Quick, P.W. v James, B.J

[1986] FCA 54

. L

IN THE F DERAL COURT OF AUST2ALIA ) )

Gn'JERAL DIVISICN	)
1

EANXRUPTCY DISTgICT OF THE STATE OF ) No. P995 of 1985

1

VICTQRIA

!

p.E: PET-. bTILLZAM OUICK

Debtsr

M P.W.TE: BilRRY J O H N JAMES

P e t l t i o n m g C r e d i t s r

C nP-W :	JACKSON J.
U:	4th Februa ry 1986
PLACE :	MELEOURNE

REASONS FOR JUDGMENT

Or. the hearing b e f o r e me of a p e t l t l o n f o r a

s e q u e s t r a t i o n o r d e r m r e s p e c t of t h e d e b t o r , the grmmc! of

bankruptcy r e l l e d on b e l n g that r e f e r r e d t o m s.bO!l)(yl gf

the Bankruptcy Act 1966, two questions h a v e a r i s s n .

??-P f i r s t question i z whethe r t he o rde r on which che

b a n k r u p t c y n o t i c e is based 1 s B "flnal ludrjment gr f l n a l

o r d e r " I n t e r m s of s. 40(1)!g).

.

L .

The order in questlon 1 s an order made by the County

Court of Victorla at Balla-at on 3 October 1993, whereby the

debtor, who was convlcted on 64 counts of theft, was sentenced

to a tern of lmprlsonment and an order was also made pursuant

to 5.546 of the Crlmes Act I958 that the debtsr pay the

petltiming creditor the sum of $101,760.52. tlrders, to lone

of whlch I shall refer later, were also made for the paynent

of sums to other persons as well, also by way of ccmpensatlon.

S.546 !11 of the Crmes Act 1958 prondes rslevmtly

that

" ! 1) hikere m any psocedings f o r m offmce, whether

upcn presentment or summarliy, a person -

!a) 1 s convlcted for an offence; cr

tb) witholct b e n g convlcted for an uffence 1 s

ordered to be released Lpon entstrlng into a recognlsance condltloned f o r 5 1 s appearance

at a latzr time and	for hls good behaviour
in the meantme; or

!c) has a pr3Satlon order made igalnsc hlm

under Divlslon 1 -

the court or ~uaqe may, lnmedlately after the

convictlor, or order onrjon the application of any

person suffermg l o s s or destructlon of or damage t o

hls Droperty throLgh o c by means of ;he Sffence,

order the person	so convlcted or released or place on
probation to pay	compensatlon f o r any such loss

destructlon or damage such sum not esceedlnq the

value of the property 10s; destroyed or damaqed as

the court or ~udge thinks f l t . "

and s . 5 4 6 ( 3 ) gces 3n to provice that:

"Every such order shall be deemed to be a

~udgment debt due to the applicant by the perssn so

convictsd or released o r placed on probation snd

payment of the amount of the order or of any anount

remaming unpaid under the order may be enforced in

any manner In whlch a ~udgment o r order for a c l v l l

debt may be enforced m the court in whlch the

proceedxqs are brought."

3 .

The provisions of 3.546(3), of thelr ow. force could

not of course gperate to brlng an order made under s . 5 4 6 ( 1 )

m t h m the concept of a "final ~udqment or final order" In

terms of s.40(l)(q) of the Bankruptcy Act	~f those words would
r?ot ocherwlse comprehend such an order:

It 1s clear that In Re m ( 1 9 6 5 ) A.L.5. 326

Mr Justice Clyne was of the vlew that an order made under

S .546!1) of the Crmes Act was not a "flnal order" or a "final

~udgmer,t", in terms of the then s.57( : ) of che Bankruptsy k t

1 3 2 4 to 1960. Slnce then, however, che provisions of

s..L0(3)(b) of the Bankruptcy Act 1966 provlde thac:

"For the purposes of paragraph l (3 ) -

(b) a ~udqment or order that is enforceable as, or m

the same manner as, a final judgment obtalned ln an

action shall be deemed to be s final ~~ldgment	so
obtaln2d and the proceedlngs In whici, of In

conzequence of whlch, the ~ u d q m e ~ t or order was

obtalne2 shall Se deemed. to be the action ~n wnlch It

was obtalned. "

It is unnecessary, ln these circumstances, tc

ccnslder whether the order for compensation would be a "final

order" m terms of s.4O(l)(q) withln the ordinary mea?.lt-.q of that tsrm.

The second question to whlch It 1 s necezsary to

dlrect attention derlves from the fact chat, as well as be1113

ordered to pay $101,760.52 compensatlsn to the petitioning

creditor, the debtor was siso ordered to pay $10,500

compensation to the petltloning creditgr	and to Lois Ellen
Tames :oLntly.

4.

Further, the debtor was ordered to pay Sylvan Crest

Nomlnees Pty Limited a sum of $18,052, and also to pay the sum of $2500 to Andersons Smash Repalrs Pty Limited. The question whlch arises 1 s whether, by vlrtue of the fact that in

additlon to belnq ordered to pay the sum of money to the

petltlonlng creditor severally, the debtor was ordered to pay the sum of $10,5GO to the petitioning credit3r and to -Lois

Ellen James ~olntly, It has the effect that there has been 111

the bankruptcy notlce an understatement of the amount due by

the debtor.

The general prlnclple ls, of course, that stated by

Mr Justlce Lockhart in Re Thmson Ex parte F.ssoclated Ml5land summarlzinq the effect of t5e cases, hls Honour sad:

"Whether a defect in a bankruptcy notlce 1 s fstal or

a formal defect or irregularlty under 5.306 of the

Act, depends on whether the defect is of such d k x d

ss could reasonably mislead the debtor upon whcm It

vas ser-?ed. The test 1s not whether the debtor was

In fact mlsled. It 1 s sufflclent that he could be

mlaled. "

and hls Hcnour went on to clte varlous cases m suppoft of

that .

It seems :o me, however, that In the present case

each gf the orders for compensatlm which was made in the

County Court was an order whlch gave rlae to a separate

obligation on the part of the debtor and that the fact that

5.

the bankruptcy notic? was founded upon one only of the orders

which was made does not mean that In any way there was an

understatement In any relevant sense.

In these circumstances, the case seems to me to be

one which does not require the exerclse of any pcwer under

5.306. It seems to me that that pomt has not been reached.

In the circumstances, I propose to make a sequestratlon order,

whlch I shall now proceed to do. I am satisfled that the

debtor has committed the act of bankruptcy alleged In the

petltlon. I am satlsfied with the proof of the other nacters,

of which s . 5 2 ( 1 ) of the Act requlres proof .

I note that Dennls Michael Foley, a reglstered

trustee, has consented to act as the trustee of the ectace of the debtor. I make a sequestratlon order agalnst the estate

af the debtor. I order chat costs, Including res.-r;red c o s t s .

be taxed and pald according to the Act. I direct that a draft

of thls order be dGllvered to the Reglstrar w t h m seven days

I n accordance with r.24.