Re Harkins, Paul Patric & Anor Ex Parte Equus Financial Services Ltd
[1995] FCA 970
•29 Nov 1995
IN THE FEDERAL COURT OF AUSTRALIA
BANKRUPTCY DISTRICT IN THE STATE
OF VICTORIA
No VP 868 of 1995
Re: PAUL PATRIC HARKINS and
MAREE BERNADETTE HARKINS
Debtors
Ex parte: EQUUS FINANCIAL SERVICES LIMITED
Petitioning Creditor
Coram: Olney J
Place: Melbourne
Date: 22 November 1995
Reasons 29 November 1995
published:
REASONS FOR JUDGMENT
On 22 November 1995 I made sequestration orders against the estates of Paul Patric Harkins and Maree Bernadette Harkins (the debtors) upon the petition of Equus Financial Services Limited (the petitioning creditor). In the course of hearing the petition I rejected two grounds of opposition raised by the debtors. At the time I indicated that I would give short written reasons for so doing. I now publish my reasons.
The petitioning creditor relied upon acts of bankruptcy said to have been committed by each of the debtors on 5 June 1995 being the failure to comply with the requirements of a bankruptcy notice served on them on 22 May 1995. So far as relevant for present purposes, the bankruptcy notice was in the following form:
WHEREAS EQUUS FINANCIAL SERVICES LIMITED of 1st Floor, 424-430 Smith Street, Collingwood in the State of Victoria (hereinafter referred to as "the judgment creditor") has claimed that the sum of $840,661.49 being the judgment amount of $628,999.02 together with interest in the sum of $211,662.47 accrued thereon under the Penalty Interest Rates Act 1983 at the rate
of 13.2% per annum for the period 29 October 1992 to 17 May 1995 inclusive is due by you under a Final Order obtained by it against you in the Supreme Court of Victoria at Melbourne on the 28th day of October 1992 being an order the execution of which has not been stayed:
THEREFORE TAKE NOTICE that within fourteen (14) days after service of this notice on you, excluding the day on which this notice is served on you, you are required -
(a)to pay the sum of $840,661.49 so claimed by the judgment creditor to the judgment creditor; or
(b)to secure the payment of the sum referred to in the last preceding paragraph to the satisfaction of the Federal Court of Australia or the judgment creditor or compound the sum so specified to the satisfaction of the judgment creditor.
The application for the bankruptcy notice was supported by a document entitled "General Form of Order" which bears the seal of the Prothonotary of the Supreme Court of Victoria and which relates to proceeding 6773 of 1992 in the Supreme Court of Victoria between the petitioning creditor as plaintiff and the debtors as defendants. The relevant parts of the order are as follows:
GENERAL FORM OF ORDER
JUDGE: The Honourable Mr Justice Hedigan
DATE MADE: 28 October 1992
ORIGINATING PROCESS: Origination Motion
HOW OBTAINED: At the hearing of the Motion
ATTENDANCE: Mr A. Vassie, of Counsel for the
Plaintiff.
Mr G. Watkins, of Counsel for the
Defendants.
OTHER MATTERS: Not applicable
THE COURT ORDERS THAT:
There is judgment for the Plaintiff against the First and Secondnamed Defendants as follows:
1(a)In respect of the guarantee of P.P. Harkins Bricklayers, in the sum of $372,135.62 principal and interest to 29 September 1992, and interest on the principal sum, $301,172.00 from 29 September 1992 to this date, $5,276.78, a total amount of $377,412.40
(b)In respect of the guarantee of Harkins Nominees, the sum of $248,069.05 principal and interest to 20 September 1992, plus interest in the sum of $3,517.55 to this date, on the principal of $200,646.00, a total sum of $251,586.60
...
DATE AUTHENTICATED: 31 December 1992
L.S. (Sgd) DEPUTY PROTHONOTARY
The grounds relied upon in opposition to the petition were:
The bankruptcy notice served on the debtors is invalid as it relies upon a judgment which does not exist;
ii)The bankruptcy notice is unclear and incomprehensible as to how the alleged debt is made up or calculated.
(Additional grounds were also pleaded but were not relied upon at trial).
The factual basis relied upon in support of the debtors' grounds of objection are set out in an affidavit of their solicitor Charles Leonidas sworn 15 November 1995. In that affidavit, the following assertions are made in paragraphs 2 - 4:
The bankruptcy notice upon which the within petition relies for the creation of the acts of bankruptcy relies in turn on an alleged judgment dated 28 October 1992. The Judgment Debtors inform me and I verily believe that they are unaware of any such judgment and the only proceedings which have taken between them and the Petitioning Creditor were concluded on 27 October 1992 when Hedigan J of the Supreme Court of Victoria handed down his judgment. Annexed hereto and marked with the letter "A" is a copy of the reasons of Hedigan J. As the front of that document indicates, the date of that judgment is 27 October 1992.
When one has regard to the terms of the judgment set out on page 43 of Hedigan J's reasons, he makes reference to a liability in paragraph 1(a) in a sum of $377,260.62 and in paragraph (b) to a figure of $251,416.81, a total of $628,677.43. In its bankruptcy notice the Petitioning Creditor claims a higher sum of $628,999.02 as the principal amount owing and it is not possible to discern how the difference between the sum actually ordered and that claimed in the bankruptcy notice arises.
Further, when one looks at the General Form of Order which has been produced by the Supreme Court in respect of the judgment, paragraph 1(a) of that order claims a total sum of $377,412.40 as distinct from the $377,260.62 referred to in paragraph 1(a) of Hedigan J's judgment. Similarly, in paragraph 1(b) of the General Form of Order, the sum of $251,586.60 is ordered to be paid, as distinct from $251,416.81 as appears in Hedigan J's reasons. In each case there would seem to (sic) an error in which arises the computation of interest claimed as part of that sum. ...
The relevant parts of the coversheet to the judge's reasons for judgment and of the reasons for judgment are as follows:
a)Coversheet of Reasons for Judgment:
SUPREME COURT OF VICTORIA
CAUSES
No 6773 of 1992
EQUUS FINANCIAL SERVICES LTD
Plaintiff
.v.
PAUL PATRIC HARKINS
and
MAREE BERNADETTE HARKINS
Defendants
-----
JUDGE: HEDIGAN, J
WHERE HELD: MELBOURNE
DATES OF HEARING: 7, 8, 12, 13 and 14 October 1992
DATE OF JUDGMENT: 27 October 1992
-----
APPEARANCES: Counsel Solicitors
For the Plaintiff Mr A. Vassie Alan Herskope
For the Defendant Mr G. Watkins Nicholas O'Donoghue
b) Extract from Reasons for Judgment:
There will be judgment for the plaintiff against the first and second defendants.
(a) In respect of the guarantee of P.P. Harkins Bricklayers the sum of $372,135.62 principal and interest to 29/9/92 and interest on the principal $301,172 from 29/9/92 to this date $5,025, a total amount of $377,260.62.
(b)In respect of the guarantee of Harkins Nominees the sum of $248,069.05 principal and interest to 29/9/92, plus interest in the sum of $3,347.76 to this date on the principal of $200,646, a total sum of $251,416.81.
...
The Judge's reasons for judgment conclude with the following certificate which has been signed and sealed by the Judge's Associate.
CERTIFICATE
I certify that this and the 43 preceding pages are a true copy of the reasons for judgment of Hedigan, J of the Supreme Court of Victoria delivered on 28th October 1992.
DATED this 28th day of October 1992.
L.S. (Sgd) Associate
A number of observations can be made from the material to which reference has been made above.
First, the recital of the judgment debt in the bankruptcy notice, both as to the amount claimed and as to the date of the judgment, is consistent with the General Form of Order.
Second, the General Form of Order purports to be a copy of a public document that is a judgment of an Australian Court which purports to be sealed with the seal of that Court and further purports to be signed by a proper officer of that Court, notably the Deputy Prothonotary.
Third, there is an inconsistency between the "Date of Judgment" shown on the cover sheet of the reasons for judgment (27 October 1992) and the certification of the Judge's Associate (28 October 1992).
Fourth, there is an inconsistency between the amounts shown in paragraphs 1(a) and 1(b) of the reasons for judgment (namely $377,260.62 and $251,416.81 respectively) and the amounts shown in the corresponding paragraphs of the General Form of Order (namely $377,412.40 and $251,586.60).
Fifth, the inconsistency referred to in the preceding paragraph relates to the amount of interest payable "to this date" on the respective amounts for which judgment was given.
In the reasons for judgment interest is calculated to 27 October 1992 whereas in the General Form of Order interest is calculated to 28 October 1992.
Sixth, the recital in the bankruptcy notice refers to a judgment debt (before post judgment interest is added) which is $321.59 in excess of the total of the sums referred to in paragraphs 1(a) and 1(b) of the reasons for judgment.
Seventh, the judgment debt referred to in the recital to the bankruptcy notice (namely $628,999.02) exceeds the total of the amounts of the judgment referred to in paragraphs 1(a) and 1(b) of the General Form of Order by 2 cents.
In my opinion the debtors' first ground of objection fails for the reason that by virtue of the provisions of s 157 of the Evidence Act 1995 (Cth) the Court is entitled to rely upon the Form of General Order as evidence to establish that on 28 October 1992 the petitioning creditor obtained judgment against the debtors in the Supreme Court of Victoria for the sum of $628,999. Section 157 provides:
157.Evidence of a public document that is a judgment, act or other process of an Australian court or a foreign court, or that is a document lodged with an Australian court or a foreign court, may be adduced by producing a document that purports to be a copy of the public document and that:
(a)is proved to be an examined copy; or
(b)purports to be sealed with the seal of that court; or
(c)purports to be signed by a judge, magistrate, registrar or other proper officer of that court.
The document presented to the Registrar in Bankruptcy as evidence of the judgment satisfies the relevant criteria of s
157 and accordingly provides evidence as to the date and the amount of the judgment. Whilst it is easy to speculate as to why there is a difference in the amounts of interest shown in the General Form of Order when compared with the amounts shown in the reasons for judgment, it is unnecessary to do so. The document produced provides the necessary evidence of the judgment. The statement by the debtors' solicitor to the effect that he had been informed that the only proceedings between the petitioning creditor and the debtors were concluded on 27 October 1992 lacks cogency in the face of the sealed and authenticated General Form of Order. The over-statement of 2 cents in the bankruptcy notice is not relevant. The debtors did not, within the time allowed for payment of the debt, give notice disputing the validity of the bankruptcy notice on the ground of the mis-statement and accordingly, by virtue of s 41(5) of the Bankruptcy Act, the bankruptcy notice is not thereby invalidated.
The debtors' second ground of objection must necessarily fall with the first ground. If the bankruptcy notice has correctly recited details of the amount and date of the judgment (albeit with a minor over-statement) there can be no basis for the debtors' claim that the notice is unclear or incomprehensible.
Having found against the debtors in relation to their grounds of opposition, and being satisfied that all necessary
formalities were duly proved, I made sequestration orders against the debtors on the creditor's petition.
I certify that this and the preceding 7 pages are a true copy of the Reasons for Judgment of the Honourable Justice Olney
Associate:
Dated:
Heard: 22 November 1995
Place: Melbourne
Judgment: 22 November 1995
Reasons
published: 29 November 1995
Appearances:
Mr J. Nolan (instructed by Alan Herskope) appeared for the petitioning creditor.
Mr S. Gardiner (instructed by Madisons) appeared for the debtor.
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