Roufos, John v Andrea, Nick

[1981] FCA 237

Re: JOHN ROUFOS
And: NICK ANDREA (1981) 57 FLR 10
No. G37 of 1981
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIAN DISTRICT REGISTRY
GENERAL DIVISION
Deane(1), Fisher(1) and Fitzgerald(1) JJ.

CATCHWORDS

Bankruptcy - Application to set aside bankruptcy notice issued by creditor - whether agreement to pay by instalments and no bankruptcy proceedings taken - whether the notice was defective as a second notice served prior to expiry of the time for compliance with the first notice - regard to external circumstances.

Bankruptcy Act, 1966 s.41(5)

Bankruptcy - Appeal - Application to set aside bankruptcy notice - Alleged agreement to pay by instalments on basis that no bankruptcy proceedings would be taken - Concurrent bankruptcy notices - Service of second notice prior to expiry of time for compliance with first notice - Invalidity of first notice - Invalidity of first notice brought to attention of debtor at time of service of second notice - External circumstances - Bankruptcy Act 1966 (Cth), s. 41 (5).

HEADNOTE

On 30th April, 1980, the respondent Andrea (the creditor) obtained judgment against the appellant Roufos (the debtor) in the sum of $20,000 and costs of $500. Execution was stayed as to the sum of $10,000 until 31st July, 1980, and as to the balance of $10,000 until 1st October, 1980; no stay was imposed in respect of the costs. On 2nd September, 1980, the creditor caused a bankruptcy notice to be issued in the sum of $10,012 allegedly due pursuant to the judgment. On 24th September, 1980, by leave, the notice was altered to the sum of $6,012. On 3rd October, 1980, a second bankruptcy notice was caused to be issued in the sum of $16,512 then allegedly due. On 3rd February, 1981, both notices were separately served on the debtor.

The debtor had made payments to the creditor in respect of the judgment debt. The first payment of $4,000 resulted in the amendment to the first bankruptcy notice on 24th September, 1980. Subsequent payments totalling $2,900 were made after the issue of, but prior to the service of, the second bankruptcy notice. Therefore the second bankruptcy notice overstated the amount of the indebtedness by $2,900. On 3rd March, 1981, the debtor issued two applications seeking to set aside each of the bankruptcy notices. There was no opposition to the application to set aside the first bankruptcy notice.

The debtor advanced three grounds in support of his application to show that the second bankruptcy notice was invalid. He alleged an express agreement between himself and the creditor that the creditor would accept instalment payments and not issue bankruptcy proceedings; he alleged that the amount claimed in the bankruptcy notice was excessive and that he had given the requisite notice pursuant to s. 41 (5) of the Bankruptcy Act 1966 (the Act); and he finally maintained that in view of the service of the first bankruptcy notice on the same day, service of a second notice was invalid, ineffective and an abuse of…