State of Tasmania, in the Matter of Hollier

[1999] FCA 1348

FEDERAL COURT OF AUSTRALIA

State of Tasmania, in the Matter of Hollier [1999] FCA 1348

RE:  WILLIAM EDWARD HOLLIER EX PARTE:  THE STATE OF TASMANIA

NO. V 7468 of 1999

HEEREY J
21 SEPTEMBER 1999
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 7468 OF 1999

RE:	WILLIAM EDWARD HOLLIER A debtor
EX PARTE:	THE STATE OF TASMANIA Applicant creditor
JUDGE:	HEEREY J
DATE OF ORDER:	21 SEPTEMBER 1999
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1.        The bankruptcy notice dated 22 June 1999 will be set aside.

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

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 7468 OF 1999

RE:	WILLIAM EDWARD HOLLIER A debtor
EX PARTE:	THE STATE OF TASMANIA Applicant creditor

JUDGE:	HEEREY J
DATE:	21 SEPTEMBER 1999
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1. The applicant seeks to set aside a bankruptcy notice dated 22 June 1999.  The amount claimed in the notice is $8649.89 being the costs taxed in this Court pursuant to an award against the applicant in favour of the petitioning creditor the State of Tasmania. 

2. The award of costs arose out of some unusual litigation.  The applicant on 16 June 1992 was granted a twelve month tenancy of Deal Island in Bass Strait by the Australian Maritime Safety Authority.  There was a lighthouse on the island.  Modern navigational aids had rendered lighthouses surplus to requirements and the twelve month tenancy was granted for the purpose of ensuring care of the island until long-term arrangements were made. 

3. In 1997 the Authority gave the applicant notice to quit.  The applicant disputed that and claimed a permanent right to remain on the island.  He commenced proceedings in this Court.  Those proceedings were unsuccessful and an appeal brought by the applicant was dismissed. 

4. The Authority obtained a writ of possession from the Supreme Court of Tasmania for recovery of this land.  The writ was executed on or about 30 June 1998.  The title to the land was transferred on 31 July 1998 from the Authority to the State of Tasmania.  It is asserted in an affidavit sworn by an officer of the Authority that the land was transferred

   “along with title to all goods, chattels and other property remaining on the land at that date.”

5. If, however, some of the goods and chattels belonged to the applicant, and it seems common ground that some did, I do not understand how the transfer of title to this land would convey title to those goods and chattels as well.  In any event, the Authority packed the goods and chattels belonging to the applicant and his family on a barge and shipped them to Welshpool, Victoria, on or about 30 June 1998.

6. What is claimed by the applicant to raise the sufficient set-off or cross-demand is the value of chattels which he says has been taken.  As counsel for the respondent correctly pointed out, the application and the material in support does not comply strictly with O 77 r 13(2) and (3) of the Federal Court Rules.  Nevertheless, since the applicant is unrepresented it is reasonable to extend a certain amount of indulgence to him.  I think this is particularly so because from what I was told there have been negotiations proceeding between the applicant and the State of Tasmania as to the ownership of certain chattels and the valuation thereof.  These seem to have been proceeding in a rather desultory fashion.  As to which side is at fault in not bringing negotiations to a conclusion, I am unable to say. 

7. But for present purposes the important thing is that the machinery of the bankruptcy law is sought to be put into operation against a background of what seems to be at least some genuine dispute.  Some of the items that the applicant claims possession of are cattle on the island, said to be 14 in number, valued at $550 a head; some gas bottles which he claims belong to him, 21 in number at $130.  There is also a dispute about a quantity of diesel fuel for which, on the Authority's case, it is owed approximately $27,000.  But the applicant disputes that and says there were serious defects in the measurement of fuel on the island.

8. My overall reaction to this case is that there is a genuine dispute about the identification, ownership and value of various chattels on the island and it is not appropriate in those circumstances that the drastic procedure of the Bankruptcy Act should be used when there is a genuine dispute.  Although the particulars are scanty indeed, I am prepared to accept that there is a genuine and arguable claim for chattels to a value which would exceed the amount specified in the notice. 

9. I do not think it appropriate that the bankruptcy proceedings should be adjourned pending further negotiation.  Once a bankruptcy notice has been issued, important consequences flow and the potential status of the applicant as a bankrupt should not remain open for an indeterminate period.

10. I should mention that there was a complaint of inadequate service.  I am satisfied that that is not made out and that the notice was validly served by fax and confirmed by service by ordinary post.  But because there is a genuine counterclaim which of course could not have been raised in the proceedings giving rise to the debt because it was only after the litigation that the State of Tasmania was able to gain possession, I think the requirements of the Act are therefore satisfied.  I will allow the application and set aside the bankruptcy notice dated 22 June 1999.

I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey.

Associate:

Dated:             21 September 1999

Counsel for the Applicant:	Appeared in person
Counsel for the Respondent:	Ms S Lighton
Solicitor for the Respondent:	Office of Director of Public Prosecutions
Date of Hearing:	21 September 1999
Date of Judgment:	21 September 1999