Re Court, P.J. & Anor Ex Parte Commonwealth Bank of Australia

[1994] FCA 289

JUDGMENT No. ..... 389 j ,.-. a

IN THE FEDERAL COURT OF AUS-	)
GENERAL DIVISION	)
WKRUPTCY DISTRICT OF THE	) No. NB1477 of 1993

OF NEW SOUTH )

RE :	PETER JOHN COURT and KATHLEEN REWAI COURT
EX PARTE:	COMMONWEALTH BANK OF AUSTRALIA

.cQEAM:  HILL J

PLACE: SYDNEY

PBTEP:  17 MARCH 1994

EX TEMPORE REASONS FOR JUDGMENT

On 7 May 1993 a bankruptcy notice addressed to Peter John Court ("the Debtor") and his wife was issued at the instance of the Commonwealth Bank of Australia ("the Bank") claiming that the debtor and his wife were indebted to the Bank under a judgment debt in the sum of $174,332.78 plus interest. The Debtor, having been served with the bankruptcy notice, filed on 18 November 1993 an affidavit sworn the preceding day claiming that he had, within the meaning of

s.40(l)(g) of the Bankru~tcv	Act 1966 (Cth) ("the Act"):
of the amount claimed by the Bank in the bankruptcy notice and	to it. The value of the cross-claim is said to be in excess
to be one which could not have been raised in the proceedings which gave rise to the judgment debt on which the bankruptcy notice was based.
That affidavit stated the date of service of the bankruptcy notice to be 28 October 1993. The affidavit dealing with the cross-claim would have been filed outside the time stipulated by s.41(7) of the Act if service of the bankruptcy notice had been effected not on 28 October, as the affidavit states, but on 27 October as the Bank now claims.
Section 41(7) requires that such an affidavit be filed "before the expiration of the time fixed for compliance with the bankruptcy notice". Such time, as described in the bankruptcy notice, was to be "within twenty one (21) days after service of this notice . . . excluding the day on whlch this notice is served ...". On 19 January 1994 the Debtor swore an affidavit referring to his previous affidavit in which he said of the date of service:

"A Cross Claim set off or Cross Demand against the Commonwealth Bank of Australia

. . . with respect to its exercise of its

l 8 MAY 1994	power to take possession and to exercise a
FEDERAL .-unn	+
AUSTRALIA	power of sale of the property known as 169
PRINCIPAL
REGISTRI	Bay Road, Bolton Point."

Presumably this property was at some time mortgaged
to the Bank to secure moneys owing by the debtor and his wife

"I am certain of the date of service.

From my recollection I was served at 414 The Esplanade, Warners Bay at approximately 7.OOpm as I was getting dressed to go out with my brother to a party a t Sandgate which takes place of a Thursday evening. "

There is thus a dispute as to the date service was effected and the parties have requested that I resolve this dispute as a preliminary issue. There appears to be agreement that the provisions of ss.41(7) and 40(l)(g) of the Act are otherwise satisfied. So if the date of service be made out by the debtor to be 28 October 1993 his affidavit will have been filed in time.

An affidavit was sworn by the process server of the bankruptcy notice, Mr Mark Stephenson, on 9 March 1994. In that affidavit Mr Stephenson deposed to havlng been instructed to serve the Debtor in May 1993. He said that he had made an attempt to do so at the Debtor's address in Charlestown, on which occasion he was told by a male person, whom he later identified as being, in fact, the Debtor, that the Debtor was in Queensland and was no longer at that address. After at least one abortive attempt to serve the Debtor when the Warners Bay premises were unoccupied, he affected service on the Debtor on 27 October 1993. He said he recognised the Debtor after observing a newspaper photo of him with the caption "Peter Court" attached, which had been published the

preceding week in the Newcastle Herald. According to his	affidavit, Mr Stephenson, after serving the bankruptcy notice,
then left the premises and completed an "Agent Fleld Report". The Field Report, which was in evidence before me, had a notation that service had been affected on 27 October 1993 at 8.10pm. Both the Debtor and Mr Stephenson gave oral evidence in addition to their affidavit evidence and were cross- examined.
In his oral evidence the Debtor said that he "believed" service of the bankruptcy notice was effected on a Thursday evening late in October. He said at the time of service he had been wearing a towel and that the reason he believed the date of service was a Thursday evening was that he normally did not shower of an evening, the exception being that he showered on Thursday evenings, that being the night when he routinely went out.
In cross-examination the Debtor's belief became a "certainty". He said that when his brother came home after service had been effected he had told his brother of the event before getting dressed to go out. The brother apparently lived in the same house. In reply to a question from the bench, the Debtor agreed that he went out on other evenings, that is to say he played tennis on Tuesday afternoon or went out on Fridays, but that he never showered in the evening, except on Thursday evening, preferring to have a shower before
going to work in the mornings. He said that he could categorically say that in the past 12 months he had never
showered on a Wednesday evening.
There were some minor inconsistencies in the Debtor's evidence. He said initially that his brother arrived home about 8.15pm or 8.30pmt which was half to three quarters of an hour after the process server had left and that they left together to go to the party to arrive at 9.00pm. It will be recalled that his affidavit had suggested that service occurred at 7.00pm. He later said he thought that service was effected between 7.30pm and 8.00pm, although he would have suggested a little later. He did not dispute the service could have been effected at 8.10pm as the process service had deposed, he disputed only the date.
Mr Stephenson, in cross-examination, admitted that the Debtor had been clad in a towel at the time of service. He refused to accept that he would not have recognised him again if he had indeed met him initially in May and then later in October. He adhered to his evidence that the Field Report had been filled in with the date of service on the night that service took place. He agreed that he had no independent recollection of the date and that his evidence depended on the notation in the Field Report. He denied the possibility he had made a mistake in writing down the date, noting that the date of service was an important matter because his job sheet
be 27 October 1993, that reflecting presumably his had shown that the last date for service of the notice was to
instructions to return the documents if service was not effected on or before that date.
Both the Debtor and Mr Stephenson gave evidence confidently and certainly there was nothing in their demeanour under cross-examination which would result in my disbelieving the one or the other. Clearly the Debtor had, at least at the hearing, a reason for departing from the truth havlng regard to the significance of the date to him. Mr Stephenson was not shown to have any such reason, and I hardly would conclude that, because he was required to effect service on or before 27 October 1993, that he would falsely note the date of service as 27 October when, in fact, service took place on 28 October.
In written submissions, counsel for the Debtor stressed that as at 17 November 1993, the date of swearing his original affidavit, the Debtor had no reason to lie because that date was still within 21 days of either 27 or 28 October. The significance of the date had arisen only because the affidavit was filed one day late if service had been effected on 27 October 1993. It was submitted that no slgniflcance could be attached to the failure to call the Debtor's brother because the brother would merely corroborate him and no evidence had been adduced which required an answer to be
Mr Stephenson who had no reason to fabricate evidence and no given. Counsel for the Bank submitted that I should believe
interest in the outcome. He placed emphasis upon the fact that Mr Stephenson had written on his report the date of service that he said service was effected. By contrast, the Debtor had not had to recollect the date until he contacted his solicitor. Further, it was said the Debtor's evidence was a reconstruction from his routine Thursday shower. Finally, it was submitted that the Debtor had indeed been the person Mr Stephenson saw in May 1993 and who had then lied and that I should find that he had lied again. I should say that the Debtor denied ever meeting Mr Stephenson before service of the bankruptcy notice in October 1993.
Ultimately the Debtor bears the onus of showing, on the balance of probabilities, that service was effected on 27 October 1993. To find for him I must find that Mr Stephenson, at the very least, made a mistake and wrote the wrong date on a sheet which showed the dates of various service attempts from 2 8 September 1993 to 2 0 October 1993 and which showed on its face the last date upon which service was to be effected.
So to find requires me, however, also to find that Mr Stephenson deliberately or otherwise exceeded his instructions and served the notice on a date after those
date, whether by mistake or otherwise, which showed that instructions had expired and then dated his report with a service occurred within the time his instructions were extant.
I have observed Mr Stephenson in the witness box and am unable
so to find. I would accordingly accept his evidence and conclude that it is more probable than not that service was effected on 27 October 1993.
I also see no reason to disbelieve Mr Stephenson that the person he attempted to serve in May was the Debtor. This, once accepted, cast doubt on the whole of the Debtor's evidence. I need not go so far as to say that the Debtor was not telling the truth. I accept that he believed the date of service to be the 28 October 1993 and obviously that belief depended upon the reconstruction he made from the fact that he had taken a shower and that he generally went to a particular function on Thursday evenings. It is posslble that he may have overlooked taking a shower on some other evening, for example, on Wednesday evening, but whatever the explanation, he has not satisfied the onus of showing that the service was in fact effected on 28 October 1993.
It follows that I would hold that the affidavit of Peter John Court, filed under s.41(7) on 18 November 1993, was filed outside the period of 21 days after the date of service of the bankruptcy notice excluding the day on which the notice
was served, namely, 27 October 1993. Accordingly, I declare that service of the bankruptcy notice issued by the Commonwealth Bank of Australia
against Mr Peter John Court and Kathleen Rewai Court was effected, so far as Mr Peter John Court is concerned, on 27
October 1993. I will stand over the application to set aside
that bankruptcy notice until 12 April 1994 before a Registrar.

I reserve costs at this stage.

I certify that this and the
preceding eight (8) pages
are a true copy of the Reasons
for Judgment herein of his Honour

Mr Justice Hill.

Date: 12 May 1994

Counsel and Solicitors	B DeBuse instructed by
for Debtor:	Paul Hines
Counsel and Solicitors	A McInnes instructed by
for Creditor:	Abbott Tout
Date of Hearing:	17 March 1994
Date Judgment Delivered:	17 March 1994