Tendiris Pty Ltd v Ogle
[2007] FMCA 1767
•26 September 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| TENDIRIS PTY LTD v OGLE | [2007] FMCA 1767 |
| BANKRUPTCY – Bankruptcy notice – cross application – the creditor rejected the receipt of a promissory note or cheque – no compliance with the Bankruptcy Notice. |
| Bankruptcy Act 1966 (Cth) |
| Moran v Lyriad Financial Services Pty Ltd (2006) FCA 631 |
| Applicant: | TENDIRIS PTY LTD (AS ASSIGNEE OF THE JUDGMENT CREDITOR) |
| Respondent: | DONALD GORDON OGLE |
| File number: | BRG 754 of 2007 |
| Judgment of: | Burnett FM |
| Hearing date: | 26 September 2007 |
| Date of last submission: | 26 September 2007 |
| Delivered at: | Brisbane |
| Delivered on: | 26 September 2007 |
REPRESENTATION
| Counsel for the Applicant: | Mr Martin |
| Solicitors for the Applicant: | Morgan Conley |
| Counsel for the Respondent: | Mr Hanlon |
| Solicitors for the Respondent: | Reichman Lawyers |
ORDERS
That a sequestration order be made against the estate of Donald Gordon Ogle.
That Mark William Pearce be appointed as trustee of the bankrupt estate of Donald Gordon Ogle pursuant to s.156A of the Bankruptcy Act 1966.
That the Applicant’s costs be taxed and paid from the estate of the Respondent debtor in accordance with the Bankruptcy Act 1966.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRG 754 of 2007
| TENDIRIS PTY LTD (AS ASSIGNEE OF THE JUDGMENT CREDITOR) |
Applicant
And
| DONALD GORDON OGLE |
Respondent
REASONS FOR JUDGMENT
(Ex Tempore)
There are two applications. The first is a creditor’s application by Tendiris Pty Ltd against Donald Gordon Ogle, which is a standard creditor’s application. The second is a cross-application by Mr Ogle for a declaration that bankruptcy notice QN1055 of 2007 dated
8 August 2007was complied with. I’ve earlier heard an application in relation to an adjournment, which application was dismissed and so I now proceed to deal with both these applications.
So far as the application for the declaration is concerned, broadly the facts are these. On 26 October 2004 an order was made in the Supreme Court of Queensland directing that Mr Ogle pay costs. On 12 January 2005 Senior Deputy Registrar McNamara assessed those costs in the sum of $6300. I expect demand was made for that sum and on
8 August 2007a bankruptcy notice issued by Tendiris against Mr Ogle in respect of the debt for $6300. That was served that same day at about 5.10 pm.
Mr Ogle’s response to the bankruptcy notice was to then give instructions to his solicitors to pay the debt.
The evidence is that on 27 August 2007 Mr Ogle transferred by way of cleared funds a sum of $6300 into the trust account of his solicitors. On 28 August Mr Ogle then gave his solicitors instructions to pay the sum of $6300 to Tendiris. It is to be noted that had that all occurred in a correct manner, then there would have been compliance with the bankruptcy notice by Mr Ogle. It appears, however, that despite the fact that Mr Ogle’s solicitor forwarded a trust account cheque that sum was not accepted. Tendiris’ solicitors, Morgan Connelly, on 28 August responded to Mr Ogle’s solicitor’s tender in these terms:
“We refer to the above amount and your facsimile of even date advising that a trust account cheque in the amount of $6300 has been forwarded to our office in payment of the debt claimed in the bankruptcy notice. We are instructed that a cheque in this amount made out to Tendiris Pty Ltd fails to account for the $400 filing fee incurred for filing the bankruptcy notice. Further, we note you propose to forward a trust account cheque and not a bank cheque. A trust account is not clear funds as required by our client. We are instructed that in order to finalise this matter our client will only accept a bank cheque in the amount of $6700.”
It appears the trust account cheque arrived the next day and was returned and the sum still remains outstanding. The claim was made by Mr Ogle that there had, in fact, been compliance with the bankruptcy notice by forwarding his solicitor’s trust account cheque. Whilst one might adopt a sympathetic view to that manner acknowledging the fact that on a solicitor to solicitor basis one would expect that a trust account cheque did mean that the solicitor forwarding the cheque had, indeed, received funds into his trust account equating to the sum represented in the cheque the question arises as to whether such a tender constituted a compliance with the bankruptcy notice.
Lindgren J in Moran v Lyriad Financial Services Pty Ltd (2006) FCA 631 at paragraph 27 noted the Bills of Exchange Act 1909 governs the position. He stated it would appear that unless accepted a bill, such as a cheque, which is a promissory note, does not constitute clear funds. In this case, as in Moran’s case, the creditor rejected the receipt of a promissory note or cheque and required clear funds. Thus despite the merits of the debtor’s response to the bankruptcy notice the fact remains there was no compliance with the bankruptcy notice and accordingly the application for the declaration is dismissed.
That then leaves the formal matters to be resolved concerning the sequestration application. I’ve already identified the background to the bankruptcy notice and the circumstances enlivening the right to a bankruptcy notice. The notice was served on 8 August. It was not responded to within 21 days of that date which, in effect, would have been 30 August, given that service would be deemed to have been effected on the 9th. A creditor’s application was subsequently made on 4 September. The application, in all respects, complies with the formal matters required under section 52 that deal with the matters which are required to be established in the petition.
I’m satisfied the creditor’s petition has been served and that as at the date of the hearing of this proceeding the debt is still owing. I have afforded the respondent an opportunity to inform the court of matters which might be relevant to solvency, but unfortunately it would appear that there is no prospect of any relevant evidence coming before the court in relation to those matters. And in all of the circumstances it is, in my view, appropriate to make a sequestration order.
The sequestration order will be made in the usual terms noting Mr Mark William Pearce as the person having consented to act as trustee and the date of the bankruptcy notice being 8 August 2007.
I will direct that the respondent debtor pay the applicant creditor’s costs of and incidental to the application to be assessed.
I certify that the preceding nine (9) paragraphs are a true copy of the reasons for judgment of Burnett FM
Associate: Bev Schmidt
Date: 19 October 2007
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