Commonwealth Bank of Australia, in the matter of Commonwealth Bank of Australia v Hurst

REASONS FOR JUDGMENT 1 In this matter the debtor seeks to amend the notice of opposition to the creditor's petition to include the following additional ground: "That the act of bankruptcy identified in the petition did not occur by reason that the bankruptcy notice upon which the applicant relies in establishing an act of bankruptcy was a nullity and of no effect." No prior intimation of an intention to rely upon this ground had been given to the applicant. Counsel for the applicant said that he was taken by surprise by the amendment application and would need time if he was to respond to it properly. 2 This matter first came into the list before Registrar Quinn on 10 August 2000. On that occasion the Registrar ordered a notice of opposition to be filed by 7 September. After a number of defaults, the present notice of opposition dated 31 October 2000 was filed in Court on 7 November 2000. That notice of opposition contains neither hint nor suggestion of the ground on which the respondent now seeks to rely. 3 It is submitted that the bankruptcy notice is a nullity because it does not follow the form prescribed as Form 1. The point of departure is said to be that the notice contains a note at the bottom of pars 3 and 4 as to how the form should be completed, contrary to a direction at the beginning of Form 1: "NOTE: words appearing below in italics are for guidance in the completion of this Notice and are not to be reproduced in the Notice." 4 I have to say that there is some confusion as to precisely what the prescribed form requires, inasmuch as I have before me three versions of the prescribed form, none of which is precisely the same. The version of Form 1 which appears at 23,471─23,472 of the Bankruptcy Practice does not contain the introductory direction, and the notes appearing at the bottom of pars 3 and 4 are not in italics. 5 The version which appears on page 462 of the CCH print of the Bankruptcy Act 1966 (Cth) ("the Act") does contain the introductory direction, but the notes which are appended to pars 3 and 4 are not in italics. Finally, I have a version of the form downloaded from ScalePlus (supplied by counsel for the debtor) that does contain the introductory direction and notes appended to pars 3 and 4, but only the word "note" in each case is in italics. The words that follow "note" are in ordinary type. 6 A consideration of the matter which the respondent now seeks to raise must necessarily begin with an understanding of the format in which Form 1 was cast at the relevant time. As I have said, different versions of the form are before me, and I do not know which, if any, of those versions is the authentic one. Given the history of this matter, I am not prepared to adjourn the hearing to enable the debtor to establish the format in which Form 1 was cast at the relevant time. 7 In any event, I am not persuaded that there is any substance in the point, even if it be assumed that the ScalePlus version of the form accords with the prescribed form. Any departure from that form is a formal defect or irregularity which could not be productive of substantial injustice. The matter is within s 306: Trustees of the Franciscan Missionaries of Mary v Weir (2000) 98 FCR 447. I was referred to the subsequent decision of the Full Court in The Australian Steel Company (Operations) Pty Ltd v Lewis [2000] FCA 1915, but this does not require any different conclusion. 8 The application for leave to amend is refused. 9 Counsel for the respondent also made submissions relating to the affidavits verifying the creditors petition. Section 52(1) of the Act provides that: "At the hearing of the creditor's petition, the Court shall require proof of (a) the matters stated in the petition (for which purpose the Court may accept the affidavit verifying the petition as sufficient)." 10 The affidavit verifying the petition is an affidavit of Julian Carroll sworn on 22 June 2000, in which he asserts that statements contained in pars 1, 2 and 3 of the petition are, within his knowledge, true. The petition, however, was not presented until 29 June 2000. Counsel for the debtor firstly submitted that the affidavit is not an affidavit verifying the petition because such an affidavit must be sworn at or after the presentation of the petition for there to be a petition to verify. 11 I do not think this is right. Section 47(1) and Order 77 rule 16 each contemplate that the affidavit verifying the petition will be sworn prior to the presentation of the petition. The fact that this affidavit was sworn prior to the presentation of the petition does not deny to it the character of an affidavit verifying the petition. 12 Alternatively, Mr De Buse submits that there must be a proximity between the date of swearing an affidavit and the presentation of the petition if it is to serve the function of verifying the existence of the facts referred to in pars 1, 2 and 3 of the petition as at the time of its presentation. 13 It seems to me that s 52(1)(a) authorises the Court to accept the affidavit verifying the petition as sufficient proof of the matters stated in the petition, if the Court considers that to be an appropriate course to adopt in all the circumstances. If the affidavit had been sworn a considerable time prior to the presentation of the petition a Court might not be prepared to accept that affidavit as proof of the matters stated in the petition, particularly if there was any prospect of change in circumstances in the intervening period. 14 However, in the present case the affidavit was sworn a week prior to the presentation of the petition. It seems to me that that is a period sufficiently proximate to the presentation of the petition to make the affidavit a reliable source of information as to the matters stated in pars 1, 2 and 3 of the petition, and I am prepared to accept it as proof of those matters. 15 I am satisfied on the basis of the affidavits read by counsel for the applicant of the matters stated in the petition. I am satisfied as to the service of the petition, and I am satisfied as to the fact that the debt on which the petitioning creditor relies is still owing. I am not satisfied that cause has otherwise been shown why a sequestration order ought not to be made. In those circumstances I make a sequestration order against the estate of Phillip Cade Hurst. I direct that the applicant's costs and any reserved costs of the petition be taxed and paid in accordance with the statute. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Hely.