Re Grieve, E.B & Anor v Ex parte Dainford Ltd

[1985] FCA 92

'12 J g.<

92 JM THE F DERAL COVET OF AUSTRALIA I

GENERKL DIVISION	QLD PET 1u38 of l984
BANKRIJPTCY DISTRICT OF THE SClUTHERM )
_- DISTRICT OF THE STATE OF OUEENSLBND I

RE: ERNEST BPIAN GRIEXE and SHIFLEE A N N GRIEVE

EX PXTE: DAINFORD LIMITED

O R D E R

J U D I ~ E MAKING ORDEF : SPENDER J .

DATE OF ORDER:	11 March 1985
WHERE MAOE:	BRISBANE
THE COURT ORDERS THAT:

1. The bankruptcy notice of 4 Juiy 1984

dlrected to Ernest B r i m Grieve and

Shirlee Ann Grieve did not valldly 1sslue on the order of Sheahan J. of 28 October 1983.

2. The creditor's petitlon seeklns the

maklns of sequestration orders asainst

Ernest Rrlan Grieve and Shlrlee Ann

Grlev; 1s dlsmissed.

!ZKTEP.IF13F.E REdSGNS FOR JUDGPIENT

Thls i s a c red i t c7 r ' s pec i t l on fo r s equesc ra t lon ac i a ins t

Ernes t Br lan Grieve and Shlrl-e Bnn Grieve.

I t ra lzes ques t ions which arc , u n i o r t u n a t e l y , of no

present Infrequ?nc\r a:j t o the clrcumstances In rlhlch a valld

bankruptcy notice can be founded on a n	o r d e r	f o r	s p e c l f l c
performance.

This C P ? ~ h a 3 f e a t u r e s a l i t t l e d l f i e r e n t from others of

a similar k ind in tha t the persons whose e s t a t e s a r e s o a r j h t t o ijr

seques t r a t ed a r e sua ran to r s unde r a c o n t r a c t f o r t h e pur1:hase of

a hcme u n i t on t ~ e 2o1d Coast .

2 .

13n 2 8 October 1903, Sheahan Z . i n the Supreme (Court of

Queensland ordered that angreement dated 54 IGctober 1381

between Dalnford Limlted, the peci t lcnlng credl tor . and Foszqrosre

Investments P t y Liml ted , the f ~ r s t defendant , ousht be to

spec l f i ca l ly pe r fo rmed dnd c a r r i e d i n t o e x e c u t l o n .

H i s o rder was: -

" . . . that the F i r s t Defendan t w i th ln fou r t een [,14!

days of tgduy do pay i n t o CourE t o t h e c r e c l l ~ of

t h i s ac t lon the ba lance purchase pr lc t : due under

t h e sald aqr'eement namely $ 1 7 5 , 1 0 ~ . 0 0 t oqe the r

with l n t e r e s t upon the sa ld ba lance purchase p r i c e

i n t h e sum of $88.32 per day f o r each an? every

day from and i nc lud ing t he 6 th day of December,

1982 u n t l l and lncludlnq the date vhen such

payment ln to Cour t shall be made

AlKl I T I S FURTHER 1 3 R D i that an account be taken

l€ any par t7 by lt5 solicitors sha l l >Q require tv

w r l t t e n o t l c e t o t h e o t h e r party S 7oli . l tors

g i v e n w i t h i n t h r e e ( 3 , calendar months of ~o-da.7 S

d a t e d s t o t h e a d i u s t m e n t of r a t e s , t axes snd

outqoinqs provided fo r In the sa id a s r5e rnen t

&NE IT I S FTJRTilER OPDERED that t h e p a r t y bsr whcm

any s u n s h a l l be found payable to the o t h e r ,>n the

t a k l n l - of such account shall pay such :urn w l th ln

seven 1.7) days of t h e t a k i n s of such 3ccount by

such pa r ty to the o the r pa r ty S s o l i c i t c r s

EJID I T IS FTJRTHER ORDERED that w l t h l n fourt.;en

( 1 4 1 davs a f t e r p r o d u c t i o n of the receipt: Lor

payment i n t o i o u r t - a s a f o r e s a i d t o t h e P l a l n t l f f

sollcltors the P l a l n t l f f e x e c u r e a n d e l l v e r t o

s o l l c l t o r s c h e f o r the f i r s t Defendant d

Memorandum of T r a n s f e r i n f a v o u r of the F i r s t

Defenclant In r e s i s t e r a b l e f o r m of a n e s t a t e l n fee

s l n p l e I n Lot 1 2 1 in Res i s t e red Bu l ld in? r l n l t s

Flan No. 5331, capable of making a t r a n s f e r f r e e

of a l l encumbrances.

AND - t h a t t h e P l a i n t i f f do at t h e sdme time u e l i v r r

t o the Solicitor f o r t h e F i r s t b e f e n d a n t the

C e r t l f i c a t e of T l t l e t o the zaFd Lot 121 f r e e ~f

a l l encumbrances 3ave for mortgage G578121 and d

r e l e a s e of th3t mortgage tosether $nth any other

documents necessary t o enab le t he transferee t g

become registered as p r o p r i e t o r of m e s t a t e ~n

f e e slnple m L o f 121 i n R e q l s t e r e d Eul ld lnq 1Unltz

3 .

Plan No. 5331 f r e e of a l l encumbrances. and that

t h e P l a i n t i f f d o a t t h e same t ime de l iver vacant

p o s s e s ~ i o n of	t he	s a id	Lot	1 2 1 t o	Lh?	First
Def endant

AND I T I S FURTHER GRDERED that t h r P l a i n t i f f h e at

l l b e r t y t o a p p l y at any time and from time t,J time

on no t l ce t o t he Defendan t s fo r an o rde r f o r

payment out of Court t o the S o l i c l t o r ; f u r the

F l a l n t i f f of w c h sum o r sums J_S mil l7 be necI;-ssar?

to dlscharqe any encumbrance upon t h E said L o t 12i

o r t o g a i n p o s s e s s i o n Gf t h e r e l e v a n t Izer t l f ica te

of T i t l e i n o r d e r t o p e r f o r m i t s o b l i s a t t o n s tunaer

t h e said aqreement o r thls o rde r

AND IT I S FURTHER ORIjERED that the P l a l n t l f f d a

r ecove r aga lns t he F i r s t Ee fendan t Lts c o s t s of

t h l s	ac t ion	mc	lud	inq	r e se rved	cos t s	t o h?	taxed
...

His Honour's ]udqment continued:-

"And It i s d e c l a r e d t h a t , upon t h e c o n s t r u c t i o n gf

t h e w i t t e n agreement between the plalnt i f f and

the s cond and th i rd defendants , (Errlest Brim

Grieve and Shl r lee Ann Gr ieve ) , be lnq t h a t

ag reemen t en t l t i ed Form of Guarantee' and

contam9d in the agreement the s u b j e c t of t h l s

a c t i o n d a t e d 2 4 t h day October, of 1981, tha t

should the f l r s t d e f e n d a n t f a i l t o s a t i s f y the

terms of thls Judgment wi th in the tlrfles thereb'r

l i m l t e d tha t the Second andior Thlrd efendants

are l i a b l e t o pay t o the F l a l n t i f f the balance

purchase price due under the s a d agreement,

namely $179,100, toge ther with I n t e r e s t upon t h e

said balance purchase pr ice in t h e sum o f 588. 32

per day Tor each and every day from and inc ludtnu

t h e 6 t h d a y of December 1982, unti l end Incll-tdlnq

the date when such payments shall be made. and

that the Second and/or Third defendants a r e l m b l e

t o parr t o t h e P l a i n t i f f I t s c o s t s of and

1nc ldFn ta l t o t h i s a c t l o r ! t o be taxed ."

His Honour f u r t h e r o r d e r e d that any par to be a t l l b e r t v

t o 3pply.

4 .

The bankruptcy notice directed to th? second and third

defendants in that action was issued out of t h e reqiztry of the

southern distrlct of the State of Queensland on 4 July 1984, and

the creditor's petltion is founded on th$ act of bankruptcy whlch

1s sald to be constituted by the fallure to pay the amount

clelmed In che notlce or adept	any of the alternatives open to	B
debtor in those circumstances.

The Registrar has indicated in his certificate t o this

court that a real slAestion exists as to the valldity of the

bankruptcy notlce.

Two questions Seem to arise as to its valldltg. Both

must be resolved In favour of the	petitionins credltnr before 2
sequestratlon order can be made.

The first is whether the judgmenc to which I have

referred, and on vhlch the petlcion is founded, IS 3 fins1

judqment or order within the meaning oi 9 . 4 0 1 l! ! S , of the

Bankruptcy Act !"the .Act"). The second aspect relates to the

requirement in chat sub-section, namely whether it 1 s a final

Judgment or order the execution of which has n(Jt been stayed.

I am prepared to accept that this Judqment is a final

judqment or order In the sense referred to In that sectlon and,

in partlcular, the descriptlon tnat it 1s a ~udqment which is a

final aajudicatlon of the rights of the pactLe-,.

5 .

It 1 s arquable whether this is the most appropriate iorm

of order for speclflc performance of contract. Reference can

profitably be made to Falmer v. i 1 9 4 5 ) Ch. 102 8 5 to the

form in which this order is made. However, that question i s

irrelevant as far as the issues with which 1 am concerneb.

Acceptln? It then to be a flnal judgment n r order, I t

seeins to me to be accepted that, at the tlme of the bankruptcv

notice, executlon was not able to be immediately effected bec3use

of Order 47 R u l e 10 of the Rules of the Supre1r.e c'ourt of

Queensland. This pr0VldeS:-

"When a iudqmenc or order is to the effect that any

party is entltled to any relief sublect to or upon the fulfilment of any condition or continqency, the partv so entitled may, upon the fulfilment of

the condltlon or continqency, and upon demand

made upon the party asainst whom he is entltlcd to

rellef, applv to the court or a Judqe for leave to

issue execution sqainst such party. And the court

or ludse may, If satisfied that the riqht to

relief has arlsen accordins to the terms of the

Judgment or order, order that executlon issue

accordinsly, or may direct that any issue or

question necessary for the determinatlon of the

rights of the parties be trled in any manner in

whlch any questlon or issue of	fact in an action
may be trled."

iilsc, that same Order in Rule 25 provides :-

"Every order of the court or a Judse In a ~ ; cause

or matter may be eniorced aqalnst all persons bound thereby in the same manner 83 a ludsment tq

the 5ame effect. "

6.

The authorltles clearly establish in my view that,

before a bankruptcy notlce can validly issue. %he ludqment or

order sald tu ground that bankruptcy notlce has to have the

chracter that esecutlon can issue on ~t immediately.

In re Ide 1 7 [].B. 755 at p.759, Bower1 L.J. said:-

"In order to entlcle a creditor to issue a

bankruptcg notice, he must be I n a positlon t o

lsslue evecution on his judqment at	the time when
he 1ssues the bankruptcy notlce."

That was referred to by the Court of Appeal In re a Debtor i1512j

3 K . B . 242, and m particular ar; p.247, where Farwell J.. havinl-

referred to Aowen L.J S . observations, said:-

"In the case of ex parte Ide, the credlLor was nor:

In that positlon; In the present cd5e he was In

that posltlon, and therefore he w m entitled to

issue the notice. "

'The cases consistently reflect the view that the requlrement of imrnediaize execution is crucial to the validity of a bankruptcy

notlce fomded on a -1udqment or order: re John Perkins Seers l 7

A.B.C. 11; re Pannowitz, ex parte Wilson Ci9757 38 F.L.F.. 184.

The words "the execution of which has not been staged"

are not restricted to cases where there is an express order a t

the court: re a Eebtor !1908) 1 K.B. 344; Ex parte Woodall. m

re Wocaaa t1884j 13 Q.B. 479; in re Ide ! l8861 17 Q.B. 755; r e

Richards: exparte Sorrqers i 19471 14 A.B.C. 112.

In my view, the fact that the riqht to immedlate

execution is a necesuarg part of a valld bankruptcy notlce is

strongly reflected in the Frovisions of s . 4 0 ( 3 ) of the Act whlch

deals with the lnterpretatlon ~f s.4O[l;(q). In each of the five

circumstances there postulated, the capacity o€	t h e judgment or
order to be immedlately enforced is highlighted.

In the first case, where leave has been qiven by a court

to enforce sn arbltratlon award, the award is deemed to be R

f m a l order.

In the second case, a judgment or order that 1s

enforceable as a flnal Iudqnent obtained in an action 1s deemed

to be a final judqment. Essentially, therefore, I f 1 t has the

enforceabllity characterlscics of a final 3udqment In an action,

then it is B judqment which comes within paraqraph	(l)(g~	of
5.40.

The third cateqory deals wlth a Judqment or order

agalnst a married woman. It provides a speclflc exemption from

the requlrements gf immediate enforceabllity,	as	does the flfth
cateqory referred to In s . 4 0 t 3 ) ( e j .

The fourth cateTcry in s.49(3)(d) equdtes the position

of a person vho 1 s immediately entitled to issue esecutlon with

that of a creditor who has obtained n final Iudgment or order.

That sub-sectlon emphasises that the characterlstics of lmmedlate

enforceability are the characteristics	of a final Iudgment or
order.

0 .

In my view, the bankruptcy notice did not validly issue

on the order of Sheahan J. of 28 October 1983. It follows that,

the creditor's petition must be diumissed.

The creditor's petition in chis matter seeklng the

making of sequestratlon orders against Ernest Rrlan Grleve and

Shirlee Ann Grieve is, therefore, dismissed.

I make no order as to costs.