Sutherland v Bezzina-Cork
[2009] FMCA 733
•28 July 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| SUTHERLAND v BEZZINA-CORK | [2009] FMCA 733 |
| BANKRUPTCY – Hearing of petition – application to exercise discretion under s.306 in relation to failure to comply with order in relation to bankruptcy notice. |
| Bankruptcy Act 1966, s.306 |
| Adams v Lambert (2006) HCA 10 Re Wimborne; Ex parte The Debtor (1979) 24 ALR 494 Clyne v Deputy Commissioner of Taxation (1982) FCA 162 Clifton George Vincent (Applicant/Debtor) v State Bank of New South Wales (Respondent/Creditor) (1995) FCA 1634 |
| Applicant: | RODERICK MACKAY SUTHERLAND |
| Respondent: | CHARMAINE BEZZINA-CORK |
| File Number: | SYG 846 of 2009 |
| Judgment of: | Raphael FM |
| Hearing date: | 28 July 2009 |
| Date of Last Submission: | 28 July 2009 |
| Delivered at: | Sydney |
| Delivered on: | 28 July 2009 |
REPRESENTATION
| Solicitors for the Applicant: | Shaw Reynolds Bowen & Gerathy |
| Solicitors for the Respondent: | No appearance |
ORDERS
A sequestration order be made against the estate of Charmaine Bezzina-Cork.
The applicant creditor’s costs be fixed in the amount of 4,804.14 and paid from the estate of the Respondent Debtor in accordance with the Act.
Under the Bankruptcy Regulations a copy of this sequestration order be given to the Official Receiver in Sydney within 2 days.
THE COURT NOTES:
(i)That the date of the act of bankruptcy is 27 March 2009.
(ii)A consent to act as trustee has been signed by C M Chamberlain and has been lodged with the Official Receiver in Sydney.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 846 of 2009
| RODERICK MACKAY SUTHERLAND |
Applicant
And
| CHARMAINE BEZZINA-CORK |
Respondent
REASONS FOR JUDGMENT
There comes before me for hearing a bankruptcy petition presented on 9 April 2009 based upon the respondent's failure to comply with a bankruptcy notice dated 12 August 2008 which had been extended to 12 August 2009 by order of this court made on 10 February 2009.
The bankruptcy notice was the subject of an order of Registrar Tesoriero of this court for substituted service on 27 February 2009. The orders of the learned Registrar required that the words in paragraph 3 of the bankruptcy notice "after service on you of this bankruptcy notice” should be deleted and there should be substituted therefore the words "after 6 March 2009”. That order was not complied with. However, the letter to the debtor which accompanied the bankruptcy notice and the order for substituted service, a copy of which is annexed to the affidavit of Sine Dellit dated 13 July 2009, has in bold the following:
“We note that pursuant to the Orders personal service of the enclosed Notice has been dispensed with and you will be deemed to have been served with the enclosed documents no later than 6 March 2009 .
You therefore have until 27 March 2009 to respond to the Notice or you will be deemed to have committed an act of bankruptcy and we will seek our client's instructions to instigate bankruptcy proceedings in the Federal Magistrates Court of Australia pursuant to the notice.”
There was no response to the notice and so the applicant creditor presented his petition on 9 April 2009. The creditor was required to obtain another order for substituted service of the petition, which he did on 8 May 2009. When the petition came on for hearing before a Registrar of this court the creditor became aware that there was a defect in the bankruptcy notice because of a failure to comply with order 5 of Registrar Tesoriero's orders in the way set out above. The creditor therefore sought an order from this court to cure the defect pursuant to its discretion under s.306 of the Bankruptcy Act 1966 (the “Act”). When the matter came before me on 14 July 2009 I was not satisfied that it had been made completely clear to the debtor that this exercise of the court's discretion was being requested and I therefore ordered that a letter be sent to her at her last known residential address and to an email address, which it was clear from the papers was being utilised by the debtor, informing her that this application would be made today. The respondent was not in attendance at 9.30am when the matter was listed for hearing and was not in attendance when her name was called outside the court shortly after 10am.
The applicant's solicitors have prepared a very helpful set of submissions as to why I should exercise my discretion in the manner requested. Essentially, the applicant relies on the High Court decision in Adams v Lambert (2006) HCA 10 to allow such a correction and accepts that the court must carry out an objective consideration of whether the defect was reasonably capable of misleading the debtor. He argues that the court can look to facts extraneous to the bankruptcy notice itself for that purpose (Re Wimborne; Ex parte The Debtor (1979) 24 ALR 494; Clyne v Deputy Commissioner of Taxation (1982) FCA 162; Clifton George Vincent (Applicant/Debtor) v State Bank of New South Wales (Respondent/Creditor) (1995) FCA 1634). In Clyne Lockhart J was dealing with an order for substituted service and said:
“The order accompanied the notice and therefore presumably would have been read by the applicant. To ignore the order when considering the assertion of the applicant that he could have been perplexed by the notice would be unreal and contrary to good sense.”
I place the letter which I have referred to from the applicant's solicitors to the respondent in the same class as the order for substituted service which, incidentally, was also served with the notice. I am satisfied that in these particular circumstances a debtor would not be confused by the failure to delete the words "after service upon you of this notice" and replace them with the words "6 March 2009". I am satisfied that, given the approach taken by the High Court in Adams v Lambert, I am able to exercise my discretion to forgive the failure to comply with that order and I am satisfied that no room was left for uncertainty as to the time for compliance with the bankruptcy notice.
The applicant has proceeded with his petition today. I am satisfied that the respondent has committed the act of bankruptcy alleged in the petition. I am satisfied with the proof of the other matters required by s.52 of the Act. I make a sequestration order against the estate of Charmaine Bezzina-Cork. I order that the applicant's costs be fixed in the amount of $4,804.14 and paid from the estate of the respondent in accordance with the Act. Under the Bankruptcy Regulations a copy of this sequestration order is to be given to the Official Receiver in Sydney within two days. The court notes that the date of the act of bankruptcy is 27 March 2009. I note that a consent to act as trustee has been signed by C M Chamberlain and has been lodged with the Official Receiver in Sydney.
I certify that the preceding six (6) paragraphs are a true copy of the reasons for judgment of Raphael FM
Associate:
Date: 30 July 2009
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