Raftos, C. v FAI Workers Compensation Ltd - [1993] FCA 689

IN THE FEDERAL COURT OF AUSTRALIA	)
GENERAL DIVISION	)
BANKRUPTCY DISTRICT OF THE	) No. NP 1338 of 1993
STATE OF NEW SOUTH WALES	)

RE : CON RAFTOS
Debtor
EX PARTE: FA1 WORKERS COMPENSATION LTD
Creditor

CORAM :

HILL J

PLACE	:	SYDNEY
DATED	:	17 AUGUST 1993

EX TEMPORE REASONS FOR JUDGMENT

Before the Court is a petition by FA1 Workers Compensation (NSW) Limited ("FAI"), a judgment creditor, seeking order for the sequestration of the estate of Mr Con Raftos ("the debtor"). The petition is based upon an alleged non-compliance with a Bankruptcy Notice dated 12 June 1992, whlch requires the debtor to pay the amount stated therein said to be due under a final judgment obtained by the judgment creditor in the Local Court of New South Wales on 17 October 1991:

counter-claim set off for cost demand.

". . .to the Judgment Creditor, (or his
agent whose name and address are Brian Thomas Agnew of Level 27, 135 King Street,

Sydney); " .

The debtor is then given the opportunity in the
usual way either to comply with the requirements of the notice
or to satisfy the Court of the existence of an appropriate

The debtor did not appear on the petition being called. Counsel for the petitioning creditor properly drew to my attention the question whether the Bankruptcy Notice, in the form I have indicated, complied wlth the provisions of s.41(2) of the Bankru~tcv Act 1966 ("the Act"), which section requires a bankruptcy notice, inter alia, to require the debtor named in it to pay the judgment debt or sum ordered to be paid, "...in accordance with the judgment or order".

The short question is whether in the present case the Bankruptcy Notice complies with that section. I should add that on 13 July 1990 Messrs Moray and Agnew, the solicitors for the petitioning creditor, wrote to the debtor instructing him that unless they received from him within a stipulated period a cheque in favour of FA1 for a stipulated amount, or evidence that the debtor was not indebted to the petitioning creditor, legal proceedings would be commenced immediately against him for recovery.

Subsequently on 22 July 1993 an authority was executed under the common seal of the petitioning creditor Confirming that as at the date of the Bankruptcy Notice and continuing thereafter, Mr Agnew of Moray and Agnew, Solicitors, had the authority of the petitioning creditor to receive any payment made by Mr Raftos pursuant to the judgment obtained by the petitioning creditor at the Local Court at Downlng Centre, Sydney. I should say, having regard to the letter of 13 July 1990, that the amount outstanding in accordance with the judgment is $3093.81, together with interest, making a total of $3327.92.

The Certificate of Judgment obtained from the Local Court in order to obtaln the issue of the Bankruptcy Notice stipulates that judgment was recovered on 17 October 1991 in the sum of $3093.81. It does not, however, in any way indlcate…

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.

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Details

Case: [1993] FCA 689
Decision Date: 17 Aug 1993

CaseChat Overview and Summary

In the Federal Court of Australia, General Division, the case of Raftos v FAI Workers Compensation Ltd involved a petition by FAI Workers Compensation (NSW) Limited, a judgment creditor, seeking the sequestration of Mr Con Raftos' estate due to an alleged non-compliance with a Bankruptcy Notice dated 12 June 1992. The petition was based on an outstanding amount due under a final judgment obtained by FAI in the Local Court of New South Wales on 17 October 1991. The central legal issue before the court was whether the Bankruptcy Notice complied with the provisions of s.41(2) of the Bankruptcy Act 1966, which requires a bankruptcy notice to stipulate payment of the judgment debt in accordance with the judgment or order.

Hill J examined the form of the Bankruptcy Notice and considered whether it complied with s.41(2) of the Act. The court noted that the Bankruptcy Notice did not specify to whom the payment was to be made, while the judgment itself was silent on the mode of payment. Hill J discussed the relevant authorities, including the decision in Re A Debtor, which held that a bankruptcy notice must strictly comply with the judgment. The court also considered the Local Courts (Civil Claims) Rules, which were silent on the mode of payment of judgment debts.

The court concluded that since both the judgment and the Local Court rules were silent on the mode of payment, the Bankruptcy Notice should have stipulated that payment should be made to the judgment creditor. Hill J rejected the argument that the Bankruptcy Notice could direct payment to a person authorised by the judgment creditor, as this could lead to confusion. Ultimately, the court found that the Bankruptcy Notice did not comply with s.41(2) of the Act and dismissed the petition for sequestration.

Orders