Re Drvodelic, J.; Ex Parte Chief Commissioner for Business Franchise Licences (Tobacco)

[1992] FCA 555

C A T C H W O R D S

Bankru~tcy - s.41(5) Bankru~tcv Act 1966 - overstatement of amount claimed in bankruptcy notice - whether time for giving

notice of mis-statement should be extended.

RE:  JOSIP DRVODELIC: EX PARTE CHIEF COMMISSIONER FOR

BUSINESS FRANCHISE LICENCES (TOBACCOL

No. B130 of 1992

SYDNEY

BEAUMONT J.

8 JULY 1992

IN THE FEDERAL COURT OF AUSTRALIA )

1

GENERAL DIVISION	1	No. B130 of 1992
1
BANKRUPTCY DISTRICT OF	1 1
NEW SOUTH WALES	1

RE:  JOSIP DRVODELIC

EX PARTE: CHIEF COMMISSIONER FOR

BUSINESS FRANCHISE LICENCES

f TOBACCO 1

CORAM:	Beaumont J.
DATE :	8 July 1992
PLACE :	Sydney

MINUTES OF ORDER

Application dismissed, with costs.

Note:	Settlement and entry of orders is dealt with in rule
124 of the Bankruptcy Rules.
I N THE FEDERAL COURT OF AUSTRALIA	)
1

GENERAL	D I V I S I O N	1	No. B130 of 1992
1

BANKRUPTCY DISTRICT OF	1 1
NEW SOUTH WALES	1

RE:  JOSIP DRVODELIC

EX PARTE:	CHIEF COMMISSIONER FOR BUSINESS FRANCHISE LICENCES
(TOBACCO ).

CO-:	Beaumont J.
m:	8 Ju ly 1992

EX TEMPORE REASONS FOR JUDGMENT

On 18 February 1992, t h e judgment c r e d i t o r served

upon t h e judgment debtor a 21 day bankruptcy not ice , a copy of

which no t ice is annexed t o these reasons.

I t i s common ground t h a t t h e amount claimed i n t h e

no t i ce is overs ta ted by $63.	This is because t h e amount	shown
a s i n t e r e s t i n t h e period from 29	September	1989 t o 31 August
1990 shown	i n t h e no t i ce a s t h e f i gu re $217,692.20	should have

been $217,629.20.

By h i s app l ica t ion f i l e d on 13 March 1992, t h e

judgment debtor seeks orders a s follows:

1. That t h e time f o r t h e giving of a no t i ce under s ec t i on

41(5) of	t h e Bankruptcy A c t 1966 be extended up t o and
including t h e da t e of	t h e hearing and determination of
t h i s	appl ica t ion .

2.   A declaration that the notice is not in accordance with the prescribed form and is invalid.

3.    That the bankruptcy notice be set aside.

In support of the application, the judgment debtor relies upon the affidavit evidence of his solicitor to the following effect.

.

On 21 February 1992, the judgment debtor's solicitor discussed a number of matters with the judgment debtor including the present matter and the solicitor asked for a couple of days to think about it. Between that date and 2 March 1992, the questions of the notice, the judgment on which it was based and the circumstances surrounding the entry of judgment were raised in the course of conferences between the solicitor and his client in relation to this and other matters. The solicitor indicated that these raised questions

of some complexity and amongst other things, it would be	necessary to see if the bankruptcy notice was technically
defective.
On 2 March 1992, the judgment debtor sought specific advice from the solicitor as to the validity of the bankruptcy notice. The solicitor could not say whether the notice was or was not valid. He said that he would need a couple of days to think about it and would also wish to brief counsel and would

need funds on account of fees. The judgment debtor said that he would get back to the solicitor; he mentioned that he was involved in a dispute with his de facto spouse that was being litigated and he would need to find the money from somewhere. He mentioned that his previous solicitor had given him some bad advice and wanted to know if he could be sued for negligence. The solicitor said that if the judgment debtor wanted him to think about these matters, he would.

On 11 March 1992, the solicitor advised the judgment debtor that in his view there was:

"at the worst, at least a technical defence to the notice. What do you want me to do? Shall I prepare a defence on the notice and brief counsel? I will need money on account."

The judgment debtor then instructed the solicitor to proceed, informing him that he would have the fees requested next week. As has been noted, the application was filed on 13 March, shortly after this discussion. The solicitor was not	cross-examined on this evidence and the judgment debtor did	not give evidence.
On behalf of the judgment debtor, it is submitted that the bankruptcy notice is defective for several reasons. First, it is said that the notice is not in the prescribed form because it bears upon it the imprint, Crown solicitor, with a date below this. Then, it is said that the notice is defective because the amount it claims is overstated. In my opinion, there is no substance at all in the first point. Although the notice does contain an imprint of the stamp of the Crown solicitor's office, I do not think this could be said to be capable of misleading any debtor.
I turn next to the overstatement point which is the substantial matter argued. As has been noted, it is common . grouhd that the amount claimed in the notice was overstated by $63. In addition to this, it is argued on behalf of the judgment debtor, that the amount claimed is overstated by the sum of $30.73. This arises out of a claim that the judgment creditor should have allowed an additional day in respect of the amount of $74,773.59 said to be received on 29 October 1991, "pursuant to garnishee".
Although there is no evidence as to this receipt, or indeed as to the circumstances surrounding its receipt, the
point taken is that if the amount was received on 29 October, then for the purposes of the calculation of interest, it should be assumed that the full day of 29 October should be
taken into account, not merely part of that day. This point was developed in argument. For present purposes, I am prepared to assume but without deciding, that there was an overstatement of $30.73 in this respect. That is to say, I am

,-

!

. IN THE SUPREME COURT OF NEW SOUTH WALES

SYDNEY REGISTRY

COMMON LAW DIVISION

, / '	CHIEF COMMISSIONER FOR
BUSINESS FRANCHISE., .. .. JUDGMENT -
LICENCES (TOBACCO)

That the Defendant pay to the

Plaint if f

Plalntlff $1,125,245.72 and $529.00

. JOSIP DRVODELIC	costs.
Defendant	Thls -Judgment takes effect o September 1989.
JUDGMENT	BY THE COURT
H.K. ROBERTS,
Crown Solicitor,

8-12 Chifley Square,

SYDNEY 2000

DX 19 SYDNEY

Tel: [phone]

(Mr. Clugs ton)

Q	I I.
[ I

f '

BANRRUPTCY DISTRICT OF ) 1.

i 1 NO. 130 of 1992 r '

OF NEW SOUTH WALES 1 1-

i 1

2        ' I '

RE JOSIP DRVODELIC . ,

I

APPLICATION FOR ISSUE OF BANKRUPTCY NOTICE

1.   The Chief Commissioner for Business Franchise Licences (Tobacco) c/- H K Roberts, State Crown Solicitor, Goodsell

I	Building, 8-12 Chifley Square, Sydney, requests the
I
Registrar to issue a bankruptcy notice addressed to Josip
i	Drvodelic of 30 Seaforth Crescent, Seaforth, hereinafter
I	referred to as "the judgment debtor".

2.   I produce a sealed copy of the frnal judgment against the

judgment debtor obtained by the Chief Commlssioner for Business Franchise Licences (Tobacco) in proceedings numbered S10942 of 1989 in the Common Law Division of the Supreme Court of New South Wales.

3.    Execution of the final judgment has not been stayed at the time of the making of thls application.

........ ........ ........ ........ ... K. K-. n b r t.

Solicitor for the Judgment Creditor

Signed in my capacity as a I I

solicitor employed in the office of
the sard H K Roberts

BANRRUPTCY DISTRICT OF ) 130 of 1 9 9 2

1             NO.

OF NEW SOUTH WALES 1

m U P T C Y NOTICE

TO:  J O S I P DRVODELIC

3 0    S e a f o r t h C r e s c e n t

S e a f o r th

WHEREAS the C h i e f C o m m i s s i o n e r for B u s i n e s s F r a n c h i s e L i c e n c e s

( T o b a c c o ) of c/-H K R o b e r t s , S t a t e Crown S o l i c i t o r , G o o d s e l l I -

B u i l d i n g , 8-12 C h i f l e y S q u a r e , Sydney, ( h e r e i n a f t e r referred t o

as " t h e j u d g m e n t c r e d i t o r " ) has c l a i m e d t h a t t h e sum of !

$ 1 , 5 3 1 , 3 6 2 . 1 9 ca lcula ted as set out h e r e u n d e r is due by you t o 1

t h e j u d g m e n t c r e d i t o r under a f i n a l j u d g m e n t obtained by the I

j u d g m e n t	credi tor	a g a i n s t you	i n the S u p r e m e C o u r t of	New	S o u t h	I..
r
Wales	on 2 9 S e p t e m b e r 1 9 8 9	b e i n g	a	l u d g m e n t	t he	execution.of

w h i c h has not been stayed. l i

C a l c u l a t i o n

J u d g m e n t

Interest on $ 1 , 1 2 5 , 7 7 4 . 7 2 :

From 2 9 . 9 . 8 9 t o 3 1 . 8 . 9 0 a t 2 1 % 2 1 7 , 6 9 2 . 2 0

From	1 . 9 . 9 0	t o 2 8 . . 2 . 9 1	a t	1 9 %	1 0 6 , 0 6 9 . 5 6
From	1 . 3 . 9 1	t o 3 1 . 8 . 9 1	a t	1 7 %	9 6 , 4 7 7 . 3 4
From	1 . 9 . 9 1	t o 2 9 . 1 0 . 9 1	a t	15%	2 7 , 2 9 6 . 1 8

- received on 2 9 . 1 0 . 9 1

pursuant t o garnishee

Interest on $ 1 , 0 5 1 , 0 0 1 . 1 3 : 1 , 0 5 1 , 0 0 1 . 1 3

From 3 0 . 1 0 . 9 1 t o 1 3 . 1 . 9 2 a t 15% 3 2 , 8 2 5 . 7 8

T o t a l interest: 4 8 0 , 3 6 1 . 0 6

T o t a l a m o u n t due a t 1 3 . 1 . 9 2 : $ 1 . 5 3 1 , 3 6 2 . 1 9

THEREFORE TAKE NOTICE t h a t w i t h i n 2 1 days a f te r service of t h i s

Notice o n you, e x c l u d i n g t h e day o n w h i c h t h i s N o t i c e is served

on you, are required:-

L

( a ) t o pay t h e sum of $ 1 , 5 3 1 , 3 6 2 . 1 9 so claimed by t h e j u d g m e n t j _

credi tor t o t h e judgment creditor; o r 1'

1	( b )	t o s e c u r e p a y m e n t of	t h e sum referred	t o i
j j	I
I
I

AND FURTHER TAKE NOTICE t h a t i f , wlthin t h e period set ou t above, you f a i l e i t h e r t o comgly with e i t h e r of t h e abovementioned

requirements of	t h i s Notice	o r t o	s a t i s f y t h e Federal Court of
Australia t h a t you have a counter-claim,	set-off	o r	c ross demand

equal t o o r exceeding t h e sum spec i f i ed i n paragraph ( a ) , being a

counter-claim, set-off o r c ro s s demand t h a t you could not have

set up i n t h e ac t l on i n whrch t h e judgment	was	obtained, you w i l l
have committed an a c t	of bankruptcy	on which bankruptcy

proceedings may be taken aga ins t you.

DATED: /O

........ ..

-	NOTE
I£ vou have a counter-claim, eaual t o o r

I

I exceeding t h e sum spec i f l ed i n paragraph ( a ) , being a counter-

claim, set-off o r c ross demand t h a t you could not have set up i n

t h e ac t ion i n which t h e judgment was obtained, you may, under

subsection ( 7 ) of sec t ion 4 1 of t h e Bankruptcy Act, 1 9 6 6 , wi th ln

I t h e perrod set out above, f i l e an a f f i d a v i t t o t h a t e f f e c t ,

giving d e t a i l s of t h e counter-claim, set-off o r c ro s s demand, a s

t h e case requires, and t h e reasons why you w e r e unable t o set up

t h e counter-claim, set-off o r cross demand, and, i f you do so ,

I t h e t i m e f o r complying with t h e requirements of t h l s Notice s h a l l

! be deemed t o have been extended u n t i l t h e Court determines

whether r t is s a t i s f i e d t h a t you have such a counter -c lam, set-

:  j off o r cross demand.

This Notice was issued on t h e application of Hugh King Roberts,

S t a t e Crown S o l i c i t o r , S o l l c i t o r f o r t h e judgment c r e d r t o r , whose

address f o r se rv lce is: Level 15, Goodsell Building,	8-12	Chif ley
Square, Sydney.

prepared to assume for present purposes that the amount

claimed in the notice was overstated by a total of $93.73.

By section 41(5) of the Bankruptcy Act, it is

provided that:

"A bankruptcy n o t i c e i s not inva l ida ted by reason o n l y

tha t the sum s p e c i f i e d i n the n o t i c e a s the amount due t o

the c r e d i t o r exceeds the amount i n fac t due, unless the

debtor , wi thin the time allowed f o r payment, gives n o t i c e

' t o the c r e d i t o r tha t he d i spu tes the v a l i d i t y o f the

no t i ce on the ground o f the mis-statement. "

In the present case, the time allowed for payment by the notice expired on 10 March and, as I have already said, this was a date before the date upon which the application in the present matter was filed.

A question arises as to whether the court has the
power to make an order pursuant to s.41(5) after the time for

payment has expired. I have been referred to the decisions in

Re Wilhelmsen: Ex Darte Gould 11 FCR 107 and Re Clubb: Ex
parte Clubb v West~ac Bankina Cor~oration	93 ALR 123, to the

effect that there is such a power. I am prepared to assume,

again without deciding the point, that this jurisdiction

exists. It follows that the real question for me is whether

it is proper to exercise the discretion. That is to say if in

fact there is an overstatement by virtue of the provisions of

s.41(5), that overstatement will not invalidate the notice

unless the debtor is able to give a notice disputing the

validity of the bankruptcy notice on the ground of the mis-	1.
statement.	1
I
In my opinion it is not appropriate that the discretion to extend time should be exercised in favour of the judgment debtor. The amount of the overstatement is relatively insignificant and, it would seem, has arisen through inadvertence. Moreover there is no suggestion that the judgment debtor was in any way misled or prejudiced by the overstatement. It does not appear that at the relevant time the judgment debtor proposed to pay the amount required or to make any other arrangements in that regard. Fairness requires, in my view, that the extension of time sought not be granted.

The application is dismissed with costs.

I certify that this and the preceding five (5) pages are a true copy of the Reasons

Dated: 8 July 1992

Justice Beaumont. for Judgment herein of his Honour Mr.

Counsel and Solicitors	Mr. S.J. McMillan instructed by
for Debtor:	Walker & Raphael
Counsel and Solicitors	Mr. R. Aldridge instructed by
for Creditor:	H.K. Roberts
Date of hearing:	8 July 1992
Date Judgment delivered:	8 July 1992