Shephard v Costa Exchange Ltd
[2010] FMCA 314
•26 May 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
SHEPHARD v COSTA EXCHANGE LTD & ORS [2010] FMCA 314
BANKRUPTCY – Disputed bankruptcy notice – whether a debtor has a countervailing cross claim considered – whether the bankruptcy notice sufficiently identifies the address at which payment can be made considered – whether the certificate of judgment annexed to the bankruptcy notice is in proper form considered.
Bankruptcy Act 1966, s.41
Bankruptcy Regulations
Evidence Act 1995 (Cth), ss.157, 160
Federal Magistrates Court (Bankruptcy) Rules 2006 (Cth)
Bryant v Commonwealth Bank of Australia [1994] FCA 470
Ebert v Union Trustee co of Australia Ltd (1960) 104 CLR 346
Glew v Harrowell of Hunt and Hunt Lawyers (2003) 198 ALR 331
Goldberg v Morrow [2005] FCA 1038
Massih v Esber (2008) 250 ALR 648
Re Gerrard Graeme Crisafulli, ex parte: National Commercial Banking Corporation of Australia Ltd [1985] FCA 238
Re Nugent; ex parte Nugent [1985] FCA 101
Shephard v Blueberry Farms [2001] FMCA 2
Shephard v Chiquita Brands (South Pacific) Ltd [2001] FMCA 78
Shephard v Chiquita Brands (South Pacific) Ltd [2002] FCA 466
Shephard v Chiquita Brands (South Pacific) Ltd [2002] FMCA 115
Shephard v Chiquita Brands (South Pacific) Ltd [2003] FCA 465Shephard v Chiquita Brands (South Pacific) Ltd [2004] FCAFC 76
Vogwell v Vogwell (1939) 11 ABC 83
Applicant: DEREK GEORGE SHEPHARD
First Respondent: COSTA EXCHANGE LTD
Second Respondent: ANTHONY GEOFFREY HARTNELL
Third Respondent: GARY WILLIAM WRIGHT
Fourth Respondent: DAVID ANTHONY BARDON
Fifth Respondent: PETER WOODS
Sixth Respondent: RIDLEY BELL
Seventh Respondent: MICHAEL TAMANI
Eighth Respondent: SCOTT ROLAND WOLGAMOT
Ninth Respondent: PETER McPHERSON
File Number: SYG 625 of 2010
Judgment of: Driver FM
Hearing date: 7 May 2010
Date of Last Submission: 17 May 2010
Delivered at: Sydney
Delivered on: 26 May 2010 REPRESENTATION
The Applicant appeared in person
Counsel for the Respondents: Mr J S Tobin
Solicitors for the Respondents: Watson Mangioni Lawyers Pty Limited ORDERS
(1)The application filed on 22 March 2010 to set aside bankruptcy notice NN596 of 2010 is dismissed with costs.
(2)Exhibit A1 is to be returned to the applicant.
FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEYSYG 625 of 2010
DEREK GEORGE SHEPHARD Applicant
And
COSTA EXCHANGE LTD First Respondent
ANTHONY GEOFFREY HARTNELL
Second Respondent
GARY WILLIAM WRIGHT
Third Respondent
DAVID ANTHONY BARDON
Fourth Respondent
PETER WOODS
Fifth Respondent
RIDLEY BELL
Sixth Respondent
MICHAEL TAMANI
Seventh Respondent
SCOTT ROLAND WOLGAMOT
Eighth Respondent
PETER McPHERSON
NINTH Ninth Respondent
REASONS FOR JUDGMENT
Introduction and background
1.Mr Shephard applied on 22 March 2010 to set aside bankruptcy notice NN596 of 2010 served on him on 2 March 2010. The application also sought an extension of time for compliance with the bankruptcy notice. Extension of time orders were made by a registrar and me pursuant to s.41(6A) of the Bankruptcy Act 1966 (Cth) (“the Bankruptcy Act”) up to and including 7 May 2010. At the hearing of this matter on that day, I formed the view that no further order under that section was required as, amongst other things, Mr Shephard was asserting a counterclaim, set-off or cross demand of equal or greater value than the sum claimed in the bankruptcy notice and, pursuant to s.41(7) of the Bankruptcy Act, the time for compliance with the bankruptcy notice is automatically extended until that issue is dealt with by the Court.
2.The application is opposed by the respondents.
3.There is a very long history of litigation between the parties, including bankruptcy litigation. In 1984 Mr Shephard and his then wife entered into a series of agreements with two companies, Johnson Farm Management Pty Ltd and Vosington Pty Ltd, whereby the Shephards acquired certain land and rights as part of a proposed cooperative scheme for the farming of blueberry plants near Coffs Harbour. The parties came into dispute on the question of whether and to what extent, property passed to Mr and Mrs Shephard. The parties also came into dispute as to the nature of the rights to the supply of water obtained from Vosington Pty Ltd and whether numerous easements were created over the property acquired by Mr and Mrs Shephard.
4.In 1985 Johnson Farm Management Pty Ltd experienced financial difficulties. The first respondent, then known as Blueberry Farms of Australia (Corindi) Limited (“the company”) progressively assumed control of certain of the farm management and supply operations. In 1987 the company changed the terms upon which farm services were to be provided to Mr Shephard. He was, however, dissatisfied with the standard of the services provided and was also dissatisfied with the arrangements made by the company for the supply of water to his property.
5.Mr Shephard commenced litigation against the company in 1991 claiming a refund of moneys that he had paid for farm management services and shares in the company. The company lodged a counterclaim for money alleged to be owing to it. There was an arbitration in the Local Court which was adverse to Mr Shephard.
6.The resulting judgment debt was not paid and the company issued a bankruptcy notice. Mr Shephard applied to have that bankruptcy notice set aside. I heard that case and allowed the application, setting aside the notice[1]. I concluded that the bankruptcy notice was invalid by reason of irregularity but also considered a counterclaim asserted then by Mr Shephard. I found that Mr Shephard had failed to establish the existence of a counterclaim, set-off or cross demand of equal or greater value than the sum then demanded of him.
[1] Shephard v Blueberry Farms [2001] FMCA 2
7.A further bankruptcy notice was issued on 14 February 2001. That case also came before me in September 2001. I relied in part upon my judgment in the earlier proceedings in relation to the then asserted counterclaim, set-off or cross demand. I gave judgment in favour of the company then known as Chiquita Brands (South Pacific) Ltd on 12 September 2001[2]. Mr Shephard appealed to the Federal Court against my decision and was successful on appeal in relation to the asserted counterclaims, which the Federal Court found I had not adequately dealt with[3].
[2] Shephard v Chiquita Brands (South Pacific) Ltd [2001] FMCA 78
[3] Shephard v Chiquita Brands (South Pacific) Ltd [2002] FCA 466
8.The case was reheard by Raphael FM. On 17 June 2002 he dismissed the application[4]. Mr Shephard appealed to the Federal Court. He was unsuccessful[5].
[4] Shephard v Chiquita Brands (South Pacific) Ltd [2002] FMCA 115
[5] Shephard v Chiquita Brands (South Pacific) Ltd [2003] FCA 465
9.The company was unable to proceed with a creditors petition because the petition was not presented within six months of the act of bankruptcy committed by Mr Shephard[6].
[6] Shephard v Chiquita Brands (South Pacific) Ltd [2004] FCAFC 76
10.I was informed that other bankruptcy notices were subsequently issued but, for one reason or another, none of them has to date resulted in a creditors petition upon which a sequestration order was made.
11.It is apparent that considerable ill feeling developed over time between Mr Shephard and individuals employed by or associated with the company. There was litigation between the parties over allegations by Mr Shephard of assault and harassment. In 1999, Mr Shephard commenced proceedings against the company then known as Chiquita Brands (South Pacific) Ltd in the District Court of NSW at Coffs Harbour concerning those allegations. Further proceedings were commenced by Mr Shephard in February 2001 against the company and a number of individuals. There was a mediation on 3 August 2005 at Coffs Harbour. Terms of settlement were agreed and the parties signed a deed of settlement on 16 September 2005. Pursuant to the terms of the deed, Mr Shephard transferred his blueberry farm to the company in return for a payment of $55,000 and all proceedings were settled by payment to Mr Shephard of $245,000.
12.Mr Shephard commenced further proceedings against the respondents to the present application in the District Court at Coffs Harbour in March 2008. He also commenced proceedings in the Supreme Court of NSW on 12 August 2008. On 18 June 2009 Macready J dismissed the Supreme Court proceedings with costs. Mr Shephard filed a Notice of Intention to Appeal the whole of that judgment on 14 July 2009 but it does not appear that any notice of appeal has been filed.
13.On 15 July 2009 the respondents applied for an assessment of costs in relation to the Supreme Court proceedings. On 22 September 2009 those costs were assessed at $48,647.98, together with costs of the assessment in the amount of $1,525.98. It does not appear that Mr Shephard has applied to review or appeal the determination of the costs assessor.
14.On 2 December 2009 the respondents filed certificates of determination of costs in the Local Court.
15.On 18 December 2009 the solicitors for the respondents wrote to Mr Shephard demanding payment of the sum of $50,473.96 within 14 days and attaching documents relating to the assessment and recovery of the respondents’ costs.
16.On 3 February 2010 the Local Court ordered Mr Shephard to pay $48,797.98. That is the judgment supporting the present bankruptcy notice.
The application, evidence and submissions
17.Mr Shephard seeks to set aside the bankruptcy notice on three grounds:
a)because he has a cross claim against the respondents exceeding the value of the amount claimed in the bankruptcy notice;
b)because the bankruptcy notice fails to provide an address for payment, or negotiation for payment, of the amount claimed in the bankruptcy notice; and
c)because the copy of the judgment upon which the bankruptcy notice is based, which was attached to the bankruptcy notice, failed to provide the Court seal as required.
18.Mr Shephard relies upon his own affidavits made on 19 March 2010 (accepted by me as a submission), 16 April 2010 and 4 May 2010 (accepted subject to relevance). He also tendered (exhibit A1) the original bankruptcy notice served on him. The respondents rely upon the affidavits of Owen James Andersen made on 31 March 2010 (to which was exhibited a folder of documents) and the affidavit of Peter John McPherson made on 20 April 2010. None of the deponents were examined.
19.Mr Shephard submits that he has claims against the respondents which were improperly resolved by the settlement of the District Court proceedings (which settlement he asserts was obtained by duress) which exceed in value the amount claimed in the bankruptcy notice. He further claims that the address nominated in the bankruptcy notice for payment of the asserted debt is impracticable for him to reach and the location is uncertain. He also submits that he fears violence from persons who might be found at the address nominated for payment and that it was therefore not reasonably practicable for him to attend the office of the respondent company to make a payment. He says that the respondents should have used an address in Melbourne which had been nominated in an earlier bankruptcy notice. The respondents concede that an earlier bankruptcy notice had nominated a Melbourne address.
20.The respondents submit that Mr Shephard has not demonstrated that he has a bona fide claim having a fair chance of success in relation to the alleged counterclaim, set-off or cross demand. The respondents point to the settlement of the claims agitated in the District Court. They further point to the absence of particulars of duress alleged by Mr Shephard in relation to that settlement. They also point to the rejection of a duress claim in the Supreme Court proceedings which followed the settlement.
21.On the claim in relation to the address for payment, the respondents submit that the address is clear and appropriate and known to Mr Shephard. They also point to the rejection of a similar argument in the Federal Court proceedings before Gyles J[7].
[7] Shephard v Chiquita Brands (South Pacific) Ltd [2002] FCA 466 at [20]-[22].
22.In relation to the form of the certificate of judgment, the respondents point to the seal and signature of the registrar on the certificate as satisfying the formal requirement of Bankruptcy Regulation 4.01(1)(b).
23.I gave Mr Shephard the opportunity to file written submissions in reply within seven days of the date of the trial of this matter. Mr Shephard filed written submissions in reply on 17 May 2010. I have taken those submissions into account. The respondents filed a “response” to those submissions on 19 May 2010. I gave no leave for further written submissions from the respondents and I have not taken them into account.
Reasoning
The alleged counter-claim
24.It is apparent that Mr Shephard had a claim of greater value than the amount claimed in the present bankruptcy notice up until 2005. That is because the deed of settlement between the parties provided for a payment to Mr Shephard of $245,000 in full and final settlement of his claims against the respondents. That money was paid. A subsequent attempt to reagitate his claims in the Supreme Court was unsuccessful.
25.I accept the respondents’ submissions concerning the relevant legal principles applicable to this issue. Bankruptcy Rule 3.02(2) provides that a person seeking to set aside a bankruptcy notice on the basis of a counterclaim, set-off or cross demand must state in their affidavit in support:
(a) The full details of the counter-claim, set-off or cross demand; and
(b) The amount of the counter-claim, set-off or cross demand and the amount by which it exceeds the amount claimed in the bankruptcy notice; and
(c) Why the counter-claim, set-off or cross demand was not raised in the proceeding that resulted in the judgment or order in relation to which the bankruptcy notice was issued.
26.The mere filing of an application and affidavit will not satisfy the Court that the debtor has a counterclaim, set-off or cross demand. The satisfaction of the Court must be expressed in a finding by the Court and an order giving effect to that finding: Bryant v Commonwealth Bank of Australia [1994] FCA 470.
27.There is an obligation on the debtor to adduce evidence that provides reasonable grounds for the institution of proceedings: Vogwell v Vogwell (1939) 11 ABC 83 at 85 (per Latham CJ)(cited with approval by Madgwick J in Shephard v Chiquita Brands (South Pacific) Ltd (op cit).
28.As to the level of ‘satisfaction’ the court must have on such an application, the High Court stated in Ebert v Union Trustee Co of Australia Ltd (1960) 104 CLR 346 at [5]:
The debtor clearly must satisfy the Court that there exists in him a counter-claim, set-off or cross demand. "Cross demand" is the word relied upon here. The appellant cannot satisfy the Court that a cross demand exists by showing no more than that she propounds one and states how she suggests that she can make it out. In Re Duncan; Ex parte Modlin (1917) 17 SR (NSW) 152; 34 WN 49 Street J. said that the debtor need not satisfy the Court that there are reasonable grounds for believing that he will establish his cross action, but only that he has a bona fide claim which he is fairly entitled to litigate. This perhaps is expressed too favourably to the debtor. In Re A Debtor (1958) 1 Ch 81 Roxburgh J. said: "But not every demand will suffice. A demand made in bad faith would not be good enough. The debtor must satisfy the Court that he has a genuine demand. . . . But in my opinion a demand must be more than bona fide: the Court must be satisfied that it has a reasonable probability of success" (1958) 1 Ch, at p 99. Perhaps the standard may be expressed by saying that the debtor must show that he has a prima facie case, even if then and there he does not adduce the admissible evidence which would make out a prima facie case before a court trying the issues that are involved in his counter-claim, set-off or cross demand.
29.The issue of what constitutes adequate “satisfaction” was clarified in Glew v Harrowell of Hunt and Hunt Lawyers (2003) 198 ALR 331, where Lindgren J stated at [9] and following:
[9] There are authorities suggesting that Glew and Tresidder must satisfy me of the following interrelated and sometimes overlapping matters:
• that they have a “prima facie case”, even if they do not adduce evidence which would be admissible on a final hearing making out that case: Ebert v Union Trustee Co of Australia Ltd (1960) 104 CLR 346 (Ebert) at 350; Re Brink; Ex parte Commercial Banking Co of Sydney Ltd (1980) 30 ALR 433 at 438–9 ; 44 FLR 135 at 141 (Brink); Gomez v State Bank of New South Wales Ltd [2002] FCAFC 101; BC200201643 at [17], [18];
• that they have “a fair chance of success” or are “fairly entitled to litigate” the claim: Brink at ALR 438–9; FLR 141; Gould v Day [1999] FCA 1650; BC9907767 at [27], [28]; Re Capsanis; Capsanis v Owners — Strata Plan 11727 [2000] FCA 1262; BC200005275 at [11]; and
• that they are advancing a “genuine” or “bona fide” claim: Re Capsanis; Capsanis v Owners — Strata Plan 11727 [2000] FCA 1262; BC200005275 at [11].
It may be that the first and second formulations are intended to cover the same ground. In Brink Lockhart J treated (at ALR 438–9; FLR 141) the reference to a “prima facie case” in Ebert as a reference to “a fair chance of success”. (emphasis added)
30.In paragraph 1 of his first affidavit Mr Shephard asserts the existence of a cross claim “for in excess of $100,000, relating to damages for serial acts of trespass to land, assault, and aggravated assault, and fraud”.
31.In the same paragraph of his affidavit Mr Shephard admits that “the claims relating to the above were made in the District Court at Coffs Harbour, and were settled out of court”. There are no particulars provided to support the alleged quantum of the claims. I surmise that Mr Shephard seeks to rely upon every claim that was raised in the District Court proceedings. That is, it appears that the asserted claims are in fact the District Court claims.
32.The District Court claims that were relevantly settled were:
a)Coffs Harbour District Court proceedings numbered 120/1999 brought by Mr Shephard against Chiquita Brands South Pacific Limited (now known as Costa Exchange Ltd, one of the respondents to this application); and
b)Coffs Harbour District Court proceedings number 7/2001 brought by Mr Shephard against the respondents.
33.The settlement of the District Court Claims was effected by way of terms of settlement and a settlement deed. The provisions of the settlement deed appear to me to constitute a complete bar to any of the asserted claims, as Mr Shephard has given releases to all of the respondents in relation to the District Court claims. The respondents submit, and I accept, that the asserted claims do not have a fair chance of success.
34.After identifying the relevant claims Mr Shephard relies upon in seeking to set aside the bankruptcy notice as being those claims made “in the District Court at Coffs Harbour”, the third sentence of paragraph 1 Mr Shephard’s first affidavit then states ‘I am applying to have the settlement agreement set aside as it was made under duress’.
35.Particulars of the alleged “duress” are not provided in the affidavit. However, in his oral submissions Mr Shephard said that the duress was the threat of bankruptcy, as he had committed an act of bankruptcy by failing to comply with a bankruptcy notice before the settlement. Mr Shephard attempted unsuccessfully to raise a duress claim in the Supreme Court proceedings. The events alleged in the District Court claims occurred up to six years before the execution of the settlement deed (none of the events were contemporaneous with the entry into the deed). Further, I do not accept that a simple fear of bankruptcy constitutes duress. Mr Shephard has shown himself capable of resisting bankruptcy proceedings over a decade with a good deal of success. I also note that Mr Shephard was legally represented on the settlement and the mediation which preceded it.
36.In March 2008, Mr Shephard commenced proceedings against the respondents in the District Court at Coffs Harbour, being proceedings 55/2007. These proceedings related to the same issues the subject of Coffs Harbour District Court proceedings 120/1999 and 7/2001. The proceedings were transferred to the Supreme Court in around August 2008.
37.Mr Shephard filed an amended statement of claim in the Supreme Court proceedings on 24 September 2008. This claim was struck out. Mr Shephard filed a further amended statement of claim in the Supreme Court proceedings on 2 February 2009.
38.The second Supreme Court statement of claim was dismissed by his Honour Associate Justice Macready on 18 June 2009. At page 4 of the dismissal judgment, his Honour remarked:
‘It is to be borne in mind that what is sought here by Mr Shephard is to set aside a settlement that was reached in 2005. One sometimes sees people make settlements as a result of misleading and deceptive conduct. Things are said to them to induce them to enter into settlements. There is no suggestion of any of that happening here. For instance, the complaints about the violence and the interruptions to the farm were all matters no doubt the subject of a complaint in the District Court proceedings that were settled. Because of their distance from the mediation it is hard to see any, at this stage, causative link between the events that happened to Mr Shephard at that stage and why he then entered into the mediation agreement. Such agreement would require either fraud or him not being a competent person, for instance, at the time he entered into the agreement such that he would be entitled to have it set aside because he was not competent. That is why I think that at the moment on the information available there appears to be no cause of action.’
39.The Supreme Court proceedings were dismissed. His Honour ordered that Mr Shephard pay the respondents’ costs (page 6 of the judgment)[8].
[8] A costs order is capable of being treated as a final order for the purposes of a bankruptcy notice: Goldberg v Morrow [2005] FCA 1038.
40.Mr Shephard filed a notice of intention to appeal the dismissal judgment. No appeal has been filed. No order has been sought or made setting aside the dismissal judgment. No order has been made staying the dismissal judgment.
41.The respondents proceeded to have their costs of the Supreme Court proceedings assessed.
42.Paragraphs 34 to 40 of Mr Andersen’s affidavit detail the assessment of those costs, culminating in the order of the Local Court in favour of the respondents with respect to the costs.
43.In paragraph 2 of his first affidavit, Mr Shephard claims he was unable to put the cross claim at the “hearing” because he was “unaware the hearing was on”. He further claims he was not served with any documents relating to Local Court case number 2053/09, “or any claim”.
44.Mr Shephard filed three statements of claim in the Supreme Court proceedings ‘putting his claim’. Mr Shephard appeared for himself at the hearing of the dismissal application in the Supreme Court proceedings on 18 June 2009 before Associate Justice Macready. The Court acknowledged the claim Mr Shephard had put and dismissed it. The Court consequently found that Mr Shephard was liable to pay the respondents’ costs of those proceedings based on the claims that he had put. The dismissal judgment and the costs judgment were effectively one and the same as regards their reflection of the merits of Mr Shephard’s claims[9].
[9] The respondents note that were substantive judgments and costs judgments to be considered mutually exclusive, any bankruptcy notice issued as a consequence of any substantive judgment (via a costs order) could be undermined on every occasion where the costs order was assessed and registered as a judgment – by the debtor raising the same claims that it failed on that were the subject of the substantive judgment. This would frustrate the due enforcement of the judgment and undermine the orders of the Court. Despite this, the respondents note the case of Massih v Esber (2008) 250 ALR 648.
45.Mr Shephard was also aware of the assessment of the respondents’ costs of the Supreme Court proceedings. He was sent the respondents’ bill of costs. He then filed written submissions dated 7 September 2009 with the costs assessor objecting to the respondents’ assessment of their costs.
46.The Notice to Costs Assessment Parties sent by the Court to the parties provides notice of a party’s rights to seek a review of the costs assessment or an appeal to the District Court. Mr Shephard has not sought to either review the costs assessment nor appeal to the District Court with respect to a matter of law concerning that assessment. The failure to seek review of these decisions was communicated to Mr Shephard in two of the respondents’ solicitor’s letters to him.
47.I reject this ground of objection to the bankruptcy notice.
No address for payment ground
48.I accept the respondents’ submissions on this ground. Mr Shephard bears the onus of adducing evidence which establishes that the address used by the creditor is not one at which, during the relevant period, it is reasonably practicable to make payment or offer to secure or compound the debt; Re Nugent; ex parte Nugent [1985] FCA 101 at [10].
49.The bankruptcy notice provides an address for payment in numbered paragraph 4 of the notice.
50.Paragraphs 2 – 5 of Mr McPherson’s affidavit support the fact that the address identified in the bankruptcy notice is an appropriate address in accordance with the relevant requirements of the Bankruptcy Act and the Regulations and associated Rules.
51.Mr Shephard knew of the address at Range Road, Corindi which is stated in the bankruptcy notice as the address for payment, and had previously been to the premises of the company at that address. That was noted by his Honour Gyles J at [20] and [21] of his decision in earlier bankruptcy related proceedings in Shephard v Chiquita Brands (South Pacific) Ltd.
52.I accept that it is the particular debtor to whom the bankruptcy notice has been directed that matters, not some hypothetical debtor – and that a court is thus able to take into account the surrounding circumstances and should consider the actual debtor: Re Gerrard Graeme Crisafulli, ex parte: National Commercial Banking Corporation of Australia Ltd [1985] FCA 238 at [7] and [8]. I take into account that Mr Shephard dislikes individuals who work for the company and has claimed that some assaulted and harassed him. However, he has not advanced any evidence of any threats or actual harm since 2005 and simple dislike is not a sufficient reason to expect “neutral territory” to be nominated as the place for payment of the debt.
53.In his submissions filed on 17 May 2010 Mr Shephard suggests that the respondents should have provided a postal address different from the address nominated in the bankruptcy notice “as there is no mail box outside lot 1 Range Road”. That demonstrates Mr Shephard’s knowledge of the respondents’ premises. Mr Shephard suggests that postal delivery to an address without a mailbox might be delayed or ineffective. I do not accept that any assumption can be made about the capacity of Australia Post to deliver mail to a business address. Indeed, there is a presumption of delivery in s.160 of the Evidence Act 1995 (Cth) (“the Evidence Act”).
54.It is important to note also that the bankruptcy notice does not (and in my view could not) require payment only at the address nominated in it. There was nothing to prevent Mr Shephard offering payment of the debt to the respondents at a different address and he appears to have been aware of several different addresses where payment might have been tendered had he wished to do so.
55.I conclude that in all the circumstances, the bankruptcy notice is not defective based upon the address for payment identified in the bankruptcy notice.
No Court seal on costs judgment ground
56.Mr Shephard appears to withdraw this ground in his submissions filed on 17 May 2010 but for an abundance of caution, I will deal with it. Bankruptcy Regulation 4.01(1)(b) relevantly provides that in order to apply for the issue of a bankruptcy notice, a person must lodge with the Official Receiver:
(b) one of the following documents in respect of the final judgment or final order specified by the person on the approved form:
(i) a sealed or certified copy of the judgment or order;
(ii) a certificate of the judgment or order sealed by the court or signed by an officer of the court;
(iii) a copy of the entry of the judgment or order certified as a true copy of that entry and sealed by the court or signed by an officer of the court.
57.The certificate of the costs judgment not only contains the seal of the Local Court at North Sydney on its face, but is signed by a registrar of that Court.
58.This asserted ground in support of setting aside the bankruptcy notice is misconceived. There is no significance in the fact that the Court seal is placed on the certificate in a different place to the signature of the registrar. Should it have been necessary to do so, resort could also have been made to s.157 of the Evidence Act.
Conclusion
59.I conclude that the application should be dismissed. Costs should follow the event. Mr Shephard makes submissions as to costs in his submissions filed on 17 May 2010 but the matters raised relate to the issues in the District Court proceedings (and the subsequent Supreme Court proceedings). Those issues have already been dealt with by settlement and judgment.
60.A consequence of the outcome of this application is that if the debt is not paid today, Mr Shephard will have committed an act of bankruptcy. It is a matter for the respondents to consider whether to then present a creditor’s petition. Previous bankruptcy proceedings over a decade have not resulted in a sequestration order against Mr Shephard. He has proven himself to be a recalcitrant debtor and a vigorous and sometimes successful litigant. Five years ago he was paid $300,000 by the respondents. I do not know how much of that money he retains. The solvency of Mr Shephard would be an issue for the Court to consider on a creditor’s petition. The settlement of the District Court proceedings was a good outcome for all concerned. Likewise, a settlement of the present matter would be a good outcome for all concerned.
I certify that the preceding sixty (60) paragraphs are a true copy of the reasons for judgment of Driver FM
Associate:
Date: 26 May 2010
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