Re Litherland, B.R. & Anor v Ex Parte Showerama Products Pty Ltd - [1985] FCA 82

Re: BARRY RAYMOND LITHERLAND and JANIS MAE LITHERLAND
Ex Parte: SHOWERAMA PRODUCTS PTY LTD
No. 1054 of 1984
Bankruptcy 5 FCR 137

COURT

IN THE FEDERAL COURT OF AUSTRALIA
GENERAL DIVISION BANKRUPTCY DISTRICT OF THE SOUTHERN DISTRICT OF THE STATE OF
QUEENSLAND
Beaumont J.(1)

CATCHWORDS

Bankruptcy - bankruptcy notice based on summary judgment for costs - Whether final - Whether defective because notice failed to state explicitly that only balance of judgment was due.

Bankruptcy - Bankruptcy notice - Final judgment or final order - Summary judgment including order as to costs - Whether bankruptcy notice could be based on an order for costs - Bankruptcy Act 1966 (Cth), ss 40(1)(g), 40(3)(b), 52(1), 52(1A)(b)(ii), 156A(1).

HEADNOTE

On application by the creditor for summary judgment the Supreme Court of Queensland ordered that the creditor recover against the debtors its claim "and costs of and incidental to the action and this application to be taxed". Subsequently the taxing officer certified pursuant to that order that costs had been taxed and allowed in a specified sum. The debtors having failed to pay the costs awarded, the creditor applied for a bankruptcy notice supported by the said order and certificate and, on the debtors' failure to comply therewith, petitioned for the sequestration of the estates of the debtors.

Held: (1) The judgment being final under O, 18, r 1 of the Supreme Court Rules was therefore final for the purposes of s 40(1)(g) of the Bankruptcy Act 1966.

(2) A. bankruptcy notice can be based on an order for costs.

(3) Failure to specify in the bankruptcy notice that the sum claimed represented the balance due under the judgment as costs was not likely to mislead or confuse the debtors and therefore was not fatal to the bankruptcy notice.

Re Skinner's and Smith's Application (1982) 45 ALR 553; Re Cartwright; Ex parte Cartwright v. Baker (1975) 1 WLR 573; Kayo Contractors v. Fernandez (1984) 27 NTR 21; Wilmot v. Buckley (1984) 2 FCR 540, referred to.

HEARING

Brisbane, 1985, February 25; March 14. #DATE 14:3:1985
PETITION

Petition for a sequestration order.

A. J. H. Morris, for the petitioning creditor.

Cur adv vult

Solicitors for the petitioning creditor: Cannan & Peterson.

GFV

ORDER

A sequestration order be made against the estates of the debtors.
Seven-eighths of the costs of the petitioner be taxed and paid according to the Act.
Direct that a draft of this order be delivered to the Registrar within seven days in accordance with Rule 124(2).

1. I. make a sequestration order against the estates of the debtors.

2. I. order that seven-eights of the costs of the petitioner be taxed and paid according to the Act.

3. I. direct that a draft of this order be delivered to the Registrar within seven days in accordance with Rule 124(2).

JUDGE1

A number of objections - some formal defects only - are raised in this bankruptcy petition. It is convenient to deal with the substantive objection first.

The act of bankruptcy relied…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: Re Litherland, B.R. & Anor v. Ex Parte Showerama Products Pty Ltd [1985] FCA 82 (5 FCR 137)
Case: [1985] FCA 82
Decision Date: 14 MARCH 1985

CaseChat Overview and Summary

In the matter of Re Litherland, B.R. & Anor v Ex Parte Showerama Products Pty Ltd, the dispute involved a bankruptcy notice issued based on a summary judgment for costs. The primary issue before the court was whether the bankruptcy notice was final and enforceable and whether it was defective due to the petitioner's failure to explicitly state that only the balance of the judgment was due.

The court examined whether the bankruptcy notice complied with statutory requirements, specifically whether it accurately reflected the amount owed by the debtor. The court had to decide if the notice was defective because it did not explicitly state that only the balance of the judgment was due, which is a requirement under the Bankruptcy Act. The court considered the necessity of precise wording in bankruptcy notices to ensure clarity and enforceability.

The court determined that the bankruptcy notice was not defective and was enforceable as it provided sufficient information for the debtor to understand the amount owed. The court found that while the notice did not explicitly state that only the balance of the judgment was due, it was clear enough to meet the statutory requirements. Consequently, the court made a sequestration order against the estates of the debtors, ordered that seven-eighths of the petitioner's costs be taxed and paid, and directed that a draft of the order be delivered to the Registrar within seven days in accordance with Rule 124(2).

Orders

Orders of the court

A sequestration order be made against the estates of the debtors.

Seven-eighths of the costs of the petitioner be taxed and paid according to the Act.

Direct that a draft of this order be delivered to the Registrar within seven days in accordance with Rule 124(2).

1. I. make a sequestration order against the estates of the debtors.

2. I. order that seven-eights of the costs of the petitioner be taxed and paid according to the Act.

3. I. direct that a draft of this order be delivered to the Registrar within seven days in accordance with Rule 124(2).

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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