Wauchope Frames and Trusses Pty Ltd v Martin
[2006] FMCA 1138
•5 September 2006
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| WAUCHOPE FRAMES & TRUSSES PTY LTD v MARTIN | [2006] FMCA 1138 |
| BANKRUPTCY – Contested creditor’s petition – asserted invalidity of the bankruptcy notice supporting the petition – failure to annex to the bankruptcy notice a certificate of the judgment debt relied upon. |
| Bankruptcy Act 1966 (Cth), ss.41, 306 Bankruptcy Regulations District Court Rules Local Court (Civil Claims) Rules 1988 |
| American Express International Inc v Held [1999] FCA 321 Clancy v Robinson [2002] FMCA 47 Commonwealth Bank of Australia v Horvarth (1999) 161 ALR 441 Robert Hudson (Junior) v Donald & Anor (unreported, 12 August 1997 – NG7501 of 1997) Hudson (Junior) v Donald & Anor (unreported, 11 March 1998 – NG705 of 1997, BC9800703)Re Scerri (1998) 82 FCR 146 Thompson v Metham [1999] FCA 935 |
| Applicant: | WAUCHOPE FRAMES & TRUSSES PTY LTD |
| Respondent: | ROBERT KEITH MARTIN |
| File Number: | SYG1290 of 2005 |
| Judgment of: | Driver FM |
| Hearing date: | 8 August 2006 |
| Delivered at: | Sydney |
| Delivered on: | 5 September 2006 |
REPRESENTATION
| Counsel for the Applicant: | Mr A Ivantsoff |
| Solicitors for the Applicant: | GWM Lawyers |
| Solicitors for the Respondent: | Mr J Merewether Merewether & Co |
ORDERS
The creditor’s petition is dismissed with costs.
Bankruptcy notice NN735 of 2005 is set aside.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG1290 of 2005
| WAUCHOPE FRAMES & TRUSSES PTY LTD |
Applicant
And
| ROBERT KEITH MARTIN |
Respondent
REASONS FOR JUDGMENT
Introduction and background
I have before me a contested creditor’s petition. The proceedings began on 18 May 2005 with a creditor’s petition filed by different creditors. The present petitioning creditor was substituted by order of a registrar on 24 January 2006. An amended creditor’s petition was filed on 7 February 2006. The life of the petition was extended for an additional period of 12 months by order of a registrar on 16 May 2006.
On 3 March 2006 Mr Martin (the respondent debtor) filed a notice of intention to oppose the petition upon the basis that the bankruptcy notice supporting it[1] is invalid. Mr Martin asserts that regulation 4.02 and form 1 in the Bankruptcy Regulations and s.41(2) of the Bankruptcy Act 1966 (Cth) (“the Bankruptcy Act”) are not satisfied and that s.306 of the Bankruptcy Act does not apply. Mr Martin complains that the document attached to the bankruptcy notice purporting to be a certificate of judgment does not identify who the plaintiff is, who the defendant is, what the proceedings are or which Court the proceedings were in.
[1] issued on 17 March 2005
The matter was referred to me from the registrar’s list on 8 August 2006. On that day I heard argument on the validity of the bankruptcy notice and agreed to deal with the challenge to the creditor’s petition based upon the asserted invalidity of the bankruptcy notice as a preliminary issue. I made clear to the parties’ representatives that, if that issue is resolved in favour of the petitioning creditor, I would deal with any subsequent issues at a later date.
The evidence
The evidence in relation to the challenge to the bankruptcy notice comprises the affidavit of James Raymond Chapman filed on 18 May 2005 dealing with service of the bankruptcy notice upon the debtor and the affidavit of James Gordon McIntyre filed on 31 August 2005 dealing with the judgment debt supporting the bankruptcy notice. It is not disputed that the original petitioning creditors obtained a default judgment in the Local Court at Port Macquarie and that it is that judgment which purportedly supports the bankruptcy notice. Mr McIntyre deposed that he obtained the document evidencing the default judgment in accordance with common practice at the Port Macquarie Local Court and elsewhere.
It is also not disputed that the bankruptcy notice annexed to the affidavit of Mr Chapman is the bankruptcy notice that was served on Mr Martin. Annexure “B” to that affidavit is the purported certificate of judgment relating to the default judgment. It is headed “MINUTE OF JUDGMENT” followed by the words:
default judgment has been entered up for the plaintiff this day for the amount of:
$7,649.72 Claim
$ nil Interest
$ nil court costs and service fees
$626.56 professional costs
$8,276.28 TOTAL
DATED:
There then appears a stamp bearing the words “RECEIVED 10 JAN 2005 COURTHOUSE PORT MACQUARIE” and the signature of S Shields purporting to be that of the registrar. There then follows details of the name and address of the solicitor acting for the plaintiff. There then follows the words “NB. If the plaintiff desires to be advised of the particulars of the judgment, this document is to be filed in duplicate and the address box above completed”. The address box referred to was completed and contained the name and address of the plaintiff’s solicitor.
Submissions
Mr Merewether, for the respondent debtor, submits that the bankruptcy notice is invalid because it did not have annexed to it the judgment to which the bankruptcy notice related or a certificate of judgment.
He relies upon the decision of Katz J in Thompson v Metham [1999] FCA 935.
Mr Ivantsoff, who appeared for the substituted petitioning creditor, submits that the defect in the document annexed to the bankruptcy notice can be cured pursuant to s.306 of the Bankruptcy Act. He submits that the document constitutes a partial certificate of the judgment and relies upon the decision of Lindgren J in Robert Hudson (Junior) v Donald & Anor (unreported, 12 August 1997 – NG7501 of 1997). That decision was affirmed on appeal by the Full Federal Court in Hudson (Junior) v Donald & Anor (unreported, 11 March 1998 – NG705 of 1997, BC9800703).
Reasoning
The document annexed to the bankruptcy notice served on Mr Martin is the second page of form 22 in the Local Court (Civil Claims) Rules 1988. The use of that form (which is in fact an affidavit of debt) is a well established procedure to identify a judgment debt in the Local Court of New South Wales. This Court has previously held that the use of a similar procedure to identify a judgment debt in the District Court of New South Wales is sufficient to meet the requirements of Form 1 and the Bankruptcy Regulations[2]. I accept that if a complete copy of form 22 had been annexed to the bankruptcy notice the judgment debt would have been sufficiently identified. A complete form 22 would meet the description of a certificate of the judgment. In Robert Hudson (Junior) v Donald at first instance Lindgren J dealt with the absence of a complete certificate of judgment in the following terms:
The second defect on which Mr Hudson relies is that, as noted earlier, there was not attached to the bankruptcy notice a copy of the judgment or order relating to Mr Whalan. The way in which Mr Hudson put his case in this respect is that Bankruptcy Reg 4.02 requires the attachment of the certificate. It does not do so in terms. However, again as noted earlier, the prescribed form of bankruptcy notice (Form 1) refers to the attachment of “[a] copy of the judgment or order relied upon by the creditor”. In the present case, for lack of a document relating to Mr Whalan, the attachment was incomplete. So far as “Annexure A” to the present bankruptcy notice revealed, Mr Hudson had been ordered to pay only $2770 to Mr Donald. Should the absence of a copy of a judgment or order relating to Mr Whalan lead to a setting aside of the bankruptcy notice?
Again, I think the question is answered by subs 306(1) and the fact that Mr Hudson could not reasonably have been misled, embarrassed or confused. Nor has any injustice been caused by the incompleteness of the annexure. Mr Hudson knew that the attachment was incomplete, as his affidavit sworn 6 May, referred to earlier, demonstrates. He also knew that Magistrate Cocks had made an order which operated identically as regards the two Creditors. He must have known that a copy of the judgment or order relating to Mr Whalan would be, mutatis mutandis, identical in form to that relating to Mr Donald which was annexed to the bankruptcy notice. I would also refuse to set aside the bankruptcy notice on the ground of the second defect.
[2] Clancy v Robinson [2002] FMCA 47
In the appeal judgment, the Full Court simply found that no viable ground of appeal had been raised.
In Thomson v Metham Katz J was dealing with a purported certificate of judgment from the District Court of New South Wales. He found that the document attached to that bankruptcy notice was not in the prescribed form under the District Court Rules and contained factual errors. His Honour said at [22] that:
…if a document other than a copy of the relevant judgment itself is being relied upon, the particulars of the judgment which that document contains must at least be substantially accurate, something which was manifestly no so in the present case.
His Honour referred with approval to the decision of Beaumont J in
Re Scerri (1998) 82 FCR 146. There, His Honour held that a bankruptcy notice was invalid if it did not contain particulars of the judgment supporting it and that the defect could not be cured pursuant to s.306. The same conclusion was reached by Finkelstein J in Commonwealth Bank of Australia v Horvarth (1999) 161 ALR 441 and by Kenny J in American Express International Inc v Held [1999] FCA 321.In the present case, the bankruptcy notice served upon Mr Martin asserts that Mr Martin is indebted to the then debtor in the amount of $8,276.28, and in the schedule on page 6 of the notice asserts that that sum is owing pursuant to some judgment or order. The obvious purpose of requiring the judgment or order (or a certificate of it) to be annexed to the bankruptcy notice is to identify for the debtor what judgment or order supports the asserted debt. The second page of the Local Court form 22 annexed to the bankruptcy notice informs the debtor that the sum of $8,276.28 was ordered to be paid pursuant to a default judgment and the stamp on the document informs the debtor that the default judgment was apparently obtained in some unidentified court at Port Macquarie. There is a signature of a registrar, although the particular court is not identified. Neither is there any identification of the parties to the judgment or a matter number.
In my view, the provision of a copy of a minute of judgment, being the second page of Local Court form 22 cannot constitute a certificate of judgment because the Court, the parties and the particular proceeding are not identified. These are essential details required by a debtor to satisfy himself that a debt is owing as a result of a particular court judgment. This is particularly important where the judgment is obtained by default. I do not accept that the document annexed to this bankruptcy notice is a partial certificate of judgment which can be cured by resort to s.306 of the Bankruptcy Act. Rather, it is not a certificate of judgment at all and is incurable. This matter id distinguishable from Hudson v Donald. In that case a certificate of judgment relating to mutual creditors failed to refer to the relevant creditor, but was otherwise complete. Here the judgment supporting the bankruptcy notice is not identified at all. The essential requirement of the Bankruptcy Act and Regulations to give particulars of the judgment or order relied upon has not been met. It follows, and I find, that the bankruptcy notice is invalid. In view of that invalidity, the creditor’s petition must be dismissed.
Costs should follow the event.
I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of Driver FM
Associate:
Date: 5 September 2006
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