Townsville City Council v Tait

[2004] FMCA 260

FEDERAL MAGISTRATES COURT OF AUSTRALIA

TOWNSVILLE CITY COUNCIL v TAIT [2004] FMCA 260

BANKRUPTCY – Bankruptcy Notice – validity – judgment for costs arising from dismissal of proceedings – defect in schedule of claim – formal defect or irregularity – reasonably mislead debtor – service – invalidity of Bankruptcy Notice – annexure of original judgment to Bankruptcy Notice – whether an order for costs can found a Bankruptcy Notice – solvency – alleged malicious prosecution and abuse of process.

Bankruptcy Act 1966 (Cth), ss.27,40(1)(g),40(3),41(1),43,44(1), 306

Uniform Civil Procedure Rules 1999 (Qld), 736, 794
Supreme Court of Queensland Act 1999 (Qld)
Planning and Environment Court Rules (Qld)

Re: Gibbs ex parte Triscott (1995) 65 FLR 80
Greenbushes Ltd v Casey [2002] FMCA 45

Applicant: TOWNSVILLE CITY COUNCIL

Respondent: WILLIAM (BILLY) PETER TAIT

File No: BZ558 of 2003

Delivered on: 29 April 2004

Delivered at: Townsville

Hearing date: 16 March 2003

Judgment of: Coker FM

REPRESENTATION

Solicitors for the Applicant: Suthers Taylor

Respondent Self-Represented

ORDERS

1. A sequestration order be made against the estate of William (Billy) Peter Tait.

2. The petitioning creditors costs of and incidental to the petition, including any reserved costs, be taxed and paid pursuant to the Federal Court rules and otherwise in accordance with the Bankruptcy Act1966.

It is noted that the date of the act of bankruptcy is 4 June 2003.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
TOWNSVILLE

BZ558 of 2003

TOWNSVILLE CITY COUNCIL

Applicant

And

WILLIAM (BILLY) PETER TAIT

Respondent

REASONS FOR JUDGMENT

1. Townsville City Council (“the creditor”) seeks a sequestration order against the estate of William (Billy) Peter Tait (“the debtor”) pursuant to s.43 of the Bankruptcy Act 1966. The creditor relies upon s.40(1)(g) of the Bankruptcy Act 1966, namely that the creditor has obtained a final judgment or final order and the debtor has not complied with the requirements of the Bankruptcy Notice.  In the Creditor’s Petition the creditor says that the respondent owes the amount of $5,495.00 under two orders for costs assessed and obtained in the Planning and Environment Court of Q ueensland before M N Goldsack, Registrar on the 16 October 2002.  The particulars relied upon in relation to the two orders for costs are as follows:

   Costs payable by the Respondent Debtor to the Applicant Creditor pursuant to orders of the Planning and Environment Court of Queensland dated 1 March 2001 and 22 February 2002 and assessed at $2,273.45; and

   Costs payable by the Respondent Debtor to the Applicant Creditor pursuant to an order of the Planning and Environment Court of Queensland dated 16 October 2002 and assessed at $3,231.50.

2. It should be noted that in the Bankruptcy Notice, the claim by the creditor for the amount outstanding pursuant to the costs orders is correctly stated at $5,504.95.  In the Creditors Petition, the amount claimed to be outstanding pursuant to two orders for costs assessed and obtained in the Planning and Environment Court is $5,495.  It would appear that there has been some typographical error in relation to the amount of the claim leading to a difference in the two figures of $9.95.  However, the point was not taken and in this instance, with the amount referred to in the Creditors Petition being less than that referred to in the Bankruptcy Notice, it does not appear that there could be confusion or an instance of the debtor being misled as to the requirements for payment.  In any event, I shall address issues with regard to that particular aspect of the matter later in these reasons.

3. A Bankruptcy Notice dated 7 May 2003 issued for $5,504.95.  As I say, the Creditors Petition refers to the amount as $5,495.00.  In any event, it is common ground that the amount of the claim has not been paid.

4. The Bankruptcy Notice was served at 11.15am on 14 May 2003.  The Affidavit of Service of the Bankruptcy Notice, filed on 17 October 2003 and under the hand of Ian Kennedy, a Bailiff, confirms that service was effected by delivering the documents to the debtor personally, at the General Enquiry Counter, Law Court Building, 31 Walker Street, Townsville, in the State of Queensland.  The bailiff indicates that he was able to identify the debtor because, the debtor is well-known to him from previous occasions when documents had been served. 

5. A previous argument was heard and determined by me in relation to the actual service of the Bankruptcy Notice.  I found on 24 February 2004 that service had been properly effected and the application by the debtor relating to the legitimacy of service, which was filed by leave on 16 December 2003, was dismissed. 

6. The time for compliance with the Bankruptcy Notice was 21 days after service and was 4 June 2003.  The act of bankruptcy, if there is found to be a final judgment or final order, was constituted by non-compliance with the Notice.  A Creditors Petition was presented on

   
   

   2 September 2003. It was presented within six months of the act of bankruptcy, pursuant to s.44(1) of the Bankruptcy Act. An affidavit under the hand of Tony Bligh was filed verifying paragraphs 1, 2 and 3 of the Petition. An affidavit of Silvana Marmotta was filed verifying paragraph 4 of the Petition. Those affidavits were filed on 17 October 2003.

7. The Petition was served on the debtor on 1 December 2003.  Service of the Creditors Petition was effected by Anthony Vernon Longson, a licensed commercial agent, of Queensland.  Mr Longson also confirmed that he had identified the debtor, because he was well-known to him from previous occasions when documents had been served on him.  Service was effected at the Drop-In Centre, Morehead Street, South Townsville.  Service at the Drop-In Centre was also the subject of proceedings and objection by the debtor, though not as strongly pushed as the objection to service of the Bankruptcy Notice which was effected at the General Enquiry Counter at the Law Court Building in Townsville.  I ruled that service had been properly effected in relation to the Creditors Petition. 

8. The order of 24 February 2004, whilst dismissing the various objections raised in the application filed on 16 December 2003 did provide for the debtor to have the opportunity to be further heard.  Order 1 of the orders of 24 February 2004 provided as follows:

   1.   That the Respondent be granted leave to file and serve upon the Applicant or its legal representatives for the hearing to be held on 16 March 2004, any such appearance notice, Notice of Motion or Notice to Oppose the Petition, affidavits or other documents which the Respondent would seek to rely upon, no later than 4.00pm on 12 March 2004.

9. Immediately upon such order being made, the debtor sought, by leave, to file a Notice of Intention to Oppose the Petition.  Leave was granted for the filing of that Notice on 24 February 2004.  In the Notice of Intention to Oppose the Petition, the debtor set out the basis upon which he opposed the petition.  There were 19 grounds detailed in the Notice of Intention to Oppose the Petition filed by the debtor.  They were as follows:

   1.   There has not been any valid service effected upon the respondent, in relation to the purportedly made Creditor’s Petition, or, alternatively, any purportedly effected service sought to be set aside.

   2.   There has not been any valid service effected upon the respondent, in relation tot he purportedly issued Bankruptcy Notice, or, alternatively, any purportedly effected service ought to be set aside.

   3.   The applicant pursues undisclosed ulterior purposes, which, are foreign to the process in question, merely seeks to frustrate and annoy, and or, or, are frivolous, vexatious, and an abuse of process.

   4.   The so-called Bankruptcy Notice was not validly issued and was null and void ab initio.

   5.   The respondent in fact, is solvent and is not bankrupt.

   6. With respect to the terms of the Bankruptcy Act 1966 (herein the BA); the respondent, in relation to the applicant, is not a ‘debtor’, and, the applicant, in relation to the respondent, is not a ‘creditor’.

   7.   The purportedly made costs orders of the Planning and Environment Court on which the purportedly made costs assessments are predicated, and indeed, those purportedly made costs assessments themselves, were null and void ab initio.

   8.   The so-called Bankruptcy Notice does not show an effective judgement and therefore suffered from a defect which could not be cured by the exercise of discretionary power to waive formal irregularities.

   9.   The respondent has not committed any act of bankruptcy.

   10. The applicant has not obtained a final judgement, nor a final order, such as those which are described in paragraph 40(1)(g) of the BA.

   11. The applicant’s attempts to proceed are designed to be cruel and inhumane.

   12. The applicant has apparently foresaken substantial debts owed to it by parties not involved in the proceedings, which, in comparison, makes this proceeding appear frivolous, vexatious, and perhaps, an example of unlawful discrimination made on the basis of the respondents political activity.

   13. The proceedings purportedly taken under the BA by the applicant appear designed to vex – ie given the outstanding ongoing proceedings involving the applicant and the respondent.

   14. Recent case law relating to the cross-vesting laws appear to render the proceedings which are – in effect – designed to have the Federal Magistrates Court enforce an order of a State Court, ultra vires.

   15. The applicant appears to be attempting to involve the Court in a controversy that is designed to breach the constitutionally implied separation of powers.

   16. There is not any provable debt owed to the applicant.

   17. The so-called Creditor’s Petition does not disclose a reasonable cause of action.

   18. The applicant’s attempts to proceed against the respondent are against;

   (i)the, constitutionally implied, and otherwise established, freedoms of, communication about, and association in relation to, matters political;

   (ii)the customary common law principles and objectives of Ecologically Sustainable Development – eg social equity, public participation in the decision making processes of government, etc; and;

   (iii)the public interest generally.

   19. The respondent is demonstrably one who bona-fide acts in the role of, an advocate for, and a representative of, the interests of members of, the wider community, and the public in general.

10. Those various grounds can be broken down into a number of sub-sets.  The first two relate to the validity of service of both the Creditor’s Petition and the Bankruptcy Notice.  Those issues have already been ruled upon by me and I have found that service has been validly and properly effected.

11. The second sub-set, as detailed in grounds 3, 11, 12, 13, 18 and 19 relate to various points which might be grouped as malicious prosecution, abuse of process, frivolous or vexatious proceedings and freedom of communication and public interest advocacy.

12. The debtor submits in various ways that the Bankruptcy Notice and Creditor’s Petition are designed, not so much to facilitate the payment of the amount claimed by the creditor to be outstanding, but rather, to hinder or hamper him in other proceedings, in other places, or, to force him away from political activism and public advocacy.  It is also contended that the proceedings are an attempt in some way to involve the court in enforcement proceedings or to involve the court in a controversy designed to breach the constitutionally implied separation of powers. 

13. The various concerns can be dealt with very simply.  There is not one skerrick of evidence to that effect, other than the assumptions made by the debtor.  The debtor’s theories as to the motivation behind the proceedings brought by the creditor may be real to him but they are clearly not any basis upon which a court could properly refuse the application and they must fail.

14. The next sub-set arises pursuant to grounds 14 and 15, which relate to a suggestion of cross-vesting and an attempt to involve the court in a controversy, designed to breach constitutionally implied separation of powers.  Again, there is, in my view, little that need be said about this particular aspect of the opposition to the petition.  The Court, in this instance, is not enforcing an order of a state court.  It is exercising its constitutional powers and responsibilities under the Bankruptcy legislation.  There is no cross-vesting issue that arises, nor could there be, in any proper interpretation of the duties and obligations of the Court.

15. Similarly, there is no evidence, nor any basis upon which it could be suggested, that the application is some attempt to involve the Court in controversy designed to breach constitutionally implied separation of powers.  The debtor’s concerns about abuse of process and malicious prosecution may be concerns that are truly held by him, but there is no evidence, as I have previously indicated, upon which any such finding could be made. 

16. There is also no basis upon which it could be contended that an application brought pursuant to the provisions of the Bankruptcy Act could be seen as some breach of constitutionally implied separation of powers, simply because the applicant in the bankruptcy proceedings is a properly constituted local council. The grounds for opposition to the petition, must fail.

17. The next ground is one which would normally, I think, be dealt with prior to the final sub-set of grounds.  In this instance, however, it is perhaps more appropriate that it be dealt with first so as to clarify the position in relation to the final sub-set of grounds.  The debtor says in ground 5 that he is solvent and is not bankrupt.  In one respect, at least, he is correct, in that until such time as this matter has been determined, he is not bankrupt.  What is relevant, however, is whether he is, in fact, solvent.  The debtor says that he is solvent and submits that the mere fact that he, or in fact any person, does not comply with a Bankruptcy Notice is not prima facie evidence, that a person is insolvent. 

18. The debtor contends that there may be any number of reasons why one would not comply with a Bankruptcy Notice and that may include, particularly, a case where the notice was invalid, or the basis upon which the notice was issued, was found to be invalid. The debtor also contends, however, that even if a notice were validly issued and served, but not complied with, that there could not be an act of bankruptcy by a solvent respondent if they simply failed to comply. It is suggested on the part of the debtor that to find otherwise would be to imply that the purpose of the Bankruptcy Act was not to assist insolvent persons in accordance with the true spirit of its purposes, but to enforce orders against solvent persons.

19. The fact is however, that the Act itself provides, that the failure to effect payment of the amount owed, or to otherwise make an arrangement to the creditor’s satisfaction, within 21 days after service of the Bankruptcy Notice, is prima facie evidence that the debtor is unable to pay his or her debts as and when they fall due.  To suggest that a small debt owed by a wealthy person could not be the subject of bankruptcy proceedings because of the capacity but refusal to pay a debt is, in my view, a nonsense. 

20. In any event, the only evidence that is before the Court here, and it arises from the debtor’s own material, is that he has no place of business, no fixed place of abode, and his income and assets are of a very limited nature.  There is, in my view, no finding open to the Court other than that the debtor could not be found to be solvent, if the Creditor’s Petition is properly bought.

21. That then brings me to the final sub-set of grounds and to the main part of the debtor’s case.  The debtor suggests in grounds 4, 6, 7, 8, 9, 10, 16 and 17 that there is not a provable debt, that there is not a reasonable cause of action, that the Bankruptcy Notice was not validly issued, that there is no debtor/creditor relationship, and all of these stem from the fact that there is no effective, final judgment or final order.

22. The Federal Magistrates Court has jurisdiction to deal with the matter. Section 27 of the Bankruptcy Act provides as follows:

    (1)The Federal Court and the Federal Magistrates Court have concurrent jurisdiction in bankruptcy and that jurisdiction is exclusive of the jurisdiction of all courts other than the jurisdiction of the High Court under Section 75 of the Constitution.

23. The question, therefore, is whether the costs orders attached to the Bankruptcy Notice, are a final judgment or order.

24. Section 41 of the Bankruptcy Act relates to bankruptcy notices. Subsection (1) provides in particular:

    (1)An Official Receiver may issue a Bankruptcy Notice on the application of a creditor who has obtained against a debtor;

    (a)a final judgment or final order that;

    (i)is of a kind described in paragraph 40(1)(g); and

    (ii)is for an amount of at least $2,000, or;

    (b)Two or more final judgments or final orders that;

    (i)are of the kind described in paragraph 40(1)(g);

    (ii)taken together, are for an amount of at least $2,000.

25. Section 40(1)(g) provides as follows:

    (1)A debtor commits an act of bankruptcy in each of the following cases:

    (g)If a creditor who has obtained against the debtor a final judgment or final order, being a judgment or order the execution of which has not been stayed, has served on the debtor in Australia or, by leave of the Court, elsewhere, a Bankruptcy Notice under this Act and the debtor does not:

    (i)where the notice was served in Australia – within the time specified in the notice; or

    (ii)where the notice was served elsewhere – within the time fixed for the purpose by the order giving leave to the effect of the service;

    (iii)comply with the requirements of the notice or satisfy the Court that he or she has a counter-claim, set off or cross-demand equal to exceeding the amount of the judgment debt or sum payable under the final order, as the case may be, being a counter-claim, set off or cross-demand that he or she could not have set up in the action or proceedings in which the judgment was obtained;

26. Clearly, therefore the Bankruptcy Notice must be founded on a final judgment or final order.  The main thrust of any argument put in this sub-grouping of grounds for opposition by the debtor, is based on the fact that the order made by Registrar M N Goldsack on 16 October 2002, does not constitute final orders or final judgments.  The matter was the cause of significant debate and argument.  The debtor submitted strongly, that there was no basis upon which costs orders could stand alone or could be considered to be final.  Submissions on the part of the creditor were to the contrary and it was argued that orders for costs, made in the Planning and Environment Court of Queensland were final and that they stood alone and were enforceable.

27. In that regard, there certainly needs to be consideration of whether an order for costs, said to found the Bankruptcy Notice, is a final order pursuant to s. 40(1)(g) of the Bankruptcy Act. The debtor asserts that an order for legal costs is not a final judgment and cites numerous cases in support of that proposition. Additionally, the debtor argues that the Bankruptcy Notice itself is invalid, because, even if the costs order is a final order or final judgment, it must form part and parcel of the original judgment, which made orders in relation to the proceedings and additionally ordered costs. It is contended that that order, must be annexed.

28. The first issue, therefore, is whether the order or orders for costs are final judgments or orders that are capable of founding the Bankruptcy Notice.  Consideration must be given to the manner in which the order for costs and their quantification came about and, in fact, more particularly, the jurisdiction in which the order was made.

1. As I have said, these orders arose out of proceedings before the Planning and Environment Court of Queensland.  The Uniform Civil Procedures Rules 1999 of Queensland are applicable and, in particular, I was referred to rule 736, headed ‘Registrar’s Assessment’. The rule provides as follows:

   (1)The registrar must state in the form of an order the amount at which a costs statement has been assessed.

   (2)Except if costs are assessed under rule 719(1) or an offer to settle is accepted under rule 722, the registrar must not, without the consent of the parties to the assessment, sign the order within 14 days after the date o f the assessment.

   (3)If a notice of objection is given under rule 739, the registrar must not sign the order until after the reconsideration procedure ends.

   (4)However, if no notice of objection is given under rule 739, the registrar must sign and file the order.

   (5)The order, once signed and filed, is final.

2. Sub-rule (5), in particular, provides that the order, is final. It is contended for the creditor, therefore, that as at the date of the Bankruptcy Notice, 7 May 2003, with costs that had been assessed by the registrar remaining unpaid, there was a situation of debt and a debtor/creditor relationship had arisen. The question then to be answered is whether rule 736 of the Uniform Civil Procedure Rules 1999 found a final judgment or final order. Section 40(3) of the Bankruptcy Act1966 gives some definition of the meaning of final judgment and final order.  As relevant here, it says:

   (1)     For the purposes of paragraph (1)(g):

   (a)   a judgment or order that is enforceable as, or in the same manner as, a final judgement obtained in an action shall be deemed to be a final judgment so obtained and the proceedings in which, or in consequence of which, the judgment or order was obtained shall be deemed to be the action in which it was obtained;

   (d)  a person who is for the time being entitled to enforce a final judgment or final order for the payment of money shall be deemed to be a creditor who has obtained a final judgment or final order.

3. Clearly, therefore, if there is a final judgment or final order for the payment of money, then pursuant to the provisions of s.40(3) of the Bankruptcy Act1966, there is a basis for it founding a Bankruptcy Notice.  The next question, then, is whether an order for the payment of costs, is a money order. 

4. Rule 794 of the Uniform Civil Procedure Rules provides that a money order may be enforced under the enforcement procedures set out in those rules. A money order is defined under the Uniform Civil Procedure Rules as meaning, what is set out in the “Supreme Court of Queensland Act” 1991 dictionary.  “Money order”, as defined in the dictionary in schedule 2 of the “Supreme Court of Queensland Act” 1991 is:

   “money order” means an order of the court or part of an order of the court for the payment of an amount, including an amount for damages, whether or not the amount is or includes an amount for interest or costs.

5. In the circumstances, therefore, it is argued on the part of the creditor that the definition of money order, as provided in schedule 2 of the “Supreme Court of Queensland Act” 1991, to include an amount for costs is sufficient, when read in conjunction with the Uniform Civil Procedure Rules 1999 to be a final judgment or final order. If costs are money orders, then it is contended they are able to be enforced on their own. The debtor says that that causal link cannot be made.

6. I simply do not agree that that is the case provided that there is proper provision under the Supreme Court of Queensland Act and the Uniform Civil Procedure Rules. It was these points in particular that were argued and ruled upon in Re: Gibbs ex parte Triscott (1995) 133 ALR 718 and in this Court by Chief Federal Magistrate Bryant in Greenbushes Ltd v Casey [2002] FMCA 45. In Re: Gibbs ex parte Triscott (supra) under the heading “Was the order for costs a final order within s.40(1)(g)?”, Justice Drummond specifically turned his mind to the issue of a costs order and, once quantified by taxation, whether it could be deemed a final judgment obtained in an action and therefore an order in respect of which a Bankruptcy Notice could issue.

7. In Re Gibbs ex parte Triscott (supra) Justice Drummond spoke specifically of that issue when he said in paragraph 40, the following:

   “The inclusion of the expression “final order” in s. 40(1)(g) gives the section a wider application than earlier provisions that operated only by reference to a “final judgment”.  The section also acknowledges that a final order can be made in either an action or a proceeding; so even if there is reason for holding that a judgment in an action will only be “final” for the purposes of s. 40(1)(g) if this requirement is satisfied, there is, in my opinion, no justification for holding that an order in a proceeding will be final only for the proceeding possesses a common but not invariable characteristic of an action, viz., that it is a proceeding in which it would have been open to the defendant debtor to have raised a counter-claim or set-off.  There is no justification for finding, by reference to cases decided on the bankruptcy statutes when they did not permit a bankruptcy notice to issue in respect of a final order in a proceeding, but only in respect of a final judgment in an action, limitations on the phrase “final order in a proceeding” which was introduced into the Acts to widen their operation.  The only limitations on whether an order is a final one are those to be gathered from the words of the section, viz., apart from those judgments or orders treated as final ones by s. 40(3), the order must give rise to an obligation on the part of the person to be served with the bankruptcy notice to pay a sum of money certain in amount so that the debtor will know what he has to tender to satisfy that obligation when served with a bankruptcy notice and it must be final in the sense that it finally disposes of the matter with which it deals, even though it does not dispose of the action or the proceeding in which it was made; it must also be able to be enforced by execution.”

8. In that commentary then, Justice Drummond detailed the matters or points that must be met in order to find that there is a final judgment.  There must be an order made by a court or a tribunal, in a proceeding between the person who later issues the bankruptcy notice and the person served with it.  That is clearly the case here, as the proceedings which gave rise to the order for costs and the order quantifying those costs were in proceedings between the first plaintiff and the first respondent which are the debtor and the creditor in this matter.

9. That point does give rise to whether the findings that I have made in relation to the “Supreme Court of Queensland Act” 1991 and the Uniform Civil Procedure Rules are applicable in relation to the Planning and Environment Court and its rules. The answer is clearly found in rule 3 of the Planning and Environment Court rules. It provides under the heading “Application of Rules” as follows:

   (i)These rules apply to proceedings in the Planning and Environment Court.

   (ii)If these rules do not provide for a matter in relation to a proceeding, or proceedings, in the Planning and Environment Court and the rules applying in the District Court would provide for the matter in relation to a proceeding, or proceedings in the District Court, the rules applying in the District Court apply for the matter in the Planning and Environment Court with necessary changes.

10. Clearly, the rules of the Planning and Environment Court adopt, where appropriate, the rules of the District Court and they are the Uniform Civil Procedure Rules. There is no basis to find other than that the Uniform Civil Procedure Rules in relation to costs are applicable to proceedings in the Planning and Environment Court as between the debtor and the creditor.

11. The second point raised by Drummond J is that the order must give rise to an obligation on the part of the person to be served with the Bankruptcy Notice, to pay a sum of money, certain in amount, so that the debtor will know what he has to tender to satisfy that obligation, when served with the Bankruptcy Notice.  The orders of the registrar, of 16 October 2002 quantify the amounts to be paid pursuant to the orders of the Court of 16 October 2000 and 1 March 2001 and

    
    

    22 February 2002.

12. The order must be final, in the sense that it finally disposes of the matter with which it deals and, in this case, it relates specifically and only to the issue of costs to be paid.  It is final in relation to the costs ordered to be paid by the debtor to the creditor and it may be enforced.

13. Drummond J found in Re Gibbs ex parte Triscott (supra) that a costs order arising out of an action for an interlocutory injunction, an order for costs arising out of the dismissal of a complaint for a summary offence or an order for costs of an adjournment of the hearing of an interlocutory proceeding, all give rise to a final order, in that they conclude the question of who is to bear those costs. 

14. I am satisfied that in this matter, the order for costs and the quantification for costs by the registrar of the court is, of itself, a final order.  As the Chief Federal Magistrate said in Greenbushes Ltd v Casey (supra):

    The final order relied on is the Taxing Master’s order.  This is consistent with s40(1)(g) and s40(3)(b) and with the approach outlined in Re Gibbs.  The cases dealing with certification of taxing can be distinguished because such a certificate is not relied on here.   Until set aside the order of the Taxing Master, as an order of a court of unlimited jurisdiction, must stand.

15. I am satisfied that the order of the registrar fulfills all of the criteria of a final order enumerated by Drummond J in Re Gibbs ex parte Triscott (supra).

16. The final point then to be addressed in relation to the matter is whether in fact there is a fundamental flaw that arises as a result of there being included in the schedule to the Bankruptcy Notice, an amount of judgments of nil, rather than the amount of $5,504.95.  That sum was in fact included in column 1 under point 2, legal costs if ordered to be paid and a specific amount was not included in the judgments or orders. 

17. It was submitted on the part of the creditor that if, in fact, that were a defect and it was not necessarily conceded that it was, then it was simply a formal defect and s.306 of the Bankruptcy Act allows for remedy of any such difficulty. The real thrust of the schedule, in my view, is to provide some explanation of the amount claimed. Whether, in fact, the amount of judgments or orders is the appropriate position for the claim or whether, in fact, it should more appropriately have been placed in column 2, is bye the bye. It was submitted and I accept without hesitation, that it cannot be realistically argued that any formal defect would have occasioned substantial injustice to the debtor or to have mislead him as regards his indebtedness to the applicant. It is not a situation where, as the debtor contended, it was misleading and contradictory. It is also clear that it was not a situation which gave rise to estoppel, in that the amount of the judgment was noted as nil and therefore could realistically have been assumed to be none. The debtor suggests that it is not a curable defect but rather is improper and incorrect information included within the schedule.

18. I cannot agree that that is the case.  The amount of the judgment is that which is included in the registrar’s orders for costs assessed.  There could not be, nor should there be, any basis upon which it could be suggested that there is some confusion which would lead to the debtor being mislead.  The fact is, and it remains, that the sub-total to the schedule and the total debt owing both reflect exactly the amount of the claim.  It is clear that there is no injustice to the respondent nor any basis upon which it could realistically be suggested that there is confusion as to the amount to be paid. 

19. In all the circumstances, I am satisfied therefore that the order for costs was a final order and that the registrar’s order for costs assessed was taken out and annexed to the Bankruptcy Notice.  I am satisfied that the Bankruptcy Notice is therefore not invalid and that a sequestration order should be made.

I certify that the preceding forty-seven (47) paragraphs are a true copy of the reasons for judgment of Coker FM

Associate:  Christina Herbst

Date:  29 April 2004