Re Young, J.L. v Ex parte Metropolitan Credit Union Ltd

[1994] FCA 602

JUDGMENT No. ...,.d 602 99 -

- Qmisnion of words from note to bankruptcy notice -

whether note part of prescribed form - whether fundamental defect

in notice.

v 1966

Bankruptcy Rulee, Schedule 1, Form 4

Re	(Lockhart J, Unreported 8 August 1989)
Lindgren J 16 Auguat 1994 Sydney

- 6 SEP 1994

RECEIVED

IN THE FEDERAL COURT OF AUSTRALIA )

GENERAL DIVISION	) NO. NP 1750 of 1994
BMXRUPTCY DISTRICT OF THE	1
STATE OF NEW SOUTH WALES	1

Re a JILL LORRAINE YOUNG
Debtor

Ex parte :  METROPOLITAN CREDIT UNION
LIMITED
Creditor

!sal	I	Lindgren J
EAU&	a	Sydney
PPfe	a	16 August 1994
-8

1. THAT the petition be dismissed.

NOTE:	Settlement and entry of orders is dealt with in Order
36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA )

GENERAL DIVISION	) NO. NP 1750 of 1994
BANKRUPTCY DISTRICT OF THE	1
STATE OF NEW SOUTH WALES	1

Re	:	JILL LORRAINE YOUNG Debtor
Ex parte c	METROPOLITAN CREDIT UNION LIMITED Creditor

GQXm	I	Lindgren J
E h ! u	I	Sydney

I 16 August 1994

In these proceedings, number NP 1750 of 1994, the file has been referred to me by a Registrar. The situation is that it has been recorded in the Rule 22 Certificate that there appears to be a defect in the form of the bankruptcy notice. The defect, which it is not disputed by Mr Biaames who appears for the Creditor exists, is in the note at the foot of the notice. What is omitted are the words: "as the case requires, and the reasons why you were unable to set up the counter-claim, set-off or crosa demand": see Form 4 of Schedule 1 to the Bankruptcy Rules.

Precisely the same defect was dealt with by Mr Justice Lockhart

in the case of Robert Le=, number NB 801 of 1989, an unreported judgment of hie Honour, dated 8 August 1989. In that case his Honour gave reasons for considering that the omission was a fundamental defect in the bankruptcy notice.

There were, in summary, two reasons which were given. The first wan that the omission of the words would convey to a debtor that it was euf ficient for him to file an af f idavit to the effect that

he had the requisite counter-claim, set-off or cross demand,

being one which he could not have set up in the action in which judgment was obtained against him, whereas the note forming part

of the prescribed form requires that in addition the debtor

depose as to the reasons why he had been unable to set-up the requimite counter-claim, set-off or cross demand. It is by reason of the filing of an affidavit in proper form and complying with the rules that a debtor is entitled to have the benefit of the time for compliance with the requirements of the notice extended.

Him Honour gave a second reason as to why the omission was a fundamental defect, although as he acknowledged, this was closely related to the first. This was that the impression would be conveyed by the defective note that the time for compliance would be autcnnatically extended, whereas that would not be the case in the event that the affidavit did not set out the reasons why the debtor had been unable to set up the requisite counter-claim, set-off or cross demand in the proceedings in which judgment had been obtained againmt him.

What Llr Bizannee has said this afternoon has not persuaded me to depart from what his Honour said in the judgment and it seems to me, with respect, that everything said by hie Honour in that judgrent applies to the present case. It does not, in my view, make any difference that in the present case the debtor does not appear; whereas in that case the debtor did appear.

Accordingly, in my view the bankruptcy notice is defective and	non-compliance with the notice did not constitute an act of
bankruptcy.
I have raised with Mr Biza~eS the possibility of any other course of action than dismissal of the current petition and no reason has been put as to why any other course should be taken. Accordingly, the petition is dismissed.

I hereby cer t i fy that t h i s and the preceding 2 pages are a true copy of the Reasons for Judgment of the Honourable Justice Lindgren

Dated:  2 septembdl994

ESard	a	16 August 1994
RSSLaiWc	16 August 1994
-	c	Mr V.A.Bizanne8, so l i c i tor , appeared for the
Creditor