Re Jonson, Peter Carl Nicholls Deputy Commissioner of Taxation of the Cth of Australia
[1996] FCA 602
•22 Jul 1996
IN THE FEDERAL COURT OF AUSTRALIA
BANKRUPTCY DISTRICT OF THE
STATE OF VICTORIA
GENERAL DIVISION No VP 262 of 1996
Re: PETER CARL NICHOLLS JONSON
Judgment Debtor
Ex Parte: DEPUTY COMMISSIONER OF TAXATION
OF THE COMMONWEALTH OF AUSTRALIA
Judgment Creditor
Coram: Olney J
Place: Melbourne
Date: 22 July 1966
MINUTE OF ORDERS
THE COURT ORDERS THAT:
Paragraph 4 of the creditor's petition herein be amended to allege that the judgment debtor committed an act of bankruptcy on 5 December 1995.
A sequestration order be made against the estate of the judgment debtor.
The petitioning creditor's costs (including reserved costs) be taxed and paid in accordance with the Bankruptcy Act.
NOTE: Act of bankruptcy 5 December 1995
Trustee: Official Trustee
NOTE: Settlement and entry of orders is dealt with in rule 124 of the Bankruptcy Rules.
IN THE FEDERAL COURT OF AUSTRALIA
BANKRUPTCY DISTRICT OF THE
STATE OF VICTORIA
GENERAL DIVISION No VP 324 of 1996
Re: MARIE-FRANCE LOUISE JONSON
Judgment Debtor
Ex Parte: DEPUTY COMMISSIONER OF TAXATION
OF THE COMMONWEALTH OF AUSTRALIA
Judgment Creditor
Coram: Olney J
Place: Melbourne
Date: 22 July 1966
MINUTE OF ORDERS
THE COURT ORDERS THAT:
A sequestration order be made against the estate of the judgment debtor.
The petitioning creditor's costs (including reserved costs) be taxed and paid in accordance with the Bankruptcy Act.
NOTE: Act of bankruptcy 20 December 1995
Trustee: Official Trustee
NOTE: Settlement and entry of orders is dealt with in rule 124 of the Bankruptcy Rules.
IN THE FEDERAL COURT OF AUSTRALIA
BANKRUPTCY DISTRICT OF THE
STATE OF VICTORIA
GENERAL DIVISION No VP 262 of 1996
Re: PETER CARL NICHOLLS JONSON
Judgment Debtor
Ex Parte: DEPUTY COMMISSIONER OF TAXATION
OF THE COMMONWEALTH OF AUSTRALIA
Judgment Creditor
No VP 324 of 1996
Re: MARIE-FRANCE LOUISE JONSON
Judgment Debtor
Ex Parte: DEPUTY COMMISSIONER OF TAXATION
OF THE COMMONWEALTH OF AUSTRALIA
Judgment Creditor
Coram: Olney J
Place: Melbourne
Date: 22 July 1966
REASONS FOR JUDGMENT
THE PROCEEDINGS
The Deputy Commissioner of Taxation of the Commonwealth of Australia (the petitioning creditor) in separate proceedings seeks sequestration orders against Peter Carl Nicholls Jonson (Mr Jonson) and Marie-France Louise Jonson (Mrs Jonson). Mr and Mrs Jonson are husband and wife and are jointly liable to the petitioning creditor under a judgment of the County Court of Victoria in proceeding MC 9411598 (the County Court proceeding). Although the issues requiring determination are not entirely identical in both matters, they are sufficiently similar to warrant the Court hearing the two petitions together and this was done. It is accordingly appropriate to deal with the factual bases of the two matters as if they were part of a single chronology of events.
The same parties have previously been engaged in other proceedings before the Court relating to the validity of the bankruptcy notices which are said to give rise to the acts of bankruptcy referred to in the petitions. On the hearing of the petitions both parties made reference to and relied upon different aspects of the evidence and other material in the earlier proceedings all of which is a matter of record and has been treated as evidence relevant to the issues now before the Court
THE FACTS
On 2 March 1995 the petitioning creditor obtained judgment against Mr Jonson and Mrs Jonson in the County Court proceeding in the sum of $50,306.40.
On 21 July 1995 Helen Stackpole, an officer of the Australian Taxation Office (ATO) responsible for the dispatch and receipt of bankruptcy notices forwarded to the Registrar in Bankruptcy for the District of the State of Victoria at Melbourne (the Registrar) for issuing three copies each of bankruptcy notices addressed respectively to Mr Jonson and to Mrs Jonson together with an appropriate application in respect of each. Each application was dated 21 July 1995 and each bears a stamp of the Registrar indicating that it was filed on 21 July 1995.
At least one copy of each bankruptcy notice was signed by a Deputy Registrar, dated 24 July 1995 and stamped with the seal of the Registrar. Those copies are to be found on the respective files in the Registry. The bankruptcy notice addressed to Mrs Jonson bears the file number VN 1727 of 1995 and that addressed to Mr Jonson is numbered VN 1728 of 1995.
There is no evidence as to what became of the other two copies of the bankruptcy notices forwarded to the Registrar on 21 July 1995. However, on or about 10 August 1995 Ms Stackpole realised that she had not received any copies back from the Registrar and after making a telephone enquiry she forwarded two further copies of each bankruptcy notice to the Registrar "for Court stamping" under cover of a letter dated 11 August 1995. On 25 August 1995 Betty Bond, another officer of the ATO, received two signed and stamped copies of each of the bankruptcy notices. All copies were dated 24 July 1995. (As an aside it should be noted that it is not the case that the Registry had "wound back the date stamp" to 24 July as suggested by the debtors' counsel. The fact is that the file copies bear a stamped date "24 Jul 1995" whereas the copies received by Ms Bond on 25 August 1995 have the same date written by hand).
Ms Bond noted that the copies of both bankruptcy notices bore the same file number namely VN 1728 of 1995. She thereupon made a telephone enquiry of the Registry and was informed that the notice addressed to Mrs Jonson should be numbered VN 1727 of 1995. She was instructed by the person to whom she spoke to alter the number on the copies of the bankruptcy notice in Mrs Jonson's name to 1727 which she did by striking out the number 8 and writing the number 7 immediately above it. She then placed her own initials beside the alteration on each copy.
One of the copies of the bankruptcy notice addressed to Mr Jonson which had been received by Ms Bond on 25 August 1995 was served on him personally on either 28 or 29 September 1995 and one copy of the bankruptcy notice addressed to Mrs Jonson was served on her on 1 October 1995. (There is a discrepancy between the date on which Mr Jonson claims the document was served, 28 September 1995, and that referred to in the petition and in the process server's affidavit, 29 September 1995. In the facts of this case this discrepancy is not relevant).
Both judgment debtors filed notices pursuant to s 41(5) of the Bankruptcy Act on 6 October 1995. Each notice asserted that the relevant judgment debtor disputed the validity of the bankruptcy notice on the ground that the sum specified in the bankruptcy notice as the amount due to the judgment creditor exceeded the amount in fact due. The notice filed on behalf of Mr Jonson asserted that service of the bankruptcy notice had been effected on 28 September 1995. The notice filed on Mrs Jonson's behalf asserted that service of the bankruptcy notice had been effected on 1 October 1995. Both notices were signed on behalf of the relevant judgment debtor by their solicitors Hussey & Co.
On 6 October 1995 an application was filed on behalf of each judgment debtor seeking an order that the bankruptcy notice be set aside on the grounds that it overstated the amount owing by the judgment debtor and was ambiguous and invalid. Both applications were made returnable on 19 October 1995 and in both cases the time for compliance with the bankruptcy notice was extended by order pursuant to s 41(6B)(b) to 4.00pm on that day. In each case the order for extension of time was made on the condition that service of the bankruptcy notice had not been effected prior to 22 September 1995.
Mr Johnson's application to set aside the bankruptcy notice was supported by an affidavit sworn 6 October 1995 to which he exhibited a copy of a summons in the County Court proceedings seeking an order that the judgment be set aside and a copy of an affidavit filed in support of that summons. In the same affidavit Mr Jonson swore that service of the bankruptcy notice had been effected on 28 September 1995 and that Mrs Jonson had been served on 1 October 1995. In an affidavit sworn on 7 October 1995 Mrs Jonson said that she had "read all affidavits of my husband Peter Carl Nicholls Jonson, and I adopt and agree with all he has deposed to".
The two applications to set aside the bankruptcy notices were adjourned on 19 October 1995 for hearing on 5 December 1995 and the time for compliance with the bankruptcy notices was in each case extended to 4.00pm on 5 December 1995.
The application to set aside the judgment in the County Court proceeding was dismissed on 27 November 1995.
On 5 December 1995 Mr Jonson's application to set aside the bankruptcy notice was dismissed. The Court record indicates that the dismissal was by consent. However, Mrs Jonson's application was adjourned to 20 December 1995 and she was given leave to file and serve an amended application and affidavits in support. She was granted a further extension of time to comply with the bankruptcy notice until 5.00pm on 20 December 1995.
Mrs Jonson filed an amended application on 15 December 1995 when two additional grounds on which she sought to have the bankruptcy notice set aside were pleaded. First, it was said "that bankruptcy notice 1727 of 1995 has unauthorised alterations made, not initialled, and not overstamped by the Court, and is invalid"; and second, that the debtor had a counterclaim, set-off or cross demand which she could not have set up in the action in which judgment was obtained. An affidavit in support of the second additional ground was filed on 20 December 1995 but was endorsed by a Deputy Registrar "Application insufficient - no case raised" pursuant to Rule 10 of the Bankruptcy Rules and returned to the debtor.
The amended application was heard by a Deputy Registrar on 20 December 1995 and was dismissed. No steps have been taken to review the decision.
As part of the factual context it is appropriate to refer to certain affidavits filed in respect of each of the bankruptcy notices. In the case of bankruptcy notice 1727 of 1995 (Mrs Jonson) an affidavit of service sworn by Andrew William James Macdonald (Macdonald) on 2 October 1995 was filed in Court on 20 December 1995. The affidavit deposes to service having been effected on Mrs Jonson on Sunday "the 1st day of October" (sic) and has annexed to it what is said to be "a true copy of the Bankruptcy Notice signed and stamped by the Deputy Registrar". The annexure is obviously one of the copies of the bankruptcy notice addressed to Mrs Jonson which Ms Bond received on 25 August 1995. It is signed by a Deputy Registrar and bears in two places the seal of the Registrar in Bankruptcy. The file number in the heading has been altered from 1728 to 1727 and some initials appear beside the alteration. A second affidavit of service sworn by Macdonald on 23 April 1996 was filed on 1 May 1996. It deposes to service having been effected on Mrs Jonson on 1st October 1995 and it has annexed to it a copy of bankruptcy notice 1727 of 1995 which is obviously a photocopy of the bankruptcy notice on Registry file 1727 of 1995 and bears an endorsement signed by a Deputy Registrar dated 11 April 1996 certifying it to be a true copy of the original document filed on 21 July 1995.
In the case of bankruptcy notice VN 1728 of 1995 an affidavit of service on Mr Jonson sworn by Macdonald on 2 October 1995 deposing to service having been effected on 29 September 1995 was filed on 3 April 1996. A copy bankruptcy notice annexed to the affidavit bears the signature of a Deputy Registrar and in two places, the seal of the Registrar in Bankruptcy.
THE PETITIONS
A creditor's petition against Mr Jonson was presented on 3 April 1996. The petitioning creditor claims that the debtor is indebted to him under the judgment in the County Court proceeding and relies upon an act of bankruptcy said to have been committed by the debtor's failure to comply, on or before 13 October 1995, with the requirements of a bankruptcy notice duly served on 29 September 1995. The petition was issued on 11 April 1996 and served on 18 May 1996. An affidavit of service sworn by Barry John Reaper on 20 May 1996 has annexed to it what is clearly a photocopy of the petition. On 14 June 1996 particulars of grounds upon which Mr Jonson opposed the petition were filed. The grounds were that the affidavit verifying paragraph 4 of the petition (dealing with the commission of the act of bankruptcy) is untrue and that the petition had not been duly served in accordance with the requirements of Rule 16 of the Bankruptcy Rules in that an official copy of the petition is not annexed to the process server's affidavit of service. A further affidavit of service sworn on 20 May 1996 was subsequently filed. It has annexed to it a copy of the petition which bears the stamp of the Registrar in Bankruptcy and the signature of a Deputy Registrar. On 17 June 1996 the petitioning creditor filed an affidavit sworn by Samuel Satterly Durland on 17 June 1996 in which he makes reference to his earlier affidavit verifying paragraph 4 of the petition. He explains that he had previously failed to note the two extensions of time granted under s 41(6B) to which reference has been made above. Upon the first return of the petition on 17 June 1996 the debtor was given leave to file an amended notice of opposition and orders were made for the filing of affidavit evidence. The hearing of the petition was adjourned to 10 July 1996 before a Judge. Further and better particulars of the debtor's grounds of opposition were filed on 1 July 1996.
A creditor's petition against Mrs Jonson was presented on 1 May 1996. The petitioning creditor claims that the debtor is indebted to him under the judgment in the County Court proceeding and relies upon an act of bankruptcy said to have been committed by the debtor's failure to comply on or before 20 December 1995, with the requirements of a bankruptcy notice duly served on 1 October 1995. The petition was issued on 3 May 1996 and served on 22 May 1996. On 6 June 1996 the debtor filed grounds of opposition asserting that the bankruptcy notice referred to in paragraph 4 of the petition is invalid and that the service of the bankruptcy notice is ineffective, invalid and inoperative. Amended grounds of opposition were filed on 12 June 1996. On 17 June 1996 the matter was set down for hearing on 10 July 1996.
THE GROUNDS OF OPPOSITION
The amended grounds upon which Mr Jonson opposes the petition are expressed as follows:
Rule 7 of the Bankruptcy Rules provides that the bankruptcy notices which are to be signed and stamped by the Registrar must be filed at the time when the application is made for issue of a Bankruptcy Notice. Here, the Bankruptcy Notice served on the debtor was signed and stamped by the Registrar some weeks after the application was made. Reference will be made to the affidavits of Betty Bond and Helene Stackpole, both sworn on the 19th of December 1995.
Rule 16 of the Bankruptcy Rules provides that due service of the Bankruptcy Notice shall be deemed not to have been proved unless a copy of the Bankruptcy Notice signed and stamped by the Registrar is marked as an annexure to the affidavit of the process server.
The debtor has previously disputed the validity of the service of the Bankruptcy Notice.
The onus of proof is now on the petitioning creditor to prove service in accordance with the Rules. Reference will be made to the unreported decision of Lee J in Thorpe Ex parte Thorpe & Perry No B275 of 1987 Perth 1st of June, 1988 No 283/88.
The copy of the Bankruptcy Notice annexed to the affidavit of the process server was not signed and stamped by the Registrar at the time when the application for issue of the Bankruptcy Notice was made.
Because of the deeming provisions of Rule 16, it follows that the Bankruptcy Notice has not been served, and the act of bankruptcy said to found the ground for the Creditor's Petition has not occurred.
The affidavits verifying paragraph 4 of the petition are not correct.
The affidavit of service originally filed was a photostat copy, and the copy now purporting to be a more correct affidavit of service of the creditor's petition has been falsely labelled as filed on a different date from its actual date of filing.
Paragraph 1 of the amended grounds filed on behalf of Mrs Jonson is identical to ground 1 of Mr Jonson. Mrs Jonson's second ground is the same as Mr Jonson's second ground except that it contains the following further assertion:
The copy of the bankruptcy notice served on the debtor is different from the one filed at the court, and has been amended by a person other than the Registrar. Reference will be made to the affidavit of Betty Bond sworn the 19th December 1995.
Mrs Jonson's notice does not raise any other issue.
ESTOPPEL
The question arises as to whether the petitioning creditor is able to rely upon the dismissal of the respective applications to set aside the bankruptcy notices in the present proceedings.
In the case of Mr Jonson the Court record shows that the application was dismissed on 5 December 1995 by consent. The application made on 6 October 1995 appears to raise only questions as to the alleged over statement of the amount owing by the debtor and nothing in the material filed on Mr Jonson's behalf refers to the question of the validity of the process whereby the bankruptcy notice was issued nor as to proof of service. Indeed, these matters only came to light subsequent to the filing of affidavits of Ms Bond and Ms Stackpole on 20 December 1996.
Mrs Jonson's application to set aside the bankruptcy notice raised in addition to the grounds relied upon by Mr Jonson the additional ground relating to the alteration to the file number. As I understand it, her application went to the question of the validity of the bankruptcy notice, rather than to the question of proof of service. As the order made by the Registrar was that the application be dismissed it must be inferred that he had dealt with and adjudicated upon all issues raised in the application touching upon the validity of the bankruptcy notice.
The first ground of objection in each case appears to raise a question as to the validity of the bankruptcy notices although the ground is not expressed in these terms. In the proceedings before the Deputy Registrar, validity was not contested on the ground now alleged and it is open for the debtors to raise that ground in opposition to the petitions.
In his written outline of argument in the present proceeding Counsel for the debtor says:
Some of the above matters were argued before Registrar Efthim in December 1995. The learned Registrar felt constrained, as a Registrar, in not making a decision on a novel point. The fact situation in the present case could not arise very frequently. The learned Registrar was primarily concerned with a question under
s 41(5) of the Act. A decision of a Registrar is not binding on a Judge.
This submission contains a serious misconception. On 20 December 1995 the Deputy Registrar was exercising by delegation the power of the Court. His decision was a decision of the Court. The debtor had the right to make application to review the exercise of power by the Registrar (s 31A(6)) but no such application has been made. It must necessarily follow that the Court has already adjudicated upon the question of whether the validity of the bankruptcy notice was affected by the alteration to the file number and that decision must stand. However, although essentially the same issue is raised in Mrs Jonson's grounds of opposition to the petition, it is raised in the context of what is said to be a defect in the proof of service of the bankruptcy notice.
In the two applications to set aside the bankruptcy notices the question of proof of service was not raised. Indeed, the applications assumed that service had been effected. Although I have some real reservations as to the entitlement of the debtors now to pursue the issues raised in their second ground of objection to the petitions I propose to deal with the petitions and the objections on their merits.
MR JONSON'S GROUNDS 3 AND 4
Ground 3 refers to the error in paragraph 4 of the petition in which it is asserted that an act of bankruptcy was committed on 13 October 1995. The date alleged in paragraph 4 of the petition should have been 5 December 1995 this being the date to which the time for complying with the bankruptcy notice was last extended pursuant to s 41(6B). The irregularity has been detected and explained in a further affidavit. No case has been put on the debtor's behalf to suggest that the irregularity has caused substantial injustice. In the circumstances the petition is not invalidated by the irregularity (s 306(1)), and I will grant the petitioning creditor leave to amend paragraph 4 of the petition to allege an act of bankruptcy on 5 December 1995.
As indicated earlier in these reasons, two affidavits of service of Mr Jonson's petition have been filed, the first (which appears to be a photocopy rather than an original) on 24 May 1996. It has annexed to it what is clearly a photocopy of the petition. The second affidavit was filed on 17 June 1996. It has annexed to it an original copy of the petition. The second affidavit bears two endorsements in the top right hand corner of the first page. One is a rubber stamp stating "Filed in Court" below which has been written by hand "17-6-96". The other is a rubber stamp stating "Filed in the Federal Court on" below which has been written "24/5/96". I take judicial notice of the fact that the first mentioned stamp is that used in the Federal Court when documents are tendered for filing in the course of a Court hearing rather than through the Registry and further that the practice is for the Associate or Judge or Registrar to write below the stamp the date on which the document is so filed. The Court record discloses that Mr Jonson's petition was before Deputy Registrar Wood on 17 June 1996 and in the circumstances I draw the inference that the document which is on the Court file was filed in Court on that day. The second endorsement is explained in an affidavit sworn 9 July 1996 by Timothy George Honey a solicitor employed in the office of the petitioning creditor's solicitor, the Australian Government Solicitor. Honey says that the second affidavit of service was filed after it was learned that a copy affidavit had been inadvertently filed and that the original had been kept on the file of the Australian Government Solicitor. The second endorsement was made on the original which was then placed on the solicitor's file to record the date of filing of the document. The facts as deposed to offer an adequate explanation. No irregularity has occurred and there is no substance in ground 4. It is regrettable that such a trivial and unmeritorious issue should have been thought worthy of engaging the Court's time.
GROUND 1 - BOTH DEBTORS
Rule 7 of the Bankruptcy Rules so far as it is relevant to the first ground of opposition, provides:
7(1)Application may be made to the Registrar for the issue of a bankruptcy notice by filing an application, in accordance with Form 3, with the Registrar.
(2)At the time when the application is filed, the applicant shall:
(a) ...
(b)furnish to the Registrar, for signature and stamping by the Registrar, so many copies of a form of bankruptcy notice as are required for service and for annexure to any affidavits of service, and one additional copy of that form for filing.
(3) ...
(4) ...
(5)Where the Registrar is satisfied that application has been duly made to him for the issue of a bankruptcy notice and that the copies of the form of bankruptcy notice furnished to him in accordance with paragraph (2)(b) are in order for signature, the Registrar shall sign and stamp each of those copies and return them to the applicant.
(6) ...
(7) ...
In each of the present cases the applicant (the petitioning creditor) made application for the issue of the bankruptcy notices on 21 July 1995 by filing applications in an appropriate form and at the time the application was filed furnished to the Registrar for signature and stamping by the Registrar 3 copies of a form of bankruptcy notice (being the number of copies required for service, for annexure to an affidavit of service and for filing). The requirements of subrules 7(1) and 7(2) were duly complied with. The Registrar was obviously satisfied that applications had been duly made to him for the issue of the bankruptcy notices and that the copies of the form of bankruptcy notice furnished to him in accordance with r 7 (2)(b) were in order for signature.
The record shows that the Registrar signed and stamped at least one of those copies, being the copies on the respective files (r 7(5)). There is no evidence as to what became of the other two copies of the bankruptcy notices. In the absence of evidence to the contrary the Court is entitled to presume that the Registrar performed his functions in accordance with the rule and signed and stamped all three copies of each bankruptcy notice and returned them to the applicant. I accept that the petitioning creditor has no record of having received any duly signed and stamped copies prior to 25 August 1995 but that fact is not sufficient to displace the presumption that the Registrar's functions were performed in accordance with the rules. Be that as it may, non-compliance with the rules does not render a proceeding void unless the Court so directs (r 195(1)).
Two further copies of each bankruptcy notice were sent to the Registrar on 11 August 1995. These copies were returned duly signed and stamped on 25 August 1995.
Apart from the matter of the numbering of the copies of the bankruptcy notice addressed to Mrs Jonson (which will be dealt with as a separate issue below) the copies returned to the petitioning creditor on 25 August 1995 were true copies of the relevant bankruptcy notices on the Registrar's file.
Rule 15 requires (subject to any order to the contrary) that 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. The rule does not prescribe that the copy served must be one of the copies referred to in rule 7(2)(b). The copy bankruptcy notice served on each debtor was in fact a true copy of the relevant bankruptcy notice that had been signed and stamped by the Registrar. Even assuming that there had been some non-compliance with rule 7(2)(b) (as to which there is no evidence) the facts do not establish that the bankruptcy notices failed to meet a requirement made essential by the Act nor could the non-compliance reasonably mislead a debtor as to what was necessary to comply with the notice (Kleinwort Benson Australia Limited v Crowe (1988) 165 CLR 71). There is therefore no warrant for the Court to set aside the bankruptcy notices as irregular. Rather it is appropriate that the Court should direct, and I so direct, that the petitioning creditor is relieved from any consequences of non-compliance with the rules in relation to the issuing of the bankruptcy notices (r 195(2)).
The first ground of objection in each case will be dismissed.
GROUND 2 - BOTH DEBTORS
The second ground of opposition which is common to both debtors relates to the proof of service of the bankruptcy notices. (I will deal separately with the wrong number question in relation to Mrs Jonson later).
The conclusion which I have reached in relation to the first ground of opposition is sufficient to dispose of the second ground insofar as the latter is dependent upon the assertion that the copy bankruptcy notices annexed to the affidavits of service were not signed and stamped by the Registrar at the time when the applications for the issue of the bankruptcy notices were made.
In their amended grounds of objection both debtors assert:
Rule 16 of the Bankruptcy Rules provides that due service of the Bankruptcy Notice shall be deemed not to have been proved unless a copy of the Bankruptcy Notice signed and stamped by the Registrar is marked as an annexure to the affidavit of the process server.
That assertion is incorrect. Rule 16 in fact provides as follows:
16Due service of a bankruptcy notice or petition shall be deemed not to have been provided by affidavit unless:
(a)in the case of a bankruptcy notice - a copy of the bankruptcy notice signed and stamped by the Registrar is marked as an annexure to the affidavit; or
(b)...
(Emphasis added)
Rule 16 applies only in a case where service is sought to be proved by affidavit.
There is nothing in the Bankruptcy Act or the Rules which decrees that proof of service by affidavit is the only means of proof. Indeed, in the unreported decision of Thorpe; Ex parte Thorpe v Perry referred to in ground 2 of the amended grounds of opposition the Court was concerned with the proof of service of a bankruptcy notice by evidence at trial.
Service of the bankruptcy notices (as distinct from proof of service) is not and has never been in issue. Each debtor filed a notice pursuant to s 41(5) disputing the validity of the relevant bankruptcy notice. In each notice the relevant date of service was asserted. It was necessary for the date of service to be stated as s 41(5) requires notice to be given "within the time allowed for payment" which in each case was 14 days from the date of service. Further, each debtor sought and obtained an order from the Registrar pursuant to s 41(6B) extending the time for compliance. Such power could only be exercised "before the expiration of the time fixed by the Registrar for compliance with the requirements of the bankruptcy notice". Again, time had to be calculated from the date of service in order to ascertain if the Registrar had any authority to extend the time for compliance, hence the qualification that applied to each extension granted on 6 October 1996 "that the Bankruptcy Notice was served not earlier than 22 September 1995". Clearly if service had been effected before 22 September 1995 the Registrar had no power on 6 October 1996 to grant the extension. The whole of the proceedings in relation to the debtors' attempts to have the bankruptcy notices set aside were based upon the debtors' own admissions that service had been effected. Proof of service by affidavit was unnecessary. Service was sufficiently proved by the debtors' own admissions.
THE ALTERED FILE NUMBER - MRS JONSON
The final issue in relation to Mrs Jonson's bankruptcy notice has to do with the alteration to the file number.
In counsel's written outline of the argument relied upon by Mrs Jonson the following points are made:
a)The copy bankruptcy notice attached to the affidavit of service is different from the one on the Court (sic) file. [The Court does not issue bankruptcy notices, the Registrar does. The file is not a Court file but a file kept by the Registrar.]
b)Unauthorised alterations were made to the bankruptcy notices.
c)The question of whether the alterations are misleading is a separate test from the test that the affidavit must contain a true copy of the bankruptcy notice.
d)All alterations must be initialled.
e)It is not a question of whether this debtor could be misled, rather could a debtor be misled.
f)The debtor could easily have been misled because the altered figure was the plaint (sic) number of her husband's action (sic) and because it was based on a joint judgment in the County Court, it may have been implied that the husband alone was being pursued. She may have thought they were proceeding against her husband.
It is true that the copy of the bankruptcy notice attached to the affidavit of service is different from the one on the Registry file in that on the former the number 1728 has been altered to 1727 whereas the latter does not have any such alteration. Although reference is made only to the copy bankruptcy notice annexed to the affidavit of service it must be assumed that the debtor is saying the same thing about the copy served on her. The debtor does not assert that the bankruptcy notice failed to meet a requirement made essential by the Act, but rather the issue is whether a debtor served with such a notice could be misled as to what is necessary to comply with the notice. Conceivably, a debtor served with the notice in question may be misled as to the file number assigned to the bankruptcy notice but there is nothing about
the document which could mislead a debtor as to what was necessary to comply with the notice. In item (f) of the submission the debtor does not apply the test as stated above but seeks to adopt a subjective approach which is not only not appropriate but is fanciful in the extreme.
CONCLUSION
Neither debtor has made out any of the several grounds of opposition raised in the respective amended notices. It follows that Mr Jonson committed an act of bankruptcy on 5 December 1995 and Mrs Jonson committed an act of bankruptcy on 20 December 1995.
Subject to the amendment of paragraph 4 of the petition in proceeding VP 262 of 1996 (Mr Jonson) to which reference has been made earlier, I am satisfied that the necessary formalities have been proved to ground a sequestration order in respect of each petition.
I certify that this and the preceding 20 pages are a true copy of the Reasons for Judgment of the Honourable Justice Olney
Associate:
Dated:
Heard: 10 July 1996
Place: Melbourne
Judgment: 22 July 1996
Appearances:
Mr J. Nolan (instructed by Australian Government Solicitor) appeared for the petitioning creditor.
Mr C.C. Hussey (instructed by Hussey & Co) appeared for the judgment debtor in each matter.
0