Re Darby, James Ex Parte Pacific Publications Pty Ltd referred to in the Certificate of judgment as Southdown Press Pty Ltd (ACN 008 430 828)
[1995] FCA 898
•9 NOVEMBER 1995
CATCHWORDS
BANKRUPTCY - Bankruptcy notice - Validity - Identity of judgment creditor - Change of name between judgment and notice - Order for substituted service of notice - Personal service - Later service pursuant to order - Order containing different deemed date of service - Date for compliance with notice - Whether notice could reasonably mislead debtor.
Clyne v. Deputy Commissioner of Taxation (1982) 42 ALR 703
Re Crisafulli; Ex parte National Commercial Banking Corporation of Australia Ltd (unreported, Toohey J., 8 July 1985)
Re Spurr; Ex parte Werner (1991) 31 FCR 236
RE JAMES DARBY; EX PARTE PACIFIC PUBLICATIONS PTY LTD referred to in the Certificate of Judgment as SOUTHDOWN PRESS PTY LTD (ACN 008 430 828) No VN 727 of 1995
COURT:Sundberg J
PLACE:Melbourne
DATE:9 November 1995
IN THE FEDERAL COURT OF AUSTRALIA )
VICTORIA DISTRICT REGISTRY ) No VN 727 of 1995
GENERAL DIVISION )
RE:JAMES DARBY
Judgment Debtor
EX PARTE:PACIFIC PUBLICATIONS PTY LTD
referred to in the Certificate of Judgment as SOUTHDOWN PRESS PTY LTD (ACN 008 430 828)
Judgment Creditor
COURT:Sundberg J
DATE:9 November 1995
PLACE:Melbourne
MINUTES OF ORDER
The Court orders that:
A sequestration order be made against the estate of the judgment debtor.
Costs (including any reserved costs) be taxed and paid according to the Bankruptcy Act 1966.
A draft of this order be delivered to the Registrar within seven days in accordance with rule 124(2) of the Bankruptcy Act.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
VICTORIA DISTRICT REGISTRY ) No VN 727 of 1995
GENERAL DIVISION )
RE:JAMES DARBY
Judgment Debtor
EX PARTE:PACIFIC PUBLICATIONS PTY LTD
referred to in the Certificate of Judgment as SOUTHDOWN PRESS PTY LTD (ACN 008 430 828)
Judgment Creditor
COURT:Sundberg J
DATE:9 November 1995
PLACE:Melbourne
REASONS FOR JUDGMENT
SUNDBERG J:
On 5 April 1995 a Bankruptcy Notice issued on the application of Pacific Publications Pty. Limited. The Notice recited that "Pacific Publications Pty. Limited (referred to in the Certificate of Judgment as Southdown Press Pty. Ltd.) of 38 Walsh Street, Melbourne" had obtained judgment against James Darby in the Magistrates' Court for $16,650 plus costs and interest, and required payment of the total amount within fourteen days of service of the Notice.
Pacific Publications Pty. Limited ("PP") encountered difficulty serving the debtor, and on 12 May 1995 an Order for substituted service was made. By par.2 it was ordered that in lieu of personal service the Notice be served
(a)by posting a letter stating the date of posting and enclosing a copy of the Bankruptcy Notice signed and stamped by the Registrar and a copy of today's Order by ordinary mail addressed to the debtor at Level 2, 253 Lonsdale Street, Melbourne
(b)and by handing a letter addressed to the debtor containing a copy of the Bankruptcy Notice signed and stamped by the Registrar and a copy of today's Order to a person apparently over the age of sixteen years apparently working at the said address.
By paragraph 3 it was ordered that service of the Notice
be deemed to be effective on 9th June 1995 upon condition that the two events referred to in paragraph 2 of this Order occur before the expiration of 21 days of the date of this Order.
On 23 May PP posted to the debtor at the Lonsdale Street address copies of the Order and Notice together with a covering letter. On 29 May the debtor was personally served with copies of the same documents. He was a person apparently over the age of sixteen years apparently working at Level 2, 253 Lonsdale Street, Melbourne. Accordingly, as a result of par.3 of the Order, service of the Notice was deemed to be effective on 9 June 1995.
The debtor did not comply with the Notice, and on 5 July 1995 PP presented a Petition, the act of bankruptcy being the debtor's failure on or before 23 June to comply with the Notice "deemed to be served on him" on 9 June 1995.
On 27 October 1995 the debtor gave notice of his intention to contend that the Notice was "fundamentally flawed" in that
(a)the Judgment Debtor ("the Debtor") could be confused and in reasonable doubt as to the identity of the Judgment Creditor ("the Creditor") for the purpose of complying with the Notice, alternatively
(b)the Debtor could be confused and in reasonable doubt as to the correct date of service of the Notice, therefore the correct date by which he should comply with the 14 day notice in order to avoid committing an act of bankruptcy.
Additional facts relevant to the first ground are that the judgment in the Magistrates' Court was given in favour of Southdown Press Pty. Ltd., and that on 24 May 1994 that company changed its name to PP.
A bankruptcy notice that could reasonably mislead a debtor is a nullity. The question is not whether the debtor was in fact misled but whether he could be misled. A debtor is not required to engage in the task of construing a notice and resolving questions of doubt or ambiguity. A notice ought to be clear and unambiguous. If it is equivocal, the doubt must be resolved in favour of the debtor. In order to determine whether the debtor could reasonably have been misled, the court is not confined to a mere examination of the notice itself. It may look at facts extraneous to the notice, including the court order on which the notice is based. See generally Clyne v. Deputy Commissioner of Taxation (1982) 42 A.L.R. 703, at pp.706-707 and Re Spurr; Ex parte Werner (1991) 31 F.C.R. 236.
In my view the debtor could not reasonably have been misled by the reference to PP in the Notice. The Notice bore on its face that the judgment had been obtained by Southdown Press, and that PP was the same entity as Southdown Press. Counsel for the debtor accepted
that had the Notice said that PP was "formerly known as Southdown Press", no objection could have been taken. In my view the debtor could have been in no doubt that the words "Pacific Publications Pty. Limited (referred to in the Certificate of Judgment as Southdown Press Pty. Ltd.)" meant that Southdown Press had changed its name to PP, and that he was required to pay PP the amount referred to in the Notice being the amount of the judgment obtained by PP under its former name.
Further, the possibility of the debtor being misled could arise only if and when he attempted to take some action pursuant to the Notice. In response to a ground of objection that was later abandoned, PP's credit manager deposed that PP's registered office was at 32 Walsh Street, Melbourne, and that "at or about the beginning of 1994" PP expanded its offices by moving its accounts section to 38 Walsh Street where the section remained until the end of June 1995 when it returned to 32 Walsh Street. Thus, at all times during the period between 23 May 1995 (when the Notice was posted to the debtor) and 23 June 1995 (the date fourteen days after the deemed date of service of the Notice) PP's address was 38 Walsh Street, Melbourne. If on receipt of the Notice the debtor had sought to deal with PP by letter, telephone or personal attendance, there is no reason to think that his use of the company's former name would have presented an obstacle or led to any confusion on his part. Cf. Re Crisafulli; Ex parte National Commercial Banking Corporation of Australia Ltd. (unreported, Toohey J., 8 July 1985).
The second objection was that the debtor could have been confused as to the date by which he had to comply with the Notice. Did he have to comply within 14 days of 29 May (the date on which he was served personally), or within 14 days of 9 June (the deemed date of service)?
When, on or about 23 May, the debtor received the Notice served by post, the accompanying Order for substituted service would have told him that in addition to receiving a copy of the Notice and the Order in the mail (the documents he was then reading), another copy of both could be expected to be delivered to Level 2, 253 Lonsdale Street, Melbourne, and that if he received those further documents before the expiration of the 21 day period referred to in the Order, the 14 period period for compliance with the Notice would run from 9 June 1995. When, five or so days later, he received at that address further copies of the Notice and the Order, he would have been in no doubt that he was required to comply with the demand contained in the Notice within 14 days of 9 June 1995.
Re Spurr, supra, which was relied on by the debtor, is distinguishable. There the notice required payment "within 14 (21) days after service of this notice", and Heerey J. held that the reference to two periods of time was likely to mislead the debtor. Spurr is to be compared with Clyne. In that case too, the notice contained two periods of time for compliance. But the Clyne notice was accompanied by an order for substituted service which removed any uncertainty as to the period for compliance. In Spurr there was no other material available to the debtor which would have removed the uncertainty. In the present case, the debtor had the Order which made clear that he had 14 days from 9 June in which to comply with the demand contained in the Notice. For those reasons I do not consider there is any substance in the second ground of opposition.
I am satisfied that the debtor has committed the act of bankruptcy alleged in the Petition. I am also satisfied with the proof of the other matters of which s.52(1) of the Act requires proof. I note that Stirling Lindsay Horne, a registered trustee, has consented to act as trustee of the estate of the debtor. I make a sequestration order against the estate of the debtor. I order that costs including any reserved costs be taxed and paid according to the
Act. I direct that a draft of this order be delivered to the Registrar within seven days in accordance with rule 124(2).
I certify that this and the preceding 5 pages are a true copy of the reasons for judgment of the Honourable Justice Sundberg
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Associate
9 November 1995
Counsel for the Judgment Debtor: Mr A W Ellis
Solicitors for the Judgment Debtor: Alex Lewenberg
Counsel for the Judgment Creditor: Mr S P Gardiner
Solicitors for the Judgment Creditor: White Cleland Pty
Date of Hearing: 1 November 1995
Place of Hearing: Melbourne
Date of Judgment: 9 November 1995
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