the applicant published a book entitled "The Gambling Man". Parts of that book were the subject of legal proceedings between the parties and awards of damages and costs were made against the applicant in favour of the respondent.

On 10 August 2000 Mr Harris, the respondent creditor, issued a Bankruptcy Notice against Mr Perkins, the applicant debtor. It was served on 28 October 2000. Paragraph 1 of the Notice claims that the debtor owes the creditor the sum of $14,917.73 as shown in the schedule. Paragraph 2 states:

“The creditor claims that the debt is due and payable by you. A copy of the judgment or order relied upon by the creditor is attached. At the time of applying for this Notice, execution of the judgment or order had not been stayed.”

The schedule is in the following form:

Column 1

Column 2

1. Amount of judgment or order

$22,199.35

plus 2. Legal costs if ordered to be paid and a specific amount

was not included in the judgment or order (see Note 1,

below)

NIL

Plus 3. If claimed in this Bankruptcy Notice, interest accrued

since the date of judgment or order (see Note 2, below)

$7,145.15

4. Subtotal

$29,344.50

Less 5. Payments made and/or creditors allowed since date of

judgment or order

$14,426.77

6. Total debt owing

$14,917.73

(NB: Amounts, where applicable, are to be inserted in Column 2.)

Note 1 to the Schedule states:

“Legal costs (item 2 of the Schedule)

If legal costs are being claimed in this Bankruptcy Notice, a certificate of taxed or assessed costs in support of the amount claimed must be attached to this Bankruptcy Notice.”

Note 2 of the information notes states as follows:

Interest accrued (item 3 of the Schedule)

If interest is being claimed in this Bankruptcy Notice, details of the calculation of the amount of interest claimed are to be set out in a document attached to this Bankruptcy Notice. The document must state:

(a) the provision under which the interest is being claimed; and

(b) the principal sum on which, the period for which, and the interest rate or rates at which, the interest is being claimed.

(NB: if different rates are claimed for different periods, full details must be shown)”

The Schedule of Interest claimed is as follows:

“Interest is claimed pursuant to Section 95 of the Supreme Court 1970 on the judgment sum as follows:

Principal: $22,199.35

Periods and rates:

(i) 1 May 1977 – 31 August 1997 @10.5% = $785.49,

(ii) 1 September 1997 – 31 August 1998 @10% = $2,219.94,

(iii) 1 September 1998 – 29 February 2000 @ 9.5% = $3,160.52

(iv) 1 March 2000 – 8 August 2000 @ 10% = $979.20;

(v) Total = $7,145.15.”

There was annexed to the Bankruptcy Notice a document entitled “Certificate of Taxation” dated 30 April 1997 and sealed with the seal of the Supreme Court of New South Wales. That certificate stated:

“I certify that pursuant to an order made on 6 June 1994 the party and party costs payable by the claimant, Kevin Perkins, to the opponent, Arthur Harris, has been taxed and allowed at $22,199.35.

Dated: 30 April 1997

Signed: Taxing Officer”

When Mr Perkins received the Bankruptcy Notice he completed a document entitled “Application to Set Aside Bankruptcy Notice” in Form 5 of the Federal Court forms. That form is divided into two halves so that the applicant can indicate by ticking the relevant box or boxes the application which he is making. On the left hand side reference is made to applications under s.30, 41(6A) of the Bankruptcy Act and on the right hand side application under s.41(7) of the Bankruptcy Act. Mr Perkins who at that stage was acting in person ticked the box on the right hand side and completed that part of the form. Mr Perkins swore an affidavit giving the grounds under which he was making the application. In that document he states:

“To Arthur Harris:

I Kevin, Perkins, pursuant to s.41(5) of the Bankruptcy Act 1966, give you notice that I dispute the validity of the Notice on the ground that you have misstated the amount in fact due to you. Further, I have commenced proceedings against Mr Harris for defamation in the Supreme Court (No 20631 of 2000 and I have a setoff in respect of the proceedings in the claims made by Mr Harris.”

A close reading of this form would indicate that Mr Perkins ought to have completed both boxes and possibly completed the claim for interlocutory relief in relation to the application under s.41(6A). However, this was not argued before me and an extension of time for compliance of the Bankruptcy Notice was automatically given in relation to the application under s.41(7) which was articulated by Mr Perkins although not argued in any detail before me.

Mr Perkins filed affidavits on 20 November, 8 December and 13 December 2000. In paragraph 3.6 of 20 November affidavit he makes reference to the mis-statement of interest in the Bankruptcy Notice and in his affidavit of 13 December 2000 he expands that in considerable detail. By that stage Mr Perkins appears to have had a solicitor, Mr J Leary, but the style of the affidavits would tend to indicate that they were probably drawn by Mr Perkins himself.

When the matter came before me Mr Douglas Knaggs appeared on behalf of the applicant and he sought leave to file an amended application to set aside the Bankruptcy Notice. I reluctantly granted that leave over the objections of Mr Bolster who appeared for the respondent. I took the view that it was important that all the relevant issues be before the court in an appropriate manner and that the Federal Magistrates Court, whilst being sensible of the requirements to comply with the Bankruptcy Act as interpreted by the Federal Court of Australia, should comply with its objects found in the

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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