Re Artigas-Grgic, A v Ex parte National Mutual Royal Savings Bank Ltd

[1991] FCA 286

JUDGMENT NO. 2% 1 ... 41 ..... .

NOT SUITABLE FOR DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA	)
GENERAL DIVISION	)
BANKRUPTCY DISTRICT OF THE STATE	) P 1451 of 1990
OF NEW SOUTH WALES	1 b 4123 of 1989

RE:  AIDA ARTIGAS-GRGIC

Debtor

EX PARTE:  NATIONAL MUTUAL ROYAL SAVINGS BANK
LIMITED

Creditor

CORAM: Burchett J.
PLACE: Sydney

DATE : 14 May 1991

EX TEMPORE REASONS FOR JUDGMENT

BURCHETT J.:

In this matter, only one question of difficulty arises.	l
:I
'l

Prlor to 1 July 1989, judgments in the Local Court requlred	II
payment to the judgment creditor. Prom that date, S. 3 and schedule 2 of the Local Courts (Civil Claims) Amendment Act
1987 (N.S.W.) commenced. By government gazette of 6 January	l
i
1989, that was the date on which new rules of the Local Courts	!
took effect. Part I, rule 4 of those rules provided as
l

(2) A step validly taken, or any process issued, under the Local Courts (C~vll Claims) Rules before the commencement of these rules shall be	rules and shall be deemed, subject to subclause	as valid as if taken or issued under these
(3), to have been taken or issued under these rules.

follows :

"(1) The Local Courts Civ~l Clalms rules are

repealed ;

(3) These rules apply to any step taken, or process issued, in any proceedings after the commencement of these rules, and, in respect of an action which was commenced, but not completed, before that commencement, so apply as if -

(a)	an ordinary summons issued before that commencement were an ordinary statement of claim lodged under Part 5 rule l(l)(a);
(b)	a special summons issued before that commencement were an ordinary statement of claim lodged under Part 5 rule l(l)(a);
(c)	a default summons issued before that commencement were a statement o f liquidated claim lodged under Part 5 rule l(l) (b);
(d)	a notice of defence filed before that
commencement were a notlce of grounds of defence filed under Part 9 rule 1;
(e)	a defence by way of set-off pleaded before that commencement were a cross-claim brought under section 15 of the Act;
(f)	an order for nonsu~t made before that commencement were an order striking out proceedings made under Part 21 rule 3;
(g)	an order made under section 40 of that Act that a judgment debt be paid by
under Part 27 rule 2; and instalments were an order that the judgment debt be paid by instalments made
(h)	an order for judgment made under section

25A of the Act were an order for judgment

made under Part 10 rule 1."

Part XXVII rule l(3) provided:

"Subject to subrule (5), the amount of every judgment debt arising from an action shall be payable to the registrar where -

(a) it is payable in one sum; or

(b) an order for its payment by instalments requires the instalments to be paid to the registrar."

Subrule (5) provided:

"Notwithstanding subrule (3), any payment by or on behalf of a judgment debtor made on account of a judgment debt to or at the dlrection of the judgment creditor shall, if accepted by or on behalf of the judgment creditor, operate to reduce the judgment debt by the amount of the payment."

In Re: Walter Soudakoff: Ex Darte: Crest Air Conditioninq Ptv Limited, an unreported decision of Gummow J. delivered on 13 March 1991, his Honour recited the next legislative event, which was that a further rule was made wlth effect from 27 April 1990. This amended Part XXVII by omitting subrule 1(3), and omitting from subrule l(5) the opening words, "Notwithstanding subrule 3".

His Honour commented:

application - I interject, the application wlth	"The result of this was that at the time of the
which his Honour was dealing, made on 29 August 1990
- for the issue of the bankruptcy notice and at the
tlme of the issue of the notice on 13 September 1990, there was no provision in the Local Courts Rules for the method of payment of a judgment debt payable in full, other than the impllcit indication in sub-rule 1(5), as amended, that payment would be made to or at the dlrection of the judgment creditor."

Gummow J. held that a judgment given during the period of
operation of the repealed rule l(3) required payment to the
registrar, but a bankruptcy notice issued after the repeal of
the rule was bad because it required payment to the
registrar - which was no longer what the judgment, having
regard to the rule change, must after that change be
interpreted as requiring. As a result, S. 41 subs. (2) of the

Bankru~tcv Act was not complied with.

The matter is also the subject of comment in two unreported decisions of Einfeld J., Re: David Gvnqell: Ex parte: Speedo Group Limited delivered 11 December 1990 and Re: Robert Leslie Stokes: Ex parte: National Acceptance Cor~orat~on Ptv Limited, delivered 11 December 1990, and an unreported decision of my own, Re: Robert Bruce Manzo: Ex parte: Imperial Leatherware Co. Ptv Limited, delivered 16 April 1991.

In the present case, judgment was entered before the now repealed subrule came into effect, and the bankruptcy notice was issued on 27 November 1989. In those circumstances, it is	necessary to have regard to the terms of the transitional	rule, rule 4, which I have already quoted. The terms of that
rule seem to me to make it clear that the then new rules, which came into effect on 1 July 1989, applied expressly to any step taken or process issued in any proceedings after the commencement of those rules, and in respect of an action which was commenced, but not completed, before that commencement. But the present case, of course, was a case which did not fall within that language, because not only was it commenced, but

it was also completed, before the commencement of the rules.

In my opinion, the Local Court judgment in the present case was, therefore, never subject to the repealed rule. Accordingly, the authorities to whlch I have referred are not in point, and the bankruptcy notice is not bad.

There being no other issue raised in this case which would give any colour to any possible defence, and the evidence having established the matters that are required to be established in such a case, I am satisfied that the debtor has committed the act of bankruptcy alleged in the petition. I am satisfied of the proof of the other matters of which S. 52 subs. (1) of the Act requires proof. I make a sequestration order against the estate of the debtor. I order that costs, including reserved costs, be taxed and paid according to the Act. I direct that a draft of this order be delivered to the Registrar wlthin seven days in accordance with rule 124, subrule (2).

are a true copy of the Reasons for Judgment herein	I certify that this and the preceding four (4) pages
of his Honour M r Justice Burchew..
Associate
Dated: 14 May 1991