Re Hopper, Mavis Isobel and Anor Ex parte Esanda Ltd

[1980] FCA 104

Re: MAVIS ISOBEL HOPPER
And: DOUGLAS HUGH HOPPER
Ex parte: ESANDA LIMITED (1980) 43 FLR 452
No. B5016 of 1979
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
McGregor J.(1)

CATCHWORDS

Bankruptcy - Service to be on Sunday - Validity thereof.

Bankruptcy - Bankruptcy notice - Service - Service on Sunday - Validity.

HEADNOTE

Held, that the Bankruptcy Rules do not forbid the service of a bankruptcy notice on a Sunday. As the rules contained the provisions laid down with regard to service, and purport to be comprehensive, there is no reason to go beyond such rules to discover regulations or directions on this subject in any other enactment.

HEARING

Sydney, 1980, June 6. #DATE 6:6:1980

BANKRUPTCY PETITION.

R. Armstrong, for the applicants.

Solicitors for the applicants: Fischer & Macansh.

D. LEVIN

ORDER

Orders accordingly.

JUDGE1

This is the hearing of a petition for sequestration of the estate of Mavis Isobel Hopper and Douglas Hugh Hopper (debtors) based upon non-compliance with a bankruptcy notice dated 20 September 1979 issued in respect of a judgment obtained on 8 June 1979. The bankruptcy notice was served, as appears from the affidavit of Brian Hepburn Tesill, on the debtors on Sunday, 20 January 1980 in New South Wales.

The petitioner has satisfied me that there is an entitlement to have the estate of the debtors sequestrated if the service on a Sunday is or maybe treated as valid. The question that arises here is as to whether such service is a defect or such a defect as to disentitle the petitioning creditor to the order sought.

Counsel for the petitioning creditor submits first that nothing in the Bankruptcy Act 1966 or Rules requires that there should be service on any particular day; or that service on a Sunday is impermissible. However, he sought to meet any possible objection to the service if the Court were minded to look further at other provisions which might be said to forbid service on Sundays. In this regard he drew attention to the provisions of the Judiciary Act 1903 s. 79 which states as follows:
"The laws of each State, including the laws relating to procedure, evidence, and the competency of witnesses, shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all courts exercising federal jurisdiction in that State in all cases to which they are applicable.
Counsel points to what might be thought to be material in the Laws of the State of New South Wales which arguably could refer to service of the Bankruptcy Notice, viz. the (New South Wales) Imperial Acts Application Act No. 30, 1969, expressed to be an Act -
"to provide that certain enactments of the Parliament of England and . . . . . Great Britain and Ireland . . . . shall continue in force in New South Wales . . . . ."
Section 41 of that Act provides - "Service of any writ, process, warrant, order, judgment or decree (except in case of an offence, breach of the peace or any warrant, writ or process for the apprehension of any person) upon a Sunday shall be void."
Is the bankruptcy notice a "process"; if so, was service of it void? Counsel contends that a bankruptcy notice is not a "process" within the meaning of that statute.

Without conceding that that section governed this matter, he submits that if it were to have an application, then: -
1. A bankruptcy notice is not comprehended by any of the words in the section.

2. In particular it is not a "process", as that word should be read as referring to some document having a quality of judicial nature or character, and that this is so even though in terms of the rule 16, the bankruptcy notice to be served has to be signed by the Registrar.
So, he contends, there are no laws of the State of New South Wales forbidding service on Sunday.

As to the issue of a bankruptcy notice being a "proceeding" see "Australian Bankruptcy Law and Practice" 5th edition p. 526 (see also re MADDOX ex parte the debtor 24 A.L.R. 279).

Counsel submitted that the Service and execution of Process Act 1901-1974 has no material in it which assists determination of this problem.

In the course of his argument reference was made to re COPLEY, ex parte SUNDELL and another (1964) 20 ABC 229. He argued that the result in that case depended upon the application of former Statutory Rules 1934 No. 77 Rule 7 (made under the earlier Bankruptcy Act) and of High Court Rules Order 60 Rule 9 (1). He submitted that since complete provision for service of a bankruptcy notice is made in existing bankruptcy rules that order does not now apply to proceedings in bankruptcy proceedings.

I should state that in my view an examination of the judgment in that case indicates that his Honour founded his decision on the provisions of the Sunday Observance Act but was able to say that if the latter Act did not apply then the result would have been the same because he would treat the Order 60 provisions as forbidding service of notices (including a bankruptcy notice) on a Sunday. Thus, his Honour's reasoning, is that, having found that there had been performed an action which was impermissible, (i.e. service on a Sunday) then any other proceeding which depended upon that act having been performed correctly, should itself be ineffective and void.

Counsel has referred me in addition to Stroud's Judicial Dictionary 4th edition vol. 4 at page 2129 and the meaning there of the word "process"; however, he has not sought to refer me to or rely on any of the authorities there referred to even those in paragraphs 2 and 5. He has contended that a bankruptcy notice has such singularity and is so unique in its quality that the meaning of the words "process", "proceeding", in other cases does not assist in a resolution of this matter. Compare also re Maddox (above cited).

The Bankruptcy Act 1966 makes various provisions for service. Section 309 permits service of a notice by post. It also empowers the Court to order service in a manner specified. The same Act in Section 315 (2) provides a power to make rules and also states -
"Subject to the next succeeding sub-section, the power to make rules conferred by the last preceding sub-section includes power to make rules modifying or adapting the rules in force under the Bankruptcy Act 1924-1965 immediately before the commencement of this Act in their application to proceedings, matters and things to which, by virtue of this Act, the Bankruptcy Act 1924-1965 continues to apply."
Rules have been made, viz. the current Bankruptcy Rules, but, I understand, no "modifying or adapting" rules.

However, it appears there are further considerations which bear upon this subject.

The Federal Court of Australia Act 1976 was assented to on 9 December 1976. The Bankruptcy Amendment Act 1976 No. 161 of 1976 came into operation on 1 February 1977. It substituted for the existing s. 28(1) in the Bankruptcy Act 1966 the following sub-section -
"(1) The Federal Court of Australia and each State Court invested with jurisdiction in bankruptcy by section 27 has jurisdiction in bankruptcy throughout Australia."

s.7 (1) of Act 161 of 1976 provided -

"On and after the date of commencement of this Act, no proceedings shall be instituted in the Federal Court of Bankruptcy."
The Federal Court of Australia Act 1976 (Part VII) empowered the judges thereof to make rules of court and regulations dealing with subjects therein enumerated. Such rules have been made. They came into force on 1 August 1979 and included Order 1 Rule 11 as follows: -
"Except as to Order 41 (which relates to form of documents), these Rules do not apply to proceedings under the Bankruptcy Act 1966."

It is clear therefore that Rules, passed pursuant to the Bankruptcy Act 1966 continue to govern bankruptcy proceedings; these Bankruptcy rules (being Statutory Rules 1968 No.2) came into operation on 4 March 1968.

They contain various Rules concerned with bankruptcy notices, e.g.
Rule 7 as to application to the Registrar for its issue and R.7(5) for the signing of the notice before issue.

Rule 9 (as to "duration of notice"), as to the requirement for service of that notice within a period specified.

Rule 9 (3) is as follows -

Service of a bankruptcy notice on a person is of no force and effect unless service is effected within the period within which service may be effected under sub-rule (1).
Division 3 of the rules is headed "Service"; it provides inter alia for personal service of the bankruptcy notice. By rule 16 "Due Service" shall be deemed not to have been proved in circumstances set out. Rule 120 deals with address for service; rule 121 refers to the age of a person to whom a document may be delivered. Rule 122 is concerned with methods of proof of service. Rule 113 is preceded by a heading as follows -

"Directions as to practice and procedure" and is as follows: -

R.113 (1) "Where the Court is satisfied that -
(a) the provisions of the Act relating to practice and procedure and the rules made under the Act do not make provision with respect to the practice and procedure applicable in the circumstances of a particular case; or

(b) difficulty arises or doubt exists as to the practice or procedure applicable in the circumstances of a particular case,

the Court may give such directions with respect to the practice . . . ."
This may be thought to replace the former rule 7 referred to in Copley's case. Rule 202 deals with computation of time; in the circumstances mentioned certain days including Sundays may be disregarded.

The Bankruptcy Rules to which Clyne J. made reference in re Copley (above cited) were passed pursuant to the Bankruptcy Act 1924-1960, s.223 viz. -
"(1) The Governor General may make rules or regulations, not inconsistent with this act, for prescribing all matters forms and things, which by this act are required or permitted to be prescribed or which are necessary or convenient to be prescribed for giving effect to this act or for the conduct of any business relating to the administration thereof . . . . . ."

(underlining is mine).

Since that Act has been repealed by the Bankruptcy Act 1966 s.4(1) (and see First Schedule), I would expect that rules made by it (including rule 7) are no longer operative. Further, in my view, the presently operating Bankruptcy Rules are comprehensive, deal fully with service and do not admit, in the sense that the former rule 7 implied, that there has been any lack of provision on any subject which is then to be found elsewhere. The failure to reproduce rule 7 in the Bankruptcy Rules further assists the view that it was not intended that recourse should be had to other legislation in fixing procedures which might anyway vary from State to State.

In my opinion, the rules do not forbid the service of a bankruptcy notice on Sunday. If the situation were otherwise, and there did exist some doubt, I would, in the circumstances of this case, give an appropriate direction permitted by Rule 113 (1)(b) to the end that service might be treated as having been validly effected.

In the order I make in favour of the petitioning creditor, it is intended to give the debtors a short period in which to consider their position.

On the evidence before me, being satisfied -

(1) that the debtor commited the act of bankruptcy alleged in the petition, and

(2) with the proof of the other matters of which Section 52 (1) of the Bankruptcy Act 1966 requires proof;

I make a sequestration order against the estate of the debtors; I order that costs, not including costs of 21 May 1980, be taxed and paid according to the Act; and I direct that a draft of this order be delivered to the Registrar within seven days in accordance with rule 124 (2). The operation of this order is suspended so that it will not operate until 20 June 1980.

I direct that service of a copy of this order be effected by the judgment creditor sending a copy by prepaid registered post to the debtors at their last known address, such notice to be posted within 48 hours herefrom. Proof of this having been done is to be effected by filing an affidavit of service within seven days herefrom. Either side is to have liberty to apply on two days' notice.