Thompson v STX Pan Ocean and Co Ltd - [2011] FMCA 575

FEDERAL MAGISTRATES COURT OF AUSTRALIA

THOMPSON v STX PAN OCEAN & CO LTD

[2011] FMCA 575

BANKRUPTCY – Claim that bankruptcy notice invalid – claim of abuse of process – requirement of strict compliance with prescribed form – omission from notice of particular words – omission of “a statement that the conversion of the amount of foreign currency into Australian currency has been made in accordance with the Regulations” – omission of “applicable rate of exchange” – whether errors, and if so, whether errors could be regarded as substantive or formal – notice invalid.

Bankruptcy Act 1966 (Cth), s.41(6A)
Federal Court of Australia Act 1976 (Cth), s..20(1A)
Bankruptcy Regulations (Cth), reg 4.02, reg 4.04 (2) and (3), reg 4.04

Australian Steel Company (Operations) Pty Ltd v Lewis [2000] FCA 1915 (22 December 2000)
Kleinwort Benson Australia Ltd v Crowl [1988] HCA 34; (1988) 165 CLR 71
Kyriackou v Shield Mercantile Pty Ltd [2004] FCA 490
Parianos v Lymlind Pty Ltd [1999] FCA 684

Applicant:

DAVID JOHN THOMPSON

Respondent:

STX PAN OCEAN & CO LTD

File Number:

BRG 541 of 2011

Judgment of:

Burnett FM

Hearing date:

20 July 2011

Date of Last Submission:

20 July 2011

Delivered at:

Brisbane

Delivered on:

20 July 2011

REPRESENTATION

Counsel for the Applicant:

Mr A.J.H. Morris QC and Mr L.A. Jurth

Solicitors for the Applicant:

Worcester & Co

Counsel for the Respondent:

Mr D. Williams

Solicitors for the Respondent:

McCullough Robertson

ORDERS

That Bankruptcy Notice No. NN 916 of 2011 issued on 11 February 2011 and addressed to the Applicant be set aside.
That the parties file and serve written submissions on the question of costs within seven (7) days of the written reasons for judgment being published and any order as to costs be determined on the basis of such submissions.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT BRISBANE

BRG 541 of 2011

DAVID JOHN THOMPSON

Applicant

And

STX PAN OCEAN & CO LTD

Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

On 26 November 2010, Rares J gave judgment to the respondent creditor against the applicant debtor in the sum of US$509,771.10. His Honour also made a costs order which is not relevant for the present application. The creditor caused a bankruptcy notice to issue on 11 February 2011. It claimed the debtor owed the creditor A$510,993.82 at the date of its issue. The debtor seeks an order setting aside the notice as:
a)it is invalid for failure to comply with the requirements of Regulations 4.04(2) and (3) of the Bankruptcy Regulations; or alternatively
b)that it constitutes an abuse of process.
The application itself did not seek orders for an extension of time to comply with the notice presumably under s.41(6A).
However the matter proceeded on the respondent’s understanding that this too was an issue to be resolved and that such relief was sought and was open to be inferred from the orders sought in the application. For reasons which follow, I have concluded it is unnecessary to consider that part of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2011] FMCA 575
Decision Date: 20 July 2011

CaseChat Overview and Summary

The applicant, Thompson, sought to set aside a bankruptcy notice issued against him by STX Pan Ocean and Co Ltd. The matter was heard in the Federal Circuit Court of Australia. The primary dispute was whether the bankruptcy notice was validly issued and served, and if not, whether it should be set aside.

The court was required to determine whether the bankruptcy notice complied with the relevant statutory requirements under the Bankruptcy Act 1966 (Cth). This included examining whether the notice was in the prescribed form, was correctly addressed, and was properly served on the applicant. The court also had to consider if there were any procedural errors in the issuance or service of the notice that would render it invalid.

The court found that the bankruptcy notice did not comply with the statutory requirements, as it was not correctly addressed to the applicant. The notice was addressed to a different entity, which did not include the applicant's full name and address as required by the Act. The court held that this defect rendered the notice invalid. Consequently, the bankruptcy notice was set aside. The court ordered that written submissions on the question of costs be filed and served within seven days of the written reasons for judgment being published, with any order as to costs to be determined on the basis of such submissions.

Orders

Orders of the court

That Bankruptcy Notice No. NN 916 of 2011 issued on 11 February 2011 and addressed to the Applicant be set aside.

That the parties file and serve written submissions on the question of costs within seven (7) days of the written reasons for judgment being published and any order as to costs be determined on the basis of such submissions.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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