Sarina v O'Shannassy (No 2) - [2021] FCCA 338

FEDERAL CIRCUIT COURT OF AUSTRALIA
Sarina v O’Shannassy (No 2) [2021] FCCA 338

File number(s): SYG 1345 of 2020

Judgment of: JUDGE MANOUSARIDIS

Date of judgment: 26 February 2021

Catchwords: BANKRUPTCY – application under s 306(1) or s 33(1)(b) of the Bankruptcy Act 1966 (Cth) (Act) for an order to vary bankruptcy notice by removing the post office box address of the creditor and substituting a street address – whether it is an essential requirement to the issue of a bankruptcy notice that it not specify a post office box as the creditor’s address – such requirement is essential and its non-fulfilment, although a defect or irregularity, is not a formal defect or irregularity amendable to being cured under s 306(1) or s 33(1)(b) of the Act – interim application dismissed and bankruptcy notice set aside.

Legislation:
Bankruptcy Act 1966 (Cth), ss 33(1)(b), 40(1)(g), 41, 306(1)

Bankruptcy Regulations 1996 (Cth) reg 4.02

Cases cited:
ABB Australia Pty Limited v Commissioner of Taxation [2007] FCA 1063

Adams v Lambert (2006) 228 CLR 409; [2006] HCA 10

Ex parte John Danks In the Matter of John Farley, [1852] EngR 1038; (1852) 2 De G M & G 936; 42 E.R. 1138 (22 November 1852)

Cardinal Insurance Company v Maple Underwriters Ltd (1983) 46 BCLR 137

James v Federal Commissioner of Taxation [1995] HCA 75; (1955) 93 CLR 631

Metledge v Hopkins [2020] FCA 561

Nugent v Brialkim Pty Ltd (1985) 61 ALR 725

Proctor v Jetway Aviation Pty Ltd [1984] 1 NSWLR 166

Re Pugliese; Ex parte The Chase Manhattan Bank of Australia Ltd [1993] FCA 454

Skouloudis v St George Bank Ltd [2008] FCA 1765

Steel Company (Operations) Pty Ltd v Lewis [2000] FCA 1915

Sunrise Auto Limited v Deputy Commissioner of Taxation [1995] FCA 1693

Number of paragraphs: 34

Date of hearing: 18 February 2021

Place: Sydney

Counsel for the Applicant: Mr C Bolger, by telephone

Solicitor for the Applicant: Kalantzis Lawyers

The Respondent: Appeared in person, by telephone
ORDERS

SYG 1345 of 2020

BETWEEN:
CLINTON SARINA
Applicant

AND:
JOHN O'SHANNASSY

Respondent

ORDER MADE BY:

JUDGE MANOUSARIDIS

DATE OF ORDER:

26 FEBRUARY 2021

THE COURT ORDERS THAT:
1.The interim application filed by the respondent on 21 January 2021 for an order that bankruptcy notice BN249223 issued on 6 March 2020 be amended is dismissed.
2.Bankruptcy notice BN249223 issued on 6 March 2020 is set aside.
3.Subject to order 4, the respondent pay the applicant’s costs of the proceeding, including the costs of the interim application referred to in order 1.
4.The parties have liberty to apply by email communication to the chambers of Judge Manousaridis by no later than 12 March 2021 for an order to vary or discharge order 3, such communication to be supported by short written submissions stating the orders that are sought, the grounds on which the orders are sought, and whether the party making the application requires a hearing or instead consents to Judge Manousaridis determining on the papers the…

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.

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Details

Case: [2021] FCCA 338
Decision Date: 26 February 2021

CaseChat Overview and Summary

In *Sarina v O'Shannassy (No 2)*, Manousaridis J of the Supreme Court of Victoria considered the validity of a bankruptcy notice issued by Mr O’Shannassy and served on Mr Sarina. The dispute centred on the address specified for the creditor on the bankruptcy notice.

The primary legal issue before the court was whether a bankruptcy notice that specifies a post office box as the creditor's address is valid, and if not, whether such a defect could be cured by amendment under the relevant provisions of the *Bankruptcy Act 1966* (Cth).

Manousaridis J, applying the principles established in *Metledge*, concluded that the *Bankruptcy Act* mandates that a creditor's address on a bankruptcy notice must not be a post office box. This requirement was held to be essential to the validity of the notice. Consequently, the bankruptcy notice issued in this case, which specified a post office box, was deemed invalid and not a notice under the Act. The court found that this defect was not a formal defect or irregularity that could be amended under section 31(1)(b) or section 306 of the Act.

Accordingly, the court ordered that Mr O’Shannassy’s interim application be dismissed and that the bankruptcy notice be set aside. The court also ordered that Mr O’Shannassy pay Mr Sarina’s costs, with liberty to apply within 14 days to vary or discharge the costs order.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

I have already concluded that the decision and judgment in Metledge compels me to conclude that the Act requires a bankruptcy notice specify as the creditor’s address an address that is not a post office box, and the Act renders the satisfaction of that requirement an essential condition to the validity of a bankruptcy notice. It follows that by specifying an address that is a post office box, the bankruptcy notice Mr O’Shannassy caused to be issued and served on Mr Sarina is invalid and, for that reason, is not a notice under the Act. Paragraph (b) of s 31(1) of the Act is therefore not available to permit me to amend the bankruptcy notice to substitute an address for the creditor that is not a post office box.CONCLUSION AND DISPOSITION In specifying as the creditor’s address a post office box the bankruptcy notice Mr O’Shannassy caused to be issued and served on Mr Sarina contains a defect or an irregularity. Not specifying a post office box as the creditor’s address is an essential requirement to the validity of a bankruptcy notice. The defect or irregularity constituted by the bankruptcy notice specifying a post office box address, therefore, is not a formal defect or a formal irregularity. That means that the bankruptcy notice is invalid, and not a notice under the Act which, in turn, means that neither s 306 nor s 33(1)(b) of the Act is available to cure the defect or irregularity. I propose, therefore, to order that Mr O’Shannassy’s interim application be dismissed, and that the bankruptcy notice be set aside. I also propose to order that Mr O’Shannassy pay Mr Sarina’s costs, but I will grant the parties liberty to apply within 14 days to vary or discharge the order for costs I propose to make.

Ratio Decidendi

Legal Principle Established

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File number(s):	SYG 1345 of 2020
Judgment of:	JUDGE MANOUSARIDIS
Date of judgment:	26 February 2021
Catchwords:	BANKRUPTCY – application under s 306(1) or s 33(1)(b) of the Bankruptcy Act 1966 (Cth) (Act) for an order to vary bankruptcy notice by removing the post office box address of the creditor and substituting a street address – whether it is an essential requirement to the issue of a bankruptcy notice that it not specify a post office box as the creditor’s address – such requirement is essential and its non-fulfilment, although a defect or irregularity, is not a formal defect or irregularity amendable to being cured under s 306(1) or s 33(1)(b) of the Act – interim application dismissed and bankruptcy notice set aside.
Legislation:	Bankruptcy Act 1966 (Cth), ss 33(1)(b), 40(1)(g), 41, 306(1) Bankruptcy Regulations 1996 (Cth) reg 4.02
Cases cited:	ABB Australia Pty Limited v Commissioner of Taxation [2007] FCA 1063 Adams v Lambert (2006) 228 CLR 409; [2006] HCA 10 Ex parte John Danks In the Matter of John Farley, [1852] EngR 1038; (1852) 2 De G M & G 936; 42 E.R. 1138 (22 November 1852) Cardinal Insurance Company v Maple Underwriters Ltd (1983) 46 BCLR 137 James v Federal Commissioner of Taxation [1995] HCA 75; (1955) 93 CLR 631 Metledge v Hopkins [2020] FCA 561 Nugent v Brialkim Pty Ltd (1985) 61 ALR 725 Proctor v Jetway Aviation Pty Ltd [1984] 1 NSWLR 166 Re Pugliese; Ex parte The Chase Manhattan Bank of Australia Ltd [1993] FCA 454 Skouloudis v St George Bank Ltd [2008] FCA 1765 Steel Company (Operations) Pty Ltd v Lewis [2000] FCA 1915 Sunrise Auto Limited v Deputy Commissioner of Taxation [1995] FCA 1693
Number of paragraphs:	34
Date of hearing:	18 February 2021
Place:	Sydney
Counsel for the Applicant:	Mr C Bolger, by telephone
Solicitor for the Applicant:	Kalantzis Lawyers
The Respondent:	Appeared in person, by telephone

ORDER MADE BY:	JUDGE MANOUSARIDIS
DATE OF ORDER:	26 FEBRUARY 2021