Re Cairns, Graham Ex parte the abovenamed and Chubbs Panel and Paint Service

[1983] FCA 421

_ _ _ _ _ _ _ _ _ _ C A T C H W O R D S

BANKRUPTCY - the debtor's notice pursuant to s.41(5)

of the Bankruptcy Act not given wlthin the time specified -

an application to extend the time for giving the debtor's

notice made pursuant	to s.41(6A) of the Act - applications
dismissed.

Bankruptcy Act 1966, as amended, (Cwlth) ss. 41(51 and (6A)

Streimer v. Tamas (1981) 37 A.L.R. 211 applied

Re: GRAWI CAIRNS; ex parte THE ABOVENAMED AND

CHUBB'S PANEL AND PAINT SERVICE

No. 329 of 1983

FITZGERALD J.

BRISBANE

26 MAY 1983

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I N THE FEDERAL COURT O F AUSTRALIA )

GENERAL DIVISION !

) No. 329 of 1983

BANKRUPTCY DISTRICT OF THE SOUTHERN	)
DISTRICT O F THE STATE OF QUEENSLAND	) '

Re: GRAHAIY CAIRNS

E x parte: THE ABOVENAbED AND CHUBB'S PANEL

AND PAINT SERVICE

_ _ _ _ _ O R D E R

JUDGE MAKING ORDER:	FITZGERALD J.
DATE OF ORDER:	26 MAY 1983

MADE:	WHERE	BRISBANE
THE COURT ORDERS THAT:

1. T h e debtor ' s appl icat ions are dismissed.

2 . T h e debtor must pay t h e creditor's taxed -

costs of these proceedmgs.

I N THE FEDERAL COURT OF	AUSTRALIA	1
GENERAL DIVISION	1

BANKRUPTCY DISTRICT O F THE SOUTHERN ) NO. 329 Of 1983

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DISTRICT OF THE STATE OF QUEENSLAND )

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Re: GRAHAM CAIRNS

Ex pa r t e :	THE ABOVENAMED AND CHUBB'S	PANEL
AND PAINT SERVICE

FITZGERALD J. 26 MAY 1983

REASONS FOR JUDGMENT

On 26 October 1982, the St ipendiary Magistrate

a t Kingaroy gave judgment i n favour of Chubb's Panel and

p a i n t S e r v i c e ( t h e c r e d i t o r ) a g a i n s t Graham Cai rns

( t h e d e b t o r ) . The concludmg words of the judgment

d e l i v e r e d were -

"I give judgment for the Plaintiff for : -

Claim - 976.46

Costs o f P l a in t and Summons - 109.45

P ro fes s iona l Costs

(P repa r ing fo r T r i a l - 193

Counsel	on	hearing	- 184
S o l r .	on hear ing)	- 162 539.00

Witness expenses 1 @ $26 26 .00

TOTAL $1650.91 "

A le t ter da ted 28 October 1982 was forwarded by

t h e R e g i s t r a r o f t h e M a g i s t r a t e s Court a t Kingaroy

i n the fo l lowing terms:

2.

"Re:- Kingaroy Magistrates Court Plaint 28/1982

chubs Panel k Pain Service -v- Graham C ' a i r n s

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I refer to the above and to the Decision dated

the 26th. instant and list hereunder amended Order

as to Costs.

Claim	976.46
Costs of Plaint & Summons	109.45
Professional Costs -

Preparing for Trial - 193.00

Counsel on Hearing - 184.00

Solr. on hearing 74 - 5 0 451.50

Witness Expenses 1 @ 26. 26.00 00

TOTAL $1563.41 "

No question has been raised in these proceedings

as to the power of the Magistrate's Court to vary the judgment

which had been delivered by reducing the professional costs

awarded. Both parties accept as a starting point that a

judgment in accordance with the contents of the-letter was

delivered in favour of the creditor against the debtor:

cf Magistrates Courts Rules, 1960 (Qld), Rule 199.

Formal judgment was entered on 9 December 1982.

The formal judgment was expressed to be for the amount of

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$976.46 for claim and the amount of $632.00 for costs, ,

including $45.05 costs of entering ludgment. The total for I

which the judgment was entered thus exceeded the amount for	i '
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which judgment was delivered by the sum of $45.05. 1

There is no suggestion that the debtor has appealed

or applied to have the judgment entered either varied, set aside,	I
or quashed.

3.

On 23 February 1983, on the appl ica t ion of the

c r e d i t o r , t h e R e g i s t r a r f o r t h e B a n k r u p t c y District of

t he Sou the rn District of the S ta te of Queens land i ssued

a Bankruptcy Notice, No. 329 o f 1 9 8 3 , d i r e c t e d t o t h e

debtor . The sum s p e c i f i e d i n t h e b a n k r u p t c y n o t i c e as

t h e amount due t o t h e c r e d i t o r was t h e f u l l amount

f o r which t h e judgment had been entered, including the

sum of $45.05 f o r costs of enter ing the judgment . The

banlxuptcy not ice was se rved on the deb to r on Monday

2 1 March 1 9 8 3 a t 5.45 p.m.

On 5 Aprl l 1983, the debtor by h i s s o l i c i t o r s

f i l e d a n o t l c e I n t h e f o l l o w i n g terms:

"I HEREBY GIVE NOTICE pu r suan t t o Sec t ion 41 (5 )

of the Bankruptcy A c t 1 9 6 6 t o 1980 as amended

t h a t I DISPUTE the va l id i ty o f t he Bankrup tcy

Notice NO. 329 of 1983 on t h e g r o u n d t h a t t h e

amount s p e c i f i e d i n t h e n o t i c e as t h e amount

due t o t h e C r e d i t o r e x c e e d s t h e amount i n f a c t

due i n t h a t c e r t a i n costs of Cour t and

p r o f e s s i o n a l costs t h a t t h e Judgment Creditor

is n o t e n t i t l e d t o claim nor i s t h e

Magistrates Court empowered t o allow, have

been inc luded there in . "

A copy of t h e n o t i c e w a s given t o t h e c r e d i t o r ' s

s o l i c i t o r s on Wednesday 6 A p r i l 1983. It is n o t

i n d i s p u t e t h a t t h a t was o u t s i d e t h e time allowed

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f o r payment under the bankruptcy not ice .

On19 Apr i l 1983, the debtor made an

a p p l i c a t i o n t o t h i s C o u r t f o r t h e f o l l o w i n g o r d e r s : ,

4 .

"1. 'l'hat the Bankruptcy Notice 329 of

1983 and dated the 22nd February, 1983

I be dec la red inva l id :

2. T h a t t h e c o s t s o f a n d i n c i d e n t a l t o

t h i s a p p l l c a t i o n be pa id by the

Respondent/Judgment Creditor."

T h a t a p p l i c a t i o n was n o t made u n t i l af ter t h e time for

compliance with the bankruptcy not ice had expired.

Before m e t h e d e b t o r a p p l i e d for an ex tens ion of t h e

time f ixed fo r compl i ance wi th t h e bankruptcy not ice ,

r e l y i n g upon sub-S. 4 1 (6A) of t h e A c t .

I t is common g round tha t , unde r the Mag i s t r a t e s

C o u r t R u l e s , t h e c r e d i t o r was only e n t i t l e d t o $22.00, being

p a r t o f t h e $ 4 5 . 0 5 costs of en te r ing judgment, and t h a t

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t h e amount fo r which the judgment was en te red and which i s

s p e c i f i e d i n t h e b a n k r u p t c y notice as t h e amount due t o

- t h e c r e d i t o r e x c e e d s t h e amount i n f ac t due by the debtor

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I	by t h e sum of $23.05.	The	c r e d l t o r d o e s n o t	now	seek
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payment of t h e amount of t h e e x c e s s .

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The d e b t o r d i d n o t s u b m i t t h a t the bankruptcy

n o t i c e was inva l id because the judgment upon which it

was founded was i n v a l i d a s beyond t h e j u r i s d i c t i o n a n d / o r t h e

power o f t he Mag i s t r a t e s Cour t which is a n i n f e r i o r

c o u r t of limited j u r i s d i c t i o n .

F o r t h e d e b t o r t o s u c c e e d i n h i s claim t o have

the bankruptcy not ice dec lared void , he must do so by

r e fe rence to sub - s . 41 (5 ) o f t he Bankrup tcy A c t .

5.

The c r e d i t o r h a s c o n c e d e d t h a t t h e amount

for which it has a valid ludgmcnt from t h e Magistrates

Court a t Kingaroy i s less by t h e sum of $ 2 3 . 0 5 t h a n

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t h e amount f o r which judgment was i n f ac t en te red .

The sum s p e c i f i e d i n t h e b a n k r u p t c y n o t i c e as t h e

amount due t o t h e c r e d i t o r i s t h e sum for which

judgment was en te red and thus , i n acco rdance wi th

t h e c r e d i t o r ’ s c o n c e s s i o n , e x c e e d s t h e amount i n

f ac t due t o t h e c r e d i t o r by $23.05. Fu r the r , it i s

n o t i n d i s p u t e t h a t t h e d e b t o r g a v e n o t i c e t o t h e

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creditor t h a t he d i s p u t e d t h e v a l i d i t y of t h e n o t i c e

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on the ground of a mis-statement of the amount due.

Sub-sect ion 41(5) of the Bankruptcy A c t provides:

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“A bankruptcy not ice i s n o t i n v a l i d a t e d

b y r e a s o n o n l y t h a t t h e sum s p e c i f i e d

i n t h e notice as t h e amount due t o t h e

creditor exceeds the amount i n f a c t d u e ,

u n l e s s t h e d e b t o r , w i t h i n t h e time allowed

f o r payment , gives not ice t o t h e creditor

t h a t h e d i s p u t e s t h e v a l i d i t y o f t h e n o t i c e

on the ground of the mis-s ta tement .”

The creditor d i d n o t d i s p u t e t h a t t h e i m p l i c a t i o n t o b e

de r ived f rom tha t sub - sec t ion i s t h a t i f t h e sum s p e c i f i e d

i n a bankruptcy not ice does exceed t h e amount i n f a c t d u e

t o t h e c r e d l t o r a n d t h e deb to r does g ive t h e n o t i c e for which

t h e s e c t i o n p r o v i d e s , f a i l u r e t o comply w i t h t h e bankruptcy

n o t i c e d o e s n o t c o n s t i t u t e a n a c t o f b a n k r u p t c y .

However, as 1s apparent f rom its terms, sub-s. 41(5)

operates o n l y i f t h e n o t i c e 1 s g iven wi th in time (and it was no t ) I

o r u n l e s s t h e time is extended, as t h e d e b t o r now seeks. I

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I	Further, I am satisfied that there	is now no
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!	power to extend the time. Sub-section	41 (6A)	, under which
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the application for an extenslon of time was made, also

requires that the step relied on, in this case an application

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to set aside the bankruptcy notice, has been taken before

the expiration of the time fixed for compliance with the

requirements of the notice. That condition was not

fulfilled. It is now too late. The act of bankruptcy

has been committed: see Streimer v. Tamas (1981)

37 A.L.R. 211 and cases cited.

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For the reasons given, the debtor's applications

are dismissed. The debtor must pay the creditor's

taxed costs of these proceedings.

1 C ' v that f h l ? 2nd the 5 preceding

- 2-c a truc copy of the rcacons for

JL' ! :rllcnt herein of H i ; Honour

!,'NI :l.lstlce Fltzgerald

F u A -2.-	,Associ3te
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k i d -?c, ""y ,17?-3

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