Re Pollard; Ex parte Lensing Management Co Pty Limited - [1991] FCA 823

Re: CAROLINE AMY POLLARD and WARWICK WILLIAM POLLARD
Ex parte: LENSING MANAGEMENT CO. PTY LIMITED
Nos. P2658 and 2659 of 1991
FED No. 823
Estoppel - Bankruptcy
(1991) 33 FCR 284

COURT

IN THE FEDERAL COURT OF AUSTRALIA

BANKRUPTCY DISTRICT OF NEW SOUTH WALES
Gummow J.(1)

CATCHWORDS

Estoppel - application to set aside bankruptcy notice - dismissal by consent - opposition to creditor's petition based on failure to comply with bankruptcy notice - whether debtor estopped from disputing validity of bankruptcy notice.

Bankruptcy - bankruptcy notice - whether invalid.

Bankruptcy Act 1966

Kleinwort Benson Australia Ltd v Crowl (1988) 165 CLR 71 applied.

State of Western Australia v Wardley Australia Limited (1991) 102 ALR 213 followed.

The Commonwealth of Australia v Verwayen (1990) 170 CLR 394 applied.

HEARING

SYDNEY

#DATE 18:12:1991

Solicitor for the Debtors: Mr B. Hearnden of Hunt and Hunt.

Solicitor for the Creditor: Mr A. Vernier of Price Brent.

ORDER

In Matter No. P2658 of 1991

The petition be dismissed.

There be no order as to costs.
In Matter No. P2659 of 1991

The petition be dismissed.

There be no order as to costs.
Note: Settlement and entry orders are dealt with in Rule 124 of the Bankruptcy Rules.

JUDGE1

These are two creditor's petitions which were heard consecutively. This course was followed because grounds of opposition in the same terms were put in respect of each petition. The petitioning creditor is the same in each matter. The debtors are husband and wife.

I will turn first to the petition seeking a sequestration order against the estate of Mr Pollard, and will then deal with that concerning Mrs Pollard.
The petition in respect of Mr Pollard was presented on 29 July 1991. The act of bankruptcy relied upon in para 4 of the petition is the failure of Mr Pollard, on or before 11 March 1991, either to comply with the requirements of a bankruptcy notice served on him on 6 November 1990, or to satisfy this Court that he had a counter-claim, set-off or cross-demand equal to or exceeding the sum specified in paragraph A of the bankruptcy notice. Mr Pollard contends that there was no act of bankruptcy because the bankruptcy notice was a nullity.
On 3 December 1990, Mr Pollard made an application to the Court for an order that the bankruptcy notice be set aside. On the same day, a Registrar, acting pursuant to sub-s. 41 (6B) of the Bankruptcy Act 1966 ("the Act") extended until 11 February 1991 the time allowed for compliance with the requirements of the notice. The application to set aside the bankruptcy notice came before a Registrar on 11 February 1991 and was adjourned until 11 March 1991; the time for compliance with the requirements of the bankruptcy notice was further extended up to and including 5 p.m. on 11th March. On that day, a Registrar ordered that the application to set aside the bankruptcy notice be dismissed, and that the debtor pay the creditor's costs. The Registrar…

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

Case: [1991] FCA 823
Decision Date: 18 DECEMBER 1991

CaseChat Overview and Summary

Lensing Management Co Pty Limited sought to set aside a bankruptcy notice served on their debtor, Pollard, on the grounds that Pollard was estopped from disputing the validity of the notice. The application was dismissed, and Pollard opposed a creditor's petition on the basis that the creditor had failed to comply with the bankruptcy notice. The court was required to determine whether Pollard could oppose the creditor's petition on the basis of non-compliance with the bankruptcy notice, despite being estopped from disputing the notice's validity.

The court considered the principles of estoppel and the relevant provisions of the Bankruptcy Act 1966 (Cth). It held that Pollard was estopped from disputing the validity of the bankruptcy notice, as they had previously represented to the creditor that the notice was valid. However, this did not prevent Pollard from opposing the creditor's petition on the basis that the creditor had failed to comply with the notice. The court found that Pollard's estoppel did not extend to preventing them from raising a defence based on the creditor's non-compliance with the notice.

The petition was dismissed, and there was no order as to costs. The court's reasoning was that the estoppel did not bar Pollard from raising a defence based on the creditor's non-compliance with the notice. The court held that the estoppel only prevented Pollard from disputing the validity of the notice itself. As a result, Pollard was able to oppose the creditor's petition on the basis that the creditor had not complied with the notice, despite being estopped from disputing the notice's validity.

Orders

Orders of the court

In Matter No. P2658 of 1991

The petition be dismissed.

There be no order as to costs.

In Matter No. P2659 of 1991

The petition be dismissed.

There be no order as to costs.

Note: Settlement and entry orders are dealt with in Rule 124 of the Bankruptcy Rules.

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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