Re Platcher, C.E. Ex parte Platcher, C.E. v Rogers, P.D. & Anor

[1993] FCA 745

7 4 6  1 9 3

JUDGMENT No. ....... , ...... ,... ..... , ......

IN THE FEDEW COURT OF AUSTRAtIA )

BANKROPTCY DIVISION	1
B?iNKRUPTCY DISTRICT OF THE STATE )	No. NB 3294 of 1992
OF NEW SOUTH WALES	1

Re: CHARLES EDWARD PLATCHER

Bankrupt

EX parte: CHARLES EDWARD PLATCHER

Applicant

And: PETER DAVID ROGERS

Trustee/First

Respondent

And:	KJD YORK MANAGEMENT SERVICES
PTY LIMITED

P e t i t i o n i n g Creditor/Second Respondent

EINFELD J SYDNEY 27 SEPTEMBER 1993

As this matter has taken much longer than was set aside for it today, and it is now late, I shall limit my remarks by way of judgment to the barest minimum at this stage.

was made.

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Charles Edward Platcher was made bankrupt on 8 December 1992. He applies to the Court now for an order for annulment on the grounds that the sequestration order should never have beenmade. The reason given is that neither the bankruptcy notice nor the petition was served personally upon him as was deposed to in affidavits presented to the Court when the sequestration order

M r Platcher has expressly denied that either of the documents was

served on him including, in the case of the petition, the documents that were said to have been served together with it. He says that he first knew about his bankruptcy some six months after it was ordered when he received a telephone call from a person working in the office of the appointed trustee. This person upbraided Mr Platcher for having failed to complete a statement of affairs. From his affidavit Mr Platcher appears also to deny that he even received the statement of affairs form until he first confronted this officer of the trustee in June

1993. That this must be his position is emphasised by other material in the file concerning contacts between the trustee and Mr Platcher after the bankruptcy. Yet Mr Platcher was not cross examined about this further assertion of non-receipt of documents so I will have to proceed on the basis that his evidence as to when he first learned of the fact of bankruptcy proceedings is unaffected by doubts about where the limit of this potentially unlikely chapter of accidents might be.

evidence of Mr Platcher, of his former or estranged wife Mrs	On the issue of service of the bankruptcy notice I have heard the
Platcher, and of the process server Mr Bernard McGuire. Even without the doubts arising fromthe additional circumstance, just mentioned, of the non-receipt of the statement of affairs form from the trustee, complete acceptance of Mr Platcher's evidence was not without some difficulties. Were there nothing else I should have been inclined to approach with very great doubt his claim never to have been served with any material at all. In
addition, Mr Platcher's affidavit was deficient in that it omitted what turns out to be a strong claim to an alibi in relation to the service of the bankruptcy notice. His explanation that it just slipped his mind would, without more, have been difficult to accept.
The evidence on behalf of the respondent trustee and of the petitioning creditor, in the form of Mr McGuire, was that service of the bankruptcy notice was effected upon Mr Platcher at what was then said to be his home at 13 Wood Street, Ashfield on 30 May 1992 at 7.25 am. Mrs Platcher swore an affidavit and gave oral evidence that on the morning of Saturday 30 May 1992, Mr Platcher was at her residence at Westmoreland Street, Glebe, where she lives with their four children. It appears that 29 May was the Platchers' wedding anniversary and that since their separation in 1989 it had been the practice of Mrs Platcher and Mr Platcher to spend, for sentimental reasons, the evening of their wedding anniversary at her home with the children. This happened at least in 1991 and 1992, and again this year. Mrs
was at her home, that they spent time watching television, that Platcher recalled that on the evening of 29 May 1992, Mr Platcher
Mr Platcher spent the night in her room while she watched television until late and, apparently, that she slept in the loungeroom or the room where the television set was.
She says that the following morning she was up early for the children, that she saw Mr Platcher asleep in her bedroom, and that the children were counselled not to disturb him. She says that he was asleep until midday or at least the late morning of that particular day. If that evidence is accepted, it is impossible that Mr Platcher was served on the same morning at 13 Wood Street, Ashfield, which is some distance from Glebe. I was impressed by Mrs Platcher's evidence and I believe she was telling the truth. No reason for her to lie emerged. It is unlikely that she was mistaken. The cogency of her evidence was not disturbed by cross examination.
On the other hand, there were many defects in the evidence of Mr McGuire who deposed to service in the original affidavits used on the application for the sequestration order. In addition, he produced, in an affidavit sworn only today, what are described as commission sheets which he said were supplied to him by his employer for the service of the bankruptcy notice and the petition. These were recently obtained from his employer's office. In his evidence he said, moreover, that the original affidavits of service which were presented on the hearing of the petition for the sequestration order and contain the details of
Platcher, were constructed for him by, as he put it, "someone in the two services, including alleged conversations with Mr
the office" or "a girl in the office" of his employer, the agent contracted to effect the services.
The commission sheet for the bankruptcy notice is dated 29 May 1992 in the context that that was the date when the job described by a number on the commission sheet was received by the agent who employed Mr McGuire. In other words, the employer of Mr McGuire received the task of serving the bankruptcy notice on Mr Platcher the day before the early morning when it was allegedly served. Mr McGuire did not live at the premises of his employer so that if the bankruptcy notice was served as alleged, the material in the form of the commission sheet and the bankruptcy notice must have been got to him in very quick time. This is certainly possible but no reason was suggested for expedition of this degree.
The first half of the commission sheet is completed in typewriting in the office of his employer. It showed Mr Platcher's address as 5 York Street, Sydney. However, there was or would have been supplied to Mr McGuire at the same time the bankruptcy notice which had the address 13 Wood Street, Ashfield. It is true that the address given of the petitioning creditor was also 5 York Street, Sydney. I do not know the building myself but there is no evidence that Mr Platcher did not have an office or even an apartment in those premises as well. In the short time between receivingthe documentation and the alleged service,
sheet, which he said he is accustomed to following closely, it is unlikely in the extreme that upon receiving a commission
showing an address at York Street, Sydney, this commercial sub- agent, who does not claim and did not display any special intellectual heights, would immediately assume that the York Street address was an error and proceed to attempt service at the Ashfield address. In fact he did not claim to have rejected York Street and gone to Ashfield on any such considered basis at all but because he knew Mr Platcher and had served him with previous process at Ashfield. People do change addresses, and the idea that having received more or less overnight an address in York Street and yet, for no reason apparent or vouchsafed to me, assumed that service was or was likely or intended to be effected at Ashfield, is in my opinion quite unlikely.
There are other features of the service which increase my doubts that Mr McGuirels evidence can be accepted. The evidence has revealed differences between the conversation set out in the af f idavit put together by an of £ice employee which he signed, and what is set out in the commission sheet in his handwriting. I do not need to repeat them as they were disclosed during the hearing and appear from the documents. In other circumstances these differences might not justify a great deal of attention but wherematters of natural justice are concerned, it is appropriate to view discrepancies of this kind with a critical eye. In the light of his evidence about them, I think the differences here are suggestive that the supposed acknowledgment by the person served that he was Mr Platcher -- literally the words are
ambiguous -- is unreliable.
The situation concerning service of the petition is likewise subject to doubt and a need for critical examination. The commission sheet for the service of the petition is, like its predecessor, a photocopy so that some entries are a little unclear. However, it appears to demonstrate, and it was not denied, that the petition was allegedly served at the Ashfield address on 9 November 1992 after some S previous abortive
attempts to serve. These previous efforts were at all different hours. No explanation was suggested or investigated in cross examination, and none otherwise emerged, as to why they were futile but why the so-called successful one was not. The commission sheet puts the time of service as 8:50pm whereas the affidavit of service says that the petition was served at "8.50 o'clock in the forenoon". This time discrepancy is of quite a serious kind when there is a direct conflict in the evidence as to whether the document was served at all. Moreover, Mr McGuire said he can only recall serving the petition as one document although it may have contained a number of other documents which he described as being part of the petition. The fact is that if he did effect service, he would have served four different documents at least, namely the petition, an affidavit verifying paragraphs 1, 2 and 3, a consent to act as trustee, and an affidavit verifying paragraph 4, being a search by Suzanne Lea Sheldrick as to whether the bankruptcy notice had been complied with. If Mr McGuire clearly recollected this service, as he claimed to do, I believe he would have recalled this sizeable
volume of documentation. It is not possible from the evidence to decide if any service which Mr McGuire effected on M r Platcher
took place in the morning or the evening.
There are some other discrepancies between the commission sheet and the affidavit which are set out in the evidence and which it is not necessary and there is no time now to repeat. Although on this occasion Mr Platcher does not have the benefit of the alibi supplied by Mrs Platcher for the supposed service of the bankruptcy notice, my conclusion that Mr McGuirers evidence of that service ought not to be accepted operates adversely to his credit in relation to the service of the petition. I am not satisfied that the evidence of M r McGuire should be preferred to that of Mr Platcher in relation to the service of the petition. I therefore find that neither the bankruptcy notice nor the petition and supporting documents were served on Mr Platcher.
This application for annulment is brought under section 153B of the Bankruptcy Act. This section provides:

I f t h e Court i s s a t i s f i e d t h a t a s eques t ra t ion order

ought no t t o have been made or, i n t h e c a s e o f a

deb tor ' s p e t i t i o n , t h a t t h e p e t i t i o n ought no t t o have been presented or ought no t t o have been accepted by the Reg i s t rar , t h e Court may make an order annul l ing the bankruptcy.

The Court therefore has a residual discretion as to whether an annulment should be granted even where there have been service defects of the kind to which I have adverted. It is well established that defective service of a bankruptcy notice cannot

of a petition can be so cured. The problem with the petition is	be cured under section 306 or rule 195 although defective service
that the act of bankruptcy relied on is the failure of Mr Platcher to comply with a bankruptcy notice duly served on him on 30 May 1992. As no such bankruptcy notice was served upon him, no act of bankruptcy was committed. The matter raised on behalf of the trustee and the petitioning creditor is, however, that Mr Platcher is manifestly indebted. Moreover, a supporting creditor, the Perpetual Trustee Company, who is the legal though not the beneficial owner of the premises at Ashfield of which it has taken possession, and whose participation in the proceedings was allowed over the opposition of counsel for Mr Platcher, claims, by an affidavit produced only today although af f irmed on 24 September, an indebtedness of more than $320,000 against a valuation of the property of $155,000.
The argument put forward by the trustee and the petitioning creditor together and by the supporting creditor separately is that, in the presence of such significant indebtedness, the Court should not exercise its discretion in favour of the annulment, on the grounds that Mr Platcher has at no time indicated his capacity to pay the debts, shown any willingness to do so or acted in a generally bona fide way towards the indebtedness. In fact Mr Platcher contests his indebtedness both to the petitioning creditor and to the Perpetual Trustee Company, although as I understand him he does not deny owing some moneys to both. He has apparently taken proceedings in the Local Court at the Downing Centre, Sydney for a stay of the judgment on which
applied for leave to pay the debt by instalments. the bankruptcy notice was obtained, having on an earlier occasion

Whilst it is true that in an appropriate case such matters may be relevant to take into consideration on the question of annulment, I do not believe that this is such a case. It is essential to the foundation of bankruptcy proceedings of this type that a bankruptcy notice be personally served and that there be established by evidence a failure to comply with its terms.

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If he has never been asked, required or given the opportunity to do so, he cannot have failed to comply with it. This is a matter of natural justice at its core. People are entitled to know of proceedings brought against them and are entitled to defend them or to deal with them in any other way permitted by law. This truism is just as relevant in bankruptcy as elsewhere in the law and I do not believe that indebtedness, whether of a general or a specific kind, ought in the ordinary course of events be allowed to outweigh that fundamental element of our system of justice.

Moreover, it has not been possible in the course of these proceedings, largely because it was only relevant if at all to the issue of discretion, to determine what is or was the actual extent of M r Platcher's indebtedness to either the petitioning creditor or the supporting creditor. Obviously I cannot predict the result of the pending proceedings on the petitioning creditor's debt, although they appear to be bona fide. M r Platcher's evidence was that his indebtedness to the Perpetual

affidavit presented today. That company's affidavit came very	Trustee Company is very much less than the amount affirmed in the
late in the piece, after the time fixed for the closing of evidence in these proceedings, and is in relevant respects in inadmissible form. There is thus no basis at all on which I could determine that Mr Platcher's indebtedness is of such a kind as should deny him the order of annulment. Although the Court has the power to examine whether these are real debts, I do not think that this is an appropriate proceeding in which to
undertake that task.	I shall order that the sequestration order

made on 8 December 1992 be annulled.

[Discussion]

I stand over the making of this order to 9:30am Friday 1 October

1993.

t l ccriify th?t thls and the	pri-ced~ng ~ 3 ~ e s	arr- a true copy of the
Reesons isr
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