Re Williams, Eric John Ex Parte Credit Union Australia Ltd

[1996] FCA 488

IN THE FEDERAL COURT OF AUSTRALIA         )
GENERAL DIVISION  )
  No. QN306 of 1996    No. QN233 of 1996
BANKRUPTCY DISTRICT OF THE          )
STATE OF QUEENSLAND  )

RE:ERIC JOHN WILLIAMS

EX PARTE:CREDIT UNION AUSTRALIA LIMITED

MINUTES OF ORDER

JUDGE MAKING ORDER:       Spender J

DATE OF ORDER:            3 June 1996

WHERE MADE:               Brisbane

THE COURT ORDERS THAT:

(1)the creditor's petition against Eric John Williams be accepted and that his estate be sequestrated;

(2)the costs of such creditor's petition be taxed and paid in accordance with the Bankruptcy Act 1966, including reserved costs;

(3)the costs with respect to the creditor's petition against Ellen Ada Williams be the creditor's costs.

THE COURT DIRECTS THAT personal service of any creditor's petition on Ellen Ada Williams be effected by serving by posting by ordinary mail to C/o Eric Williams (Snr) and such service be deemed to have taken place on the third working day after the date of posting.

NOTE: Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules.

IN THE FEDERAL COURT OF AUSTRALIA         )
GENERAL DIVISION  )
  No. QN306 of 1996   No. QN233 of 1996
BANKRUPTCY DISTRICT OF THE          )
STATE OF QUEENSLAND  )

RE:ERIC JOHN WILLIAMS

EX PARTE:CREDIT UNION AUSTRALIA LIMITED

CORAM:     Spender J
DATE: 3 June 1996
PLACE:     Brisbane

REASONS FOR JUDGMENT

I have before me a number of complaints of non service.  The matters that are presently before the court are a creditor's petition by Credit Union Australia Limited against Eric John Williams, which is petition No 233 of 1996, and in addition, there are proceedings involving bankruptcy notice No 306 of 1996, against Eric John Williams and Ellen Ada Williams. 

The matters that presently are relevant involve the question of service of a bankruptcy notice on Eric John Williams, the question of service of the creditor's petition on Eric John Williams, and the question of service of a bankruptcy notice on Ellen Ada Williams.

There was an application which Mr Eric Williams Snr filed as agent for his son, Eric John Williams, which was filed on 27 March 1996.   That proceeded to a hearing before
Einfeld J, who dismissed the application.  His Honour ordered that personal service on Ellen Ada Williams be dispensed with, and service of the bankruptcy notice be effected by personal service on Eric Williams Snr.

In relation to the application filed on 27 March there were matters canvassed about the liability of Eric John Williams, together with or, alternatively, Ellen Ada Williams, as guarantors in regard to a lease between Credit Union Australia and Johns Formal Wear Pty Ltd, and whether that liability ceased when the lease in question was surrendered.  

Mr Williams Snr, who has argued the matter, has made plain the view that service of the originating proceedings in those District Court proceedings had never been effected, and he seems to have placed, in the circumstances, a disproportionate view on the correctness of that allegation.  The purpose of service is to bring proceedings to the notice of the person who is to be served.  If, in fact, there was any irregularity in the originating process of the principal proceedings, it is quite clear that the respondents to those proceedings were aware of them because they defended and lodged a cross claim.

It is not the case where in ignorance of proceedings against them a judgment has been obtained.  What, in fact, seems to have happened is that the proceedings were defended, but there was no appearance at the trial, which was in Brisbane.  The complaint by Mr Eric Williams Snr seems to be that the respondents to those proceedings are immune to any obligation to attend the trial at Brisbane, because their personal preference was that the trial be held at Maroochy- dore.

While there may be questions of convenience involved, the legal consequence was that a trial in Brisbane proceeded to judgment in default of any defence being prosecuted at that trial.  Since then there has been no application to set aside the judgment, and having regard to the basis on which the judgment is said to be tainted, namely, that there was some default in service of the originating process, and having regard to the history of the matter, the likelihood of having the judgment set aside have very small prospects of success.  In any event, the matter was canvassed before Einfeld J and the application filed on 27 March 1996 was dismissed.

The matters that I have to consider are questions of service of the bankruptcy notice and the bankruptcy petition on Eric John Williams, and the question of service of the bankruptcy notice on Ellen Ada Williams.  It is significant that on the question of service on Eric John Williams there is no affidavit filed by him deposing to the contrary of the affidavit evidence of Dean Robert Wilson, who has filed an affidavit deposing as to service.

Dean Robert Wilson, the process server involved in each of the three disputed services with which I am concerned, has sworn in terms that he served Eric John Williams on the two occasions, and Eric Williams Snr on the occasion of the service of the bankruptcy notice on Ellen Ada Williams, for which substituted service had been ordered by Einfeld J.

Noting the absence of any evidence from Eric John Williams in particular, I accept that on 22 February at 8 o'clock in the morning there was service on Eric John Williams.  The evidence of Mr Wilson as to the conversation that occurred between them at 61 Amerina Avenue, Mooloolaba on that day is not disputed by any sworn evidence.  And I accept the evidence of Mr Wilson.

In relation to 22 April 1996, again the account given by Mr Wilson is not challenged by sworn evidence from Eric John Williams, and the circumstances deposed to there amount to personal service consistent with the authorities.  I am satisfied then that the requirements of service in relation to the creditor's petition have been made out, and that the other matters of which the Bankruptcy Act 1966 requires proof, have been established.

In those circumstances, notwithstanding there has been repeated submissions by Mr Eric Williams Snr challenging the bona fides of the debt and the circumstances in which it came into existence, the circumstances here are such that I am
obliged to make a sequestration order against the estate of Eric John Williams, which I do.   I find the debt alleged in paragraph 4 of the petition and I am satisfied of the other matters of which the Act requires proof, and I make a sequestration order against the estate of Eric John Williams.  And I order that the costs of and incidental to that petition, including reserved costs, be taxed and paid in accordance with the Act.     Mr Milner, who has consented to act as trustee of the estate of Eric John Williams, becomes trustee by virtue of the Act.

As to the question of service on Ellen Ada Williams, there is a serious factual dispute between Mr Eric Williams Snr and Mr Wilson, as to what was said and what occurred.   In particular, objection is taken by Mr Eric Williams Snr to what is said to have been said by him.  Without attempting the invidious task of resolving one way or the other that question, it is plain beyond argument that as a result of the orders made by Einfeld J, Mr Eric Williams Snr (who argued the matter with his usual force before Einfeld J) was aware of the fact that, consistent with his request in his application of 27 March 1996 that there be an order prohibiting any contact with Mrs Williams by any means in regard to this matter, the Court had made an order giving effect to that request by ordering that personal service on Eric Williams Snr would be sufficient service. 

It is plain to me that when Mr Wilson knocked on the door of unit 6, 14 Melrose Drive, Maroochydore, and was there present with the bankruptcy notice to serve in accordance with the order of Einfeld J, Mr Eric Williams Snr made it plain, by whatever words were in fact used, that Mr Williams was aware of the purpose of Mr Wilson's visit, and that he should clear off.  In those circumstances it seems to me that the account given by Mr Wilson which includes the fact that papers were then left outside the door of those premises, or according to Mr Eric Williams Snr, partly lodged in the door, constituted sufficient personal service.

There can be no argument that Eric Williams Snr became aware of the bankruptcy notice against Ellen Ada Williams at that time.  The purpose of service had been achieved.  I am satisfied that there has been effective service of the bankruptcy notice on Ellen Ada Williams.

That is, of course, not the end of the matter and there has to be a creditor's petition.  It seems to me that in the interests of everybody, I should make an order that will permit Mrs Williams not to be personally contacted concerning any creditor's petition that may issue seeking the sequestration of her estate.  What I propose to do in relation to that question is either make an order that service be affected by either personal service on Mr Eric Williams Snr, or preferably by post by certified mail to Ellen Ada Williams at a nominated address.  Certified mail permits authentication
of receipt and will obviate any need for personal contact by any process server with any member of the Williams family.

I direct that personal service of any creditor's petition in these proceedings on Ellen Ada Williams be effected by serving a copy of the creditor's petition and any supporting material on Ellen Ada Williams, by posting by ordinary mail to her, care of Eric Williams Snr, postal address, PO Box 5463, Maroochydore South, Q, 4558 and I direct that service will be deemed to have taken place on the third working day after the date of post.  Costs in relation to that aspect of the matter be the creditor's costs in the petition. 

I certify that this and the  preceding six (6) pages are a true copy of the reasons for judgment herein of the Honourable Justice Spender.

Associate

Date:  3 June 1996

Mr Eric Williams (Snr) appeared for the debtor.

Counsel for the creditor       :         Mr P Applegarth

instructed by                  :         Hopgood and Ganim

Date of Hearing                :         3 June 1996