SUSSMAN v Johncorp Industries Pty Ltd

FEDERAL MAGISTRATES COURT OF AUSTRALIA

SUSSMAN v JOHNCORP INDUSTRIES PTY LTD          [2002] FMCA 58

BANKRUPTCY – Application to set aside Bankruptcy Notice – overstatement in amount of debt owed.

Bankruptcy Act 1966, ss 33, 306

Australian Steel v Lewis (2000) FCA 1915
Kleinwort Benson Australia Ltd v Crowl (1998) 165 CLR 71

Applicant: ALEXANDER SUSSMAN

Respondent: JOHNCORP INDUSTRIES PTY LTD

File No: SZ163 of 2002

Delivered on: 26 March 2002

Delivered at: Sydney

Hearing Date: 26 March 2002

Judgment of: Raphael FM

REPRESENTATION

Counsel for the Applicant: Mr J Johnson

Solicitors for the Applicant: Gordon & Johnstone

Counsel for the Respondent: Mr R J Bromwich

Solicitors for the Respondent: Alan Parszos & Associates

ORDERS

1. Bankruptcy notice set aside. 

2. Respondent pay the Applicant’s costs as agreed or taxed. 

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SZ163 of 2002

ALEXANDER SUSSMAN

Applicant

And

JOHNCORP INDUSTRIES PTY LTD

Respondent

REASONS FOR JUDGMENT

1. In this matter the applicant seeks to set aside a bankruptcy notice issued by JOHNCORP INDUSTRIES PTY LTD against the debtor, ALEXANDER SUSSMAN.  The bankruptcy notice was required to be served by way of an order for substituted service made on 30 January 2002 by District Registrar Segal.  The bankruptcy notice follows a consent judgment in the Supreme Court of New South Wales in the sum of $1,914,248.18.  There is also a claim for interest made.  The claim for interest commences on 29 June 2001.

2. A copy of the judgment which is required to be annexed to the Bankruptcy Notice clearly states that the judgment was ordered and entered on 18 July 2001, even though the document is actually dated 28 June 2001. It is because of this, Mr Johnson argues that there is an obvious overstatement in the amount of the debt owed because of the excess of interest that was payable. The applicant issued the notice required under section 41(5) of the Bankruptcy Act, advising the respondent of the overstatement and suggesting that the respondent issue a new notice and consented to the dismissal of the current one. This the respondent declined to do.

3. Hence, we are here today.  Mr Bromwich who appears on behalf of the respondent, has admitted that there is a formal defect.  That there is an overstatement of interest.  He may not go as far as Mr Johnson by suggesting that interest only commences on 18 July 2001.  It is suggested in an affidavit in support of the respondent that the document was filed with the court on 2 July 2001 but whatever the situation is, there was some overstatement.  That overstatement has been drawn to the attention of the respondent, then it would appear to me that the bankruptcy notice is invalid.

4. Mr Bromwich suggests that I may make one of three possible orders. I may utilise section 306(1) to cure a formal defect or irregularity and substitute the correct figures. I think it is fairly clear from the authorities such as Australian Steel v Lewis (2000) FCA 1915 and even authorities before that,…