Russell, N.R. v Australia & New Zealand Banking Group Ltd

[1987] FCA 73

Re: NEIL ROBERT RUSSELL
And: AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
No. G424 of 1984
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA

DISTRICT REGISRTY OF THE STATE OF NEW SOUTH WALES AND THE AUSTRALIAN CAPITAL TERRITORY
GENERAL DIVISION
Bowen C.J.
Sweeney J.
Burchett J.

CATCHWORDS

Bankruptcy - creditor's petition of corporation signed under Power of Attorney - Court's power to permit amendment.

Bankruptcy Act 1966, ss. 43, 306, 308

Growden v. Wiltshire (1935) 52 CLR 286

Alexander Ward & Co. Ltd. v. Samyang Navigation Co. Ltd. (1975) 1 WLR 673

Re: Nick Manias; Ex parte: Edsill Pty. Limited, Jackson J., unreported, 25 March 1986

HEARING

SYDNEY

#DATE 27:2:1987

Counsel for the Applicant: Mr. S.G. Finch

Solicitors for the Applicant: Gell, Rockliff & Co.

Counsel for the Respondent: Mr. R.S. Hulme, Q.C., Mr. D. Hall

Solicitors for the Respondent: Dawson Waldron Solicitors

ORDER

The appeal be dismissed.

The appellant pay the respondent's costs other than the costs of the affidavits referred to in the schedule to this order and the costs of and incidental to the abortive hearing on 21 October 1985 as to which the Court makes no order.

NOTE: Settlement and entry of orders is dealt with in Order 36

of the Federal Court Rules.

JUDGE1

This is an appeal from a sequestration order made by Morling J. against the estate of the appellant.

1. The petition was entitled:
   
   

"Re Neil Robert Russell Ex parte Australia & New Zealand Banking Group"

and its opening words were:

"Australia & New Zealand Banking Group Limited of 20 Martin Place, Sydney petition the Court for a sequestration order against the estate of Neil Robert Russell..."

It stated that -

"The debtor is justly and truly indebted to the Bank in the sum of $72,619.45 as to the judgment and $11,698.69 as to interest calculated from 14th day of May 1982 to 23 December 1983 making a total amount of $84,318.14 owing being the amount due under the final judgment recovered in the Supreme Court of New South Wales on the 14th day of May 1982, the consideration for such debt being monies advanced by the Bank on the personal guarantee of the debtor."

The act of bankruptcy alleged was that -

"The debtor within 6 months before the presentation of this petition, committed the following act(s) of bankruptcy namely that the debtor failed on or before the 16th day of July 1984, either to comply with the requirements of a Bankruptcy Notice served on him on the 1st day of March 1984, or to satisfy the Court that he had a counter-claim, set-off or cross demand equal to or exceeding the sum specified in paragraph (a) of the Bankruptcy Notice."

1. The petition was not executed by the respondent under its common seal, but bore a stamped endorsement:
   
   

"Signed by the said Bank at Australia and New Zealand Sydney by its Attorney Banking Group Limited Lloyd Frederick Guthrey... incorporating ANZ Bank and ES & A Bank by its Attorney and I, the said Attorney state that I have not received any notice of the revocation of the Power of Attorney registered in the Office of the Registrar General Sydney as No. 997 Book 3560 under which this document is executed."

1. Then followed Mr. Guthrey's signature, over the words "Manager Martin Place Branch Sydney for the time being of Australia and New Zealand Banking Group Limited."

2. At the foot of the second page of the petition there appeared the words -
   
   

"This petition is filed by Dawson Waldron Solicitors on behalf of creditor whose address for service is C/- Dawson Waldron Solicitors 60 Martin Place Sydney ..."

1. The petition and the affidavits verifying it were served upon the appellant. One of those affidavits sworn on 17 October 1984 by Mr. Guthrey (though his name was mis-spelled) states:
   
   

"(1) I am employed as a Bank Manager by Australia and New Zealand Banking Group Limited, the petitioner named in the petition hereunto annexed and marked with the letter 'A'.

(2) I am a person authorised by Australia and New Zealand Banking Group Limited to make the affidavit pursuant to Power of Attorney No. 997 in Book No. 3560.

(3) The statements contained in paragraphs 1, 2 and 3 of the petition are within my knowledge true.

(4) I am the person who executed the petition on behalf of Australia and New Zealand Banking Group Limited pursuant to the above mentioned Power of Attorney.

(5) I have not received any notice of the revocation of the said Power of Attorney."

1. In an affidavit of continuing debt sworn on 13 November 1984, Mr. Guthrey deposed as follows:
   
   

"1. I am employed as a Bank Manager by Australia and New Zealand Banking Group Limited the petitioner herein.

2. I am a person authorised by Australia and New Zealand Banking Group Limited to make this affidavit pursuant to Power of Attorney No. 997 in Book No. 3560.

3. I have not received any notice of the revocation of the said Power of Attorney.

4. I have checked the above mentioned Bank's accounting records relating to the above mentioned debtor and have found that no payments have been made since the date of the presentation of the said petition. The said debtor is still justly and truly indebted to the Australia and New Zealand Banking Group Limited in the sum of EIGHTY FOUR THOUSAND THREE HUNDRED AND EIGHTEEN DOLLARS AND FOURTEEN CENTS

($84,318.14), being $72,619.45 as to the judgment and $11,698.69 as to the interest calculated from 14 May 1982 until 23 December 1983, being the sum referred to in the said petition".

1. By the amended Notice of Appeal the appellant seeks a declaration that the power of attorney relied on by Mr. Guthrey did not authorise him to sign the creditor's petition. Apart from costs, this is the sole order sought in this Court. Only one ground of appeal is raised: that "His Honour erred in finding that Lloyd Frederick Guthrey had sufficient power pursuant to a Power of Attorney to execute the Creditor's Petition in which the Respondent sought a Sequestration Order against the Estate of the Appellant."

2. The Notice of Appeal does not appear to have been served on the trustee. In the normal course this should have been done so as to enable the Court, if minded to allow the appeal, to set aside the sequestration order having given the trustee an opportunity to advance any reason why that should not be done. See Re Sleath; Ex parte Lotus Shoe Company (1913) 109 LT 222.

3. Before the learned trial Judge, the respondent submitted that the grant of power to the branch manager, Mr. Guthrey, to manage the branch "and do all things necessary or expedient to be done for properly and efficiently conducting the business of the Bank" at the branch was wide enough to include a power to present a petition in bankruptcy. His Honour, in an ex tempore judgment, held that these words, when coupled with the rest of the document, particularly Clause 5 which empowered the Attorney:
   
   

"Generally to do all acts and execute all deeds and other instruments whether of the nature of deeds or not relating to all or any of the matters aforesaid."

were sufficient to authorize Mr. Guthrey to sign the petition on behalf of the respondent.

1. In our opinion, his Honour's finding was justified upon the material before him. In In re Anderson (1909) VLR 465 at 468, Cussen J. thought similar wide words might be sufficient, though his decision was based on a clause authorising the institution of "any action suit or other proceeding". See also Pepper v. McNiece (1940) 64 CLR 642.

2. The debtor did not comply with the command in the Registrar's notice endorsed on the petition -
   
   

"If you intend to deny or dispute any statements in that petition or to oppose that petition on any other ground you should -

(a) file in my office at Federal Court of Australia, General Division, 16th Level, Law Courts Building, Corner King and Macquarie Streets, Sydney, a notice setting out or referring to the statements that you intend to deny or dispute or the other grounds on which you intend to oppose the petition;

(b) serve a copy of that notice on the Solicitor for the petition not less than 3 days before the day specified above as the day fixed for the hearing of that petition".

1. The words "Solicitor for the petition" were no doubt meant to be "solicitor for the petitioner" and would have been understood in that sense.

2. Had the appellant filed such a notice raising the challenges to the petition which he put to his Honour, there seems little room for doubt that ample evidence would have been tendered and admitted to show that the petition was indeed brought on behalf of the respondent.

3. Courts exercising jurisdiction in bankruptcy have always insisted upon strict compliance with the requirements for a proceeding which may lead to a drastic change of status and, sometimes, may crystallize criminal liabilities that were previously only potential. That is especially so where there is an ex parte hearing. But, in a proper case, amendments (for which s.306 gives statutory sanction) can be allowed to meet those requirements, provided no injustice results. At a contested hearing, such a course can sometimes be more readily permitted. In Growden v. Wiltshire (1935) 52 CLR 286 the High Court dismissed an appeal against a sequestration order made in favour of a petitioner, who had petitioned in his own name, upon the basis that he had done so on behalf of a company of which he was the liquidator and that the petition should be remitted to the bankruptcy judge to be amended to name the company as the petitioner. In Re a Debtor (1939) 2 All ER 338, a petition was presented with the name of a firm written by a partner in purported signature of the petition. The Court of Appeal upheld an amendment to allow the partner to sign the petition. In In re Marsden (1921) B & CR (6 Hansell) 188 Astbury J. and P.O. Lawrence J. dealt with a case where the secretary of a company had been authorized to present a bankruptcy petition on its behalf, but had signed the petition by simply subscribing his own name. They did not regard this as invalidating the petition, but held that if it were a defect it was cured under a section equivalent to s.306.

4. Though it appears that at one stage during the pendency of this appeal the Bank harboured doubts, which it later regarded as dispelled, about the procedure it had followed, it appeared at the hearing by solicitors, whose retainer was not challenged, to prosecute the petition. Whether or not it thereby ratified the signature of the petition (see Alexander Ward & Co. Ltd. v. Samyang Navigation Co. Ltd. (1975) 1 WLR 673; Danish Mercantile Co. Ltd. v. Beaumont (1951) Ch 680; Re: Nick Manias; Ex parte: Edsill Pty. Limited (unreported, Jackson J., 25 March 1986)), it should have been permitted to make any formal amendment shown to be required to the manner of its signature, there being in the particular circumstances no possible prejudice to the appellant. Indeed such an amendment would not have re-shaped the petition as radically as did the High Court's order, made on the appeal, in Growden v. Wiltshire. But, as the evidence was presented at the hearing, it was not demonstrated that any amendment was necessary.

5. The appeal should be dismissed with costs other than the costs of the affidavits referred to in the schedule to the Court's formal order and the costs of and incidental to the abortive hearing on 21 October 1985, as to which there should be no order.