Re Francis, C.

[1987] FCA 681

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CATCHWORDS

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Bankruptcy	amount	stated	to	be	due	on a judgment	debt	II
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understated in bankruptcy notice because of miscalculation of

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interest - effect of decision of Full Court in Crow1 v. Xleinwort

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Benson Australla Limited (1987) 74 A.L.R. 148 - whether room for

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of	application	rule.	de minimis	I
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Bankruptcy Act 1966, ss . 41, 306.

$11

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RE: COL FRANCIS: EX PARTE PREMIER PLASTERBOARD SUPPLIERS PTY

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LIMITED	I .
No. P1767 of 1987	i
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Date : 24 November 1987
Coram: Sheppard	J.
Place:	Sydney

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IN THE FEDERAL COURT OF AUSTRALIA	)
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GENERAL DIVISION	)
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BANKRUPTCY DISTRICT OF NF;w SOUTH HKES	1 No. P1767 of 1987
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AND THE AUSTRALIAN CAPITAL TERRITORY ) I. .

R& COL FRANCIS

EX PARTE: PREMIER PLASTERBOARD

SUPPLIERS PTY LIMITED

MINUTES OF ORDER

JUDGE MAKING ORDER: SHEPPARD J.

DATE ORDER MADE	: 24 NOVEMBER 1987
WHERE MADE	: SYDNEY
THE COURT ORDERS THAT the petition be dismissed with	costs.

NOTE:	Settlement and entry of	orders is dealt with in Rule 124
of the Bankruptcy Rules.

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IN THE FEDERAL COURT OF AUSTRALIA	I
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DIVISION	GENERAL	)
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BANKRUPTCY DISTRICT	OF NEW	SOUTH WALES No.	P1767 of 1987
AND THE AUSTRALIAN	CAPITAL	TERRITORY	)

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RE:  COL FRANCIS

Ex	PARTE:	PREMIER
PLASTERBOARD	SUPPLIERS	PTY
LIMITED

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CORAM: SHEPPARD J .

: 24 November 1987

REASONS FOR JUDGMENT

HIS HONOUR:  The petition in this matter is opposed on a number

of qrounds. Two only need be referred to. One 1s that the

petitionins creditor was not correctly named in the petition

because it was described as Premier Plasterboards Suppliers Ptp

Limited. The petition was sealed with the common seal of a

company, Premier Plasterboard Suppliers Pty Limited. I do not

regard the discrepancy, such as it is, as being of any

consequence, and I would not uphold the ground of opposition

based on that matter.

The more serious qround which has been relied upon relates to

the form of the bankrupty notice. The copy bankruptcy notice

which is annexed to the affidavit of service of it, insofar as it

is material, says:- , .I

"Whereas PREMIER	PLASTERBOARD	STJPPLIERS PTY
LIMITED	of reaistered office	41 Brisbane Water

Drive Point Clare N.S.W.	(hereinafter referred to
as 'the judgment creditor') has	claimed that the

sum of $5,410.83 together with interest thereon at

the rate of 18.25 per centum per annum from 30th

June, 1986 to 5th November, 1986 amounts	to	!
$345.60 making a total of $5756.43 is due	by you	-
to it under a final judgment obtained by it	i

against you in the District Court of Gosford on	l
the 30th day of June	1986 ..."

The notice which was actually served did not refer to 5 November

1986 but continued after "30th of June	1986"	where firstly
appearing by saying:-

"which at the date of issue of this Notice

amounts to $345.60 ..."

The notice was issued on 10 December 1986. It is common ground

that the calculation of interest from the date of judgment up to

10 December 1986 would yield an amount approximately $100 more than the sum of $345.60 which is referred to in the notice. To that extent, the notice which was served understates the amount I '

of interest which was	due at	the date of the issue of the
bankruptcy notice.	If,	however, one has regard to the notice
which was annexed to the affidavit	of	service, the interest,

subject to a discrepancy of 80 cents, which I reqard as de

minimis, would in fact be the amount stated, namely, $345.60. served which must be considered.

Uninstructed by the decision of the Full Court of this Court ,.

in Crow1 v. Kleinwort Benson Australia Limited (1987) 74 A . L . R .

148.   I would myself, with great respect, have come to the

conclusion that the defect in the notice resulting from the

understatement of interest was a formal defect or irregularity

occasioning no substantial iniustice to the debtor; see S . 306 of

the Bankruptcv Act 1966. However, a different view has been

expressed by the majority of the Court in Crowl's case, which

reversed the decision of another Judge of this Court who was of	a
different opinion.	I am bound to follow the decision of the
majority.	I.
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The only point of distinction which has been put to me by the

solicitor for the petitioning creditor is the comparatively small
amount which is involved when one compares the figures in this
case with those which were involved in Crowl's case. There the

judgment debt was approximately $1.400,000 and the interest had

been understated by $23,000. Here, the judgment debt was

$5,410.83 and the amount of interest $345 to the 5 November or

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approximately $445	to 10 December.	I find it difficult to take
the view that, in the range	of figures which are in play	here,

there is any substantial difference between the two cases simply

because of the differences in the amounts involved. If one

compares the proportion of the amount of the understated interest

to the total amount of the debt in each case, I think it will be found that the proportion involved in Crowl's case was slightly smaller than it is here.

As Wilcox J. said in his dissenting judgment in Crowl's case

(p. 154):-

"I say that the majority's view is that anv

erroneous understatement invalidates the notice

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because there	I s here no scope	f o r the operation
of the maxim	de	minimis non curat lex. The whole

point of the appellants' argument is that a debtor

who chose to check the interest calculation would

realise that the amount properly payable exceeded !

the sum demanded and would then be uncertain how

much to pay, secure or compound. The assumption

is that this uncertainty might so affect the

debtor's response to the notice as to lead to a

failure act to in accordance with its

requirements: where, in the absence of the error,

the notice might have been complied with. Upon

this argument the amount of the discrepancy is

irrelevant: an error of	$10 must be regarded as
havinq the same paralysis potential as one of	, -.
$10.000".	_...

Notwithstanding my dislike of matters which, with respect,

seem to me to involve the Court in	an overly strict view of the
formalities and technicalities which are involved,	I think, with

some hesitation, that Crowl's case obliges me to take the view

that the notice here is not one which can be cured by the

provisions of S. 306. I reach that decision with some regret,

notwithstanding my recognition that bankruptcy is still sadly a

technical jurisdiction and that technicalities of this kind

sometimes have to be upheld. I recognize also that mistakes of

the kind made here ought not to be made. Almost always they are

due to carelessness on the part of someone for whom the judgment

creditor must take responsibility. Usually the error involves

miscalculation. Here this was not the case: the error was

failure to correct the copy of the bankruptcy notice actually served on the debtor by making it clear that the interest was

calculated to	10 November 1986,	about 5 days after the request	)i
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for the bankruptcy notice was made, rather than to 10 December

1986 when the notice issued from the Registry. Maybe one can

wash one's hands of the problem by saying that it is the

profession's responsibility to get things right. That, of

course, is true, but the error is one which experience shows is

common, notwithstanding some checkinq of amounts which OCCUKS in

the Registry before a bankruptcy notice is issued.

In the liqht of the judicial disagreement which there

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obviously is in relation to this matter as revealed by Crowl's

case, it would seem to me to be desirable, if a suitable vehicle

can be found for it, for there to be some test of the decision by

perhaps the constitution of a Court of five. Alternatively,

notwithstanding the Law Reform Commission's investigation into

the whole matter of bankruptcy law, it miqht be advisable for the

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leqislature to make some stop-gap amendment to overcome the

problem. A simple amendment could be made applying the

provisions of sub-sec.	41(5) of the Act.	which deals with the
consequences of an over statement of the amount	of	a judgment

debt in a bankruptcy notice, to understatements of amounts due.

In the result, there will be in this case, and I would think

in many others, a	substantial delay and a great deal of money
thrown away	in costs all to	no constructive purpose. However.

for the reasons I have given, I have reached the conclusion that

the point is good and must be upheld.	The	petition will be
dismissed with costs.

i certlfy that this and the d& precedlng

pages are a true copy of the reasons for

judgment herein of The Honourable	. .
Mr Justlce Sheppard.

Associate

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Solicitor for the Debtor:	Miss S. Nash of Sally Nash .S
Co.
Solicitor for the Petitioninq

Creditor:	Mr. M. Kennedy of Turner.
Whelan & Wells, City Agents for
Peter Blackwell  & Co. of West
Gosf ord

Date of hearins:  24 November 1987

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