The Department of Human Services v MITCHELSON - [2013] FMCA 226

FEDERAL MAGISTRATES COURT OF AUSTRALIA

THE DEPARTMENT OF HUMAN SERVICES v MITCHELSON

[2013] FMCA 226

BANKRUPTCY – Creditor’s petition – presentation – electronic filing – e-lodgement – whether the act of bankruptcy was committed within six months of the presentation of the petition – meaning of “presented” – whether an e-lodgement receipt constituted acceptance of filing by the Registry – receipt of court documents after hours – calculation of time for presentation.

Bankruptcy Act 1966 (Cth), ss.52(1), 44(1)(c)
Acts Interpretation Act 1901 (Cth), ss.32, 36(2)

Angus Fire Armour (Australia) Pty Ltd v Collector of Customs (NSW) (1988) 19 FCR 477
Gerblich v Adplan Pty Ltd[2012] SASCFC 79
Lancaster v Downes [2002] FMCA 40
Purden Pty Ltd v Registrar in Bankruptcy for the Bankruptcy District of the State of New South Wales and the Australian Capital Territory[1982] 64 FLR 306
Re Gray; Ex parte Deputy Commissioner of Taxation (1989) 89 ATC 4728
Re Ousley; Ex parte Commissioner of Taxation (1994) 48 FCR 131
Shephard v Chiquita Bands (South Pacific) Ltd (2004) 1 ABS (NS) 610
Swan Television and Radio Broadcasters Ltd v Satie [1999] WASCA 79

Applicant:

COMMONWEALTH OF AUSTRALIA AS REPRESENTED BY THE DEPARTMENT OF HUMAN SERVICES

Respondent:

MARK MITCHELSON

File Number:

BRG 314 of 2012

Judgment of:

Burnett FM

Hearing date:

5 March 2013

Date of Last Submission:

5 March 2013

Delivered at:

Brisbane

Delivered on:

5 March 2013

REPRESENTATION

Solicitors for the Applicant:

Australian Government Solicitor

There was no appearance by or on behalf of the Respondent

ORDERS

That a sequestration order be made against the estate of the respondent Mark Mitchelson.
That the applicant creditor’s costs of and incidental to the petition be fixed in the sum of $6,964.61 paid from the estate of the respondent debtor in accordance with the Bankruptcy Act 1966 (Cth).

THE COURT NOTES that the date of the act of bankruptcy is 6 October 2011.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT BRISBANE

BRG 314 of 2012

COMMONWEALTH OF AUSTRALIA AS REPRESENTED BY THE DEPARTMENT OF HUMAN SERVICES

Applicant

And

MARK MITCHELSON

Respondent

REASONS FOR JUDGMENT

(Ex Tempore)

On 12 February 2010, the applicant creditor obtained judgment against the respondent debtor in the District Court of Queensland in the sum of $188,256.79. A Bankruptcy Notice issued on 21 April 2011 and was served on the debtor on 15 September 2011. The debtor failed to comply with the terms of the Notice and, accordingly, committed an act of bankruptcy on 6 October 2011. On 10 April 2012, a Creditor’s Petition issued from the Court. On 1 November 2012, orders were sought for substituted service of the Creditor’s Petition by way of pre-paid post. Those orders were obtained, and on 5 November 2012 service of the Creditor’s Petition was effected in accordance with the orders made by the Registrar on 1 November 2012.
The debtor remains indebted, and the applicant creditor has, in all respects, demonstrated the matters required to be established under s.52(1) of the Bankruptcy Act 1966 (Cth) (the Act) entitling it to a sequestration order. However, an issue arises as to whether or not the Creditor’s Petition was presented in time. Section 44(1)(c) of the Act relevantly provides the conditions upon which the creditor may petition. It requires, inter alia, that:
“Conditions on which creditor may petition
(1) A creditor’s petition shall not be presented against a debtor unless:
…
(c) the act of bankruptcy on which the petition is founded was committed within 6 months before the presentation of the petition.”
The question here is whether the act of bankruptcy was, in fact, committed within six months before the presentation of the Petition. Two issues seem to arise. The first is what is meant by “the presentation”. The second is how, in these circumstances, is time is to be calculated.
The act of bankruptcy was committed on 6 October 2011. The Creditor’s Petition was filed electronically in the Court on 5 April 2012 at 4:40:14 pm Australian Eastern Standard Time. However, the Court file notes that the Creditor’s Petition was filed on 10 April 2012. 5 April 2012 was Easter Thursday and 10 April 2012 was the Tuesday following the Easter break, that is, the first working day after 5 April 2012. It appears that, consistent with Registry policy, and given the Creditor’s Petition was physically received after 4:00 pm, the petition was stamped as having been received on the next business day, that is, 10 April 2012.
The first question to arise then, is whether or not the submission of the petition by the creditor to the Registry for filing by electronic means constitutes a “presentation” for the purposes of s.44(1)(c) of the Act.
The term “presented” has been considered on a number of previous occasions, although not in the context of electronic filing. The Court has, in the last couple of years, introduced an electronic filing system through the Court’s electronic portal. The purpose of electronic filing, of course, is to facilitate, both an internal administrative and customer convenient process for, the filing of documents in proceedings before the Court, including documents for the commencement of proceedings.
In Purden Pty Ltd v Registrar in Bankruptcy for the Bankruptcy District of the State of New South Wales and the Australian Capital Territory[1] the meaning of “presented” was considered. In that instance, the Court was considering the filing of a Creditor’s Petition. At page 309, the Court said this:
“The primary Judge held that a creditor's petition cannot be presented unless and until it is filed in the appropriate Registry; that filing is part of the presentation of a petition; that a petition is not filed until it has been lodged for filing in the Registry and all necessary steps required by the Bankruptcy Rules have been taken within the Registry to issue the petition culminating in the payment of the prescribed fee of sixty dollars. As these matters had not been attended to on or before 10th February, 1982, his Honour held that the petition had not been presented within the time required by s.44(1)(c) and that the Registrar had acted correctly. His Honour made no order as to costs. The appellant appealed to this Full Court from his Honour's judgment.”
[1] [1982] 64 FLR 306.
The Court continued:
The Act does not define “present,” “presented” or “presentation.” The dictionaries provide some guide to the meaning of the words. The Oxford English Dictionary defines “presentation,” so far as relevant, as “the action of offering for acceptance, esp. formally or ceremoniously; handing over, delivery; bestow, gift, offering” and as an illustration makes specific reference to the presentation of a bankruptcy petition.
Jowitt’s Dictionary of English Law (2nd ed.) defines “present” in its transitive sense as “… to tender or offer. Thus, to present a bill of exchange for acceptance or payment is to exhibit to the drawee or acceptor (or his authorised agent) with an express or implied demand for acceptance for payment.”
There are reported cases where the meaning of the words “presented” or “presentation” is adverted to; but they must be viewed with some care because of different statutes, rules and contexts in which they are used.
“Presentation” of a commercial document has been held to mean delivering up or handing over the document, not merely showing it …”
The Court continued at page 310:
In our opinion the words “presented” or “presentation” are used in the Act, not in the sense of the unilateral act of the creditor of showing the petition to the appropriate court officer; but in the sense of handing or delivering the petition to and acceptance by that officer. The showing of the document to the court’s officer and its receipt by him are both necessary elements in the notion of presentation of a petition. However, what the officer does with the document thereafter is nothing to the point as by then it has been presented.
Not only is this so according to the ordinary use of the words in the context of the Act; but the far-reaching consequences in bankruptcy law of the presentation of a petition, to which we have already adverted, demonstrate the necessity for the act and date of presentation to be certain and readily ascertainable. Merely to show the petition to the Registry clerk without its being received would necessarily introduce an unacceptable element of uncertainty surrounding the date of presentation. Our view is supported by s.47(2) of the Act which provides: “Except with the leave of the Court, a creditor’s petition shall not be withdrawn after presentation.” There would be no point in this provision if receipt by the Registry were not an integral part of the presentation of a petition.
There is a distinction of long standing between the presentation and the filing of a petition. The act of presentation has been said to be the act of a party and the act of filing to be the act of the court …
Counsel for the respondent argued that a petition is not presented until it is filed.
“Filed” is not a word to be found in the Act in relation to a petition, whether a creditor’s or a debtor’s petition. The Act uses the word “presented.” “Filed” is a word which appears in the Bankruptcy Rules, and understandably so. Those rules are concerned with what happens within the Bankruptcy Registries and with the duties of parties lodging documents there. “Filing” is the word traditionally used to describe the act or process of placing documents in the records of courts or registries.
Where the presentation and filing of a petition are synchronous or where the two acts take place on the same day, no problem arises.
In the past the two acts often merged into one: the creditor handed the petition over the Registry counter together with the requisite fee, and the officer of the Registry who received it then stamped it as filed. This practice was described by Walker J in Daunt’s case [Re Daunt; Ex parte McIntyre (1905) 5 SR (NSW) 533] at p. 537 in relation to New South Wales in 1905 as:“… the invariable course, and is so universally recognised that in practice a presentation of a petition involves and implies a request that it be immediately filed. The old distinction has become purely verbal. It is not unreasonable to suppose that the Legislature, when speaking of ‘presentation,’ spoke of it as every practitioner would regard it, as carrying with it the usual incident of filing.”
That decision has been referred to and applied in a number of subsequent cases, including Re Gray; Ex parte Deputy Commissioner of Taxation (1989) 89 ATC 4728, Angus Fire Armour (Australia) Pty Ltd v Collector of Customs (NSW) (1988) 19 FCR 477, Lancaster v Downes [2002] FMCA 40, Swan Television and Radio Broadcasters Ltd v Satie [1999] WASCA 79, Re Ousley; Ex parte Commissioner of Taxation (1994) 48 FCR 131 and Gerblich v Adplan Pty Ltd[2012] SASCFC 79.
For present purposes, having regard to the principles enunciated by the Full Court in Purden, the real question that arises is whether or not the e-lodgement acknowledgement constitutes acceptance by a Registry officer. In that regard, I am particularly mindful of the observations of the Full Court, that “merely to show the petition to the Registry clerk without its being received would necessarily introduce an unacceptable element of uncertainty surrounding the date of presentation.”
In my view, the provision of an electronic filing system, which is open on a continuous basis, constitutes an invitation by the Court to file documents. It introduces an implied acknowledgement of acceptance of any document filed by use of that process, provided that a receipt issues in respect of any document purported to be filed and the fee is paid. In that regard, I note that, in this instance, the creditor has exhibited a copy of the e-lodgement receipt, which issued at the domain address aspx together with evidence of the court having accepted payment..
Plainly, if the Court did not intend to receive documents electronically after hours, it would be within its capacity to alter its electronic filing processes, in order to reject the receipt of documents after hours and or purported payment. Furthermore, if the Court did not intend to receive documents after hours, but permitted the facility to file documents electronically on the basis that those documents received after hours would be noted as having been accepted by the Court the next business day, the Court could simply issue, in its e-lodgement receipt document, a notice to that effect.
Again, the acknowledgement of presentation from the e-document filing system makes no such notation. Accordingly, the recipient of such acknowledgement from the Registry would be or could be misled into believing that the document had been accepted by the Registry. These matters are significant, because it is always open to an applicant with a time-critical application, upon the payment of the appropriate fees, to request that the Registry remain open after hours and, in this instance, at least until midnight on the night in question.
It follows, in my view, that the e-lodgement acknowledgement, as constituted in the exhibited annexure, constituted an acknowledgement of receipt and payment of the appropriate filing fee, or an acknowledgement of acceptance by the Registry of the presentation of the Petition. Accordingly, in my view the Petition was presented within six months of the act of bankruptcy.
The second point, relates to the calculation of time, and I note in passing that the Petition was one which was open to be presented, at least until 12 midnight on 6 April 2012. The 6^th of April was Good Friday, a public holiday. The next business day was Tuesday 10 April. Section 36(2) of the Acts Interpretation Act provides that when the last day provided for doing any act falls upon a public holiday the day for doing the act may be done as the first date following, which is not a public holiday.
However the expression in s.44(1)(c) does not provide for doing any act. It provides a condition precedent for doing any act, namely the presentation of a petition and is not a time limitation for the presentation of a petition. There is no power to enlarge that time. Shephard v Chiquita Bands (South Pacific) Ltd (2004) 1 ABS (NS) 610
Accordingly the application falls to be determined on the question of filing alone. In all other respects, the application is regular and the sequestration order ought be made.

I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of Burnett FM.

Date:23 September 2013