Re; Ken Brown Ex Parte Hunstead, Jane

[1984] FCA 351

351 CATCHWORDS

Bankruptcy - defect in bankruptcy notlce - omlsslon

of paragraph B of prescribed form.

James v. Federal Commissioner of Taxation (1955) 93 C.L.R. 631 - cor

Re Wong; Ex parte Kltson (1979) 27 A.L.R.	405 - con.
Bankruptcy Act, 1966, ss.41, 306

KEN BROWN Ex parte:

PENELOPE JANE HUNSTEAD

No. P.1029 of 1984

Beaumont, J.

2 November 1984

Sydney.

I

I N THE FEDERAL COURT OF AUSTRALIA

GENERAL DIVISION )

BANKRUPTCY D I S T R I C T OF THE STATE

OF N E W SOUTH WALES AKD THE 1

AUSTRALIAN CAPITAL TERRITORY j No. P1029 Df 1984

Re :	BROWN	KEK
D e b t o r

Ex par te :

PENELOPE JANE HUNSTEAD

C r e d l t o r

CRDER

J u d g e maklng o r d e r : Beaumont , J .

Date o r d e r m a d e : 2 November 1984

Where made: S y d n e y

TEE COURT ORDERS THAT:

1. P e t i t i o n d i s m i s s e d .

2 . KO o r d e r as c t o s t s .

1

I N THE FEDERAL COURT OF AUSTRALIA

GENERAL DIVISION 1 1

BANKRUPTCY DISTRICT OF THE STATE

1

OF N E W SOUTH WAImES AND TEE

1

P.USTRALIAK CAPITAL TERRITORY 1 No. Plc29 of 1984

Re :	KEK BROWN
Debtor

Ex p a r t e : PEKELOPE JANE HUNSTEAD

C r e d i t o r

CORAM:	Beaumont, J.
DATED:	2 November 1984.

REASOKS FOR JUDGMENT

Upon t h e h e a r l n g o f t h e b z n k r u p t c y F e t l t l o n i n t h l s

matter, it a p p e a r e d t h a t h e b a n k r u p t c y n o t l c e r e l i e d upon

by t h e p e t l t i o n e r d e p a r t e d f r o m t h e p r e s - r l b e d f o r m i n o n e

i m p o r t a n t r e s p e c t : a l t h o u g h t h e n o t i c e r e q u i r e 3 t h e d e b t o r

t o p a y t h e J u d g m e n t c r e d i t o r t h e amount c la lmed under the

judgment debt (paragraph A ) , t h e a l t e r n a t l v e p r o v l d e d b y

~ . 4 1 ( 2 ) ( a ) ( i i ) t h a t t h e d e b t o r may s e c u r e t h e payment of t h e

deb t o r compound t h e d e b t as t h e r e i n p r o v i d e d was s t r u - k

o u t . The word "or" and paragraph E I n t h e prescribed form

2.

were s t ruck o u t .

I n my o p i n i o n , t h i s d e f e c t i s f a t a l . James v .

Federal Commissioner o f Taxat ion (1955) 93 C.L .R . 631 ( a t

pp.643-4) , emphasises the Importance o f t h e s t a t e m e n t i n a

b a n k r u p t c y n o t i c e t h a t t h e d e b t o r h a s t h e a l t e r n e t l v e of

s e c u r i n g t h e payment of t h e sum clalmed o r of compundlng it

t h e I n manner provided by ~ . 4 1 ( 2 ) ( a ) ( i i ) . Those

o b s e r v a t i o n s a r e s q u a r e l y i n p o l n t h e r e .

It was sugges t ed in a rgumen t tha t , even i f a d e f e c t

e x i s t e d , t h l s was a n a p p r o p r i a t e c a s e f o r t h e a p p l i c a t i o n of

s . 306 . In my n p i n i o n , t h e d e f e c t i s not mere ly formal. I t

is capable o f m i s l e a d i n g t h e d e b t o r a n d t h e e f f e c t of t h e

d e l e t i o n o f p a r a g r a p h B was t o c o n v e y t o t h e d e b t o r t h e

i m p r e s s i o n t h a t t h e o p t i o n p r o v i l e d u n d e r ~ . 4 1 ( 2 ) ( a ) ( i l ) was

no t ava i l ab le . These a r e fundamen ta l b reaches 3f t h e scheme

p r o v l i e d by S . 4 1 and, f o r t h a t r e a s o n , S .';06 canno t , I n my

view, be invoked (see James a t p . 6 4 4 ) .

I n Re Won&; Ex par te Kxtson (1979) 27 A.L.R. 405,

L o c k h a r t , J . h e l d t h a t a b a n k r u p t c y n o t i c e was bad i n a

s i t u a t i o n similar p r t h e t o s e n t c a s e . T h e r e , t h e

a l t e r n a t i v e s t o be provided between paragraph A and E I n t h e

prescr lbed form of the bankruptcy no txce were no t p roper ly

s t a t e d : t h e word "or" between the paragraphs was omi t t ed .

Lockhart , J . h e l d t h a t t h i s d e f e c t cou ld r easonab ly ml s l ead

3.

t h e d e b t o r a n d t h a t h e n o t i c e was t h e r e f o r e i n v a l i d e t e d .

From t h e d e b t o r ’ s s t a n d p o l n t , t h e p r e s e n t c e s e 1s e v e n

s t r o n g e r .

The p e t i t l o n must be dismissed. Slnce the debtor

was n o t p r e s e n t , t h e r e w i l l be no o rde r f o r c o s t s .

I make the fo1lowi:lg orders:

1. Pe t i t l on I l i smls sed .

2 . No o r d e r as t o c o s t s .