Purden Pty Ltd v Registrar in Bankruptcy

[1982] FCA 132

Re: PURDEN PTY. LIMITED
And: THE REGISTRAR IN BANKRUPTCY FOR THE BANKRUPTCY DISTRICT OF THE STATE OF
NEW SOUTH WALES AND THE AUSTRALIAN CAPITAL TERRITORY
No. G 40 of 1982
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Bowen C.J.
Fisher J.
Lockhart J.

CATCHWORDS

Bankruptcy creditor's petition - meaning of the word "presented" considered in context of the presentation of a creditor's petition under the Bankruptcy Act 1966 - distinction between "presentation" of a creditor's petition under the Act and "filing" of a creditor's petition under the Bankruptcy Rules.

Bankruptcy Act 1966 (Cth.) ss. 44 (1), 47 (2)

Bankruptcy Rules r. 12

HEARING

SYDNEY

#DATE 15:7:1982

ORDER

1. The appeal be allowed.

2. The Registrar in Bankruptcy for the Bankruptcy District of the State of New South Wales and the Australian Capital Territory pay the costs of Purden Pty. Limited of this apeal and of the Reference to a single Judge of this Court.

JUDGE1

This appeal raises a narrow but important question in bankruptcy namely, the meaning of the word "presented" in the Bankruptcy Act 1966 ("the Act") in the context of a creditor presenting a petition for a sequestration order against the estate of a debtor.

Curiously enough, the question is comparatively free of authority, notwithstanding the presence of the same words, although not always in the same context, in the previous Commonwealth Bankruptcy Act - the Bankruptcy Act 1924 and in earlier bankruptcy legislation of the States of Australia and of the United Kingdom.

The question is important because Parliament has selected the presentation of the petition as the event which determines many rights, duties and liabilities of bankrupts and creditors under bankruptcy law and from which important consequences flow. For example, before a debtor becomes bankrupt, the Court may appoint a trustee to take control of his property (s. 50), stay legal proceedings against his person or property (s. 60), or order his arrest in certain circumstances and the seizure of his property (s. 78) - in each case after the presentation of the petition against him.

After a debtor becomes bankrupt the date of presentation of the petition on which he was made bankrupt is critical for various purposes including the determination of the period of relation back (s. 115), the ascertainment of his property divisible amongst his crediors (s. 116), the avoidance of preferences (ss. 122 and 123), and the repayment by creditors to the trustee of his estate of moneys received as a result of execution by those creditors against his property (s. 118).

The appeal arises this way. On Tuesday 9 February 1982 a law stationer, representing the petitioning creditor, Purden Pty. Limited ("the appellant"), attended at the New South Wales Bankruptcy Registry in Sydney and lodged there a petition by the appellant as petitioning creditor, petitioning this Court for a sequestration order against the estate of Alan Darnay White; a cheque for $60.00 being the fee prescribed under the rules for the presentation of a petition; and affidavits in support of the petition. At the same time the law stationer completed a document described in the evidence as a "Debit Note" relating to the lodgment of the cheque. The law stationer was then told by the Registry officer to whom she handed the documents that it was not possible for the petition to be sealed and issued that day and that she should return on Thursday 11 February 1982 to collect it. The evidence does not show whether the cheque for $60.00 remained at the Registry or was taken away by the law stationer.

On 10 February 1982, a Deputy Registrar in Bankruptcy signed and sealed the petition and, on the note attached to it, listed the petition for hearing on 20 April 1982.

On 11 February 1982 a clerk from the office of the solicitors for the appellant went to the Registry to collect the petition. He was informed by a Deputy Registrar in Bankruptcy that the petition could not be handed out "it was out of time" i.e., the period of six months within which the petition should have been presented expired on 10 February 1982 because the act of bankruptcy on which the petition was founded was committed on 10 August 1981. The Deputy Registrar relied on s. 44 (1) (c) of the Act which provides:-

"44 (1) A creditor's petition shall not be presented against a debtor unless -

. . .

(c) the act of bankruptcy on which the petition is founded was committed within 6 months before the presentation of the petition."

The solicitors for the appellant insisted that the petition be handed out. The Acting Registrar in Bankruptcy for the Bankruptcy District of New South Wales and the Australian Capital Territory then purported to refer a question of law to the Court under Rule 119 of the Bankruptcy Rules. Rule 119 provides that if a question of law arises which the Registrar or a party to an application made to him under the Bankruptcy Rules wishes to have determined by the Court, the Registrar shall state the facts in the form of a special case for the opinion of the Court and refer the special case for hearing and determination by the Court.

Although the form of Reference to the Court signed by the Acting Registrar set out facts it did not state the question of law which had arisen. This caused no difficulty in the present case because it was common ground before the learned primary Judge and before this FUll Court on appeal that the question of law was whether the petition was "presented" within the meaning of the Act on 9, 10 or 11 February 1982. However, it would be as well if any future References to the Court under Rule 119 stated specifically the question of law referred as well as the relevant facts.

The primary Judge held that a creditor's petition cannot be presented unless and until it is filed in the appropriate Registry; that filing is part of the presentation of a petition, that a petition is not filed until it has been lodged for filing in the Registry and all necessary steps required by the Bankruptcy Rules have been taken within the Registry to issue the petition culminating in the payment of the prescribed fee of $60.00. As these matters had not been attended to on or before 10 February 1982, his Honour held that the petition had not been presented within the time required by s. 44 (1) (c) and that the Registrar had acted correctly. His Honour made no order as to costs. The appellant appealed to this Full Court from his Honour's judgment.

The Act does not define "present", "presneted" or "presentation". The dictionaries provide some guide to the meaning of the words. The Oxford English Dictionary defines "presentation", so far as relevant, as:-

"the action of offering for acceptance, esp. formally or ceremoniously; handing over, delivery; bestow, gift, offering."

and as an illustration makes specific reference to the presentation of a bankruptcy petition.

Jowitt's Dictionary of English Law 2nd. ed. defines "present" in its transitive sense as

"to tender or offer. Thus, to present a bill of exchange for acceptance or payment is to exhibit to the drawee or acceptor (or his authorised agent) with an express or implied demand for acceptance for payment."

There are reported cases where the meaning of the words "presented" or "presentation" is adverted to; but they must be viewed with some care because of the different statutes, rules and contexts in which they are used.

"Presentation" of a commercial document has been held to mean delivering up or handing over the document, not merely showing it: Bartlet v. Holmes (1853) 13 C.B. 630; 138 E.R. 1347 per Jervis C. J. at p. 1350.

In Alston v. Alston (1946) p.203, Willmer J. held that the date on which a petition is "presented" within the meaning of s. 2 of the Matrimonial Causes Act 1937 (U.K.) is the date on which it is filed with the Court.

Even where the words have been considered in bankruptcy legislation there are differences, sometimes material differences, between that legislation and the Bankruptcy Act 1966; and the practices operative in different Registries have varied, sometimes markedly.

Cave J. said of a bankruptcy petition in Re Cripps, Ross & Co. Ex parte Ross (1880) 5 Morr. 226 at p. 229:-

"Now prima facie a petition is presented when it is received and put on the file".

To the same effect see Halsbury's Laws of England 4th Ed. Vol. 3 para. 314.

In our opinion the words "presented" or "presentation" are used in the Act, not in the sense of the unilateral act of the creditor of showing the petition to the appropriate Court officer; but in the sense of handing or delivering the petition to and acceptance by that officer. The showing of the document to the Court's officer and its receipt by him are both necessary elements in the notion of presentation of a petition. However, what the officer does with the document thereafter is nothing to the point as by then it has been presented.

Not only is this so according to the ordinary use of the words in the context of the Act; but the far-reaching consequences in bankruptcy law of the presentation of a petition, to which we have already adverted, demonstrate the necessity for the act and date of presentation to be certain and readily ascertainable. Merly to show the petition to the Registry clerk without its being received would necessarily introduce an unacceptable element of uncertainty surrounding the date of presentation. Our view is supported by s. 47 (2) of the Act which provides:-

"Except with the leave of the Court, a creditor's petition shall not be withdrawn after presenatation."

There would be no point in this provision if receipt by the Registry was not an integral part of the presentation of a petition.

There is a distinction of long-standing between the presentation and the filing of a petition. The act of presentation has been said to be the act of a party and the act of filing to be the act of the Court: see for example Re Daunt (1905) S.R.(N.S.W.)533 per Walker J. at pp. 536 and 537.

Counsel for the respondent argued that a petition is not presented until it is filed.

"Filed" is not a word to be found in the Act in relation to a petition, whether a creditor's or a debtor's petition. The Act uses the word "presented". "Filed" is a word which appears in the Bankruptcy Rules, and understandably so. Those rules are concerned with what happens within the Bankruptcy Registries and with the duties of parties lodging documents there. "Filing" is the word traditionally used to describe the act or process of placing documents in the records of Courts or Registries.

Where the presentation and filing of a petition are synchronous or where the two acts take place on the same day, no problem arises.

In the past the two acts often merged into one: the creditor handed the petition over the Registry counter together with the requisite fee, and the officer of the Registry who received it then stamped it as filed. This practice was described by Walker J. in Re Daunt (supra) in relation to New South Wales in 1905 as:-

". . .the invariable course, and is so universally recognised that in practice a presentation of a petition involves and implies a request that it be immediately filed. The old distinction has becom purely verbal. It is not unreasonable to suppore that the Legislature, when speaking of 'preseantation', spoke of it as every practitioner would regard it, as carrying with it the usual incident of filing."

It is common ground that the current practice in the New South Wales Bankruptcy Registry is that the creditor or his representative hands the petition and accompanying documents to the counter clerk of the Registry who places them in the "In-tray" of the Registrar or a Deputy Registrar in Bankruptcy. Later, whether the same day or a later day (sometimes several days elapse if the pressure of business is considerable), they are checked by a Deputy Registrar in Bankruptcy who completes the note attached to the (Ruls 13 and Form 6). The documents are then placed in a container for collection by the creditor; and when collected, the prescribed fee is tendered to the cashier who places a stamp on the petition recording that it was filed that day and the appropriate fees paid. Such is however not necessarily the practice in other District Registries, some of which may indorse the petition as filed when it, accompanied by the appropriate fee, is accepted into the Registry.

It is important to have in mind that the the Act and the Bankruptcy Rules apply not only in one State or Territory of Australia but throughout the nation. The rights and liabilities or creditors and debtors which flow from the presentation of a petition cannot be affected by practices in Bankruptcy Registries which may, and do, vary from place to place and time to time. This indicates to us the importance of a construction being placed on the word "presented" which is uniform throughout Australia and not susceptible of State or Territorial variations or dependent upon local practices.

Subordinate legislation, including Regulations and Rules, cannot control the construction of an Act; but they may be considered to determine "whether they fit into the construction which I think the Act properly bears": Hales v. Bolton Leathers Limited (1951) A.C. 531 per Lord Normand at p. 544.

There is a conflict of judicial opinion whether recourse may be had to delegated legislation which has been made under the authority of an Act to assist in the construction of the Act if it is ambiguous: see for example Ex parte Weir (1871) L.R. 6 Ch. App. 875; Stephens v. Cuckfield R.D.C. (1960) 2 Q.B. 373 at p. 381. We need not enter this area of controversy as, in our opinion, there is no ambiguity surrounding the meaning of the word "presented" in the Act.

Nor do we regard the Bankruptcy Rules as being inconsistent with the construction of the words which, in our view, they properly bear.

The Bankruptcy Rules provide that a "...creditor may present a petition seeking the making a sequestration order against the estate of a debtor by filing the petition with a Registrar in Bankruptcy" (Rule 12 (1) ); that the "...petition shall be in accordance with Form 5 and shall have attached to it or written on it, a note, for signature and stamping by the Registrar, in accordance with Form 6" (Rule 12 (2) ). The note contains provision for inserting the date fixed for the hearing of the petition by the Court and informing the debtor of the steps he must take if he intends to deny or disput any statements in the petition or to oppose the petition on any other ground.

The petitioning creditor is required, at the time when the petition is filed, to do various things including furnishing the Registrar with copies of the petition, filing various affidavits, and a copy of the trustee's consent to act as the trustee of the estate of the debtor, if applicable (Rule 12 (3) ).

Rule 13 (1) requires the Registrar, where a petition is filed, to fix a date, time and place for the hearing of the petition; to cause particulars of those matters to be inserted in the note attached to each copy of the petition that is furnished to the Registrar; to sign and stamp the note and return each of the copies to the petitioning creditor.

A document shall not be filed, issued or otherwise dealt with unless the prescribed fee has been paid (Rule 180). The fee payable for the presentation of the petition is currently $60.00 (Rule 179 and Schedule 4, Item 1).

By merely providing that if a creditor wishes to present a petition he may do so by filing it with a Registrar in Bankruptcy, Rule 12 (1) is not saying that a petition which is handed to the counter clerk at the relevant Registry and received by him has not been presented, if it is not accompanied by the note in accordance with Form 6, the documents referred to in Rule 12 (3) or the filing fee. The act of presentation of a petition is under the Act, not the Bankruptcy Rules, and it affects rights and liabilities of the petitioning creditor, other creditors and the debtor. The act of filing the petition under the Rules, whether by presentation or otherwise, is an act of a different character; it is internal to the Registry. This is not to say that the Registrar may not be entitled to refuse to file the petition if the requirements of the Bankruptcy Rules are not complied with; for example, by failure to tender the prescribed fee or to file the documents referred to in Rule 12 (2) and (3).

It is vital however that the date of presentation of the petition be ascertained with certainty. Hence that date ought to be stamped or otherwise marked on the petition.

We conclude that the petition in the present case was presented on 9 February 1982 which is within the time required by s. 44 (1) (c).

We would allow the appeal with costs.