Walker, A v Nobel Einsiedel P/L

[1992] FCA 970

JUDGMENT No. ...~.J.o...l..~I& -

IN THE FEDEFUG COURT OF AUSTRALIA )

)

VICTORIA DISTRICT REGISTRY	) No. VG 153 of 1992
)
GENERAL DIVISION	)
BETWEEN : ANTHONY WALKER	Appellant
AND	NOBEL EINSIEDEL PTY LIMITED

Respondent

THE COURT :	Sweeney, Burchett and Einfeld JJ
PLACE	Melbourne
15 October, 1992

3 0 DEC 1992

FEDERAL COUR' c)r

AUSTRALIA

EXTEMPORE REASONS FOR

Sweenev J

In this matter we have been dealing with two different subjects. In the first place the appellant seeks to challenge the exercise of discretion by M r Justice Northrop in refusing an adjournment of the hearing of the petition because the debtor had entrusted a trustee with the calling of a meeting of his creditors under part 10.

say that having had the advantage of reading the judgment of	task. For myself on that aspect of the case I would simply
Mr Justice Northrop, despite the careful argument of Mr Irlicht, I have seen no error in what his Honour did which would justify me in saying that his discretion had miscarried.
If contrary to that view I had been persuaded that there had been some such error, and I were required myself to exercise the discretion sitting in appeal, I must say that I would have exercised it in exactly the same way as his Honour did, and I would therefore dismiss the appeal so far as it related to that discretionary order.
The second aspect of the case is that the appeal challenges the order of his Honour in which he accepted the bankruptcy notice in this case as being an appropriate foundation for finding the act of bankruptcy upon which his Honour made an order of sequestration. His Honour again here expressed his reasons for being satisfied that it was proper torely upon the bankruptcy notice, and again Mr Irlicht has said everything in relation to what his Honour said about that
which could reasonably have been said by anyone.
Despite that I am not persuaded of any error on the part of his Honour and I would dismiss the appeal against the making the order of sequestration for the reasons his Honour gave being satisfied as I am that his Honour correctly interpreted the bankruptcy notice and correctly applied the current law to it. In the result I would dismiss the appeal in both respects.

As is well recognised, an appellant who seeks to overturn
a discretionary order of that character faces a difficult

I c e r t i f y that t h i s and the preceding two ( 2 ) pages are a true copy of the Reasons f o r Judgment herein of the Honourable M r Justice Sweeney

Dated: 15 October, 1992

Associate

IN THE FEDERAL COURT OF AUSTRALIA )

)

VICTORIAN DISTRICT REGISTRY	)	VG 153 of 1992
)
GENERALo DIVISION	)

BETWEEN :  ANTHONY WALKER
Appellant

AND:  NOBLE EINSIEDEL PTY LIMITED

Respondent

CORAM: Sweeney, Burchett and Einfeld JJ.
PLACE: Sydney

DATE : 15 October 1992

EX TEMPORE REASONS FOR JUDGMENT

BURCHETT J.:

I agree and I would add only two remarks. 1t was suggested in the appellant's argument that the passage in DeDutv Commissioner of Taxation IVic) v. Boxshall (1988) 83 ALR 175 at 181, where reference was made to the decision of Mr Justice Lockhart in Re Wimborne: Ex Darte Debtor (1979) 24 ALR 494 at 498-9 and to my own decision in Re McCormac: Ex ~arte	Tavlor (1985) 10 FCR 162 at 165-7, does not actually approve	that part of the decision in Re Wimborne where attention was
given to the proposition that the actual state of mind of the particular debtor is not relevant to the question of whether he could reasonably be misled - the question is rather to be answered objectively upon a consideration of whether or not the alleged defect in the bankruptcy notice could reasonably mislead, although that objective inquiry has reference to the particular debtor to whom the notice is directed. It seems to me that whether Boxshall should be regarded as endorsing that proposition or not, it is a proposition which has been accepted by numerous judges of the court, and that we should, as a full court, accept that it is correct.
The other matter is this. It was suggested by counsel for the appellant that the particular defect he identified in this case might have misled the debtor into thinking that the bankruptcy notice was defective, and that therefore he could ignore it. It seems to me that this is not the kind of thing that is contemplated by the classic test which asks whether a defect in a notice is such that it might reasonably have misled the debtor. I refer to what was said by me on that matter in Re McCormac (supra) at 165-166.

I certify that this and the preceding page are a true copy of the Reasons for Judgment herein of his Honour Mr Justice Burchett.

Date: 15 October 1992

IN THE FEDERAL COURT OF AUSTRALIA )

VICTORIAN DISTRICT REGISTRY	)	VG 153 of 1992
GENERAL DIVISION	1

BETWEEN:  ANTHONY WALKER

Appellant

AND:  NOBLE EINSEDEL PTY LIMITED

Respondent

CORAM.	Sweeney, Burchett and Einfeld JJ.
PLACE:	Melbourne
DATE:	15 October 1992

EX TEMPORE REASONS FOR JUDGMENT

EINFELD J.

The bankruptcy in this case was pronounced on 16 April 1992, just pllor

to which on 3 April the appellant signed an authority under section 188

of thc Bankruptcy Act appolnnng the trustee to which the learned

presiding judge has referred. This proposed meeting was the basis for

the adjournment apphcat~on made to Just~ce Northrop wh~ch is the first

subject of this appeal. The appellant has argued before the Full Court

that the refusal of the adjournment as a matter of discretion was contrary

to principle.

Reference was made to the remarks of Mr Justice Sweeney in Field v

Commercial Banking Companv of Sydnev Limited [l9781 22 ALR 403 at 41 1 setting out certain criteria appropriate for consideration in such circumstances. In particular criticism was made of the supposed failure of the learned primary judge to take adequately into account, first, the nature of the dealing between the parties since the debt which was the subject of the petition, and second, the proposed part X meeting.

It was also said that the learned primary judge allowed inadmissible evidence; failed to take into account a number of relevant matters, wrongly determined that the creditors wodd not be significantly advantaged by the administration of the debtor's affairs under part X; gave no or madequate weight to the absence of prejudice to the respondent in the event of an adjournment to awalt the part X meeting; and dld not pay sufficient regard to the fact that most of the debt had been pad

In my opin~on there is no substance to this ground of appeal. Nothing

was said in Field that an adjournment must or will generally bc granted

every time a part X meeting has been called or 1s pending, nor would

such a n ~ l e be possible without opening up a real opportunity for debtors

to avoid or delay bankruptcy by obsm~ctive unmeritorious conduct. As

it seems to me, Justice Northrop committed no legal error at all in not

granting an adjournment, still less an error of such principle as would
call for an interference with his exercise of discretion I agree with the
learned presiding judge that if, contrary to that view, an error of some

kind was made, I would myself have refused the adjournment as did the

primary judge.
The appellant also attacks the bankruptcy notice because it refers to two

judgments when there was only one. Well known authority was quoted

as to the effect of certain errors in bankruptcy notices. It was said that
the failure of this notice to comply precisely with form 4 to the rules

invalidates the notice per se. This argument is that the provisions of

section 41(l)(a) and rule 8 make complete compliance with form 4

essential to validity	In my opinion a textual deficiency of the kind that
exists h e ~ e	will, in accordance with authonty, only invalidate a

bankruptcy notice if it is capable of misleading the debtor as to what

needs to be done to comply with its ternls. T h ~ s notice is not so

capable. I would overn~le	the submission that the notice is bad on its
face.

The appellant next says that the notice is capable of nlisleadmg, but only

if, as on the facts of this case must be the approach, the questlon is

exarmned from the standpoint of a hypothetical debtor.	He is forced to
take this stance by reason of the fact that he is himself a practising
solicitor.	Not that all solicitors are or would be expected to be skilled
at bankn~ptcy	law, but no doubt all sol~citors who receive a bankruptcy

notice and lack the requisite knowledge, know where advice might be sought in this connection and how their rights might best be advanced and protected. No argument was therefore put that the appellant, the debtor in this case, might himself have been misled.

I would reject the consequent formulation propounded by the appellant

in this regard. I think it unjustifiable at this time to accept a formulation

which would invalidate a notice by which the particular debtor could not
reasonably have been misled but which might have deceived another

debtor who had no qualifications or background of a similar kind.

With the other members of the court I agree that the appeal must be

dismissed.

I certify that this and the preced~ng pages are a true copy of the

Reasons for Judgment herein of his Honour Mr Justice Einfeld.

Associate.

Datc:  15 October 1992