Re McGettigan, John Ex Parte Lancaster, Christopher John

[1996] FCA 87

IN THE FEDERAL COURT OF AUSTRALIA )

GENERAL DIVISION                 )        VP 1155 of 1994

BANKRUPTCY DISTRICT IN THE STATE  )

OF VICTORIA  )

RE:      JOHN McGETTIGAN (also known as JOHN PATRICK McGETTIGAN)

(Debtor)

EX PARTE: CHRISTOPHER JOHN LANCASTER

(Creditor)

CORAM:    Ryan J

PLACE:    Melbourne

DATE:     28 February 1996

MINUTES OF ORDERS

THE COURT ORDERS:

1. That the petition be dismissed.

2. That there be no order as to costs.

NOTE:     Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules

IN THE FEDERAL COURT OF AUSTRALIA )

GENERAL DIVISION                 )

BANKRUPTCY DISTRICT IN THE STATE  )        VP 1155 of 1994

OF VICTORIA  )

RE:      JOHN McGETTIGAN (also known as JOHN PATRICK McGETTIGAN)

(Debtor)

EX PARTE: CHRISTOPHER JOHN LANCASTER

(Creditor)

CORAM:    Ryan J

PLACE:    Melbourne

DATE:     28 February 1996

REASONS FOR JUDGMENT

By his notice of opposition to the making of a sequestration order, the debtor, John McGettigan, disputes service on him of a copy of the bankruptcy notice on which the creditor's petition is founded.  The bankruptcy notice was issued on 22 September 1994 claiming the sum of $7,431.34 due under an order of the Magistrates' Court at Bendigo made on 4 November 1992.  The petitioning creditor, Christopher Lancaster, claims himself to have served the bankruptcy notice.  By his affidavit of service sworn 27 October 1994 he deposed, so far as is relevant:

"1.THAT on Thursday the 27th. day of October, 1994 at 2.45 p.m. I served JOHN McGETTIGAN with an official copy of the Bankruptcy Notice herein signed and stamped by the Deputy Registrar by delivering such document to him personally in Lyttleton Terrace, Bendigo in the said State.

2.THAT I identified the person served by me as JOHN McGETTIGAN by reason of the fact that I have previously known and dealt with John McGettigan personally as he engaged me to carry out electrical work for premises at 136 Mollison Street, Bendigo for which the money, the subject matter of this Bankruptcy Notice constitutes the outstanding account.

3.At the time of service I said to John McGettigan `How are you going John'.

He said: `Fine, what do you want'.

I said:`I have a Bankruptcy Notice for you'.

He said: `I don't want that', whereupon I gave the Bankruptcy Notice to him, which he accepted."

That allegation of service was denied by the debtor who deposed in an affidavit sworn on 31 May 1995:

"That I John Patrick McGettigan was not served a bankruptcy notice on the 27th day of October 1994 or any other day by Christopher John Lancaster or any other person.  The last time I saw or spoke to Christopher John Lancaster was around April 1994 when I requested him to leave and not reenter my property at 136 Mollison Street Bendigo Victoria as he was trespassing."

That prompted Mr Lancaster to file a further affidavit sworn 28 June 1995 amplifying his earlier affidavit of service.  The material paragraphs of his second affidavit were:

"2.In relation to service of the Bankruptcy Notice on the debtor, on the day when service was effected I noticed that a car belonging to the debtor was parked in Lyttleton Terrace, Bendigo outside the coffee shop commonly known as `Cafe Naturale'.  At the time when I first noticed the car it was not occupied by any person or the debtor.  It was obvious to me that whoever was driving the car whom I suspected at that time to be John McGettigan would be returning to the car.  So as to avoid John McGettigan noticing me when he returned to the car, I chose to wait for him to return to his car by sitting inside `Cafe Naturale' which is approximately 3 metres from where the car was parked at the time.

3.At the time I asked the proprietor of `Cafe Naturale' if I could sit in the coffee shop as I had some bankruptcy notices to serve on the person whose car was just parked outside her establishment.

4.As I was waiting for the person to return to the car I had brief conversations with the daughter of the proprietor of the coffee shop Katherin Hallam.

5.At or about 2.45 p.m. I noticed John McGettigan return to his car at which time I left `Cafe Naturale' and effected service of the Bankruptcy Notice on him."

The evidence was later adduced in the form of an affidavit of Mr Lancaster's de facto's wife, Ms Elizabeth Brasier, that she
had witnessed his service of the bankruptcy notice on the debtor.  Ms Brasier's affidavit sworn 26 June 1995, so far as it was admissible, was in these terms:

"2.That on Thursday the 27th. day of October, 1994 I witnessed the Petitioning Creditor serve John McGettigan with a document which I knew was a Bankruptcy Notice.  I now know the man as John McGettigan.

3.Mr McGettigan's car was parked in the Coles carkpark in Lyttleton Terrace, Bendigo.  It was parked outside a small caneware shop.  The car was an old red Mazda 929.

4.The Petitioning Creditor handed Mr. McGettigan the documents as Mr. McGettigan opened the rear passenger door of his vehicle.  the parties had a short conversation.

...

6.I know the man served by the Petitioning Creditor to be John McGettigan the debtor named herein because I have previously seen the Petitioning Creditor speak to him at 136 Mollison Street, Bendigo, premises owned by a company of which Mr. McGettigan was a director.  Mr. McGettigan is and was well known to me at the time the Petitioning Creditor served the Bankruptcy Notice on him."

Mr Lancaster was cross-examined at some length by the debtor who represented himself.  He was driven to acknowledge that, at the time he claimed to have served the debtor, he did not know whether the debtor's car was a four-door sedan or a two-door coupe although he was emphatic in identifying it as a red Mazda, registration number CST 403.  There was a considerable dispute in the course of evidence before me as to the respective positions said to have been occupied by the debtor's car and Ms Brasier's car and whether the petitioning creditor would have been able to view from the "Cafe Naturale" the debtor's car in the position ascribed to it.  However, I am satisfied that it was feasible for the debtor's car to have occupied a parking space on the side of Lyttleton Terrace nearer to the "Cafe Naturale" from which it was separated by a
footpath approximately four metres in width.  I am also satisfied that a car in that position would have been visible from the "Cafe Naturale", although at a distance closer to ten metres than the three metres suggested by Mr Lancaster.  Ms Brasier's car was said to have been in the second of the car spaces on the other side of the south-bound carriageway Lyttleton Terrace.  I am satisfied that from that position an occupant of a car would have had a generally uninterrupted view of a car in the parking space ascribed to the debtor's vehicle.

Ms Brasier was also cross-examined by Mr McGettigan and conceded that she may have been mistaken when she swore that documents were handed to him "as Mr McGettigan opened the rear passenger door of his vehicle", as she acknowledged that she was unsure whether it was a two-door or four-door car.  I do not consider that anything turns on the attribution by Mr Lancaster and Ms Brasier of the name "Coles Car Park" to the parking spaces on the south-bound part of Lyttleton Terrace where the two cars are said to have been.

To support his denials of service, the debtor relied first on the affidavit of Mr William Pittaway who was a client of the debtor's accountancy practice and deposed:

"1.THAT John Patrick McGettigan who I have known as John McGettigan has been my accountant for approximately eight (8) years.

2.THAT On the 27th day of October 1994 at 3.00pm my accountant John Mcgettigan visited me at my place of business The Royal Dental Hospital Royal Parade Parkville Melbourne Victoria to have me sign an Australian Securities Commission form and a Company Income Tax Return for Hospital Guard and Protection Services Pty Ltd. We discussed the progress of the deregistering of my company plus other tax and financial matters.

3.THAT John McGettigan always visited me at my place of business here at the Dental Hospital or previously at the Royal Childrens Hospital rather than I visiting him at his office.

4.THAT John McGettigan always rang to make an appointment to see me at 3.00pm and most appointments were made for approximately 3.00pm which is about half an hour before I left work for the day which was usually 3.30pm.  I cannot recall him visiting me before lunch or midday."

Mr Pittaway produced to the Court a photocopy company income tax return signed by Mr McGettigan as tax agent beside the typewritten date "25/10/94".  That return was signed by Mr Pittaway and dated in his hand "27/10/94".  A notice of intention to deregister a company was also signed by Mr Pittaway above the notation in Mr McGettigan's hand "Signed 27/10/94" which was initialled by Mr McGettigan.  The copy of that document lodged with the Australian Securities Commission on 4 January 1995 does not bear that notation.

Mr Pittaway agreed under cross-examination that he had no independent record to substantiate his belief that he had signed both documents on 27 October 1994.  However, he asserted that he would have recorded the correct date when he appended his signature to the company tax return.

Mr McGettigan also sought corroboration from his estranged wife, Shirley Lynette McGettigan who deposed, so far as is relevant:

"1.THAT at 4.00 p.m. on the 27th October 1994 John Patrick McGettigan collect [sic] me from my place of employment at 459 Lit Collins Street Melbourne Victoria, to drive me to my mothers home at Ocean Grove to collect some garments which I intended to wear to the start of the Melbourne Cup Carnival on Saturday the 29th day of October 1994.  We stayed overnight in Ocean Grove and returned to Melbourne the next morning Friday the 28th day of October 1994 at approximately 9.00am."

Under cross-examination, Mrs McGettigan testified that in October 1994 she had been employed as a legal secretary by a firm of solicitors and had made an appointment for Mr McGettigan to collect her from her place of employment at 4.00pm on Thursday, 27 October 1994, to drive her to her mother's home at Ocean Grove.  The purpose of the trip, she said, was to collect some outfits which she proposed to wear to the races on the following Saturday.  She claimed to have sought and been given permission to leave work early at 4.00pm on the day in question.

Mrs McGettigan's credit was impugned by cross-examination to the effect that she had falsely sworn in the Magistrates' Court at Bendigo that Mr McGettigan was on that day in Brisbane whereas she had met him in Bendigo on the same day shortly after the Court hearing.  She explained that evidence by saying that, at the time, she believed Mr McGettigan to have been in Brisbane and she had been surprised to meet him in Bendigo shortly afterwards.  When re-examined by the debtor, Mrs McGettigan said that she had been a regular attender at the Melbourne Cup Carnival for some twenty years and had been anxious in 1994 to collect her outfit for the Derby Day meeting which opened that Carnival.

By way of himself corroborating his denial that he had been in Bendigo at any time on 27 October 1994, Mr McGettigan deposed in an affidavit sworn on 19 June 1995:

"1.THAT on Wednesday the 26th day of October, 1994 I was in Bendigo and visited my property situated at 136 Mollison Street Bendigo Victoria at about 11.00 A.M.

2.THAT I visited the property almost every week to check that no damage or burglary had taken place at the property.

3.THAT I have made a sworn statement to the police that I had not visited the property situated at 136 Mollison Street between Wednesday the 26th day of October 1994 and Wednesday the 2nd day of November 1994.  Between these dates a burglary took place at the property.

4.THAT on Thursday the 27th. day of October, 1994 at 2.45 p.m. I was not in Lyttleton Terrace, Bendigo in the said State.

5.THAT on the 27th day of October 1994 I was not in Bendigo Victoria.

6.THAT on the 27th day of October 1994 at 3.00pm I visited a client William Jessie Pittaway at his place of business The Royal Dental Hospital Royal Parade Parkville Melbourne Victoria to have him sign a Australian Securities Commission form and a Company Income Tax return. We discussed the deregistering of his company and other tax and financial matters.

7.THAT on the 27th day of October 1994 at 4.00 p.m., I was at 459 Lit Collins Street Melbourne as I had arranged to collect my wife SHIRLEY LYNETTE McGETTIGAN from her place of employment to drive her to her mothers home at Ocean Grove where we stayed the night and returned to Melbourne the next morning Friday the 28th October 1994 at approximately 9.00 a.m."

When cross-examined by Counsel for the petitioning creditor, Mr McGettigan claimed that it had been his invariable practice to go to Bendigo on a Wednesday.  He claimed that his appointments to attend on Mr Pittaway and pick up his wife on Thursday, 27 October 1994, had been noted in a diary or appointment book which he had kept jointly with a Mr Buckley, another accountant with whom he shared an office and telephone answering service.  What was claimed to be a photocopy from a page of that diary contained the notation "7 o'clock Ocean Grove" which Mr McGettigan explained as his estimate of the time of arrival at his mother-in-law's home.  Mr McGettigan denied the suggestion that he had recently concocted or fabricated the photocopy of those diary entries.

Mr McGettigan revealed some confusion as to when certain handwritten interlineations had been inserted on the application to deregister Mr Pittaway's company.  However, I am not persuaded that his confusion in that respect seriously impaired the thrust of his evidence.  It is significant in this context that Mr Pittaway was not asked whether the interlineations had been inserted before he signed the document.  Nor am I persuaded that Mr McGettigan's failure to deny in a "without prejudice" letter of 26 May 1995 to the petitioning creditor's solicitor that he had been served with the bankruptcy notice impairs his credit on this issue.

In respect of the insurance claim which asserts that the burglary at the Bendigo property occurred between 26 October 1994 and 2 November 1994, Mr McGettigan gave evidence that he had inspected the property at about 10.30am on the morning of 26 October and had returned, presumably to Melbourne, by train about half an hour later.  His assertion that his property remained intact for the rest of that day was based on the fact that an estate agent, Mr Craig Tweed, had shown a prospective purchaser through the property and had telephoned him, McGettigan, at about 3.00pm on the same day without mentioning any sign that it had been broken into.

With regard to the incident at the Bendigo Magistrates' Court, Mr McGettigan said that he had been required, in the interests of a client, to attend a meeting in a suburb of Brisbane at 8.00am on the morning of the hearing. The meeting had occupied up to forty-five minutes after which, Mr McGettigan said, he proceeded to the airport and took a flight to Melbourne which occupied "about three hours".  He then, according to his evidence, hired a car at Tullamarine Airport and drove to Bendigo in about two and a half hours, arriving there at between 3.00 and 3.30pm.  Taking judicial notice of the fact that the time for a direct flight from Melbourne to Brisbane is approximately two hours and of the difference between Eastern Standard Time as observed in Brisbane and Eastern Summer Time which prevails in Victoria, Mr McGettigan's evidence is just plausible if the hearing occurred during the summer months.  If it took place when both Victoria and Queensland were observing Eastern Standard Time, the journey described by Mr McGettigan could have been undertaken with a little time to spare.

It is clear that the onus of proving service of a bankruptcy notice is on the judgment creditor.  As to the standard of that proof, Hill J in Re: Roberts; Ex parte Evans (Unreported 25 August 1989) observed, at page 7:

"Further it was submitted that while the criminal onus did not apply nevertheless the standard of proof required was something greater than the ordinary civil onus being of the kind envisaged in Helton v. Allen (1940) 63 CLR 691, namely that the proof must be established to a standard of `reasonable satisfaction according to the nature of the case' (see at p.714). Reference was also made to the case of re J S (a minor) a paternity case reported at (1980) 1 All ER 1061, 1066.

The present is not a case where it is necessary to determine whether there is some higher but intermediate standard of proof between the ordinary civil balance of probabilities on the one hand and the criminal standard on the other applicable to the proof of service of bankruptcy notices.  It is of course obvious that bankruptcy, involving as it does not only the sequestration of the estate but also a change of status from debtor to bankrupt, is a matter of considerable seriousness.  The making of a sequestration order with its consequence that the debtor thereupon becomes a bankrupt may lead ultimately to criminal proceedings being taken against the bankrupt. 
Whether it necessarily follows from this that a standard of proof higher than the civil standard of proof applies has not, so far as I am aware, been the subject of any decision. There is in my view much to be said for the view expressed by Dixon J as his Honour then was, in Briginshaw v. Briginshaw (1938) 60 CLR 336, from which the concept of an intermediate standard of proof derived, that no third standard of persuasion different from the civil and criminal has ever definitely been developed by the common law. It is however somewhat of a truism that the more serious the allegation, the more grave the consequences flowing from a particular finding, the more likely it will be that the tribunal of fact will require some actual persuasion of its occurrence or existence before that fact is found. As his Honour said at p.361:

`It (i.e. the fact) cannot be found as a result of a mere mechanical comparison of probabilities independently of any belief in its reality.  No doubt an opinion that a state of facts exists may be held according to indefinite gradations of certainty;  and this has led to attempts to define exactly the certainty required by the law for various purposes.'

To put it in another way:

`...the nature of the issue necessarily affects the process by which reasonable satisfaction is attained.'  (see at p.363)"

On my perception of the facts, there are three available hypotheses by reference to which the disputed question of service of the bankruptcy notice can be resolved.  There is some force in the strictures made by Mr Nolan of Counsel for the petitioning creditor on the credit of Mr McGettigan, and to a lesser extent Mrs McGettigan, based on inconsistences in oral evidence and a lack of frankness or candour in their affidavits.  However, it is apparent that those affidavits were drawn by Mr McGettigan, a layman, with, at times, a less than sure grasp of the issues to which evidence was required to be directed.  I have therefore not been able to come to a clear preference for one or other of the three hypotheses which I have mentioned simply by regarding one witness or set of witnesses as more credible than those whose testimony supports either of the other hypotheses.

The first hypothesis is that Mr Lancaster and Ms Brasier have deliberately lied about both the fact and date of service.  They had a strong mutual interest in bringing to a successful conclusion a long, frustrating, process of collecting a debt from Mr McGettigan in the course of which, I infer, some animosity has been generated on both sides.  On the other hand, the amount of the debt is comparatively trivial and any difficulties of service of the bankruptcy notice, had they been encountered, could easily and cheaply have been overcome by the assistance of a professional process server or by substituted service.  I have also had close regard to Mr Lancaster's original affidavit of service which purports to give a verbatim account.  If that was solely composed by Mr Lancaster, it embodies a detailed recital which I consider was beyond his imaginative powers to invent.  However, in this context it is to be remembered that the petitioning creditor's account involves the proposition that on the day of service he attended at the office of his solicitor in Bendigo and gave instructions for the preparation of the affidavit of service whereupon it was drawn, engrossed and sworn all in what remained of that afternoon.  Mr Buman, the petitioning creditor's solicitor, swore a lengthy affidavit of some twenty-six paragraphs all of which I ruled inadmissible.  Nowhere in that affidavit did Mr Buman touch on the matters to which I have just drawn attention in respect of which he could admissibly have corroborated Mr Lancaster.

The second hypothesis is that Mr Lancaster and Ms Brasier have been generally truthful but mistaken as to the date on which service was effected. This allows the possibility that service occurred, for example, on 26 October 1994 when Mr McGettigan admits he was in Bendigo and that the affidavit was not prepared, or at least sworn, until the following day, 27 October.  This hypothesis entails the corollary that Mr McGettigan's denial that he was ever served with the bankruptcy notice was deliberately false, but it can be reconciled with the evidence of Mrs McGettigan and Mr Pittaway.

The third hypothesis is that Mr McGettigan has deliberately lied as to both the date and fact of service and has concocted an elaborate alibi.  He clearly had a strong motive to take that course to avoid bankruptcy. Nevertheless, this hypothesis encounters at least three major objections.  The first is that it entails that Mr Pittaway, who had no apparent motive to perjure himself, either colluded with Mr McGettigan in the assumed concoction or was adventitiously mistaken in a way which afforded it critical support.  The second is that it entails the active and deliberate co-operation of Mrs McGettigan in an elaborate invention to deceive the Court.  She had nothing like as strong a motive as her estranged husband for committing perjury in his interests.  The third objection to this hypothesis is that it involves the assumption that Mr McGettigan was able to devise a complex, inter-related, tissue of fabrications, one of them (the insurance claim) before the presentation of the petition.  It follows that he had to preserve the whole fabric in the face of a penetrating forensic scrutiny without making a single error which was capable of casting real doubt on the fiction.  It is highly improbable that such an achievement was the result purely of good luck.  Having observed Mr McGettigan, and taking account of the ramshackle way in which he apparently conducts both his accounting practice and his personal affairs, I cannot confidently put it down to good management.

In the final analysis, for the reasons indicated, I have not attained the requisite degree of reasonable satisfaction that one of those hypotheses is more probable than the others.  Accordingly, the petitioning creditor has not discharged the onus of proving service of the bankruptcy notice and the petition must be dismissed.

I certify that this and the preceding twelve (12) pages are a true copy of the Reasons for Judgment of his Honour Justice Ryan.

Associate:

Date:

Counsel for the Debtor      :    Debtor in person

Solicitors for the Debtor    :    Debtor in person

Counsel for the Creditor         :    Mr J. Nolan

Solicitors for the Creditor  :    John R. Buman & Co

Date of Hearing             :    18 and 19 October 1995

Date of Judgment            :    28 February 1996