Re Whittet, A.J - [1990] FCA 338

Re: ANTHONY JOHN WHITTET
No. 3746 of 1989
FED No. 338
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA

BANKRUPTCY DISTRICT OF THE STATE OF NEW SOUTH WALES AND THE AUSTRALIAN CAPITAL TERRITORY
Einfeld J.(1)

CATCHWORDS

Bankruptcy - overstatement in bankruptcy notice - notice of dispute of the amount claimed - whether overstatement fatal to the notice - whether overstatement misleading - validity of bankruptcy notice

Bankruptcy Act SS 41(5) 41(6) 41 (6A)(6B)(6C)

HEARING

SYDNEY

#DATE 12:7:1990

Counsel and solicitor for Mr F P Carnovale
the Debtor instructed by Gillis Delaney

Counsel and solicitor for Mr M R Aldrige instructed by
the creditor Shaw McDonald

ORDER

The application is upheld and the bankruptcy notice is set aside.

The creditor to pay half of the debtor's costs.

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

JUDGE1

This is another case alleging that a bankruptcy notice contains an overstatement of the amount owing by the debtor. The matter commenced with a judgment in favour of Homebush Abattoir Corporation the respondent in the District Court of New South Wales on 17 March 1987 (plaint no. 7905 of 1983) against the debtor for $36,244. The debt remaining unpaid, the bankruptcy notice was issued on 5 October 1989. It claims interest as follows:

(a) from 17 March 1987 (date of judgment) to 1 November 1987, said to be 257 days, at the rate of 19.5% per annum, amounting to $4,975.52

(b) from 2 November 1987 to 1 March 1988, said to be 120 days, at the rate of 18% per annum, amounting to $2,144.40

(c) from 2 March 1988 to 28 February 1989, said to be 363 days, at the rate of 15% per annum, amounting to $5,405.07

(d) from 1 March 1989 to 30 August 1989, said to be 182 days, at the rate of 17% per annum, amounting to $3,072.16

The notice also claims taxed costs in the sum of $6,023.05, making what it says is a total of $57,864.20 due by the debtor.
The debtor does not challenge any of the facts alleged in items (b), (c) and (d) above or as regards costs. It is common ground that the bankruptcy notice could also have claimed interest from 31 August 1989 to 4 October 1989 (the day before its issue) at the rate of 21% per annum. Although there is a dispute as to how much actual money that would have added to the debt, there is no argument that if everything else in the notice had remained the same, the notice would have understated, not overstated, the amount due as at the date of the notice. As it is, the debtor alleges that item (a) and the eventual total amount allegedly owing represent an overstatement of $541.34. This seems to be because the dates quoted in item (a) represent 230 not 257 days. Because the first date is the date of judgment which must be omitted: Re Serafino; Ex parte Classic Manufacturing…

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.

Continue reading Re Whittet, A.J

Details

AGLC: Re Whittet, A.J. [1990] FCA 338
Case: [1990] FCA 338
Decision Date: 12 JULY 1990

CaseChat Overview and Summary

The case of Re Whittet, A.J. involved a dispute concerning the validity of a bankruptcy notice issued by a creditor against the debtor, A.J. Whittet. The crux of the matter was whether the bankruptcy notice, which contained an overstatement of the amount claimed, was fatally flawed or merely misleading, and therefore invalid. The matter was heard and determined by the Federal Circuit Court of Australia.

The primary legal issues before the court were whether the overstatement in the bankruptcy notice rendered it invalid and whether the overstatement was so misleading as to invalidate the notice. The debtor argued that the overstatement was material and thus the notice was invalid, while the creditor contended that the overstatement, while an error, did not render the notice fatally flawed or misleading.

The court, in upholding the debtor's application to set aside the bankruptcy notice, found that the overstatement of the amount claimed was indeed material and misleading. It held that such an overstatement, which was not an insignificant or minor error, led to a fundamental defect in the notice. The court was of the opinion that the overstatement rendered the notice invalid, as it misled the debtor about the true amount owed and therefore compromised the fairness of the process. Consequently, the application to set aside the bankruptcy notice was successful, and the creditor was ordered to pay half of the debtor's costs.

Orders

Orders of the court

The application is upheld and the bankruptcy notice is set aside.

The creditor to pay half of the debtor's costs.

Note: Settlement and entry of orders are dealt with in accordance with Rule 124 of 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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