Re Honeyman, D. v Barnsley Joinery Works Pty Ltd

[1991] FCA 923

3UDGMENT No. - V -A- 73 9

CATCHWORDS

BANKRUPTCY - bankruptcy petition based on act of bankruptcy said to be constituted by return of unsatisfied execution - wrlt of execution addressed "to a bailiff" - no available bailiff where writ to be executed - execution attempted by Sheriff's Officer - Sheriff's Officers authorised by statute to levy execution - whether attempted execution unlawful - conflict of evidence about whether execution was in fact attempted - resolution of that conflict - comments on inadequacy of records kept by Sheriff's Officers.

Bankruptcy Act 1966, subpara. 40(l)(d)(ii)
District Court Act 1973 (N.S.W.), ss.25, 26

Date: 19 March 1991 ,

District Court Rules 1973, r.5(2), form 94

Coram: Sheppard J.

Place: Sydney	11 MAR 1992
IN THE FEDERAL COURT OF AUSTRALIA	)
GENERAL DIVISION	)
BANKRUPTCY DIVISION OF	) No. NP2787 of 1990
THE STATE OF NEW SOUTH WALES	)

RE. DOUGLAS HONEYMAN

EX PARTE: BARNSLEY JOINERY WORKS PTY. LIMITED

CORAM: SHEPPARD J.
PLACE: SYDNEY

DATE: 19 MARCH 1991

MINUTES OF ORDER

THE COURT ORDERS THAT:-

1.    The petition be dismissed.

2.    The petitioning creditor pay to the debtor his costs of the petition including reserved costs.

3. The debtor pay to the petitioning creditor the costs of and occasioned by the attendance as witnesses of

Brian Lewis Roberts and Berbardus Bijl, including

witnesses expenses properly payable to them.

NOTE:	Settlement and entry of orders is dealt with in rule 124 of the Bankruptcy Rules.
IN THE FEDERAL COURT OF AUSTRALIA	)
GENERAL DIVISION	1
BANKRUPTCY DISTRICT OF	1  No. NP2787 of 1990
THE STATE OF NEW SOUTH WALES	)

RE. DOUGLAS HONEYMAN

EX PARTE: BARNSLEY JOINERY WORKS PTY. LIMITED

REASONS FOR JUDGMENT

SHEPPARD J.: This is the hearing of a petition for the sequestration of the debtor's estate. The act of bankruptcy relied upon is that provided for in subpara. 40(l)(d)(ii) of the Bankruptcy Act 1966, which provides that a debtor commits an act of bankruptcy if execution has been issued against him under process of a court and has been returned unsatisfied.

The petitioning creditor recovered judgment in the

District Court against the debtor on 25 July 1979 in the sum

outstanding, which includes the costs of a writ of execution	of $991. Interest has run on that amount, and the amount
on 12 July 1990, has become $2,618.80. A writ of execution
was issued out of the District Court at East Maitland on 12 July 1990. On 10 August 1990, Mr. Goodrich, the Sheriff's Officer who had sought to levy execution, signed a form entitled "Notice that Levy has not been made." The substance of the form said:-

"TAKE NOTICE that I have not made a levy under the

Writ of Execution against the defendant's goods and lands for the following reason: Execution in the above matter was attempted at Legges Camp, via Bulahdelah on the 7th August, 1990, demand made, debtor was unable to satisfy. No goods sighted belonging to the debtor upon which a seizure could be made. Advised all goods at the address given belong to Honeyman Enterprises Pty. Limited."

Upon the basis of that return the petitioning creditor has presented its petition and claims that an act of bankruptcy was committed on 10 August 1990 when there was, in its submission, a return of the execution unsatisfied. There are three issues between the parties. The first concerns the fact that the writ of execution was addressed to the bailiff and not to the Sheriff or a Sheriff's Officer. The second concerns the question whether Mr. Honeyman, the debtor, was present at Legges Camp on 7 August 1990 when it is said execution was attempted; and the third is an issue concerning whether the indebtedness was paid in 1983.

Counsel for the debtor was not in a position to proceed
in relation to the third of the issues which I have mentioned,

so that that matter has not been dealt with. However, the

either one, the result must be the dismissal of the petition.	other two issues have been and if the debtor be successful on
The writ of execution is addressed, "To the bailiff required under the District Court Rules 1973". That does not make a great deal of sense, but if one has regard to form 94 in the Schedule to the District Court Rules 1973 one can see what has happened. The words "to execute this writ" have been
omitted after the words "District Court Rules 1973." Furthermore, the form which was in existence at the time the writ was issued required the writ to state, "To the Sheriff's Officer or bailiff required under the District Court Rules, 1973 to execute this writ." The change in the form came about as a result of amendments which were made to the forms in the schedule to the rules on 18 May 1990. No point has been taken based upon the omission of the words "to execute this writ", so I may leave that matter aside. The return signed by Mr. Goodrich on 10 August 1990 is signed by him in his capacity as Sheriff's Officer. The point upon which counsel for the debtor relies is that the return was thus made by a person other than the person to whom the writ was addressed, the person to whom it was addressed being the bailiff.
A reference to the District Court Act 1973 (N.S.W.) and the Rules shows that at least since 1988 Sheriff's Officers have been empowered to execute writs of execution issued out of the District Court. Inquiries of the District Court made
during the day established, and this is common ground, that there are apparently now very few bailiffs in New South Wales.
The Chief Judge of the District Court has power under s.26 of the District Court Act to appoint persons to be bailiffs of the Court for the proclaimed places specified in the order of appointment. Apparently, that would only be done if there were places in New South Wales where there were no court houses and thus no Sheriff 'S Officers. Otherwise, all executions are in fact carried out by Sheriff's Officers as is provided for in s.25 of the District Court Act, which is a substituted section inserted by Act No. 20 of 1988.
There were amendments to the District Court Rules in 1988 which bear on the matter. The relevant part is Part 34. Rule 5(2) of that Part provides that the registrar shall prepare, and forward to the Sheriff's Officer or bailiff with a writ of execution, a notice of execution, and the Sheriff's Officer or bailiff shall, upon levying against goods of a judgment debtor under the writ of execution, deliver the notice to the judgment debtor or leave it at the place where the levy is made. There are other provisions which indicate that the execution may be by a Sheriff's Officer.
For reasons which are not apparent to me there was no consequential amendment of Form 94 and other forms relevant to this problem until 1990 so that for two years or so the form was out of step with the rule. Nevertheless, the Act and the rules plainly show that the Sheriff and his officers were authorized to execute the writ in this case, it having issued on 12 ~ u l y 1990.
Undoubtedly, execution of writs of execution on the property of debtors is a serious affair, and a degree of technicality exists in the law relating to it, just as it does in relation to the law concerning bankruptcy. I have been referred to some authorities, particularly the decisions of Pincus J. in Re Greenland; Ex parte National Westminster Finance Australia Limited (1989) 21 F.C.R. 247, and - Re Johnson; Ex parte Greendale Enqineerinq and Cables Pty. Limited (1967) 11 F.L.R. 335.
I do not find those cases of relevance in determining the question to be decided here, but in the latter case Gibbs J. sitting as Judge in Bankruptcy, referred to a New Zealand decision, Re Boddie; Ex parte H. O'Dell & Son Limited [l9341 N.Z.L.R. supp. 6.
That case decided that, where a bankruptcy petition was based on an act of bankruptcy alleged to be a return of nulla bona on an execution against the debtor, and it was proved that the distress warrant was issued and addressed to one bailiff who made no return, but that the return was made by another bailiff, and there was no explanation on the warrant itself why a return was not made by the bailiff to whom the warrant was addressed, the distress was irregular, and no act of bankruptcy was proved. The petition was accordingly
dismissed. The decision is a decision of McGregor J. of the New Zealand High Court. No examination of the legislation
upon which the decision was based has been made before me, but whether that would shed any light on the problem or not, it would seem to me that the case is distinguishable because this case does not concern the issue of a writ of execution to one officer and the return being effected by another.

The warrant was received by Mr. Goodridge, a Sheriff's

Officer in Taree, and the attempted execution, if it took place, was by him, and the return was by him. No occasion for the explanation referred to in the judgment in Re Boddie therefore arises, and it seems to me the case does not assist in the resolution of the present problem.

Despite the technicality of the law in this area, I think a realistic view has to be taken. It seems to me that there was no bailiff to whom the writ could have gone in Taree. Mr. Goodridge is apparently the Sheriff's officer in Taree. He is not a bailiff, and he is the only person who would normally execute a writ of this kind. He is authorized to do so, because he is a Sheriff's Officer, and he was acting within the powers conferred upon Sheriff's Officers by the District Court Act and the rules in doing or attempting to do what he did. He was also acting within that authority when he made the return which he did.

In those circumstances, despite the misdescription of his properly executed, was good and that the point relied upon by	office on the writ, I think the writ, if it was otherwise
counsel for the debtor should not therefore be upheld.
The second point has occasioned me far greater difficulty and necessitates some reference to the evidence. In his affidavit of 4 March 1991 Mr. Goodridge, having referred to the affidavit of Mr. Honeyman in which he denied that he was present at Legges Camp after 6.45 or 7 o'clock on the morning
of 7 August until some time late that evening, said:-

"I have no independent recollection of the defendant being at Legges Camp on 7th August, 1990 when I executed on the Writ. However, my Writ of Execution states that 'the debtor was unable to satisfy'. My policy and procedure is that if the debtor is present at the time I make the Levy then I refer to him in this manner. If I am given this information by another person I refer to that other person as being e.g. his wife or a male person. As I did not use any other terminology I believe that the defendant was the person who advised me that he was unable to satisfy the Writ of Execution."

The endorsement to which Mr. Goodridge has referred appears in his handwriting on the back of the writ and is as follows:-

"7/8/90 Exec attempted Legges Camp via Bulehdelah,

demand U.T.S. - " [which stands for Unable to Satisfy] -

"No goods All goods belong to Honeyman Enterprises P/L."
Then there is the abbreviation, "NNL filed" which is a
reference, I think, to the form earlier mentioned, "Notice
that Levy has not been made." As I have said that was signed

by Mr. Goodridge on 10 August.

Mr. Goodridge keeps a book, each page of which is headed, "Work Diary and Motor Vehicle Running Record." The relevant page of that book has been tendered. The entries are in Mr. Goodridge's handwriting and commence at 6.30 am on 7th August 1990. The first column is headed, "Time"; and there are sub- headings "start" and "finish". Under this column there is an entry for 6.30 am. There are some further entries lower down which contain times of 1.30, 2 o'clock and 3 o'clock. I do not think Mr. Goodridge was asked any questions about it, but it would seem from the record that he must have finished work at about 3 pm.

The next column is headed, "Hours". That shows that 12 hours of field work were brought forward. Seven were carried out during the day so that 19 were then carried forward to the next day, 8 May. One hour's office work was done, increasing the progressive total from 21 to 22.

Then there is the "Speedo Reading" which shows that on the day in question he travelled approximately 260 kilometres. There are then columns headed, "Defendant", "Locality" and "Process Number". The record shows that 18 defendants were visited, or more correctly, 18 writs were in question. In some cases there was apparently more than one writ for one

defendant. The seventh entry is "Honeyman, Legges Camp, 4 3 " ,

43 being the process number. In the next column the result is provided for, and the result in Mr. Honeyman's case is no

goods. The remaining columns need not be referred to.

In his oral evidence Mr. Goodridge confirmed what he had said in his affidavit about his recollection of the matter not being independent of his records and of his practice to note information given him by a person other than the defendant as having been given to him by such a person. In other words he confirmed that his practice was that information given him by the defendant himself would simply be stated and the fact that

no source was stated would indicate that the information came
from the defendant.

It is understandable that he should have no independent recollection of the visit. He has in fact been to serve process of one kind or another on Mr. Honeyman at Legges Camp on a number of other occasions, some 12 in all I think he said. But he cannot remember this occasion except on the basis of what he has written down either in his record or in his notes on the back of the writ. I accept that part of his evidence because it seems to me that few Sheriff's Officers would, after a time, have a memory good enough to single out every occasion upon which they attempt to execute a writ or serve process.

Mr. and Mrs. Honeyman have each given evidence that Mr. Honeyman was not present at Legges Camp after about 7 o'clock on the morning of 7 August 1990 until half past 8 or 9 o'clock that night. Their evidence is to the effect that they have

two motor vehicles, one a Landrover type vehicle and the other	a Toyota Camry. The Toyota Camry's brakes were in need of
repair and arrangements had been made for it to be repaired by a firm in Newcastle. Mrs. Honeyman had, in any event, to go to Newcastle that day because one of their children was taking part in a parade and a recital at Christchurch in Newcastle during the morning. Their evidence is that they left home at or before 7 am, Mr. Honeyman driving the Toyota and Mrs. Honeyman the other vehicle. They kept together until
Bulahdelah when she diverted to pick up other children and he continued on to Newcastle.
His evidence is that he left books with his accountant and then dropped the Toyota into a brake repair company to have the brakes repaired. He then went to Chirstchurch and saw most of the church service and the recital. Mr. and Mrs. Honeyman and their children then had lunch. Some shopping was done. They split up again; he picked the Toyota up at about 4.30 pm and thereafter picked up some films that had been developed. They went to Mrs. Honeyman's mother's place, had tea at McDonalds at Hexham on the way home and arrived, as I have said, about half past 8 or 9 in the evening.
In order to support what they say, there have been produced in evidence the account from the brake repair company, the cheque which was apparently handed over for the repairs, which cost some $450, a cheque paid to Kodak for films in the sum of $55 and a bank statement which shows that
Honeyman Enterprises Pty Limited and were paid, as to the the cheques were drawn on the account of a company, D & C
Kodak cheque, on 8 August, and as to the cheque for the brake repair on 9 August.
The repairs appear to have been as Mr. Honeyman has deposed and the records tend to support the view that they were done on 7 August although no one from the brake repair company has been called. On the basis of this evidence the Honeymans say that it was quite impossible for Mr. Honeyman to have been at home if and when Mr. Goodridge called at the premises.
Mr. Honeyman was cross-examined about statements he has made in the past concerning his assets and particularly about statements made to Mr. Goodridge on other occasions in which he has said that he has had no assets and that they were all owned by his family company. Mr. Honeyman agreed that he did say that, but not in relation to the position after 1988 when there was a reconstruction of the company. He said that thereafter he has had assets and mentioned, amongst other things, a video camera, some wine, and some furniture. His case is that those assets were his and were at the premises when Mr. Goodridge went, if he did go, to Legges Camp, on 7 August 1990. I must confess that I was not over-impressed by Mr. Honeyman's evidence in this respect. I thought he was, to a degree, evasive and if the matter had rested there I might have reached a different conclusion.
Mrs. Honeyman had not sworn an affidavit and was called to give her evidence in chief orally. She knew what evidence her husband had given and had read his affidavits, so I must bear that in mind in determining what my assessment of her credibility is. But having listened to her answer a number of questions, some asked by counsel and some asked by me, and watched her in the witness box, I have come to the conclusion that she is a witness whose evidence I should accept. She was able to give small details which, if they were invented, would indicate that she is a much cleverer person than I think she is. For instance, she said that she remembered her husband coming late to the church service and having to sit or stand apart from the family because he could not reach them. There were other matters of this kind which indicated a recollection of the day which I do not think could be invented.
I should mention the evidence of Mr. McKenzie who is an employee of the Honeyman company. His affidavit was obviously wrong because he has no independent recollection of 7 August whatever. He frankly conceded this but he did say that he had no recollection of seeing a Sheriff's Officer in the sense of a person in uniform coming to the premises since his employment there began towards the end of 1989. He said that it would be unlikely that such a person could come to the premises on any working day without his seeing him. He said he had not seen anybody come there who was in uniform other than police officers . In some ways his evidence is not
evidence that should be taken into account and I think adds evidence that one would give great weight to, but it is
some weight to my conclusion that I should accept the Honeymans' account of the day. In other words, it establishes that Mr. Honeyman was not at the premises.
Perceiving that this might be my conclusion, the solicitor for the petitioning creditor pressed upon me the fact that it was not necessary for Mr. Honeyman to have been present at all. I agree with this and had it not been for Mr. Goodridge's own evidence that the way in which his note on the back of the writ is written, indicated to him that he was given the indication by Mr. Honeyman himself, I would have thought there was a good deal to be said for the submission. But Mr. Goodridge said this in his affidavit and he said it again in his evidence today. In those circumstances Mr. Honeyman's presence or absence from the premises on the day in question becomes quite critical. My conclusion that he was not there casts a shadow over what was done or said to have been done by Mr. Goodridge on the day.
The solicitor for the petitioning creditor also pressed upon me that the return, which I have referred to earlier, is in a form - and there is no contest about this - which would satisfy the provisions of subpara. 40(l)(d)(ii). I agree that that is so, but I do not believe, and I have not been referred to any authority which suggests that it is the case, that it can be the law that a Sheriff's Officer, simply by writing
what may not be correct on the back of a writ and filling in a return which also may be incorrect, makes a return of
execution unsatisfied for the purposes of the section. The submission would have to go so far as to show that what the Sheriff's Officer writes is conclusive. The consequences of an unsatisfied execution are that the judgment debtor will have committed an act of bankruptcy. It is a matter therefore which is of the utmost seriousness and a matter about which one has to take a view which is strict or on the strict side.
Accordingly, the evidence does not satisfy me that execution in this case has been issued against the debtor and has been returned unsatisfied.

Before I conclude I wish to say this. I do not know

whether the records of all Sheriff's Officers are kept in the way that Mr. Goodridge keeps his records. If they are, what has occurred may be the fault of the system and not the fault of Mr. Goodridge personally. But I feel bound to say that the record which has been produced is a most inadequate one. It seems to me that judgment creditors are entitled to expect of the department which executes process in this State a standard of record-keeping far better than that which apparently is in force. I would have thought that the times at which the Sheriff's Officers arrive at particular premises and leave particular premises were essential information that should be contained in any record, and I would have thought also that there should be, in a running record of this kind, room for an adequate statement of what has occurred at each visit, what,

observed, what he said, and what was said to him. I think the	if it be relevant to say so, the Sheriff's Officer did or
community has a right to expect that that sort of information will be kept and available to be used in cases of this kind so that room for error and misunderstanding will be reduced.
That does not, of course, help the judgment creditor in this case. For the reasons I have given, I have reached the conclusion that it has not been established that the act of
bankruptcy relied upon was committed by the debtor. Accordingly, the petition must be dismissed.

1 certify that this end the preceding

pages are a true copy of the reasons for

ludgrnent herein of The Honourable

Mr Justic Sheppard

hlh ,socm

Oatad /? M M C ~ /V/

A P P E A R A N C E S

Solicitor for the Petitioning Creditor:	Sally Nash of Sally Nash & Co.
Counsel for the Debtor:	B.J. Skinner
Solicitors for the Debtor:	M.D. Nikolaidis h Co.
Date of Hearing:	19 March 1991