Re Collard, Graham
[1997] FCA 983
•19 SEPTEMBER 1997
FEDERAL COURT OF AUSTRALIA
Bankruptcy - Bankruptcy petition - whether final judgment or final order - whether defect in statement of sum due - whether proof of authority of agents.
Bankruptcy Act Section 40, 41, 47, 52.
RE:
GRAHAM COLLARD
EX PARTE
AUSTRALIAN GUARANTEE CORPORATION LIMITED
NO: VG 7397 OF 1997
Abigroup Limited and Abignano (1992) 39 FCR 74
Broers and Another v Forster (1981) 36 ALR 605
Myer Melbourne Limited v Hammond (1984) VR 40
Excell; ex parte Martin (1995) 134 ALR 597
Hogg v J Isherwood Hicks Pty Ltd (1992) 108 FLR 262
RYAN JR
MELBOURNE
19 SEPTEMBER 1997
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VG 7397 of 1997
RE:
GRAHAM COLLARD
EX PARTE
AUSTRALIAN GUARANTEE CORPORATION LIMITED
JUDICIAL REGISTRAR:
RYAN
DATE OF ORDER:
19 SEPTEMBER 1997
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
the estate of the Debtor be sequestrated.
the Petitioning Creditor’s costs (including reserved costs) be taxed and paid in accordance with the Act.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VG 7397 of 1997
RE:
GRAHAM COLLARD
EX PARTE
AUSTRALIAN GUARANTEE CORPORATION LIMITED
JUDICIAL REGISTRAR:
RYAN
DATE:
19 SEPTEMBER 1997
PLACE:
MELBOURNE
PETITION FOR SEQUESTRATION ORDER
Australian Guarantee Corporation Limited petitioned the Court for a sequestration order against the estate of Graham Collard based on the debtor’s failure to pay the sum of $37,637.88 claimed by the petitioning creditor as a judgment creditor in what is claimed to have been a final judgment or order against the debtor in the County Court of Victoria.
On 26 August 1997 a notice of intention to oppose the petition was filed by the debtor alleging the following grounds of opposition:
That the Judgment Debtor had made application to the Credit Tribunal of Victoria pursuant to Section 146 of the Credit Act 1984 for re-opening of the contract upon which the petitioning creditor relied to obtain the Judgment referred to in paragraph 2 of the Petition.
2.*The County Court order of 10 October 1995 is not a final judgment or order within the meaning of section 40(1)(g) of the Bankruptcy Act 1966. Accordingly no act of bankruptcy has been proved and the petition should be dismissed.
*During the course of the hearing leave was granted to amend the notice of objection to include the second ground.
APPLICATION TO CREDIT TRIBUNAL
Counsel for the debtor did not pursue the first ground of opposition with any vigour. This is not surprising given that Counsel for the petitioning creditor asserted, and the debtor did not deny, that the creditor appeared before the Credit Tribunal but the debtor failed to appear to pursue any application.
STATUS OF COUNTY COURT JUDGMENT
The second ground of opposition is of more substance. The bankruptcy notice issued 10 September 1996 was founded on a judgment entered against the respondent in the County Court of Victoria at Melbourne on 10 October 1995. In the County Court writ the petitioning creditor as plaintiff claimed that the debtor as defendant had defaulted on obligations pursuant to a hire purchase agreement in which the plaintiff was the owner and the defendant the hirer of a motor vehicle. The defendant filed notice of defence. The plaintiff requested further and better particulars. The defendant filed further and better particulars of defence.
On 10 October 1995 the petitioning creditor as plaintiff obtained an order against the debtor. Campbell J ordered that:
The Defendant pay the sum of $30,671.20 to the Registry of the County Court, in a form acceptable to the Registry, on or before 24 October 1995, such funds to be held by the Registry until:
(a)payment to the Plaintiff in the event of judgment for the Plaintiff, in such sum as is appropriate given the amount of any such judgment; or
(b)payment to the Defendant in the event of judgment for the Defendant.
If the Defendant defaults in compliance with Order (1) herein, there shall be judgment for the Plaintiff against the Defendant for $32,787.14 plus interest in the sum of $1,174.14 for the period 17 July 1995 until 24 October 1995, and $11.86 for each day thereafter, together with costs to be taxed on Scale “C” and when taxed paid by the Defendant to the Plaintiff.
If the Defendant complies with Order (1) herein:
(a)the Defendant shall file and serve an Amended Defence on or before 25 October 1995;
(b)the proceedings shall be set down for hearing as soon as is convenient after 25 October 1995.
Section 40(1)(g) of the Act provides that a debtor commits an act of bankruptcy if a creditor who has obtained against the debtor a final judgment or final order, being a judgment or order the execution of which has not been stayed, has served on the debtor a bankruptcy notice and the debtor does not comply with the requirements of the notice or satisfy the Court of a counterclaim, set off or cross demand equal to or exceeding the amount of the judgment debt or sum payable under the final order.
The debtor asserts that the petitioning creditor has failed to prove an act of bankruptcy. The debtor further asserts that the order of 10 October 1995 was made under Rule 24.05 of the County Court Rules and has the effect of putting the plaintiff in a position to apply for judgment upon proof that the act or omission upon which judgment is predicated has occurred. In other words the debtor claims that the judgment is not a final judgment or order within the terms of section 40(1)(g) of the Act.
Counsel for the debtor categorises the judgment as one similar to judgments in cases cited in Abigroup Limited and Abignano (1992) 39 FCR 74 at 80 where judgment creditors had not put themselves in the position of being able to issue execution, so execution was deemed or considered to be stayed on the ground that in each case the judgment creditor was not entitled at the date of the issue of the bankruptcy notice to issue immediate execution on the judgment.
Counsel also cited Abigroup and Broers and Another v Forster (1981) 36 ALR 605 in support of his proposition that a Registrar of the County Court or Judge Campbell himself needed to enter final judgment to entitle the judgment creditor to issue a bankruptcy notice under section 40(1)(g).
In Broers the Full Court of this Court held
By Order 23, rule 7 of the Rules of the Supreme Court of the Australian Capital Territory, the court may order that a defence be struck out and that interlocutory judgment be entered if the order is not complied with.
If such an order is made, the Registrar may, on evidence of non-compliance with the order, enter judgment without the need for a motion for judgment, provided the order and the event upon the happening of which judgment can be entered are stated with great precision.
Counsel for the debtor also sought assistance from Myer Melbourne Limited v Hammond (1984) VR 40 at 42. In Myer Melbourne a County Court Judge ordered that, unless within 21 days the respondent swore, filed and served an affidavit of documents, the respondent’s action be dismissed and the solicitor for the appellant applied on affidavit to the Registrar of the Court for judgment to be entered in the register of the County Court on the basis of the respondent’s lack of full compliance with the Judge’s order.
However, in my view, Myer Melbourne does not assist the debtor but provides comfort to the creditor. The order of the County Court Judge was held by the Full Court of the Supreme Court to be a self executing order. The Full Court stated:
“Judge Gorman’s order made on 16 August 1978 being self-executing, once there was a failure to meet its full requirements within the time limited by it, the consequence, namely dismissal of the respondent’s action, immediately became effective. There was at that time no power in Judge Gorman or any other Judge of the County Court to set aside the order itself or the dismissal which had resulted from non-compliance with it.”
The effect of the first and second orders of Campbell J is that a failure by the defendant to pay $30,671.20 into Court on or before 24 October 1995 results in judgment, on 25 October 1995, for the plaintiff for $32,287.14 plus interest as specified for the period 17 July to 24 October plus interest at $11.86 for each day thereafter.
I note the comment in McDonald, Bankruptcy Law and Practice page 2592 paragraph 40.1.280 that the broader view of “execution” as “the process for enforcing or giving effect to the judgment of the Court” is to be preferred to the narrower view of “enforcement by a public officer under writs of fieri facias”: see re Excell; ex parte Martin (1995) 134 ALR 597.
Order 66.01 of the County Court Rules provides that a judgment includes an order.
Order 60A.01 provides that authentication of a judgment or order of the court is the process by which the judgment or order is made of record, that is, is recorded or entered in the records of the court.
In the County Court the party requiring authentication draws up the form of judgment or order (see Order 60A.07).
Order 60A.01.10 provides that which is to be authenticated under O 60A will be one of the following:
(a) a judgment given
(b) a judgment entered, or
(c) an order made.
By r 1.13(1) “judgment given” means a judgment given by the court at the trial of a proceeding or on the hearing of an application in a proceeding, and “order made” an order made by the court at the trial of a proceeding or on the hearing of an application in a proceeding. Judgment entered is not defined, but it means a judgment which is entered in the records of the court by the Registrar on the demand of a party pursuant to a right to enter judgment under the rules, as, for instance, upon default by the defendant in filing an appearance or serving a defence, or under a self executing order, one that provides that judgment may be entered upon the failure of the other party to take a step which by the order the party is required to take. See Hogg v J Isherwood Hicks Pty Ltd (1992) 108 FLR 262 at 263 (SC(NT)).
In my view the order of 10 October 1995 as authenticated by a Registrar on 31 October 1995 and taken out by the solicitors for the plaintiff on 31 October 1995 embraced a judgment given on 10 October and orders made on 10 October and, because of non-compliance with the first order, judgment on 25 October in favour of the plaintiff.
I also take the view that the judgment authenticated on 31 October was self-executing on 25 October and that the self-executing second order was sufficiently authenticated on 31 October, albeit that the form of judgment authenticated was in the form and words of the judgment of 10 October.
I also take the view that at the time when the applicant issued the notice of bankruptcy the authenticated judgment was sufficient to place the plaintiff in the position of a creditor who had obtained against the debtor a final judgment or final order in terms of section 40(1)(g).
The petitioning creditor was in a position to issue execution on the judgment of Campbell J at the time of the application for the issue of the Notice of Bankruptcy. Indeed, the debtor seems to have contemplated or perhaps even later taken action that assumed that the petitioning creditor was in a position to execute. The solicitors for the debtor forwarded to the solicitors for the creditor a copy of an application to the Registrar of the County Court for the payment of the judgment debt by instalments. This document may or may not have been filed but it bears the date 21 February 1997 and also bears what appears to be the seal of the County Court dated 21 February 1997. The debtor by his own actions seems to assume that there was a final judgment against him.
I have concluded that the petitioning creditor has obtained a final judgment or final order effective 25 October 1995 and that, to paraphrase Broers v Forster, “the order and the event upon the happening of which judgment can be entered (have been) stated with (adequate) precision.”
OTHER OPPOSITION TO THE PETITION
The debtor, through Counsel, raised two other matters which were not included in the Notice of 26 August 1997 as grounds of opposition to the petition.
The first of these additional matters was raised in a facsimile letter from the debtor’s solicitors to the creditor’s solicitors. The letter is dated 21 February 1997 and was sent on 19 February and purported to give notice pursuant to section 41(5) of the Act that the Bankruptcy Notice dated 10 September 1996 “is defective as the judgment debt is referred to as a different sum in the second line of the first paragraph and the first line of paragraph (a) of the notice”. The debtor asserts that “it is not apparent on the face of the notice as to what is the judgment debt and what is accrued interest”.
The notice is not defective. A reference to a “judgment debt” of $32,787.14 in the second line of the first paragraph of the notice is clearly a reference to that sum for which Judge Campbell provided judgment in his second order. The sum of $37,637.88 in paragraph (a) of the notice is obviously a reference to the $32,787.14 together with the two sums for interest of $1,174.14 and $3,676.60 referred to in the second and fourth lines of the first paragraph of the notice.
The second additional matter is a claim that the creditor has failed to prove execution of the petition because of a lack of proof as to the position of either of the signatories to the petition within the meaning of Schedule A of the Respondent’s General Power of Attorney dated 2 June 1994.
It is clear from the affidavit of 20 June 1997 of Gregory John Avenell and the affidavit of 27 August 1997 of Paul Anthony Wilde that both are the holders of positions included as attorneys in Schedule A of the General Power of Attorney.
ORDERS
I am satisfied that the Debtor committed the act of bankruptcy alleged in the Petition.
I am satisfied with the proof of the other matters of which sub-section 52(1) of the Act requires proof.
I order that the estate of the Debtor be sequestrated.
I order that the Petitioning Creditor’s costs (including reserved costs) be taxed and paid in accordance with the Act.
I certify that this and the preceding seven (7) pages are a true copy of the Reasons for Judgment herein of Judicial Registrar Ryan
Associate:
Dated: 19 September 1997
Counsel for the Petitioning Creditor: Mr M Lapirow Solicitor for the Petitioning Creditor: J Stuart Bett Counsel for the Debtor: Mr J Carney Solicitor for the Debtor: Tetley McNamara & Murphy Date of Hearing: 15 September 1997 Date of Judgment: 19 September 1997
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