Van Reesema v Official Trustee in Bankruptcy

[1983] FCA 213

Re: ERNST ABRAHAM SIEWSERTSZ VAN REESEMA
And: THE OFFICIAL TRUSTEE IN BANKRUPTCY (1983) 69 FLR 424
No. G3 of 1983
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
BANKRUPTCY DISTRICT OF THE STATE OF SOUTH AUSTRALIA
Sweeney(1), Sheppard(2) and Beaumont(3) JJ.

CATCHWORDS

Bankruptcy - appeal from an order refusing an application for discharge made pursuant to s.150 - whether bankrupt was discharged by operation of s.149(2) upon the expiration of three years from the date of his bankruptcy - whether objection by trustee to discharge of bankrupt by operation of law was entered on one of the statutory grounds - order made by trial judge amending the ground upon which the objection was granted after the expiration of three years from the date of his bankruptcy

Bankruptcy Act 1966 ss.33; 149; 150; 153; 269; 272; 306

Bankruptcy Rules: R49; 51A; Form 23

Companies Code: s227

Bankruptcy - Objection to discharge - Grounds of objection - Whether objection complied with statutory grounds - Whether compliance must be strict or only substantial - Whether non-compliance involved a formal defect or irregularity - Amendment of objection after automatic discharge at expiration of three year period - Effect of amendment - Bankruptcy Act 1966 (Cth), ss 33(1)(b), 149, 150, 153, 269, 272, 306 - Bankruptcy Rules, rr. 49, 51A; form 23.

HEADNOTE

The appellant was made bankrupt on 17 September 1979. By notice of objection dated 19 November 1981 the official receiver objected to the discharge of the appellant on the ground that he "is likely before the date of his discharge from bankruptcy to be in a position to make a significant contribution to his estate". By application dated 10 March 1982 the appellant sought an order of discharge under s. 150 of the Bankruptcy Act 1966 (Cth). In those proceedings, before a single judge of the Federal Court, the official receiver applied for and was granted leave under s. 33(1)(b) to amend the objection so that the ground stated therein agreed precisely with the second limb of s. 149(4)(a) of the Act. Section 149(4) provides that an objection to discharge shall not be entered otherwise than on one or more of the grounds stated therein, and s. 149(4)(a) contains the following ground: "(a) that the bankrupt is able, or is likely within five years from the date of the bankruptcy to be able, to make a significant contribution to his estate. . . ."

The primary judge's order allowing the amendment and refusing the appellant's application for discharge was made on 24 November 1982, after the expiration of three years from the date of the bankruptcy and therefore after the date on which the appellant would have been automatically discharged pursuant to s. 149(2) but for the objection. Against that decision the appellant appealed arguing that the original objection was invalid, as it failed to comply strictly with the terms of s. 149(4)(a), that the primary judge had no power to make the order allowing the amendment, and that, alternatively, it was an improper exercise of power to allow the amendment.

Held: (1) Per Sheppard & Beaumont JJ. (Sweeney J. not deciding): It is sufficient if the notice of objection to discharge, in the statement of the grounds on which the objection is based, substantially complies with the terms of s. 149(4); strict compliance is unnecessary.

Tasker v. Fullwood (1978) 1 NSWLR 20, applied.

Samuel Montagu & Co. Ltd. v. Swiss Air Transport Co. Ltd (1966) 2 QB 306;

Nichol v. Thompson (1976) 12 ALR 528, referred to.

(2) Per Sweeney & Sheppard JJ. (Beaumont J. dissenting) - On its true construction, the expression "before the date of his discharge" in the notice of objection was a reference to the appellant's discharge whenever that might be. Therefore, as the discharge could conceivably occur more that five years after the date of the discharge could conceivably occur more that five years after the date of the bankruptcy, the notice did not substantially comply with the second limb of s. 149(4)(a), and was therefore invalid and of no effect.

(3) The noncompliance with s. 149(4) was not a formal defect or irregularity in the notice of objection and therefore s. 306(1) did not save it from invalidity. (Sheppard J. holding that the notice was a "proceeding" within the meaning of that expression in s. 306(1); Sweeney J. not deciding).

(4) The objection being invalid, the appellant was automatically discharged upon the expiration of three years from the date of the bankruptcy, and therefore the primary judge's order under s. 33(1)(b) allowing the amendment to the objection was futile and should not have been made.

Streimer v. Tamas (1981) 54 FLR 253, distinguished.

HEARING

Melbourne, 1983, July 15; August 26. #DATE 26:8:1983

APPEAL.

Appeal against a decision of the Federal Court of Australia (McGregor J.) refusing to grant the appellant's application for discharge from his bankruptcy.

The appellant in person.

N. W. Lowrie, for the respondent.

Cur. adv. vult.

Solicitor for the respondent: N. W. Lowrie.

F.P.C.

ORDER

1. The appeal be allowed against the order of 24 November 1982 and the order of 4 January 1983.

2. The order of 24 November 1982 be set aside and in lieu thereof it be ordered that the application for amendment be refused.

3. The order of 4 January 1983 be set aside and in lieu thereof it be declared that the bankrupt was discharged from bankruptcy upon the expiration of three years from the date of his bankruptcy which was 17 September 1979. Orders that:

The appeal be allowed against the order of 24 November 1982 and the order of 4 January 1983.

The order of 24 November 1982 be set aside and in lieu thereof it be ordered that the application for amendment be refused.

The order of 4 January 1983 be set aside and in lieu thereof it be declared that the bankrupt was discharged from bankruptcy upon the expiration of three years from the date of his bankruptcy, which was 17 September 1979.

JUDGE1

Ernst Abraham Siewsertsz Van Reesema ("the bankrupt") appeals in person against an order of a single judge of this court, made on 4 January 1983, refusing to grant his application for discharge from his bankruptcy.

An order of sequestration against the estate of the bankrupt was made on 17 September 1979 by Sangster J. exercising federal jurisdiction in bankruptcy. By notice dated 19 November 1981 the Official Receiver for and on behalf of the Official Trustee objected to the discharge of the bankrupt on the ground that he "is likely before the date of his discharge from bankruptcy to be in a position to make a significant contribution to his estate". By application dated 10 March 1982, the bankrupt sought an order of discharge under s.150 of the Bankruptcy Act 1966 ("the Act").

In the course of the hearing of his application for discharge, the bankrupt submitted that, after making his application for discharge, he had been, by force of s.149(2) of the Act, discharged from bankruptcy, upon the expiration of three years from the date of his bankruptcy, which was 17 September 1979, the date of the order of sequestration made against his estate (see s.5(1) of the Act).

The question raised by this submission may be better appreciated by reference to the history of the sections of the Act dealing with discharge from bankruptcy.

The Committee appointed to review the bankruptcy law of the Commonwealth (often referred to as "the Clyne Committee" after its chairman, Mr Justice Clyne, Federal Judge in Bankruptcy) in its report dated 14 December 1962, which led to the passing of the Act, stated:-

"Evidence before the Committee shows that relatively few bankrupts apply for a discharge, with the result that there is always a very large number of undischarged bankrupts in the community who ought not to be undischarged bankrupts. The Committee is satisfied that one substantial reason for this situation is that many bankrupts are unaware of their right to apply for a discharge.

A great many bankrupts are the victims of misfortune and it appears to the Committee to be reasonable that they should receive a discharge with the minimum of trouble and expense. On the other hand, the dishonest bankrupt ought not to be discharged except under stringent conditions.

The Committee considers that it is undesirable, both in the interests of the administration of estates and of the business community, that there should be a large number of undischarged bankrupts to whose discharge there would be no objection and recommends that a system of discharge by operation of law should be introduced subject to the necessary safeguards in the interests of creditors and the community." (see paragraphs 228, 229 and 230.)
When the Act came into operation on 4 March 1968 it introduced a new concept in Australian bankruptcy law, that of discharge by operation of law. Until the Bankruptcy Amendment Act 1980 came into operation, s.149(1) and (3) of the Act provided:-
"(1) Subject to this section, a person who becomes a bankrupt after the commencement of this Act is, by force of this section, unless sooner discharged in accordance with the next succeeding section, discharged from bankruptcy upon the expiration of five years from the date of the bankruptcy.

. . . . . . . . . . . . . . . . . . . . . . .

(3) This section does not operate to discharge a bankrupt from a bankruptcy if -

(a) at the time when he would have been so discharged but for this sub-section, he is still undischarged from an earlier bankruptcy; or

(b) the Registrar, the trustee or a creditor has entered an objection, in the prescribed manner, to the discharge of the bankrupt by force of this section and the objection has not been withdrawn before the time when the bankrupt would have been so discharged but for this sub-section."

Rule 49 of the Bankruptcy Rules then read as follows:
"(1) For the purposes of paragraph (b) of sub-section (3) of section 149 of the Act, a person may enter an objection to the discharge of a bankrupt by filing a notice of the objection, in accordance with Form 23, at any time before the bankrupt would have been discharged but for that sub-section.

(2) A person who enters an objection to the discharge of a bankrupt shall post a copy of the notice of the objection to the bankrupt, by pre-paid registered post, at the last-known address of the bankrupt."

Form 23 read as follows:-
"Form 23
NOTICE OF OBJECTION TO DISCHARGE
(Title)
I, (full name, address and occupation of objector), object to the discharge of (full name, address and occupation of bankrupt) from bankruptcy by force of section 149 of the Bankruptcy Act 1966 on the following grounds:-
Dated this day of , 19 .
Registrar (or Trustee or Creditor)."

The Bankruptcy Amendment Act 1980 made a number of changes to s.149, which came into effect on 1 February 1981 so that sub-secs (1) and (2) now read as follows:-
"(1) Subject to this section, a person who becomes a bankrupt after the commencement of this section is, by force of this section, unless sooner discharged in accordance with section 150, discharged from bankruptcy upon the expiration of 3 years from the date of the bankruptcy.

(2) Subject to this section, a person who was an undischarged bankrupt immediately before the commencement of this section is, by force of this section, discharged from bankruptcy-

(a) in a case where the bankrupt became a bankrupt more than 3 years before the commencement of this section - upon the commencement of this section; or

(b) in any other case, unless sooner discharged in accordance with section 150 - upon the expiration of 3 years from the date of the bankruptcy."

Under the new sub-sec (1), the qualifying time for discharge by force of the section was reduced from five years to three. Sub-sec (3)(c) was amended so as to provide that an objection in accordance with the prescribed form and in the prescribed manner may be entered by the Registrar, the Inspector-General or the trustee, or a creditor with the leave of the Court. The Inspector-General is included amongst those who may enter an objection, and a creditor now requires the leave of the Court to enter an objection.

Rule 49 now provides as follows:-
"(1) For the purposes of paragraph 149(3)(c) of the Act, a person may enter an objection to the discharge of a bankrupt by filing a notice of the objection, in accordance with Form 23, at any time before the bankrupt would have been discharged but for sub-section 149(3) of the Act.

(2) A person who enters an objection to the discharge of a bankrupt shall cause a copy of the notice and, where the objection is entered by leave of the Court, a copy of the order granting leave, to be posted, by pre-paid certified mail, to-

(a) the Inspector-General;

(b) the trustee; and

(c) the bankrupt.

(3) Where the Court makes an order under sub-section 149(8) of the Act, the person on whose application the order is made shall serve a copy of the order on the bankrupt."

Form 23 is altered only in that it now makes provision for its possible signature by the Inspector-General.

The new sub-sec (6) of s.149 provides that an objection entered by a creditor under sub-sec (3)(c) may be withdrawn only with leave of the Court.

Sub-secs (4), (7), (8), (9), (10), (11),(12) and (13) now provide as follows:
"(4) An objection shall not be entered under paragraph (3)(c) otherwise than on one or more of the following grounds:

(a) that the bankrupt is able, or is likely within 5 years from the date of the bankruptcy to be able, to make a significant contribution to his estate;

(b) that the discharge of the bankrupt by force of this section would prejudice the administration of his estate;

(c) that the bankrupt has failed to co-operate in the administration of his estate;

(d) that the conduct of the bankrupt, either in respect of the period before or the period after the date of the bankruptcy, has been unsatisfactory.

. . . . . . . .

(7) Subject to sub-section (11), an objection entered under paragraph (3)(c) lapses at the expiration of -

(a) subject to paragraph (b), the period of 5 years from the date of the bankruptcy; or

(b) if the Court makes an order under sub-section (8) or (9) in relation to the bankrupt - the period fixed by the order.

(8) The Court may, at any time before the expiration of 5 years from the date of the bankruptcy, on the application of the Registrar, the Inspector-General, the trustee or a creditor, order that the period at the expiration of which an objection entered under paragraph (3)(c) will lapse be such period, being a period exceeding 5 years, commencing on the date of the bankruptcy as is specified in the order.

(9) The Court may, at any time before the expiration of 5 years from the date of the bankruptcy, on the application of the bankrupt, order that the period at the expiration of which an objection entered under paragraph (3)(c) will lapse be such period, being a period exceeding 3 years but not exceeding 5 years, commencing on the date of the bankruptcy as is specified in the order.

(10) In deciding whether to make an order under sub-section (8) or (9), the Court shall take into account such matters (if any) as are prescribed for the purposes of this sub-section.

(11) An objection to the discharge of a bankrupt, unless sooner withdrawn, lapses upon the discharge of the bankrupt under section 150.

(12) The Court may, at any time before the discharge of a bankrupt, on the application of the Registrar, the Inspector-General, the trustee or a creditor, direct that the bankrupt shall not be discharged from bankruptcy by virtue of this section.

(13) In deciding whether to make an order under sub-section (12), the Court shall take into account such matters (if any) as are prescribed for the purposes of this sub-section."

Rule 51 A prescribes the matters which the Court is to take into account for the purposes of sub-secs (10) and (13), the first of which is "whether the bankrupt is able, or is likely within 5 years from the date of the bankruptcy to be able, to make a significant contribution to his estate."

One need hardly say that a provision under which a person is discharged from bankruptcy by operation of the statute confers upon such a person a right of great value. The power which s.149 gives to the Registrar, the Inspector-General, the trustee (whether he be an Official Receiver or a registered trustee) or a creditor with the leave of the Court, to enter an objection is correspondingly great.

Subject to the exceptions set out in s.153(2), where a bankrupt is discharged from a bankruptcy, the discharge operates to release him from all debts (including secured debts) provable in the bankruptcy subject to the terms of sub-secs (1) and (3) of that section. Property acquired by a bankrupt after discharge no longer vests in the trustee (see ss58, 116 and 131). He is freed from the restrictions of s.269 in relation to obtaining credit to the extent of $500 or more and carrying on business under an assumed name or under a firm name without disclosing that he is an undischarged bankrupt, and from the constraints upon leaving Australia or doing an act preparatory to leaving Australia, without the consent in writing of the trustee of his estate, which are found in s.272. He is no longer subject to the restrictions of s.227(1) of the Companies Code upon being, without the leave of the Court, a director or a promoter of, or being in any way (whether directly or indirectly) concerned in or taking part in the management of a corporation.

S.149(4) does not provide simply that an objection may be entered in accordance with its terms, but that it shall not be entered otherwise that on one or more of the grounds therein set out.

It is true that Form 23, which is prescribed by Rule 49, does not itself contain the grounds which are specified in s.149(4), but when one reads the form in the light of the sub-section and the rule, it is clear that anyone seeking to use the form to give notice of objection to discharge is required to set out in it one or more of the only grounds upon which an objection may be entered, or one of the alternatives contained in them.

Ground (a) reads, "that the bankrupt is able, or is likely within 5 years from the date of the bankruptcy to be able, to make a significant contribution to his estate."

A trustee who seeks to exercise the power conferred upon him by s.149(3) is not at large in relation to the grounds of objection, as he was before the 1980 amendment. He is called upon to consider, as a trustee, whether it is proper that he should enter an objection on one or more of the grounds set out in sub-sec (4). He should have regard to the facts as they are known to him and weigh them when forming an opinion in respect of the grounds, which in most instances will involve value judgments.

The ground stated in the notice here in question reads, "that the bankrupt is likely before the date of his discharge from bankruptcy to be in a position to make a significant contribution to his estate". A reading of it suggests that its draftsman did not turn his mind to the grounds set out in s.149(4). The stated ground is not based on an allegation of the bankrupt's present ability to make such a contribution, but it departs from the statutory ground by substituting for the words "is likely within 5 years from the date of the bankruptcy to be able to make" the expression "is likely before the date of his discharge from bankruptcy to be in a position to make".

What is to be understood by the words "before the date of his discharge"? The notice of objection relied upon is either effective or ineffective. If ineffective, the bankrupt is already discharged. If effective, the meaning of the words "the date of his discharge" depends upon the happening of any of a number of events, none of which is certain.

Under s.149(12) the Court, at any time before the discharge of a bankrupt, on the application of the Registrar, the Inspector-General, the trustee or a creditor, may direct that the bankrupt shall not be discharged from bankruptcy by virtue of s.149.

Under s.149(14) where an objection is withdrawn after the time when the bankrupt would have been discharged but for sub-sec (3), or lapses otherwise than by virtue of sub-sec (11); there is no other objection entered that has not been withdrawn or has not lapsed and the bankrupt's discharge is not prevented by sub-sec (3)(a) (b) or (d), the bankrupt is, by force of s.149, discharged from bankruptcy upon the withdrawal or lapsing of the objection. Paragraphs (a) (b) and (d) of sub-sec (3) deal with a bankrupt who is still undischarged from an earlier bankruptcy, or who has, since the date of the bankruptcy, again become a bankrupt, or with the situation where an order of the Court under sub-sec (12) is in force in relation to the bankrupt.

An objection lapses, pursuant to s.149(7), at the expiration of the period of five years from the date of the bankruptcy or at the end of the period fixed by any order under sub-sec (8) or (9). The period fixed under sub-sec (8) may be one exceeding that period of five years.

The bankrupt may be discharged by an order of the Court under s.150 of the Act, under sub-sec (5) of which the Court shall if any of the matters specified in sub-sec (6) is established
"(a) refuse to make an order of discharge; or

(b) make an order of discharge but suspend the operation of the order as the Court thinks proper, either unconditionally or subject to conditions."

The notice of objection here in question purports to substitute for the period referred to in s.149(4)(a) the period "before the date of his discharge from bankruptcy". That period is of uncertain and possibly unlimited duration. It may end by the withdrawal or lapsing of an objection, by an order of discharge by the Court, or by the expiration of a period of suspension expressed in such an order. It may never end. The Court may make an order pursuant to s.149(12) or it may fix a period under s.149(8), which proves to be longer than the life of the bankrupt, and the bankrupt may not obtain an order of discharge under s.150. The death of the bankrupt before he is discharged does not, of itself, put an end to the proceedings in bankruptcy (see s.63).

The period "before the date of his discharge from bankruptcy" may be longer than the period "within five years from the date of the bankruptcy". The significance attached to this latter period by the legislature in its scheme relating to discharges is reflected by the references made to it which recur throughout ss149 and 150.

S.150(7) provides that "the Court shall not, under sub-section (5), suspend the operation of an order of discharge subject to conditions that require, or have the effect of requiring, the bankrupt to make payments from his income at any time after the expiration of the period of five years commencing on the date of the bankruptcy."

Other references occur in relation to

1. one of the grounds of objection to discharge (s.149(4)),

2. the possible lapse of an objection (s.149(7)(a)),

3. the time within which the Court may make an order under s.149(8), or under s.149(9),
4. the matters prescribed by R.51A for the purposes of s.149(10) and (11),

5. the conditions subject to which the Court may suspend the operation of an order of discharge (s.150(7)),

6. the operation of certain orders of the Court already made (s.150(8)).

S.149 provides that "subject to this section" a bankrupt is, by force of this section, unless sooner discharged in accordance with s.150, discharged from bankruptcy upon the expiration of three years from the date of the bankruptcy.

The legislature has by sub-secs (3) and (4) conferred upon the trustee, amongst others, the great power of preventing that discharge occurring by entering an objection, which, however, shall not be entered otherwise than on one or more of the specified grounds.

The entry of an objection in accordance with these sub-sections prevents a discharge by operation of law upon the expiration of three years from the date of the bankruptcy. It requires a bankrupt to undertake the trouble and expense of an application to the Court, the powers of which are limited by s.150.

In the present case I do not find it necessary to decide whether s.149(4) calls for strict compliance or whether substantial compliance is sufficient. Upon either view, the notice relied upon in this case was not in my opinion entered on one of the statutory grounds. The event which, by force of s.149(3)(b), may prevent a discharge did not happen. In the result, the bankrupt was discharged from bankruptcy upon the expiration of three years from the date of the bankruptcy.

Nothing that has since transpired alters that result. The Act provides by s.150(11) that the Court may, at any time while the operation of an order for discharge is suspended, rescind or vary the order. The whole tenor of s.149 is to the effect that in the absence of one of the events to which it refers, the bankrupt is discharged, and there is no provision by which he may be deprived of that status, or by which, having been released by s.153 from all debts (including secured debts) provable in the bankruptcy by the operation of the discharge, he may lose the benefit of that release. The entry of a valid objection under s.149(4) is not an event which affects the position of the bankrupt alone, but one which affects the rights of his creditors.

Counsel who appeared for the trustee on this appeal sought to rely upon an order made by the learned trial judge on 24 November 1982, in the course of the hearing before him, that the ground stated in the objection be amended to read:-
"that the bankrupt is able to or is likely within five years from the date of the bankruptcy to be able to make a significant contribution to his estate."
There is also before the Court an appeal against this order.

Before his Honour, the Official Receiver, who then appeared in person, had relied upon s.33(1)(b) and s.306 of the Act in support of his application for leave to amend the objection.

S.33(1)(b) provides that the Court may at any time allow the amendment of any written process, proceeding or notice under the Act. What the Official Receiver needed was an order, pursuant to s.33(1)(c), under which the Court may extend before its expiration, or if the Act does not expressly provide to the contrary, after its expiration, any time limited by the Act for doing an act or thing. Had such an application been made, it should, in my opinion, have been refused.

S.149 expressly provides to the contrary, within the meaning of s.33(1)(c), in that it provides that if the three years have passed, without the entry of an objection which satisfies the requirements of sub-sec (4), a bankrupt is discharged. It does not contemplate that a bankrupt so discharged may revert to the status of being undischarged by some later order. If there were a power to extend the time for entry of an objection to discharge, it would have to be wide enough to cover a case where no objection of any kind had been entered. The fact that certain conduct which is lawful for a discharged bankrupt is unlawful for one who is undischarged tells against the existence of any such power.

Similarly, s.33(1)(b) should not be used to produce the effect that a bankrupt, who has been discharged by operation of s.149(2)(b) should revert to the status of being undischarged.

S.306(1) provides as follows:
"Proceedings under this Act are not invalidated by a formal defect or an irregularity, unless the court before which the objection on that ground is made is of opinion that substantial injustice has been caused by the defect or irregularity and that the injustice cannot be remedied by an order of that court."

Unlike s.33(1)(b), it does not speak of "any written process, proceeding or notice".

On appeal, counsel for the trustee submitted that the objection entered was not invalidated because it suffered only from a formal defect or irregularity. If one were to assume, without deciding, that a notice of objection is "a proceeding under this Act" within the meaning of s.306(1), I would not regard the deficiencies of the present notice as a formal defect or irregularity. In my opinion, it was not entered on one of the only grounds permitted by s.149(4), as it departed in fundamental respects from the requirements of the statute.

The words of s.306(1) seem inappropriate to the consideration of a notice of objection to discharge. The provision that proceedings are not invalidated, unless the court before which the objection is made "is of opinion that substantial injustice has been caused by the defect or irregularity and that the injustice cannot be remedied by an order of that court", can be readily applied where a proceeding with a formal defect or irregularity has been initiated against a respondent and the applicant seeks to rely upon s.306. There it is the respondent who may have suffered "substantial injustice which cannot be remedied by an order of that court." Here the Act provides that on the happening of a certain event, namely the entry of an objection, a person is not discharged from bankruptcy and that event has not happened. The purported entry of an objection on a ground which is, in my view, fundamentally different from that specified in s.149(4)(a) is not to be given the effect which by the statute arises only upon the entry of an objection so specified.

I would allow the appeal against the making of the order of 24 November 1982 and in lieu thereof order that the application for amendment be refused.

I would allow the appeal against the order of 4 January 1983 and in lieu thereof order that it be declared that the bankrupt was discharged from bankruptcy upon the expiration of three years from the date of bankruptcy, which was 17 September 1979. I would make no order in respect of costs.

JUDGE2

Logically the first matter to be considered is the appellant's appeal against the making of the order of 24 November, 1982, by which his Honour allowed the amendment of the objection in order that it might conform with para.149(4)(a) of the Bankruptcy Act 1966 ("the Act"). The appeal against the making of the order was out of time but, by consent, the time for instituting the appeal was extended. If the order stands it seems to me that the notice of objection was a good notice. The order was made pursuant to para. 33(1)(b) of the Act which is expressed in very wide terms. It provides that the Court may at any time allow the amendment of any written process, proceeding or notice under this Act.

In normal circumstances the provision is wide enough to empower the Court to amend a proceeding at any time. But here the effect of the order may have been to work a change in the status of the appellant. If he be otherwise right in his submissions, he ceased to be a bankrupt by operation of law on 18 September, 1982, over two months prior to the making of the order allowing the amendment. Questions therefore arise as to whether the learned primary judge had power thereafter to amend an objection so as to cause the appellant's status to revert to that of an undischarged bankrupt. If there be power, the further question arises as to whether it was a proper exercise of discretion to order as his Honour did.

Logical though it may be to deal with these questions first, I prefer to approach the problem, first of all, as if the order allowing the amendment had not been made. The resolution of the position as it was immediately before the order was made will assist in determining questions relevant to the power to make it and the exercise of the discretion. Furthermore, if the fundamental argument based on the trustee's failure to enter a valid objection is rejected, the questions as to the propriety of the order of 24 November, 1982, will not arise.

The directly relevant provisions of the Act are sub-secs.149(3) and (4). Paragraph (c) of the former sub-section provides that a bankrupt is not discharged from bankruptcy by virtue of s.149 if the Registrar, the Inspector-General or the trustee has entered, or a creditor has, with the leave of the Court, entered an objection, to the discharge of the bankrupt by force of the section. It is to be observed that the paragraph does not expressly say that the objection must be entered before the expiration of the period of three years for which sub-secs.149(1) and (2) provide; but the general framework of the section and the latter words of the paragraph which speak of the withdrawal or lapse of the objection before the expiry of the relevant period lead to the conclusion that the objection must be entered before the period has expired. This conclusion is in general accordance with the provisions of para. (d) of sub-sec. 149(3) which provides that a bankrupt is not discharged by virtue of s.149 if an order of the Court under sub-sec.(12) is in force in relation to the bankrupt. That sub-section provides that the Court may, at any time before the discharge of a bankrupt, direct that the bankrupt shall not be discharged by virtue of s.149.

The provisions of sub-sec.149(4) are as follows:
"An objection shall not be entered under paragraph (3)(c) otherwise than on one or more of the following grounds:

(a) that the bankrupt is able, or is likely within 5 years from the date of the bankruptcy to be able, to make a significant contribution to his estate;

(b) that the discharge of the bankrupt by force of this section would prejudice the administration of his estate;

(c) that the bankrupt has failed to co-operate in the administration of his estate;

(d) that the conduct of the bankrupt, either in respect of the period before or the period after the date of the bankruptcy, has been unsatisfactory."

The essential question is whether failure to specify precisely or in substance one or more of these grounds renders the objection of no effect so that the position is as if no action pursuant to para. 149(3)(c) had been taken at all.

At the outset it should be noticed that the grounds of objection do not necessarily have relevance when the Court comes to the question of whether a bankrupt, against whose discharge an objection has been entered, should be discharged upon an application made pursuant to s.150. The matters referred to in sub-sec.150(5) and specified in sub-sec.150(6) do not include, in terms, any of the grounds specified in sub-sec.149(4). They may, however, cover similar matters; particularly is that so in the case of the ground specified in para.149(4)(d). If none of the matters specified in sub-sec.150(6) be established, the Court has nevertheless a discretion to refuse a discharge; sub-sec.150(9). It is not necessary, although it may do so, for the Court to have regard to any of the matters specified in sub-sec.149(4). In particular the ground upon which an objection has been entered may not, in an application for discharge, arise for consideration. That does not mean that it would not be relevant to consider material tending to establish any of the grounds specified in sub-sec.149(4). The point I make is that it is not necessary for that to occur; a person opposing an application for discharge pursuant to s.150 need not rely upon the ground upon which an objection to discharge has been entered.

What then is the significance of the grounds so specified? What part do they play in the overall scheme of the legislation insofar as it provides for the discharge of bankrupts? It seems to me that the purpose of sub-secs.149(3) and (4) is to cast upon a person entitled to enter an objection, i.e. the Registrar, the Inspector-General, the trustee or a creditor (with the leave of the Court) an obligation to apply his mind carefully to the question of whether there is sufficient reason or basis for the entry of an objection upon one or more of the available grounds. By that I do not mean that the objector must be satisfied that the ground exists upon the basis of any absolute standard. But in my opinion he must turn his mind to the problem and ought not to enter the objection unless reasonably satisfied of the correctness of what the ground implies. The reason for that view is the clear intention of the legislature that bankrupts are to be automatically discharged after the expiration of three years from the date of their bankruptcies unless at least one of the grounds exists. The legislature has thus specified with precision the circumstances in which the operation of the section will be stayed.

This means that from the point of view of bankrupts the section confers a substantial advantage. A bankrupt knows that at the end of a period of three years after his bankruptcy he will be discharged and thus freed from a number of obligations and disabilities which arise upon bankruptcy. It is true, I think, to say that bankruptcy of itself does not today carry with it the overtones of moral and commercial delinquency which once was the case. It may do so in some cases but that will be because of their particular facts. But bankruptcy does carry with it real disadvantages. It is enough to mention the fact that after acquired property, apart from income, continues to vest in the trustee until discharge (ss.58, 116 and 131) and the continuing risk an undischarged bankrupt runs of infringing s.269 of the Act (obtaining credit in the sum of $500 or more without disclosing bankruptcy). In a society where the obtaining of credit is an every day affair for ordinary people one could not, therefore, at least at first sight, treat non-compliance with provisions such as are contained in the relevant sub-sections as a light matter. But for an objection lodged in accordance with them, a bankrupt will be discharged by operation of law at the end of a three year period.

The question is essentially one of statutory construction. What did the legislature intend to be the consequence of non-compliance with the relevant provisions? The way in which a court should approach the resolution of such a question has been stated in many cases. In seeking guidance from them I acknowledge the help I have found in the treatment of this subject by Professor Pearce in his work, Statutory Interpretation in Australia, second edition, pp. 169-176.

In State of Victoria v. The Commonwealth (1975) 134 C.L.R. 81 Stephen J. discussed, in general terms, the approach of courts to the question of whether particular statutory provisions were mandatory or directory, and if the latter, whether substantial compliance was nevertheless required or not (pp.178- 180). In Tasker v. Fullwood (1978) 1 N.S.W.L.R. 20 the New South Wales Court of Appeal said (pp.23-24):
"The remaining submission was that the order made by the Court under s.27 granting a conditional license was not denied legal effect by the failure to produce any agreement between the applicant and the lessor. The submission raises a question of a type which is frequently encountered. The problem arises whenever a judicial or executive act, or the act of a litigant, is subjected by statute to the prior performance of conditions. The numerous decisions in this field have been recently reviewed by this Court: Attorney-General (N.S.W.) ex rel. Franklins Stores Pty. Ltd. v. Lizelle Pty. Ltd. ((1977) 2 N.S.W.L.R.955) and Hatton v. Beaumont ((1977) 2 N.S.W.L.R. 211). The position of directory enactments has also been expounded in an authoritative but obiter way in Victoria v. The Commonwealth ((1975) 134 C.L.R. 81). From these sources we take the following propositions:

"(1) The problem is to be solved in the process of construing the relevant statute. Little, if any, assistance, will be derived from the terms of other statutes or any supposed judicial classification of them by reference to subject matter. (2) The task of construction is to determine whether the legislature intended that a failure to comply with the stipulated requirement would invalidate the act done, or whether the validity of the act would be preserved notwithstanding non-compliance; the Franklins Stores Pty. Ltd. case (supra at pp.963 et seq.). (3) The only true guide to the statutory intention is to be found in the language of the relevant provision and the scope and object of the whole statute; Hatton v. Beaumont (supra at p.220). (4) The intention being sought is the effect upon the validity of the act in question, having regard to the nature of the precondition, its place in the legislative scheme and the extent of the failure to observe its requirement; Victoria v. The Commonwealth (supra at pp.179, 180). (5) It can mislead if one substitutes for the question thus posed an investigation as to whether the statute is mandatory or directory in its terms. It is an invitation to error, not only because the true inquiry will thereby be sidetracked, but also because these descriptions have been used with varying significations. (6) In particular, it is wrong to say that, if a statute is couched in directory terms, the act will be invalid, unless substantial performance is demonstrated; the Franklins Stores Pty. Ltd. case (supra at pp.965 et seq.). A statute which, on its proper construction, does not nullify the act in question, even for total non-observance of the stipulation, is also described as directory in its terms; Victoria v. The Commonwealth (supra at pp.118, 162, 179, 180)."

Professor Pearce summarises the position as follows (ibid p.174):
"The only guiding principle will be the statute and from it the court will have to glean one of three intentions in regard to the designated procedure: (a) that strict compliance is necessary together with the degree of 'substantiality'; or (c) that compliance is not a precondition to the action taken. Breach of (a) or (b) will result in invalidity but no adverse consequences will flow if (c) is found to apply (unless some separately designated penalty is included in the legislation)."
I would respectfully agree with what is there said. Usually there will be one of three situations. Sometimes strict compliance is required; otherwise an act will be invalid. In other cases substantial compliance will be sufficient; in such cases there will sometimes be questions of how substantial the compliance must be. In yet others there may be no compliance at all, but the validity of the act in question will not be affected. Sometimes a case will not lend itself to any question of substantial compliance. There will either be actual compliance or no compliance with the result that the only question is whether, if there be no compliance, invalidity results. Such a case was, in the view of Stephen J., Victoria v. The Commonwealth (supra) where invalidity did result. Another is Montreal Street Railway Company v. Normandin (1917) A.C. 170 where invalidity did not result.

An example of a case where substantial compliance was sufficient, but non-compliance would have been insufficient, is Samuel Montagu & Co. Limited v. Swiss Air Transport Co. Limited (1966) 2 Q.B. 306 where consignors of bullion sought to overcome reliance by a carrier on provisions of the Warsaw Convention which enabled it to limit its liability. The Convention required the consignment note to contain a statement that the carriage was subject to the rule relating to liability established by the Convention. It further provided that if the note did not contain, inter alia, such a statement, the carrier should not be entitled to the benefit of the provisions which excluded or limited his liability. The consignment note departed from the precise language of the Convention but it was held that it substantially complied with the result that the carrier was entitled to the limitation of liability for which the Convention provided.

With these principles in mind it is possible to return to the provisions in question. It is to be observed that the ground provided for in para.149(4)(a) has two limbs. Broken up the paragraph provides for the entry of an objection on the ground that the bankrupt is able to make a significant contribution to his estate and/or that the bankrupt is likely within five years from the date of the bankruptcy to be able to make such a contribution. It seems to me that there may be many ways of stating the ground or grounds to be relied upon pursuant to the paragraph. One might state them or both of them, in terms as was done by his Honour when allowing the amendment. One might state them, or one of them, and add particulars, for example, the bankrupt is likely within five years from the date of the bankruptcy on 1 January, 1983, to be able to make a significant contribution to his estate because on 1 January, 1987, he will become entitled to the residuary estate left him by his father under his will. Or one might state the facts without using the words of the paragraph at all; that is, in the example I have given, one might state what I have described as the particulars and not the ground in terms. A similar course could validly be taken in relation to the grounds specified in the other paragraphs. For example, it would be a sufficient statement of the ground specified in para.(d) to say that the bankrupt, in the period of two years prior to his bankruptcy, gave valueless cheques on specified occasions or a specific number of times.

There may be a question as to whether objections stated in these terms complied strictly with the provisions of the legislation or whether, if stated in these terms, they amounted to substantial compliance with its terms. I am inclined to think that they state the ground strictly, but if that view be incorrect, they state it substantially. I do not need to resolve this question. All I need to say is that it is enough, in my opinion, if there be a substantial compliance. But I would reject the notion that there can be a valid objection entered even though there has been no compliance with the section at all. For reasons earlier given the entry of an objection will fundamentally affect the change in the status of a person which would come about but for its entry. Only if an objector shows that he has addressed his mind to the right question should an objection be allowed to stand. In my opinion this view of the legislation is supported by the emphatic words with which sub-sec.149(4) opens, namely, "An objection shall not be entered . . . . . otherwise than on one or more of the following grounds".

The question then is whether the statement of the ground here was in compliance or substantial compliance with the section. The first problem is to endeavour to understand its meaning. It said, "That the bankrupt is likely before the date of his discharge from bankruptcy to be in a position to make a significant contribution to his estate".

A possible meaning of the ground as stated is that reference to the date of discharge from bankruptcy is a reference to the date when the appellant would, subject to the entry of the objection, be discharged by operation of law pursuant to sub-sec.149(1), i.e. 18 September, 1982. If that were its meaning, I would be of the opinion that the objection complied substantially with the section. The date is within the period of five years from the date of the bankruptcy specified in para.149(4)(a) and the objection was purportedly based only on the limb of the paragraph which depends on the likelihood of the bankrupt making a significant contribution within five years from the date of the bankruptcy.

However, I am unable to accord such a meaning to the objection. It seems to me to mean, "before the date of his discharge from bankruptcy" whenever that may be, and thus to be based on the notion that the appellant would be likely to be able to make a contribution at some time in the future, but before his discharge whenever that might be. I am reinforced in my view of the meaning of the words by the fact that the very purpose of the entry of the objection was to prevent the discharge by operation of law for which s.149 provides. Once an objection was entered, 18 September, 1982, ceased, subject to the objection lapsing or being withdrawn beforehand, to be a relevant date. I think that makes it most unlikely that the trustee had in mind 18 September, 1982, as the date by which it might be expected that the appellant would be likely to be in a position to make a contribution. Indeed, if that is what the trustee had intended, one might have expected him to say so in terms.

In my opinion what the objection contemplated was that at some future unspecified time, but before the appellant was discharged upon an application made to the Court pursuant to s.150 of the Act, it was likely that the bankrupt would be able to make a contribution. It follows that the objection did not comply either strictly or substantially with the provisions of the legislation pursuant to which the trustee purported to enter it. That must follow, if for no other reason than that the time when the contribution might be expected could well be beyond the end of the five year period for which para.149(4)(a) provides. It follows that in my opinion the objection was not a valid objection and had no effect.

In reaching my conclusion I have paid some attention to the question of whether it is relevant to take into account whether the appellant was, or was capable of being, misled by the form of the objection. In this respect it should be mentioned that an attempt was made by the appellant in his argument to draw upon authorities which emphasise the penal nature of bankruptcy proceedings and insist on strict compliance with the provisions of the Act which relate to the form of bankruptcy notices. I do not think that any subjective element is involved, nor do I think that the cases on bankruptcy notices have any relevance. In my opinion the sole question is whether the form of the objection is such as to indicate reliance in substance upon one of the specified grounds in sub-sec.149(4). Unless it emerges reasonably clearly that the objector has directed his mind to the right question, there can be no valid objection.

Reliance was placed by the trustee on sub-sec.306(1) which provides that proceedings under the Act are not invalidated by a formal defect or an irregularity unless the Court is of opinion that it has caused substantial injustice which cannot be remedied by an order of the Court. Although I consider the objection to be a proceeding under the Act for the purposes of this provision, I do not think that the defect is formal nor is it a mere irregularity. For reasons already given the defect goes to the very substance of the matter.

It follows that at the date his Honour made the order pursuant to para.33(1)(b) allowing the amendment of the objection, the appellant had been discharged by operation of law. No valid objection pursuant to para.149(3)(c) had been entered. The objection being a proceeding under the Act, his Honour had power to allow the amendment of it. But in my opinion the amendment was futile and should not have been allowed. The appellant having been discharged, amending the objection achieved nothing. In reaching this conclusion I have taken into account the decision of this Court in Streimer v. Tamas (1981) 37 A.L.R. 211. But the provision under consideration in that case (sub-sec.41(6A)) was one which empowered the Court to extend the time for compliance with a bankruptcy notice. The majority were of opinion that the power might be exercised even though the time for compliance had expired. However, their reasons show that their decision was based upon their view of the proper construction of sub-sec.41(6A). In their opinion the sub-section specified the steps which had to be taken before the expiry of the notice. If one or both of these steps were taken, the Court's power to extend time would arise and could be exercised whether the time for compliance had passed or not. Furthermore, in the normal course notice of the steps which had to be taken before the time for compliance had expired would come to the notice of the creditor. He would be unlikely to be much inconvenienced if an extention of time were granted ex post facto, notwithstanding that the effect of the extension would be to nullify the act of bankruptcy which would otherwise have been committed.

Here a different provision of the Act is in question and the circumstances themselves are quite different. The Act plainly evinces an intention to allow a bankrupt a discharge after three years unless the procedure for which it provides is followed at least in substance. Her it was not. The appellant was in fact discharged on 18 September, 1982. The amendment should not have been allowed.

For the reasons I have given I agree in the orders proposed by Sweeney J.

JUDGE3

This is an appeal against an order of a judge of this Court refusing to grant a discharge from bankruptcy sought pursuant to the provisions of s.150 of the Bankruptcy Act, 1966 ("the Act"). In the application for discharge, the appellant sought to take a preliminary point that, although a purported notice of objection to his discharge had been filed by the prescribed date, such objection was bad in form in that it departed from the grounds of objection provided by the statute. The notice of objection was therefore, he argued, a nullity. It followed, he said, that in the absence of a valid notice of objection, he was discharged from his bankruptcy by operation of law upon the expiration of three years from the date of his bankruptcy.

During the hearing of the application, the learned judge allowed an amendment of the notice of objection so as to pick up the language of the statute in its statement of the grounds of objection. The bankrupt challenges that amendment as being beyond power and as an improper exercise of discretion in that connection. He further seeks to dispute the findings of the learned judge on the merits of the application itself.

When the hearing of the appeal commenced, it was agreed by both parties that the Court should deal first with the preliminary point of the efficacy, if any, of the notice of objection filed.

That question turns on the construction of s.149 of the Act. Paragraph 149 (2) (b) provides that, subject to the other provisions of s.149, a person who was an undischarged bankrupt immediately before the commencement of s.72 of the Bankruptcy Amendment Act, 1980 is, by force of the section, discharged from bankruptcy upon the expiration of three years from the date of the bankruptcy. By para.149(3) (c) it is provided that a bankrupt is not discharged if (inter alia), the trustee has entered, or a creditor has, with the leave of the Court, entered, an objection in accordance with the prescribed form and in the prescribed manner. By sub-section 149(4), it is provided that an objection shall not be entered otherwise than on one or more of the four grounds there specified.

But for the entry by the trustee of an objection purportedly pursuant to para.149(3)(c) of the Act, the appellant would, by reason of the operation of para.149(2)(b) thereof, have been discharged from his bankruptcy on 18 September, 1982. The trustee's objection was entered on 19 November, 1981. The form of the objection, omitting formal parts, was as follows:
"I, FRANCIS JAMES PEARCE, Official Receiver for and on behalf of the Official Trustee, object to the discharge of

ERNST ABRAHAM SIEWERTSZ VAN REESMA (sic)

from bankruptcy by force of Section 149 of the Bankruptcy Act, 1966, on the following grounds:

That the bankrupt is likely before the date of his discharge from bankruptcy to be in a position to make a significant contribution to his estate."

Sub-section 149(4) of the Act provides, so far as it is relevant:
"An objection shall not be entered under paragraph (3)(c) otherwise than on one or more of the following grounds:

(a) that the bankrupt is able, or is likely within 5 years from the date of the bankruptcy to be able, to make a significant contribution to his estate;"

It is to be observed that the ground stated in the notice of objection does not follow, in terms, the language of para. (a) of sub-section 149(4). The essential difference is that the ground as stated refers to the likelihood of a contribution "before the date of his discharge from bankruptcy"; the section refers to the likelihood of a contribution "within 5 years from the date of the bankruptcy".

Paragraph 149(3)(c) requires that an objection be entered accordance with the prescribed form and in the prescribed manner. Rule 49 provides that, for the purposes of the paragraph, a person may enter an objection by filing a notice in accordance with Form 23 in the first schedule "at any time before the bankrupt would have been discharged but for sub-section 149(3) of the Act". Form 23 indicates that the grounds of objection are to be stated but it does not prescribe their form. In that sense the notice of objection here was in the prescribed form. Such defect, if any, as it has lies in the statement of the ground, a matter which is not the subject of any specific prescription in the Rules or Forms.

The appellant first submits that the notice of objecttion, by reason of its alleged erroneous statement of the ground provided for in para.149(4)(a) of the Act, was not effective to prevent the operation of para.149(2)(b) with the result that he was discharged from his bankruptcy on 18 September, 1982 by operation of law. The appellant relies also upon the above quoted words from r.49 which provide for the entry of an objection before the bankrupt would have been discharged but for sub-section 149(3) of the Act.

Secondly, and alternatively, the appellant submits that, notwithstanding the width of the language of para. 33(1)(b) of the Act his Honour had no jurisdiction or power to allow the amendment of the ground after the period provided for in sub-section 149(1) had expired. Alternatively, he should be taken to have submitted (the matter is not spelled out in the grounds of appeal, but he appears in person) that, questions of jurisdiction and power aside, it was a wrong exercise of his Honour's discretion to allow the amendment after the period provided for in sub-section 149(1) had expired.

We have not yet heard argument on the second submission as we propose to deal now only with the appellant's first submission since it is in the nature of a preliminary point which could dispose of the whole appeal.

In considering whether a valid notice of objection was entered in the present case, it is first necessary to determine whether the prescribed "form" and "manner" requirements have been complied with. In this connection, while form 23 calls for a statement of grounds, it affords no particular guidance as to the terms in which those grounds are to be stated. In the absence of the prescription of any specific manner in which the grounds are to be stated, the objector may describe his grounds in any appropriate way (see Downey v. Pryor (1960) 103 C.L.R. 353 at p.362.)

In my opinion, although a literal reproduction of the terms of para. 149(4)(a) would, of course, satisfy the requirements of the statute, such a reproduction is not essential: it would suffice if the substantial effect of the provision were stated (see Samuel Montagu & Co. Ltd. v. Swiss Air Transport Co. Ltd. (1966) 2 Q.B. 306; Nichol v. Thompson (1976) 12A.L.R. 528. Pearce Statutory Interpretation in Australia, 2nd Ed. (1981) at p.174). Indeed, a slavish following of the language of the statute may be relatively uninformative, at least in the absence of further and better particulars. This is especially so in the case of para.149(4)(a). It has two limbs, one in which the current position is looked at and another limb, in which a prediction as to what is likely to be the position is assayed. Thus, merely to reproduce the terms of the paragraph is to raise two very different cases even if it is accepted that such cases are, strictly speaking, not inconsistent but alternative.

The present notice of objection, if it does anything, attempts to fasten on the second, rather than the first, limb of the paragraph. So much appears from the reference, in the notice, to the likelihood of future contributions. Under the second limb, the statute delimits a period of five years as the required time span in which the bankrupt is likely to be able to make the required contribution. The notice does not refer to that period. Rather, it selects the time which had to elapse before the bankrupt's discharge would occur. In the context of s.149, this could only be read as a reference to the date upon which a discharge would occur by operation of law, that is, three years from the date of the bankruptcy. In other words, the notice should be construed as a reference to the future position and, in particular, to the second limb of para.149(4)(a) as distinct from its first limb.

The question then arises: is a notice of objection based on the second limb still valid if it refers to a period which is shorter than that specified in the paragraph? In my opinion, it is.

In the first place, it may be said that it is necessarily implicit in an allegation that a bankrupt is likely to be able to make a particular contribution within a period of three years from the date of his bankruptcy that he is likely to be able to do so within a period of five years from that date: the shorter period must be comprehended within the longer one. In the second place, in my view, the departure from the exact language of the paragraph in the notice can, if necessary, properly be regarded as no more than a falso demonstratio. That is, a fair reading of the notice indicates, I think, an intention to object to the discharge on one of the grounds described in para.149 (4) (a). To the extent that, in this connection, there was a failure to reproduce the precise language of the statute, it is an appropriate case for the application of the maxim falso demonstratio non nocet (see Wingadee Shire Council v. Willis (1910) 11 C.L.R. 123 at pp. 144, 148).

On the other hand, the appellant contended that the provisions of sub-sections 149(3) and (4) require strict compliance with the consequence that the departure from the language of those provisions in the notice of objection in the present case meant that no effective objection was entered. In support of his submission, the appellant pointed to the serious consequences which flow from the entry of a notice of objection, namely the suspension of an "automatic" discharge by operation of law after the statutory three year period. This, he urged, demonstrates a need for strict compliance with the requirements of the Act in all relevant respects.

In this connection, the appellant argued that an appropriate analogy may be found in the approach taken by the courts to the construction of a bankruptcy notice. It is well established that such a notice, being quasi-penal in character, should be strictly construed so that an error in the notice which is capable of misleading the debtor can vitiate it (see James v. Federal Commissioner of Taxation (1955) 93 C.L.R. 631 at p.644). The appellant says that a similar approach, strict as it is, should be taken to a notice of objection in terms of any departure from the statement of the statutory grounds presscribed by para. 149(4) (a).

In my opinion, the approach contended for by the appellant is unduly rigorous in the present context, whatever force such a submission may have in the context of a bankruptcy notice. In this respect, it is significant, I think, that sub-section 149(3) calls for no response to the notice of objection on the part of the bankrupt. The notice is not intended to operate as a pleading or anything like it. It does not determine any issue, finally or otherwise, between the parties. What the notice does is to suspend the "automatic" discharge until such time, if at all, as an order of discharge is made by the court in an application made to it in that behalf pursuant to s.150. Whilst, therefore, the notice of objection is of the utmost importance to the bankrupt in this general way, it is not analogous to a bankruptcy notice insofar as that type of notice requires a specific response to its terms on the part of its addressee, the debtor. In that context, one can readily appreciate why the view has been taken that a debtor should not suffer the quasi-penal consequences which flow from failure to comply with the terms of a bankruptcy notice if those terms could mislead him.

At the same time, it must be assumed that the Parliament intended that a notice of objection would only be entered, if at all, after the officer charged with responsibility in this connection had properly directed his mind to the question of whether the circumstances of the case, as known to him, justified its entry upon a particular statutory ground or grounds. But, in my view, granted the gravity of the consequences of entry of the notice of objection, no proper analogy is to be found in the approach taken to the construction of a bankruptcy notice. For one thing, the notice of objection requires no response or answer on the part of the bankrupt. For another, the ground of objection is not necessarily even an issue in any application to the court for discharge. It may well be so in some cases. Indeed, usually it would be one of the matters relied upon by an objector to the discharge when the matter came before the court. Nevertheless, if, for example, because of a change of circumstances in the meantime, a ground of objection valid at the time of entry came to lack foundation, presumably it would not be raised by an objector as an issue in the application for discharge. In such a case, the ground of objection would be of little more than academic interest. Such a case may be rare but it serves to illustrate the limited, suspensory nature of the notice of objection. It further indicates why the bankruptcy notice analogy urged by the appellant is difficult to sustain.

In my opinion, the notice of objection in the present case gave a sufficient indication that it was grounded upon the circumstances described in the second limb of para. 149(4) (a). On its face, the notice refers to s.149 and, in my view, it is reasonable to infer that the notice intended to pick up one of the grounds in para.149(4) (a). It should be read accordingly.

It follows, in my opinion, that the notice of objection was validly entered. I would therefore determine the preliminary point adversely to the appellant and, to this extent, I would dismiss the appeal. In those circumstances, it is unnecessary for me to consider the effect, if any, of the amendment allowed by the learned judge.