Williams, L. v Claude Neon Ltd

[1982] FCA 176

I N THE COURT OF INSOLVENCY 1 1

OF THE STATE OF SOUTH AUSTRALIA )

AT ADELAIDE

B/N No. 609 of 1981

EXERCISING FEDERAL JURISDICTION i	\
I N BANKRUPTCY
BANKRUPTCY DISTRICT	i

OF THE STATE OF SOUTH AUSTRALIA I

m:  L. iJILLIAMS

a debtor

EX PARTE: CLAUDE NEON LIMITED

a c red l tor

JUDGEMENT

c

12 th August 1981 R o g e r s o n J.

. . :  - ",'

T h i s a p p l l c a t l o n 1 s L 0 s e t d s ~ r l e bdrrkruptcy notice No. 609

o f 1981 on t h e ground O f I t s lnva l lc l l ty . The n o t l c e was served on

/

t h e d e b t o r on a day ca re l e s s1y s td t ed 111 t 5 e a ~ p 1 1 c d n t ' s a f f l d a v l t

t o h a v e b e e n 1 9 t h i l a r c h , 1 5 3 1 , b u t I n f a c t c e r t a l n l y a f t e r 3 r d J u n e ,

1981, and on 24th ;un?, :>PI, a d3y w j ~ l c h 11 war. n o t contes ted was

wl th ln t he 14 c!ays s t l ]?ulat ,ed oy a e c t l o n /&l ( 5 ) of the Eankruptcy Act,

1966, the debtor gave wl1.3t 1 s cleerl:; a s u f f l c l e n t n o t l c e t h a t h e

d i spu ted t he va l i . d l ty of t!Ie no t i cc on t t ~ c [:round OJ" r l s - s t a t emen t of

the anour~t due . The bankruptcy ncjt~.ce clalnms a sum o f 517,135.15,

said by the r e sponden t ' s counse l , ( a l t i l o u c h The n o t l c e nowhere says

s o ) t o have been made up 01 I o u r co:?pcnents, VIZ . , a Judgment debt of

$16,500, c o s t s on t h e ~ u c j r n ~ e n ~ ef ,,:?10.65, ,!I?.OO f o r subsequent fees

and	cos t s	l nc lus lve o f	t he ce r t :	I l c :3 t e	o f	Jutlg-nent,	and	l n t e r e s t on
the	~udgment	c iebt .	I	deddce	LhaL	t;le amount	c i a lmed	as l n t e r e s t was

'15413.50. The no t l ce does no t say s o . Counsel told me t h a t he had

c a l c u l a t e d t h e amohnt O C 1nteresL due nct from t h e da te o f Judgment

but €rom t h e 1ssuc of the summon5 111 tble a c t l o n I n the Local Court of

Adelalde. I t 1s c l e a r l y lmpernnsslble t o c l a l m l n t e r e s t on a Judgment

from a d a t e be fo re Lhat :jurlg;lncnt 1.5 21 r:ncd, 2nd f o r t ha t r ea son a lone

t h e sum clalmed I n n o h c e must exceer: t i?e amount I n f a c t due under the

Jud&nent.	I t ls, of course , the	case	That,	un,der	Lectlon	107	of	the
Loca l	and	D l s t r l c t	Crlralnal	Courts	; ,c t ,	192L-1975,	l n a Judgment by

d e f a u l t I n r e s p e c t of a deb t or llc!ul.lated claim the 7 l a l n t l f f may, i f

h e t h e n m a n ~ f e s t s t h e d e s l r e , SI an .~ur:,:rr:cnt f o r t h e m o u n t of t he

claim, together vnth lnte . -cs t r'ron, Lhe dn%e of t he f l l l n g o f the c la im

to the da te o f s lgn lnf ; Jud@enL, on so rlluch of the c la im as does no t

consist o f i n t e r e s t . The respondent p l a l n t l i f dld not i n f a c t do

t h l s , and t h e sum f o r h l c h :u.lg:rent 'via5 sqzned was the save as t h e

amount clalmed. The sm clnimed 1 1 1 t he bankrup tcy nc t i ce t he re fo re

exceeds the amount I n f a c t due.

..

* I

'There a r e two f u r t n e r mdt1-pr-z hhlc!! I n my view a l s o make t h e

I

amount c l a m e d I n the banPruptcy no t lce excessive. F l r s t , c o s t s ,

/

/

/' under Sect lon 255 o f the last-r , ,en t loneci Act, are taxed by t h e c l e r k o f

a

t h e c o u r t . 'The p rocess , 111 a defaul l; J U ~ I & I I e n t , ~ s / p u r e l y m e c h a n l c a l

one done by r e f e r e n c e t o ~ c h e & ~ ~ l e s nldr!e unf-ier The r u l e s , b u t t h e

process 1s n e v e r t h e l e s s 111 my vlew one of taxmy: costs . To " tax" ,

a c c o r d l n g t o t h e j h o r t e r imxford Lngl lsh Dlc t lona ry , 1s " t c determine

t h e amount o f ; t o a s s e s s " . Noxw, a e c t l o n l j 7 ( 2 ) o f t h a t Act provldes

t h 2 t a Judgment or c r d e r , 111 so far as ~t p r o v l d e s for t h e payment of

c o s t s , s h a l l n o t be enfcrcecl u n l e s - the defew2ant has been e l the r per-

sona l ly s e rved w i t h , o r Seen s e n t by [-c?t , a l p t t e r s e t t l n g f o r t h t h e

amount of t h e t a x e d c o s t s . Ths 15 an e q t l r e l y r e a s o n a b l e p r o v ~ s l o n ,

f o r a de fendan t aea lns t whom a default ;udri;me~t has been glven, wlll

n o t kno.w, u n t l l t o l d , what t o t a l sum f1e has t o pay. The summons w i l l ,

o f course , have to ld ln h t h e amounl; clalnlcr: I n a l lquldatec! c la lm,

and w i l l have specxf l ed ce r t a ln of [.he c o s t s o f tlle a c t l o n , b u t n o t a1

of therh. A defendant cannot CO17Jply ; n t h hls obligation t o pay u n t i l h

knows how much he l:, obllged 'C'J pay, and ]le rdust be p v e n t h e o p p o r -

t u n l t y voluntarily to rlt.?clx+rce 111s ob1 t rcJ t lon bcfore enforcement

p r o c e d u r e s a r e r e s o r t e d t o . Now, no such l e t t e r was served on or sent

t o t h e a p p l l c a n t , and t'ne Judgment, so Car a s I t p r o v l d e s f o r t h e pay-

ment of t h e c o s t s o f J.21C.G';, d p p a r r , :.o !-:e n c t t o bc enforceable

a g a l n s t t h e a p p l l c a n t t o t h s t e x i e n t . I can see nothlnE I n the Act

t o restrict, t h e c p e r a t 1 o a of L e c t ~ on 153 ( 2 ) t o con te s t ed ac t lons . I

1s no t poss tb l e , o f cou r se , € o r a bdnb.rIlptcjr n o t l c r t o be I s s u e d f o r

sum whlch exceeds t h a t f o r , + ~ L c ~ I execut ldn I u l l : ? t l a v f u l l y be l ev i ed .

L a s t l y , I do not thmK thdt the I 'ee ci larged € o r obtainlnl?; a

c e r t l f l c a t e o f ~udgrnent , ancl t h e charge wnlch a p r n c t l t l o n p r 1s en-

titled under the Act to md.e Cor cioln,., m, a r e em whlch ought t o W

.1, .. -

inc luded I n a bankruptcy noLlce. 'l'tlr.se 1Lrms are, a s t h e c e r t l f l c a t e

l t s e l f s a y s , s u b s e q u e n t t o t he amount ordered to be p3id.

i v e n If I am w o n g on t k e s e 1;s: t L 3 0 : : ,+r te rs there can , how-

ever , be no doubt a t all t h a t an exces31ve a.;lount has been claimed I n

r e s p e c t o f I n t e r e s t . The Sanl..raptcy n c t l c e 1.s lnvalld and any

p e t l t i o n b a s e d on f a l l u r e t o c3'ilply v11 tn lt xo~ : ld be bound t o f a l l .

I t h i n h t h a t it 9wou13 have ;leen l n v 4 l d wlthou~ a n y a p p l l c a t l o n t o

the Court having to be made, but fr,r tbe avoidance of doubt I formal ly

dec la re t ha t bankrup tcy no t l ce 1.0. 6L3 of 1;jSl 1s l n v a l l d .

Q u l t e a p a r t frorn ;eci;i.on h1 ( 5 ) o f t h - ?anl;ruptcy Act, 1366,

the r l o t l ce 1s l n v a l l d . : . l t h m t s a y l n y s o , It I n f a c t c l a l m s a sum by

way o f l n t e r e s t o n tl:c ,)urlperl t , arld ~t :10es noL q ta t e t he pe r lod for

which	I n t e r e s t	1s	c l a m & ,	n o r	thc	amount	cf	I n t e r e s t .	I t was	ob jec t ed
by b;r.	Jordan ,	€o r t he	r e sponden t ,	t t l a t	t hn	app l~can t	had	no	t	spec i f -

l c a l l y r a x s e d t h l s Issue In h ~ s appl lczLlon . 13ut how was t h e a p p l i c a n t

t o know rrom the bankrup tcy no t l ce t ha t t he excessive amount clalrced

was I n r e s p e c t of I n t e r e s t , ,\ken no aent lor , o f l n t e r e s t 1s made i n t h e

not lce? That was a rra tt8:r ~ C I ' - ~ I I I I n y peculiarly -:,I t h l n the knowledge o f

the respondent , s o f a r a s any ~ n T o r m e t l o n r w e n l e d by the bankruptcy

n o t l c e 1s concernpJ. In f a c r , l i l e d F p l l c c n t ' s ~ f f ~ d a v l t 1n suppor t o f

h i s a p p l l c a t i o n statps t h a t t h ? amcunt salu t o be due 1s excess ive ,

but , accordlr i ) ; to 14r. Jordan , he s ! i ~ u l c ' have done more, and, being

presumed t o know the la;*., oL:Fhi; t o Imve r e d l l s e d t h a t s t a t u t o r y i n t e r e s i

a t 5: '~ was helng clnlmed on t h e JuZpment, ~ : I Z only u p t o t h e d a t e o f

i s s u e o f the bankru7tcy no t lce . 3u L 1t 1s not t h e debtor's obll[:atlon

t o c a l c u l a t e	tlle	m o u n t of	I n t e r e s t htI1ci1	h e	15 r e c u l r e a	t o pay,	even
If he 1s g v e n I n the	not	lcc	lnEorm7rion	cn	,;,hlLh	be	r l & h t a c c u r a t e l y

do so . And In t h i s c a s e he ~ c u l d n o t , i n i a c t , have been Far t lcu lar ly

en l igh tened i f he hdl nwle d calculation for, as I h a v e s a l d , l n t e r e s t

o f t h a t wnlch was l awfu l ly

on the day be fo re t he no t l ce

was I s s u e d . I n any event I ttIlr ,k t h a t 1'; hard ly becalrle P!r. Jordan to

J conlplaln about tbe applicant' S plt,adln;::j. The r e s p o n d e n t ' s n o t l c e oi

oppos l t l on con ta lned	much	1rrelevanL mater ia l	and	dld	not ,	I n my	vleln
s p e c i f l c a l l y ? u t	l n issue	t'ne	a u p l l c a n t ' s	c o n t e n t l o n	t h a t	t h e	sum

clalmed exceedea the amuunt due. ilobrever, a t the hea r lng t he Issues

w e r e q u l t e c l e a r , and II rhs re were any Lreaches of t h e t h l e s or

l r r e g u l a r l t l e s colnrrntted by e l t n e r parLl they' f e l l , In my V ~ S W , wi th1

t h e scope of R u l - 155 and of : ;wtlon 3i36 o f the Act .

I r ega rd Plr. J c r u a n ' s l n w r p r 2 t a t l o n o f t he ca se or' Ex p a r t e

Commercial Iiankln,? Co. o f Sydt:ey L t d . , 23 A.I..R. 522, whlch he s a l d

saved t he no t l ce kleczuse o f t h e u s r I n i t , :ldmlttedly i n both para ( a

and para (b) of the ./:3rrlS "and nu more", as untenalble. That case la;:

I t dovm 'inat tt.e words "anci 110 n.or-e" nay be used I n a bankruptcy

not lce , proviaed thar : i t -ey :>re used I n a!?proprlate places and I n t h e

same sense throughoat. ti:e n u t l c e , n ~ t w ~ t h s t a n d ~ n$ t h a t t h e p r e s c r l b e d

form o f Jin!r.rupzcy notlce Zoes not contain them. I t d o e s n o t a f f e c t

the r u l e s , lair! L l w r ~ I n tbe c a s e s c l t e c by Lockhart J., t h a t If In -

t e r e s t 1s c l a l m c r i t h a t f a c t lwst be r c r e r r e d t o , the F e r l o d du r ing

whlch l n t e r e s t 1s clallncd Ilu-, t be s ;ec l r led , and the amount o f i n -

t e r e s t co r rec t ly ca l cL l l aLed . rtle L..lnm-u?tcy n o t i c e m u s t be s e t

as lde . The respondent ~~;ust Fay tlle a p p l l c a n t ' s t a x e d c o s t s .