Re Walker, D.R. Ex parte Broken Hill Holdings Ltd

[1993] FCA 822

8aa 9 3

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

IN THl3 FEDERAL COURT OF AUSTRALIA	) )
VICTORIA DISTRICT REGISTRY	) No. VN 1842 of 1993
)
GENERAL DIVISION	)
B E T W E E N :

Re: DONALD ROBIN WALKER

Applicant

Ex Parte BROKEN HIL& HOLDINGS LIMITED

Respondent

JUDGE :	Heerey J
m:	3 November 1993
PLACE :	Melbourne

RECEIVED

REASONS FOR JUDGMENT ' 8 NoV 1993

I am satisfied that there is no substance in the attacks which

were made on this bankruptcy notice.

The first point was that the notice did not comply with form 4 in the Bankruptcy Rules in that the signature and seal of the Registrar in the Bankruptcy appeared at the end of the notice rather than, as in the statutory form, immediately before the paragraph commencing "Note. If you have a counter-claim, set- off or cross-demand ..."

nor could it confuse or mislead any reasonable person in the	that this is a matter which confused or misled this debtor,
position of the debtor. This is manifestly a case wh~ch, if there be a defect at all, it is one for the application of s.306 of the Bankruptcy Act.
Associated with this point there was reference to the fact that there was no seal at the bottom of the first page. Applying the ordinary presumption of regularity I see no reason for concluding that the document on the court file which is stapled together which has a court stamped number at the top of the first page and the "Registrar in Bankruptcy" seal at the end of the second page is not the one document or otherwise unauthentic.
The second point was that there was no rate of interest glven in the notice. The calculations of the two amounts of interest which make up the sum claimed in the bankruptcy notice are given in that in each case the principle sum is given, the period for which interest is claimed is given, and the amount of interest is given. There is no suggestion that
the amount claimed is wrong or excessive. The actual rate of interest used is a matter of simple arithmetical calculation
from the information given. Again, I do not think this is a matter which did mislead or confuse the debtor, or would have that effect on any reasonable person in his position. So I find that the attacks on the validity of the bankruptcy notice fail.
I am satisfied that this application to set aside the bankruptcy notice should fail because the applicant debtor has not satisfied me that his counter-claim, set-off or cross- demand is, within the meaning of s.40(1) (g) of the Act, one that

I think there is merit in the submission of counsel for the creditor that there is no defect because every element of the statutory form is contained in the bankruptcy notice here and in the correct sequence. But in any event it is not suggested

"he could not have set up in the action or proceeding in which the judgment or order was obtained."

The creditor's claim was for money lent. What is now said to be the counter-claim, set-off or cross-demand which exceeds the amount of the judgment was a claim that as between the debtor and creditor there was a joint venture agreement and that the amount claimed by the creditor was not a loan but an "entry fee or additional payment" pursuant to the joint venture agreement.

The inability to set up the counter-claim, set-off or cross- demand which the Act speaks of is an inability which arises as a matter of law. As Lockhart J said in Re Brink (1980) 30 ALR 433 at 437:

action or proceeding in which the judgment or order	"The words 'that he could not have set up in the
was obtained' mean 'which he could not by law set up in the action': see R e Jocumsen, supra at 85; Re a D e b t o r [l9141 3 K B 726, per Avory J, at 730; and R e S t o k v i s (1934) 7 ABC 53, especially per Lukin J at 57, where his Honour said: 'I take a counter-claim, set-off, or cross-demand which could not be set up as one which, from point of time, or from its nature or from absence of empowering provisions, or from positive inhibitions so to do, could not be set up in the particular case in which judgment was obtained... Mere failure to take advantage of the opportunity can hardly be said to be inability.'"
The debtor's claim that there was a joint venture with the creditor was, as it happened, the claim made - by him as plaintiff in Supreme Court proceeding number 4840 of 1991. The creditor's claim for money lent was raised as a counter- claim in that proceeding. When the matter came on for hearing before Eames J on 5 August 1992 there was in existence an order of Master Gawne staying the debtor's statement of claim until he had paid costs of $3,500 incurred as a result of an earlier adjournment. In an affidavit filed in the present proceeding the debtor says his non payment of those costs as at the date of the Supreme Court trial was, "based on advice I had received from my previous solicitors." The debtor does not indicate the nature of that advice, and it appears that in any case he paid the costs five days after the judgment in the Supreme Court.
More importantly, however, it seems that at the start of the trial Eames 3 varied the Master's order, and here I quote from his Honour's judgment delivered on 18 September L992

defence to the counterclaim matters which have been	" . . . so as to allow the plaintiff to raise in his
pleaded in his statement of claim. For all practical purposes the effect of the stay was only that had I accepted the version of events put forward by Mr Walker then he would have been unable to obtain judgment on his claim unless and until he complied with the order for costs which had been imposed as a result of an earlier judgment of the proceedings."

It is clear from a reading of his Honour's reasons for judgment that the substance of the claim that there was a

joint venture in existence was dealt wlth by his Honour and

rejected.

In an affidavit in the present proceeding sworn on 1 November

1993 the debtor deposes that during the trial in the Supreme

Court he applied for adjournment of the trial in order to secure two additional witnesses. One was a Mr David Moffat, a former chairman of the creditor, who was then in jail. The other was a M r Raymond Wright who was then in Western Australia. He was then apparently involved in litigation with the creditor and as a result, according to the debtor, would only appear if subpoenaed. The debtor deposed:

"His Honour rejected my application for an adjournment to call these witnesses. I believe that had I been allowed to call these witnesses then his Honour would have ruled in my favour.

In the same affidavit the debtor also mentions that a payment to his company Walkerminco of $138,000 from the creditor supported the contention of a joint venture, because it was

inconsistent to have spent that amount of money if he had been a contractor. He deposes:	"By virtue of simply defending the counter-claim I
was precluded from bringing this material before the
court.  "

I am afraid I do not understand that sentence. The debtor does not suggest that there was any attempt to tender evidence relating to the Walkerminco payment before Eames J, or that he was in some other way precluded from giving that evidence. But in any event the matters raised in relation to the proposed witnesses Moffat and Wright and the Walkerminco payment do not satisfy the test imposed by s.40(l)(g).

This seems to be a case where not only has the debtor failed to show that he had a counter-claim, set-off or cross-demand that he could not have set up in the proceeding but the reality and substance is that he did in fact set up that counter-claim, set-off or cross-demand. It was heard and determined by Eames J adversely to the debtor. Any complaint about the rejection of evidence or adjournment applications in hat proceeding is a matter for the debtor to seek to rectify by appeal. The debtor's alleged counter-claim, set-off or cross-demand was in fact set up in the action or proceeding in which the judgment founding the bankruptcy notice was obtained. So for those reasons the application will be dismissed with costs, including reserved costs.

I certify that this and the

preceding six (6) pages are a true copy of the reasons for judgment of his Honour Mr Justice Heerey.

Appearances

Counsel for the applicant:

Solicitor for the applicant:	Rennick Gaynor KiddLe Briggs
Counsel for the respondent:	Mr S Wilson QC
Solicitor for the respondent:	Marshalls & Dent
Date of hearing:	3 November 1993

JUDGES CHAMBERS,

FEDERAL COURT OF AUSTRALIA

~%LITTL~BOURKE	STREET,
MELBOURNE.	3000

J AUSTRALIA r*

J'>>>3>>,#<<<<<G--

16 November 1993

Sonia Cornale
Federal Court of Australia
Principal Registry
Law Courts Building
Queens Square

SYDNEY NSW 2000

Dear Sonia,

Re: Donald Robin Walker

Ex Parte: Broken Hill Holdinqs Limited

NO. VN 1842 of 1993

I enclose a copy of the judgment delivered by his Honour Mr

Justice Heerey in the above matter on 3 November 1993.

This judgment is not for general distribution.

Regards,

David Brennan

Associate to Heerey J