Re Ramsey, Mrs C.J. v Ex Parte Boylan & Company

[1989] FCA 754

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

IN THE FEDERAL COURT OF AUSTRALIA )

)

SOUTH AUSTRALIA DISTRICT REGISTRY )

)

GENERAL DIVISION	)	NO. 958 of 1989
)
BANKRUPTCY DISTRICT OF THE STATE	)
)
OF SOUTH AUSTRALIA	)

Re: MRS C.J. RAMSEY

Ex Parte: BOYLAN & CO.

EX TEMPORE REASONS FOR JUDGMENT

VON DOUSSA J. :
21 NOVEMBER 1989

This is a creditor's petition by Boylan and Company seeking a sequestration order against the debtor, Mrs C.J. Ramsey. I am satisfied from the evidence on the Court file that a bankruptcy notice duly issued was served on 2 June 1989 and that an act of bankruptcy occurred on 16 June 1989. I am satisfied that the debt remains unpaid and that the formalities of the Act have been complied with. In those circumstances, in the ordinary course, the petitioning creditor would be entitled to the sequestration order.

REGISTRY

However, a notice of opposition has been filed by Mrs

Ramsey in which by para.(l) she disputes that she is justly and

truly indebted to the petitioning creditor. The background of the matter is that the alleged debt was incurred for legal . -

by Boylan and Company to Mrs Ramsey in relation

dispute. Durlng the course of that dispute the

FEDERAL COURT OF

AUSTRALIA

PRIVCIPAL

instructions of the petitioning creditor were terminated. It is apparent that Mrs Ramsey was dissatisfied with the quality and quantity of the service that she had received. In respect of that she made complaints to the Legal Practitioners Complaints Committee and, in due course, to the Lay Observer. It must be said, and I stress, that whilst I note the outcome of those complaints, the results in no sense amount to a final adjudication at law of the complaints which Mrs Ramsey makes. It is of course still open to her as a matter of law to allege negligence and loss against Boylan and Company if that is what she wishes to do, but she has not at this stage commenced any proceedings to that effect.

Following the termination of the instructions of the petitioning creditor, there was also a dispute as to the quantum of the costs. That led to a taxation of the costs before the Family Court, and then to proceedings in the Local Court when the petitioning creditor sued the debtor on the certificate of costs.

In those proceedings the debtor was represented by

solicitors and, after some adjournments, a judgment by consent

was entered. Many of the complaints that are now made by the

debtor in respect of the quality of the service and the amount of work done were matters that should properly have been raised on the taxation and, if not, could perhaps have been raised again in defence of the court proceedings. There is now a consent judgment for the costs. No attempt has been made to disturb that ludgment nor, indeed, is there any ground available on which it could be disturbed. In those circumstances, this Court

cannot go behind the judgment of the Local Court which establishes the liability of the debtor to the petitioning creditor.

After the consent judgment was entered, a bill of costs was taxed in the Local Court. Those costs now form part of the

petitioning creditor's claim. Again, there is no ground on which this Court at this stage could go behind the certificate of costs as taxed.

For these reasons I am compelled to hold that Mrs Ramsey is indebted to the petitioning creditor for the amount claimed.

The second ground of the notice of opposition is that no act of bankruptcy was committed on 16 June 1989, that is, 14 days after service of the bankruptcy notice in accordance with s.40(l)(g) of the Bankruptcy Act 1966. The act of bankruptcy takes place 14 days after service of the notice unless the debtor, within that time, has applled to have the bankruptcy notice set aside or has established a counter-claim set off or cross demand equal to or exceeding the amount of the judgment

debt.

In this case within the 14 day period no action of any type was taken either in these proceedings in respect of the bankruptcy notice or elsewhere. An act of bankruptcy therefore occurred by force of the Bankruptcy Act on 16 June 1989, and there is no ground upon which this Court can go behind the operation of the Act. In other words, the act of bankruptcy then occurred and that is sufficient to found the petition.

The remaining grounds of opposition raise matters which are technically irrelevant to the current proceedings. They again canvass the quality of the service that was rendered by the petitioning creditor and raise general grounds of unfairness in what will follow if a sequestration order is made. I am in no position to finally judge the merits of the dispute which Mrs Ramsey has with the petitioning creditor and I do not propose to pass a view one way or the other on it. But even if there is merit in her complaints, it is not a matter that I can allow to stand in the way of the sequestration order which should follow once the petitioning creditor has established the indebtedness and the act of bankruptcy. The debtor can still proceed, if she wishes, to test her views about the quality of the service in separate proceedings. The fact that the bankruptcy may prove of no practical value to the petitioning creditor is not a ground that I can take into account as a legitimate reason for refusing to make the order. It 1s up to the petitioning creditor to decide whether there is value in taking the course that it has. It has come to the Court seeking a sequestration order and, in

matters, to proceed to make that order and I propose to do so.

the circumstances, I am obliged, upon proof of the requisite

There will, therefore, be a sequestration order in terms of the

minutes which have been handed up. That is:

(11	a sequestration order made agalnst the estate of mrs C.J. Ramsey
( 2 )	the petitioning creditor's costs including reserve costs, be taxed and paid in accordance with the Bankruptcy Act 1966. The date of the commission of the

act of bankruptcy is 16 June 1989.	I will simply
initial the minutes.

I certify that this and

for Judgment of Mr Justice	a tr e copy of the Reasons the t preceding pages are
von Doussa. a
Associate:  d / - / r 8 4
Dated: