Bendigo Bank Ltd v Scerri

REASONS FOR JUDGMENT 1 Bendigo Bank Limited petitions for a sequestration order against the estate of Joseph Anthony Scerri. The act of bankruptcy upon which the petition is based is the failure to comply with a bankruptcy notice that was founded on a judgment debt: s 40(1)(g) of the Bankruptcy Act 1966 (Cth). 2 The petition, which is not opposed, was returnable before a registrar of the Court. However the registrar was of the view that the bankruptcy notice might be defective and referred the petition to a judge. 3 The bankruptcy notice is in the form prescribed by reg 4.02 of the Bankruptcy Regulations. It states (in par 1) that the petitioner claims that the debtor "owe[s] a debt of 20,088.71 as shown in the Schedule" and (in par 2) that "the debt is due and payable". The notice requires (in par 3) the debtor to pay "to the creditor the amount of the debt or to make an arrangement to the creditor's satisfaction for settlement of the debt" within 21 days after the service of the notice. A place for payment is nominated in par 4. The notice warns (in par 5) that if the debt is not paid or settled, bankruptcy proceedings may be taken against the debtor. 4 Paragraph 7 of the notice is important. It provides: "In addition, within the time specified in paragraph 3 above, you may file an application to the Federal Court of Australia for an order to set aside this Bankruptcy Notice on the specific grounds that: (a) you have a counterclaim, set-off or cross demand equal to or exceeding the sum specified in this Bankruptcy Notice as owing to the judgment creditor; and (b) in the action or proceeding in which the judgment or order mentioned in paragraph 2 of this Bankruptcy Notice was obtained, you could not have set up that counterclaim, set-off or cross demand*.