BANKRUPTCY - whether act of bankruptcy established - execution against debtor under process of court returned unsatisfied - requirements for proper return - mnkruotcv Act 1966 (Cth)
6 . 40(1)(d)(li).
Bankruotcv Act 1966 (Cth) 8. 4O(l)(d)(ii)
tee Courts R U k S 1960 (Qld) rr. 230, 305(2), Schedule 1
BB Greenland! Ex oarte N a t i p n a l Weetmineter Finance Auetralia Ltd
(1990) 21 F.C.R. 247
| B | e Worelev: E x oarte Gill (1957-1963) 19 A.B.C. | 105 |
| M | t | Spender J. |
| a | t | Town~ville |
| - 1 | |
| FFE: | E X | -VEN | M A R I N E | PTY | LTQ |
OLD. NO. P2710 of 1991
| - | ) | ~ O . P Z ~ I O O ~ | 1991 |
STATE OF OUEENSLANP
| RE : | - |
| EX PARTE: | EN MARINE PTY LTD |
| E W I N G ORDER: | Spender J. |
| DATE OF ORBERI | 5 February |
THE COURT ORDERS THAT:
The petition ie dismissed with coete, to be taxed if not agreed.
| kU?U: | Settlement and entry of orders is dealt with in Rule
124 of the Bankruptcy Rules. |
-
TCY DISTRICT OF THE
RE I
| EX PARTE: | EN MARINE PTY LTP |
| CQULMr | Spender J. |
| u & ! 3 1 | Towneville |
| -I | 5 February 1992 |
By a petition which was filed on 28 October 1991,
Rosehaven Marine Pty Ltd sought the eequeetration of the estate
of Ron Hinchliffe. Paragraph 4 of the petition wae in these
| " The | Debtor | w i t h i n | s ix | ( 6 ) months | b e f o r e | the |
| p r e s e n t a t i o n | of | this | P e t i t i o n | commi t t e d | the |
| f o l l o w i n g Ac t | o f Bankruptcy , | namely t h a t a | Warrant |
| o f Execu t i on , | d i r e c t e d | t o the | Debtor | arid | i s s u e d |
| o u t o f the M a g i s t r a t e s Court o f Queensland h e l d | a t |
| T o w n s v i l l e | on | the | 7 t h d a y o f June | 1991 | on | t h e |
| a p p l i c a t i o n | o f | the | P e t i t i o n i n g | C r e d i t o r , | f o r |
| e x e c u t l on a t the Lakes | Caravan Park, | Hllgh | S t r e e t , |
| T o w n s v l l l e , | i n | t h e | S t a t e | o f | Q u e e n ~ l a n d and |
| Rosshaven Marine, | 5 t h Avenue, | Sou th I 'ownsvi l le .in |
| t h e s a i d S t a t e , b e i n g Warrant o f Execu t ion No. | 313 |
| o f 1991 from | t h e B a i l i f f o f the M a g i s t r a t e s Coclrt |
| a t | T o w n s v i l l e | was | r e t u r n e d | u n s a t i s f i e d | by | the |
| B a i l i f f o f | the M a g i s t r a t e s | Court | a t | l ' ownsv i l l e | on |
| the 1 1 t h d a y o f September 1991. | " |
The petition wae eerved on 20 November 1991 and by a notice of intention filed on 29 November 1991, two grounds of opposition were specified. At the hearing of the petition only the first of thoee ground6 was pursued. That grmnd was that. the
2 1
debtor had not conmitted an act of bankruptcy pureuant to eection 4O(l)(d)(ii) of the Bankru~tcy Act 1966. That paragraph provides
" A debtor commits an act of bankruptcy in each of the following casesr
(d) if -
| (1) | execution has been issued against him under process of a court and any of his property has, in consequence, either been sold by the sheriff or held by the sheriff for 21 days: or |
| (if) execution has been f | ssued | agaf ~1st him |
under process of a court alld has been
returned unsatisfled.
The short and perhaps technical point taken on behalf of the debtor is that the return irl respect of the warrant of execution is deficient and, in particular, llle return does not establish that the writ of execution wae returned unsatisfied. While the point may be a technical one, if it is valid, no act of bankruptcy ia eetabliehed. The resolution of thie question depende very much on the conetruction of the return to the warrant of execution.
| Ian Kennedy is a bailiff of the Magistratee Court of Townaville and exhibited to hie affidavit ia a certified copy of a warrant of execution which was applied for at 2.39 p.m. on 7 June 1991. |
The warrant of execution, which on ite face refers to r. 230, and the content8 of which are in accordance with the form of d warrant of execution to be found in Schedule 1 to the ploaistrates Courts Rules 1960, sets out that the amount of
judgment and i n i t i a l c o s t s i n r e e p e c t of a judgment r e g i s t e r e d
| i n t h e Mag i s t r a t e s Court | i n Townevil le on 24th day of | May | 1991 |
| wae | f o r $3672.29. | I n a d d i t i o n , | c o s t s of | c o u r t | f e e s of | $146.00, |
| s o l i c i t o r ' s | f e e s of | $73.00 | and c o s t a of | execu t ion of | war ran t | of |
| $33.50 | a r e r e f e r r e d t o . | There is a f u r t h e r i t e m of | $22.50 which |
| is | i n s e r t e d | i n t h e war ran t | of | execu t ion , | t h e p r e c i s e | b a s i s | f o r |
| t h a t | i t e m n o t | be ing | p a r t i c u l a r l y | c l e a r . |
| The war ran t r e f e r e t o t h e sum | of | $3,947.29 | a e t h e t o t a l |
| amount | t o be | l e v i e d and | con t inuee t |
| " | I n accordance | wi th | t h e M a g i s t r a t e s | Cour t s | Rules |
| 1960, | you | a r e | r e q u i r e d | t o | f o r t h w i t h | l e v y | t h e |
| amount | d e t a i l e d | above, | which | sun! | i n c l u d e s |
| i n t e r e s t | from | t h e d a t e of | judgment | Up | t o t h e |
| i s s u e o f t h e warrant of | execu t ion prlrsuant | t o t h e |
| p r o v i s i o n s | of | S e c t i o n | 73 | o f | t h e | Comnton | Law |
| P r a c t i c e s A c t | 1867-1981, | t o g e t h e r | wi th | i n t e r e s t |
| and costs | o f execu t ion | a f t e r t h e i s s u e o f | t h i s |
| warrant , | u n t i l | t h e | war ran t | is | s a t i s f i e d , | by |
| s e i z u r e and | s a l e o f | t h e | goods | o f | t h e judqnent |
| d e b t o r o r such p a r t | t he reo f | a s may be | s ~ l f f l c i e n t |
| to sa t isfy t h i s warrant , | and t o p a y such anrount |
| f o r t h w i t h | t o t h e R e g i s t r a r | of | t h e Court | t o g e t h e r |
| wi th | your | r e t u r n | t o | t h e | e f e c u t i o n | t h e r e o f . |
| I n Schedule 1 t o t h e m e t r a t e e Courte Rulee 1960 i s a |
| form | of | r e t u r n | t o war ran t | of | execu t ion . | I n t h e body | o f | t h a t |
| r e t u r n under | t h e r u b r i c | "REPORT" | appears | t h e fo l lowingt |
" I certify, "
| and | then | a | b lank | appears , | and | t h e n | i n t h e | p r i n t e d | form | t h e |
| " | ( t h a t , | by | v i r t u e o f | t h i s war ran t , | I | have made |
| d i l i g e n t searcl ] f o r t h e goods of | t h e w i thin-named |
| j t rdgm~nt d e b t o r and | t h e r e a r e i n s u f f i c i e n t | goods |
4 I
| o f t h e judgment | d e b t o r upon which a levy cou ld be |
| made. ) |
The statutory form then continueer
| " | N.B. | B a i l i f f i s t o make | f u l l | e n q u i r i e s o f a s s e t s |
| o f judgment | d e b t o r i n c l u d i n g d e t a i l s o f r e a l | and |
| personal | p r o p e r t y , | employment | and | bank | accoun t s . |
| Major | a s s e t s t o be | l i s t e d t o g e t h e r w i t h d e t a i l s i f |
| p r o p e r t y | under hire purchase | or | l e a s e agreement. |
| The goods | a r e n o t | to be | s o l d | un t 11 | a t l e a s t f ive |
| c l e a r | days | a f t e r | s e i z u r e , | u n l e s s | t h e y | a r e |
| p e r i s h a b l e . | The | judgment | d e b t o r may | consen t | i n |
| w r i t i n g | f o r | a | s a l e | of | h i s | goods | a t an | e a r l i e r |
| d a t e . | T h i s | warrant | r e m a i l ~ s | i n | f o r c e | f o r | t w e l v e |
| ca l endar months | from | t h e | d a t e | o f i s s u e and | n o |
| " |
| l o n g e r b n l e s s renewed i n the pre sc r ibed | manner. |
Mr Kennedy completed a "BAILIFF'S RETURN TO WARRANT OF
EXECUTION" and under the type-written word "REPORT" and the
printed worde "I certify" has written in handwriting the
followingt
| " That | d e f e n d a n t ' s | vessel | "P1 atypu.9 | Duck" | was |
| s e i z e d | and | a d v e r t i s e d | f o r | a u c t i o n | on | 4 t h d a y o f |
| September 1991 however n o persons | were i n |
| a t t endance | a t | t i m e | o f | a u c t i o n . | ~ h f s | o f f i c e |
| r e q u i r e s | t h e | sum | o f $491.00 | b e i n g | f o r | c o s t | o f |
| adver t i s emen t | and | expense s o f Auc t i on | ($112.50 | - |
| a d v e r t . , | $45.50 | draw | u p a d v e r t | p l u s | 3 | hrs | a t |
Aleo on the printed form are the worde which appear in the statutory form in printing:
| " | ( t h a t , by | v i r t u e o f th is warrant , | I | have made |
| d i l i g e n t search for | the goods o f the wi thin-named |
| judgment | d e b t o r and | there a r e i n s u f f i c i e n t goods |
| o f the judgment | d e b t o r upon which a levy cou ld be |
| made. ) " |
5 ',
Nothing further appears but the signature of Mr Kennedy and the date, 11 September 1991. It seeme clear to me that the worde in parentheeis in the statutory form, after the worde "I cert-ify ", are offered as a possible report that might be made in a return to warrant of execution. It was submitted on behalf of the petitioning creditor that on its proper construction the report of Wr Kennedy ought to be read ae meaning that Mr Kennedy had reported that he had made a diligent search for the goods of the within-named judgment debtor and there were insufficient goods of the judgment debtor upon which a levy could be made.
I am unable to accept this submission. It seems plain to me that the return by the bailiff is quite insufficient, that what was meant to be reported was that which appears in handwriting and that there is no claim in the return concerning any other goods of the debtor, their existence or value or what had been done by the bailiff in reepect of those goods. The nature and extent of the advertieing in reepect of the vessel "Platypus Duck" does not appear, nor does the time and place of
| in the report, to be satisfied ae to what had in fact been done | the auction and so it is impossible, on the material contained |
| concerning that particular item of the judgement debtor. |
| More importantly, on the view I take of the document, the report by the bailiff is silent as to whether there were other goods of the debtor, the eubject of the warrant and what, if anything, wae done in respect of those goodu. |
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I t may be unsatisfactory from the petitioning creditor's
| point o f view t h a t the deficiency by the b a i l i f f i n his duty as imposed by r . 3 0 5 ( 2 ) o f the w t r a t e s Courts Rules | 1960 means |
| that the petition must be dismissed. | However, i n Re Worslev: Ex |
parte G i l a ( 1 9 5 7 - 1 9 6 3 ) 19 A . B . C . 105 , Manning J was concerned
with whether there had been a proper return t o a writ o f
execution.
| Hie | Honour | said | a t 1 0 7 1 |
| " A return t o a | w r i t i s nothing else b u t a |
| bail i f f | ' S answer touching those matters which the |
| b a i l i f f i s commanded | t o do by the w r i t | and | the |
| return i s made | t o enable the court t o ascertain |
the truth o f the matter. Returns t o a w r f t o f execution are merely statements o f fact . Edward's Law o f Execution 60.
In s tr ictness, the b a i l i f f must make a return stating what he has done i n pursuance o f the w r i t and it i s for the court t o say whether h i s return invol ves the conclusion t h a t the w r i t was
| unsatisfied. | A statement by the b a i l i f f that the |
| w r i t i s returned | unsatisfied i s merely a |
statemelrt o f h i s conclusion o f the e f f e c t o f what he has done and i s not a return o f the w r i t a t
a l l . A return which does not answer the conimand
o f the court i s a t least irregularr McIntosh v. Shashoug (1931) 46 C.L.R. 494 a t pp. 510, 511;
| Re Huntinaton: E x Darte the Council o f the Shire |
| o f Warring& (1935) 8 A.B.C. | 161, a t p. 163. " |
| The writ | required | the b a i l i f f t o s a t i s f y by | "seizure and |
sale o f the goods o f the judgment debtor" and on the view I take o f his return, he has reported i n respect o f one o f the items o f property o f the judgment debtor but the return i s simply i n su f f i c i en t as t o whether there were other goods o f the judgment
| debtor and | w h a t was done i n respect o f them. |
| In Re Greenbdr Ex varte National ~eetminster | ~inancg |
Utralia Ltd (1990) 21 F.C.R. 247 Pincus J. was concerned with an act of bankruptcy constituted by S. 40(l)(d)(ii) of the Act.
| His Honour in that case concl~~ded | that S. 40(l)(d)(ii) |
contemplates a return to the court out of which was issued the writ of execution on which the creditor relies. His Honour said, at 2491
"
| A r e t u r n o f t h e k ind mentioned i n S . 40(l) ( d ) | ( i f ) |
| i s a | s ta tement | i n w r i t i n g s igned | by o r on | b e h a l f |
o f the S h e r i f f s e t t i n g f o r t h what has been done under t h e wri t r Be Hunter: Ex Darte Dowel1
P t v LLtE( (J968) 11 FLR 265 at
| 266: 119681 ALR 416 at 266; pe Johnson: Ex Da&e | - |
| m e e n d a l e E ~ ~ e e r i n o | and | Cables P t v Ltd | ( 1 9 6 7 ) |
| 11 FLR 335 et 339; C19681 ALR 408 a t 41 | 1 . " |
Hie Honour held that an act of bankruptcy within S. 4O(l)(d)(ii) ie committed only if there hae been a proper return to a writ of execution, and that a return which fails to report on the existence or otherwise of all the property mentioned in the writ is not a proper return.
| On the view I take of the return in thia case, it wae not of the kind required because it merely dealt with one item of property of the debtor. It did not, on my construction of the return, indicate that any diligent eearch for the goods of the judgment debtor had been made. It is not therefore proper to conclude that there were insufficient goods of the judgment debtor upon which the levy could be made. The obligation on the bailiff ie as indicated by Manning 3, and in my judgment has not been discharged in thia case. |
R
It may be that the act of bankruptcy constituted by section 40(l)(d)(ii) had in fact been committed in this case, - namely, that goods had been held by the he riff for 21 days - but the return is jn my opinion insufficient to establish the act of bankruptcy constituted by section 40(l)(d)(ii) and as a consequenre the petttion must be dismissed.
I mention that it is quite unsatisfactory from the petitioner's point of view, n C the default really is the inadeqnacy of the bailiff's return.
I certify that this and the
preceding seven (7) pages are a true copy of the reascns for judgme~it herein of his I!~l701lr
Justice J.E.J. Soender.
Solicitors for the petitioning creditor: Connolly Suthers
| Soli cf tors for the debtor: | suthers and Taylor |
| Date of Hearing: | 5 February 1992 |
| Date of Judgment: | 5 February 1992 |