Bonds Industries Ltd v Sing

Telephone 03-92899333" 8 There is no such thing of course as the Federal Court of Victoria. What was intended to be referred to was the Victoria Registry of the Federal Court of Australia. That, however, was not the critical error. At the time when the bankruptcy notice was issued and at the time when the Official Receiver authorised the extension of the period for service, the address of the Victoria Registry of the Federal Court of Australia was 450 Little Bourke Street, Melbourne, Victoria, 3000. 9 However, on 22 March 1999 the Victoria Registry moved to a new address, following the opening of the Commonwealth Law Courts Building on the corner of William and Latrobe Streets in Melbourne. The new address was Level 7 of that building. In addition, the telephone number changed. Thus, at the time when the bankruptcy notice was served on 25 March 1999, the bankruptcy notice did not state correctly the address of the Federal Court Registry for the State in which the Debtor resided. 10 The question before me is whether that defect is fatal or whether it can be ignored by reason of the operation of section 306 of the Act. Section 306(1) relevantly 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." 11 The Debtor did not appear before the Registrar and, although the Debtor was notified that the proceeding had been referred to me for hearing today, there has been no appearance for the Debtor today. There is no material before me to suggest that any substantial injustice has been caused by the defect to which I have referred. The question, however, is whether the statement of an address at the Registry of the Court which is wrong at the time of service of the notice, is a formal defect or an irregularity, so as to attract the operation of section 306. The Registrar's concern in the light of decisions of this Court, was that it may not be properly characterised as a "formal defect" or "an irregularity". 12 A bankruptcy notice is a nullity if it fails to meet a requirement made essential by the Act, or if it could reasonably mislead a debtor as to what is necessary to comply with the notice - see Kleinwort Benson Australia Limited v Crowl (1988) 165 CLR 71 at 79. There is no requirement of the Act which states that the address of the Federal Court must be stated in a bankruptcy notice. 13 The position may be different in relation to the address at which a debtor may make the payment demanded under the bankruptcy notice. A judgment creditor in a bankruptcy notice must give an address or addresses where he may be found. The address stated must be one at which the debtor may, during the currency of the notice, make payment of the amount claimed in the notice or, one where he may make arrangements to secure or compound the debt. The test for adequacy of such an address must satisfy the demands of common sense in the highly ordered and busy world in which we live, tempered by a consideration of the implications of a bankruptcy notice and the serious consequences that can flow from non-compliance with its requirements. The address given should be one at which, during the relevant period, it is reasonably practicable for the debtor to make payment or to offer to secure or compound - per Lockhart J in Nugent v Brialkim Pty Limited (1985) 61 ALR 725 at 726 and 727. 14 Prior to the 1996 amendments to the Act, section 41(2) relevantly provided as follows: "The prescribed form of bankruptcy notice shall be such that the notice (a) requires the debtor named in it, within a specified time ... to (i) pay the judgment debt or sum ordered to be paid in accordance with the judgment or order." [emphasis added] The provision no longer appears in section 41. Nor indeed, does it appear in the prescribed form. 15 In Re Celestini; ex parte Monte Paschi Australia Ltd (1996)71 FCR 399, Sackville J considered the application of the principles to which I have referred in circumstances where a bankruptcy notice required payment in accordance with the District Court Rules. Those Rules refer to payment at the Registry. The address shown in the bankruptcy notice in question stated the wrong address for the District Court Registry because the Registry had moved from Macquarie Street to another part of Sydney. In a sense, therefore, the circumstances of that case, were similar to this. The difference however, is that there was the requirement of section 41(2)(a)(i) which required that the bankruptcy notice must require the Debtor to pay the judgment debt "in accordance with the judgment or order". Secondly, the defect in the notice was concerned with payment of the debt which is, of course, the basic requirement of a notice. 16 The defect, in the present case, is not a defect in a matter which is made essential by the Act, because it is simply not referred to in the Act. It is a matter referred to in the prescribed form, although of course section 41(2) requires that a bankruptcy notice must be in the prescribed form. 17 The question therefore resolves itself into this: could the bankruptcy notice in question reasonably mislead a debtor as to what is necessary to comply with it? The requirement of the notice is to make a payment. The requirement in the prescribed form is in the following terms: "3. You are required within ('insert number in accordance with the note to this paragraph') days after service on you of this bankruptcy notice; (a) to pay to the creditor the amount of the debt; (b) to make an arrangement to the creditor's satisfaction for settlement of the debt." That is the requirement of the bankruptcy notice. Compliance with the notice involves the making of a payment. Compliance with the notice has nothing to do with making an application to the Federal Court. By making such an application, it may be that compliance will not be necessary. The question however, in the light of the principle derived from Kleinwort Benson Australia Limited v Crowl, is whether the bankruptcy notice before me could reasonably mislead the Debtor as to what is necessary to comply with the notice. 18 The notice makes quite clear in paragraphs 5 and 6, that the requirement of paragraph 3 may not be necessary if an application is made to the Federal Court. Such an application could be made at any registry of the Court. The application does not have to be made to the registry in the State of residence of the Debtor. I do not consider that the statement, in paragraph 10 of the bankruptcy notice in question, of an address which had become incorrect could reasonably mislead the Debtor as to what was necessary in order to comply with the notice. 19 In any event, and I am not sure that this is necessarily relevant, there is evidence before me that, at all times during the period during which payment was required, it would have been apparent to anybody who attended at 450 Little Bourke Street, Melbourne, that the registry's address had changed between 25 March 1999, and 16 April 1999, when that period expired. Three laminated signs were located around the main doorway entrance to the building at 450 Little Bourke Street, directing attention to the new location of the Federal Court registry. One of the signs was attached to a wooden stand in the front of the door during that time. The other two signs were located in the front windows adjacent on either side of the doorway entrance looking in a northerly direction from Little Bourke Street. Little Bourke streets runs generally east to west. 20 In any event, I am not convinced that that is a significant or relevant factor. I consider that the significant factor is that the bankruptcy notice makes clear that compliance requires either payment or an application to the Federal Court. It is a matter for any citizen to find out how to make an application to the Federal Court. That is a matter of public record. In the circumstances, I do not consider that the defect is one which could reasonably have misled the Debtor as to what was necessary to comply with the notice in question. Accordingly, I am satisfied that section 306 has the effect that the proceeding on the petition is not invalidated only by that defect. 21 I propose to make a declaration that the proceeding on the petition is not invalidated by reason only of the fact that in paragraph 10 of the bankruptcy notice on which the petition is based states that the Federal Court Registry is located at Federal Court of Victoria, 450 Little Bourke Street, Melbourne, Victoria 3000, telephone (03) 9289 9333. I will remit the hearing of the petition to the hearing before the Registrar on Monday, 2 August.

I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.

Solicitor for the Creditor: Nicholas McCready for Nash O'Neill Tomko Lawyers