Re Hanlin, R.H. v Ex parte South Properties Development Pty Ltd

[1985] FCA 609

Re: ROBERT HENRY HANLIN
Ex Parte: SOUTH PROPERTIES DEVELOPMENT PTY. LTD.
No. QLD PET 736 of 1985
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA
GENERAL DIVISION
BANKRUPTCY DISTRICT OF THE SOUTHERN DISTRICT OF THE STATE OF QUEENSLAND
Pincus J.

CATCHWORDS

Bankruptcy - service of bankruptcy notice - effect of agreement by solicitors to accept service - date of deemed service - agreement void.

Bankruptcy Act, ss.30, 40(1)(g), 41(4), 306

Bankruptcy Rules, rr.15, 195

HEARING

BRISBANE
#DATE 2:12:1985

ORDER

That the affidavit of Caroline Ellen Bell filed in these proceedings on 9 August 1985 does not establish due service of the bankruptcy notice.

NOTE: Settlement and entry of orders is dealt with in Order 36

of the Federal Court Rules.

JUDGE1

I have before me a creditor's petition for a sequestration order based upon the allegation that the debtor committed an act of bankruptcy in that he failed to comply with the requirements of a bankruptcy notice served on him on 13 February 1985.

1. To support the allegation that the bankruptcy notice was so served, Mr. McKinnon of counsel, for the petitioning creditor, has read an affidavit by one Caroline Ellen Bell who deposes to the fact that on that day she posted a bankruptcy notice to Messrs Durack and Zilko, solicitors, of Perth. The affidavit exhibits a letter from those solicitors dated 28 February 1985 which mentions a letter written by Messrs Patterson and Dowding, solicitors, dated 20 February 1985, the contents of which do not seem to be deposed to. In their letter of 28 February 1985 Messrs Durack and Zilco say:
   
   

"We have today received instructions from our client to accept service of the notice. In light of the

above, and in view of the fact that we do not have prior instructions to accept service of the same,

the appropriate date for service is 28 February

1985, for purposes of time running on the notice."

1. Mr. McKinnon says that there is a difficulty with respect to proof of service of the petition, and that seems to be so. He thus wishes the matter to be adjourned in any event, but desires to have my view on the propriety of service of the notice. I am somewhat doubtful as to whether I should express one, in view of the fact that the petition will not necessarily come before me; however, it appears to me to be a convenient case in which to make a declaration on the point under section 30, in the interests of saving costs and avoiding delay.

2. Curiously enough, the effect, if any, of purported acceptance of service of a bankruptcy notice by solicitors does not seem to be the subject of authority. Section 41(4) of the Bankruptcy Act says:
   
   

"Service of a bankruptcy notice shall be effected as prescribed."

That prescription is to be found in rule 15, which so far as relevant, reads as follows:

"Unless otherwise ordered by the court under

subsection 309(2) of the Act -

(a) service of a bankruptcy notice shall be

effected on the debtor by delivering to the

debtor personally a copy of the bankruptcy

notice signed and stamped by the Registrar."

Plainly enough, the mode of service prescribed has not been followed, from which it seems clear that section 41(4) has not been complied with.

1. Mr. McKinnon, however, argues that the proper course is to deal with the matter under section 306 or rule 195, asserting that the debtor cannot possibly have suffered any injustice. It is my opinion that I should not do so.

2. The date of service of a bankruptcy notice is plainly of central significance. The act of bankruptcy defined by section 40(1)(g) depends upon service of the notice, and occurs at the expiration of the time fixed after service of the notice.

3. The solicitors' response to the letter of 20 February 1985, by their letter of 28 February 1985, suggests that the matter should be treated as if service took place on 28 February 1985. Their suggestion points up the difficulty. If service occurred, when did it occur? There seem to me to be two possible approaches to the problem: one of them is to say that the debtor has waived such service as is required by rule 15, and in that connection I refer to Maxwell on the Interpretation of Statutes Tenth Edition, pages 380 et seq., and the decision of the House of Lords in Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquay) Ltd. (1971) AC 850.

4. In that case the House of Lords divided on the question whether or not a statute permitted a waiver. Section 29(3) of the Landlord and Tenant Act 1954 read:
   
   

"No application under section 24(1) of this Act

shall be entertained unless it is made not less

than two nor more than four months after the giving of the landlord's notice under section 25 of this

Act or, as the case may be, after the making of the tenant's request for a new tenancy."

Lords Reid and Pearson (dissenting) held that, despite the apparently peremptory requirement that no application be entertained, waiver was possible. The majority held otherwise. No language similar to the English provision is used in any of the provisions of the Bankruptcy Act or rules to which I have referred; nevertheless, it appears to me that one cannot deem an act of bankruptcy to have occurred by waiver. It either has occurred or has not. Plainly an act of bankruptcy could not be based upon an agreement as to its date. Maxwell says public policy is an exception to the rule that provisions purely for one's benefit, in a statute, may be waived; the matter depends here not so much on public policy as upon the impossibility of agreeing to treat the matter as if the act of bankruptcy has occurred on a particular day if it has not.

1. Looking next at the approach suggested by Mr. McKinnon, it does not appear to me that any of the authorities goes far enough to justify the court's waiving the irregularity under section 306 or rule 195. The case to which Mr. McKinnon referred me, re Florance; Ex parte Turimetta Properties Pty. Ltd. (1979) 37 FLR 256, was indeed one in which an irregularity of a similar kind was treated by Lockhart J. as being capable of being overlooked. However, the irregularity related to service of the petition. There is authority, as Mr. McKinnon concedes, that service of a bankruptcy notice is a juristic act in a special category. Such authority is to be found, for example, in the decision of Hart J. in the Supreme Court of Queensland in re Fairlie; Ex parte Armco Australia Pty. Ltd. (1969) 14 FLR 65, especially pp 67 and 68. I refer also in this connection to the decision of Sweeney J. in Federal Court of Bankruptcy in re John T. Martin & Co.; Ex parte Australian Continental Resources Ltd. (1971) 18 FLR 450, especially at pp 455 and 456, and the decision of Walters J. in re Long; Ex parte Fraser (1975) 24 FLR 392, especially at pp 395 and following.

2. The trend of the authorities is against treating defects in the service of a bankruptcy notice under the provisions on which Mr. McKinnon relies. Here it is not so much a matter of purported personal service at all, nor indeed, any attempt at it. The court is, I think, entitled to be influenced somewhat by the undesirability of encouraging people to essay service of a bankruptcy notice in such an informal fashion.

3. I hold that the bankruptcy notice is not shown to have been served in the fashion prescribed by rule 15, and therefore section 41(4) has not been complied with. I declare that the affidavit of Caroline Ellen Bell filed in these proceedings on 9 August 1985 does not establish due service of the bankruptcy notice.