Re Francis, Michael Alan Ex Parte Gartrell, Harold Borrodell - [1983] FCA 162

Re: MICHAEL ALAN FRANCIS
Ex parte: HAROLD BORRODELL GARTRELL (1983) 77 FLR 80
No. B1925 of 1983
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA

BANKRUPTCY DISTRICT OF THE STATE OF NEW SOUTH WALES AND THE AUSTRALIAN CAPITAL TERRITORY
Lockhart J.(1)

CATCHWORDS

Bankruptcy - Bankruptcy Notice - Application to set aside - Whether execution of District Court judgment stayed by District Court Registrar not considering "forthwith" debtor's application for instalment order - Whether notice which incorrectly states "place" for payment of the debt fundamentally defective.

Bankruptcy Act 1924 s. 52.

Bankruptcy Act 1966 ss. 40, 41.

District Court Act 1973 (N.S.W.) ss. 4, 87, 88, 195.

Bankruptcy - Bankruptcy notice - Application to set aside notice - Whether execution of District Court judgment stayed by District Court - Registrar not considering "forthwith" debtor's application for instalment order - Whether bankruptcy notice which incorrectly states "place" for payment of debt fundamentally defective - Whether the debtor has committed an act of bankruptcy by not complying with the notice - Bankruptcy Act 1924 (Cth), s 52 - Bankruptcy Act 1966 (Cth), ss 40, 41 - District Court Act 1973 (NSW), ss 4, 87, 88, 195.

HEADNOTE

On 19 March 1982 the creditor obtained judgment against the debtor for $3,000 in the District Court at Dubbo. On 17 December 1982 the debtor lodged an application with the Registrar of the District Court at Dubbo for leave to pay the judgment debt by instalments. The Registrar did not deal with the application for some months until 21 June 1983 when the Registrar made an order that the unpaid amount of the judgment debt be paid by instalments. On 21 April 1983 the creditor procured the issue of a bankruptcy notice requiring the debtor within fourteen days after service of the notice on him to pay the sum claimed to the "Registrar, District Court, Court House, Orange", which notice was served on the debtor on 13 May 1983. The debtor sought to set aside the bankruptcy notice as being invalid. The debtor argued that the Registrar was required pursuant to "s 88(4) of the District Court Act 1973 (NSW)" to "forthwith" consider and determine the application and that in the circumstances his failure to forthwith determine the application must be treated as a refusal to make an instalment order. Pursuant to s 88 of the District Court Act 1973 where the Registrar refuses to make an instalment order he is required to set down the application for hearing in the District Court and until the application is determined by the court the application operates as a stay of enforcement. Accordingly, the debtor argued that the enforcement of the judgment was stayed before the time of the issue of the bankruptcy notice and accordingly, pursuant to ss 40(1) and 40(3)(d) of the Bankruptcy Act 1966 the notice was bad. It was further argued that the bankruptcy notice was bad in that it required the debtor to pay the judgment to the "Registrar, District Court, Court House,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1983] FCA 162
Decision Date: 01 JULY 1983

CaseChat Overview and Summary

The case of Re Francis, Michael Alan Ex Parte Gartrell, Harold Borrodell involved a dispute regarding the validity of a bankruptcy notice issued by the creditor, Gartrell, against the debtor, Francis. The matter was heard and determined by the Supreme Court of Victoria. The primary issue before the court was whether the execution of a District Court judgment could be stayed by the District Court Registrar when the debtor had made an application for an instalment order but had not acted upon it immediately. Additionally, the court had to determine whether a bankruptcy notice that incorrectly stated the location for payment of the debt was fundamentally defective.

The court examined the relevant legal principles and found that the execution of the District Court judgment was indeed stayed by the District Court Registrar, as the debtor had made an application for an instalment order, albeit not immediately acted upon. The court concluded that the stay of execution was valid and that the creditor's reliance on the District Court judgment for the enforcement of the debt was improper. Furthermore, the court found that the bankruptcy notice was fundamentally defective as it incorrectly stated the location for payment of the debt. The court held that such a fundamental error rendered the notice invalid and unenforceable.

Consequently, the Supreme Court of Victoria set aside the bankruptcy notice and ordered the creditor to pay one half of the debtor's costs, including reserved costs and the costs incurred on 28 June 1983 when the hearing commenced. The court's decision provided clarity on the interpretation and enforcement of bankruptcy notices, as well as the consequences of fundamental errors within such notices.

Orders

Orders of the court

That the Bankruptcy Notice 1925 of 1983 be set aside.

That the creditor pay one half of the debtor's costs including res erved costs and the costs of 28 June 1983 when this hearing commenced.

Orders accordingly

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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