Sunstate Wholesale Jewellery v Millar
[2007] FMCA 734
•2 February 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| SUNSTATE WHOLESALE JEWELLERY v MILLAR | [2007] FMCA 734 |
| BANKRUPTCY – Creditor’s petition – excusing formal defects or irregularities – sequestration order. |
| Bankruptcy Act 1966, ss.47, 306 |
| Adams v Lambert (2006) 225 ALR 396 Daly v Watson (1994) 128 ALR 309 |
| Applicant: | SUNSTATE WHOLESALE JEWELLERY |
| Respondent: | ROBERT JOHN MILLAR |
| File number: | BRG 892 of 2006 |
| Judgment of: | Wilson FM |
| Hearing date: | 2 February 2007 |
| Date of last submission: | 2 February 2007 |
| Delivered at: | Brisbane |
| Delivered on: | 2 February 2007 |
REPRESENTATION
| Counsel for the Applicant: | N/A |
| Solicitors for the Applicant: | Schultz Toomey O’Brien Lawyers |
| Counsel for the Respondent: | N/A |
| The Respondent: | No appearance |
ORDERS
UPON THE UNDERTAKING of the solicitors for the judgment creditor to make file and serve an affidavit of Rita Williams verifying paragraphs 1, 2 and 3 of the Creditors Petition:
A Sequestration Order be made against the estate of ROBERT JOHN MILLAR.
The Applicant Creditor’s costs (including reserved costs, if any) be taxed and paid from the estate of the Respondent Debtor in accordance with the Bankruptcy Act 1966.
The Court notes that the date of the act of bankruptcy is 14 December 2006
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRG 892 of 2006
| SUNSTATE WHOLESALE JEWELLERY |
Applicant
And
| ROBERT JOHN MILLAR |
Respondent
REASONS FOR JUDGMENT
This is an application for a sequestration order brought by Sunstate Wholesale Jewellery Proprietary Limited, ACN 009 967 042. The matter has been referred to me by the Registrar on the basis that there are four deficiencies in the material relied upon by the petitioning creditor.
The first is that, in the bankruptcy notice, at paragraph 1, the amount of $165,709.17 is claimed to be owing. In schedule 1 to the bankruptcy notice, an additional amount of $1879.10 is claimed, making a total of $167,588.27. Then, for some inexplicable reason, the total is expressed to be $166,567.02. In my view, it is plain on the face of the bankruptcy notice that there are arithmetical or typographical errors in the document, and it is a matter which can be cured by s.306(1) Bankruptcy Act, in accordance with the recent judgment of the High Court of Australia in Adams v Lambert (2006) 225 ALR 396.
In my view, the creditor has attempted to claim interest on the judgment debt but has not transposed that amount correctly to the body of the bankruptcy notice. I am of the view that the debtor would not be misled by the bankruptcy notice. Accordingly, that ground would not preclude the making of a sequestration order.
The judgment obtained from the District Court of Queensland at Maroochydore was against Robert John Millar trading as Initial Design Solutions. The bankruptcy notice is addressed to Robert Millar, omitting the second name. The amount claimed is identical with the amount of the judgment ordered on 25 August 2006, and I note that, in the subsequent documents, the middle name has been reinserted. Again, this is a matter which, in my view, is able to be dealt with under s.306(1) of the Act and is a formal defect or irregularity, that ought be excused.
The bankruptcy notice is issued by Sunstate Wholesale Jewellery, ACN 009 967 042. The correct name of the company is Sunstate Wholesale Jewellery Pty Limited, with the same ACN number. However, the judgment obtained in the District Court at Maroochydore when damages were assessed, names the plaintiff as Sunstate Group Precious Jewellery. There is no explanation as to why this typographical error occurred. I note that the actual judgment obtained on 6 August 2004 correctly names the plaintiff and judgment creditor. In my view, the misstatement of the plaintiff in the order of 25 August 2006, by which damages were assessed, is a formal defect or irregularity which can be cured under s.306(1) of the Act. The judgment of 6 August 2004 creates the obligation to pay. It correctly records the name as that of the petitioning creditor.
Finally, the affidavit verifying the creditor’s petition is sworn by the solicitor for the judgment creditor, who swears that he has access to the books and records of the company, and is authorised to swear the affidavit on its behalf. At paragraph [2] of his affidavit, Mr Schultz says that:
“The statements made in paragraphs 1, 2 and 3 of the creditor's petition are, within his own knowledge, true.”
Mr Schultz is the solicitor for the company, and the statement in paragraph 2 must, necessarily, be hearsay. There is no evidence that Mr Schultz has personal knowledge of not only the amount owing, which he may have if he acted as solicitor and obtained a judgment from the court, but certainly of the facts alleged in paragraphs 2 and 3 of the petition, being the holding of security and the whereabouts of the debtor.
This matter was dealt with in Daly v Watson (1994) 128 ALR 309. A similar situation arose before Hill J, and his Honour permitted the production of further evidence which supported the making of a sequestration order. An appeal from his Honour's decision was dismissed. The Full Federal Court agreed that a formal affidavit, which was defective, could be cured if the evidence was substantiated by other evidence produced at the hearing.
In this case, there is an affidavit of debt of Rita Williams which verifies that the debt is still owing, and there is an affidavit of service of the bankruptcy notice and the bankruptcy petition, both of which demonstrate that the debtor resides in Australia. Therefore, it is only necessary to produce an affidavit formally curing the defect arising from non-compliance with s.47(1)(b) of the Bankruptcy Act.
In those circumstances, upon the undertaking of the solicitors for the judgment creditor to make, file and serve an affidavit of Rita Williams verifying paragraphs 1, 2 and 3 of the creditor's petition, I make a sequestration order against the estate of Robert John Millar. The date of bankruptcy is 14 November 2006. I order that the petitioning creditor's costs be taxed and paid from the estate.
I certify that the preceding ten (10) paragraphs are a true copy of the reasons for judgment of Wilson FM
A/Associate: Kristy Glover
Date: 16 May 2007
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