Queensland Building Services Authority v Mogg
[2012] FMCA 426
•23 May 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| QUEENSLAND BUILDING SERVICES AUTHORITY v MOGG | [2012] FMCA 426 |
| BANKRUPTCY – Service of bankruptcy notice and creditor’s petition – receipt of service – last known address – whether service was properly effected – whether service of another proceeding established a last known address. |
| Bankruptcy Act 1966, ss.43(1)(a), 52(2), 306 Bankruptcy Regulations 1996, rr.16.01(1)(a), 16.01(2)(a) |
| Ditfort, Re; Ex parte Deputy Commissioner of Taxation (NSW) (1988) 19 FCR 347 Drake t/as TH Drake & Associates v Stanton [1999] FCA 1635 Magafas v Carantinos [2008] FMCA 1654 Zagoridis, Re ; Ex parte Q’Plas Group Pty Ltd (1990) 27 FCR 108 |
| Applicant: | QUEENSLAND BUILDING SERVICES AUTHORITY |
| Respondent: | JOHN ANDREW MOGG |
| File Number: | BRG 1068 of 2011 |
| Judgment of: | Burnett FM |
| Hearing date: | 16 May 2012 |
| Date of Last Submission: | 16 May 2012 |
| Delivered at: | Brisbane |
| Delivered on: | 23 May 2012 |
REPRESENTATION
| Solicitors for the Applicant: | Robinson Locke Litigation Lawyers |
| Solicitors for the Respondent: | Connolly Suthers Lawyers |
ORDERS
The parties submit minutes of consent order giving effect to the terms of these reasons within seven (7) days of today’s date and in default the matter be listed for further directions on 22 June 2012.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRG 1068 of 2011
| QUEENSLAND BUILDING SERVICES AUTHORITY |
Applicant
And
| JOHN ANDREW MOGG |
Respondent
REASONS FOR JUDGMENT
Introduction
On 13 September 2011 the debtor, John Andrew Mogg was purportedly served with a bankruptcy notice issued 9 September 2011 by prepaid post directed to 78 Mystic Avenue Balgal Beach, Queensland, 4816. The rules permit service by such means provided they be upon the debtor’s “last known address;” regulation 16.01(1)(a). However, Mogg denies that he was served. The bankruptcy notice relied upon a default judgment in favour of the creditor, the Queensland Building Services Authority (the Authority), which was entered in the District Court. The Authority relied upon personal service of those proceedings to satisfy itself that the address to which the bankruptcy notice was posted was Mogg’s last known address. However, the matter of service in the District Court proceedings is also in issue. In that case, service under the UCPR was required to be personal. Mogg has sworn that he has “absolutely no recollection of being served” with the District Court proceedings.
Mogg proposes to bring an application before the District Court seeking to set aside the judgment on the basis that he was never served. He also contests the merits of the proceedings underlying the judgment and seeks leave to defend.
Was there available evidence as to Mogg’s last known address?
Given that the Authority relied upon the evidence of service of the District Court proceedings to found its knowledge as to Mogg’s last known address, the question in issue is whether that is a sufficient basis for knowledge in the face of a contest concerning service of the District Court proceedings.
The Authority contends that the Court may rely upon knowledge based upon the affidavit of service of the District Court proceedings. Mogg says that as service of those proceedings is in issue, and, as the matter is yet to be resolved by the District Court, reliance upon knowledge of his last known address sourced from such information is flawed and cannot be relied upon.
At the outset, it must be remembered that a defect in service is not a mere form of defect that can be remedied by the Court (see s.306). Such a defect renders the notice invalid; Ditfort, Re; Ex parte Deputy Commissioner of Taxation (NSW) (1988) 19 FCR 347.
This is not a case where Mogg merely complains that as the debtor he had no notice of proceedings; Magafas v Carantinos [2008] FMCA 1654. Rather, Mogg says that the Authority had no basis to believe that the bankruptcy notice was forwarded to his last known address.
The matter of knowledge is significant. In Drake v Stanton[1] Tamberlin J, when considering the term “last known address” in the context of service, observed:
“The relevant expression is "the last-known address of the person" and it does not matter whether the debtor currently lives or resides there or not. The expression is difficult on one view in the sense that it does not indicate to whom the address must be known in order to satisfy the requirements of the person. On one view of it, it could be taken to be the knowledge of the creditor. Alternatively … the words could mean the last-known address of the person in an objective sense, namely that address at which the debtor could be said to be located.”[2]
[1] Drake t/as TH Drake & Associates v Stanton [1999] FCA 1635
[2] At paragraph [5].
In Drake v Stanton Tamberlin J did not need to consider that matter further as there was more than sufficient evidence before him to enable him to make a satisfactory finding. However, it is plain from his Honour’s remarks that there must be some basis for knowledge.
That is not the case here. In this application, the only evidence addressing the matter of “last known address” is contained in the affidavit of Nicholas James Morgan filed 19 April 2012. He swore that as solicitor for the Authority he knew that in the District Court proceedings there was an affidavit of service. The affidavit was by William John Brazel deposing to service of the District Court proceedings upon Mogg on 3 March 2011. Mr Morgan proceeded to swear that “for the period 3 March 2011 to 13 September 2011” (the date of posting of the bankruptcy notice by Alice Irene Tollis) he was not aware of any other known address for Mogg. He stated that “on that basis as at 13 September 2011 I believed 78 Mystic Avenue Balgal Beach, Qld, 4816 was the respondent’s last known address.” No other material was relied upon by the Authority to support the conclusion deposed to by Mr Morgan.
The logic of Mogg’s argument appears to be compelling; that is, if Mogg was not served with the District Court proceedings then the Authority’s reliance upon an affidavit of service at the stated address in those proceedings could not found a basis for belief concerning service of the bankruptcy notice. I note that Mogg’s submission differs from the point addressed by the Court in Zagoridis, Re ; Ex parte Q’Plas Group Pty Ltd (1990) 27 FCR 108, the authority relied upon by the Authority. In Zagridis the Court explained why, until set aside, a judgment was final and conclusive and entitled a petitioning creditor to proceed to enforcement of it (at page 114). Furthermore, the Court noted at page 118 that it is immaterial that the judgment relied upon may later be set aside on the grounds of any irregularity. It follows that Mogg’s arguments addressing indebtedness cannot succeed.
However, the matter of service is a matter that must be demonstrated, because without it an act of bankruptcy cannot be established. Without an act of bankruptcy there is no jurisdiction to make a sequestration order; s.43(1)(a). It is a jurisdictional fact requiring proof, with the onus for such proof resting upon the creditor, being in this instance the Authority. Although the fact is to be accepted “in the absence of proof to the contrary” (regulation 16.01(2)(a)), that matter is rebuttable. In this case, Mogg says he was never served with the District Court process so the fact giving basis for the Authority’s knowledge as to his “last known address” is in issue. This matter can only be resolved by trial as to the service of the District Court proceedings.
Presently, that matter and another as to the efficacy of the judgment are proposed to be subject to application to the District Court. If, following such hearing, the District Court finds that there was no service, as contended for by Mogg, the basis for the Authority’s knowledge of his “last known address” must be absent. In that case, service could not have been effected as required by regulation 16.01(1)(a). In turn, Mogg would not have committed an act of bankruptcy and in the absence of that essential jurisdictional fact the creditor’s petition must fail.
If the District Court accepts service was effected, it does not matter for present purposes if the judgment is in turn set aside, as at the time of committing the act of bankruptcy there existed a final judgment; Zagoridis. In that case, Mogg ought be permitted an opportunity to address the Court on whether or not there exists a state of indebtedness and/or whether he might be permitted relief pursuant to s.52(2) of the Bankruptcy Act.
In the circumstances, the most appropriate course would be to permit the District Court application to proceed. I am however open to submissions on the point given that no application has yet been commenced. Given that there are two issues which may be agitated before the District Court, it is probably in the interests of both parties that both the matter of service and the efficacy of the judgment be determined in that Court at the same time. The parties should agree on a timetable for that to occur and in the meantime this application ought be adjourned to allow those processes to be exhausted. However, if the creditor Authority so wishes I am happy to hear it on the disposition of the service point.
Orders
The parties submit minutes of consent order giving effect to the terms of these reasons within seven (7) days of today’s date and in default the matter be listed for further directions on 22 June 2012.
I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of Burnett FM
Date: 23 May 2012
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