Law, Re G.W. McLean, Ex Parte J.C. [1986] FCA 218

Federal Court of Australia|1986-05-06|Before: Pincus J

A sequestration order against the estate of the debtor be made and the petitioning creditor's costs of and incidental to this petition be taxed and paid in

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISION ) QLD P235 of 1986

This 18 a creditor's petition for a sequestration order. Mr. Lee of counsel, for the petitioner, has satisf1ed me that, with one possible exception, the apparent deficiencies in the

papers are able to be dealt with under s.306(1) which provides:

"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

injustice cannot be remedied by an order of that court."

The possible exception is that the creditor's petition has the wrong title; it does not mention the name of the petitioner, but, more importantly in my view, does not mention the name of any court. Since the name of the petitioner appears prominently immediately under the name of the debtor, it does not appear that

the former deficiency is of any consequence, but the absence of

the name of the Court appears to me a matter requiring

The test which s.306(1) propounds is simply justice, that is, the Court must overlook the defect or irregularity as to form unless it is of opinion that substantial injustice has been caused which cannot be remedied. It seems to me that the defect is one as to form, not substance, although I initially had some

Section 47(1)(a) requires that a creditor's petition be in the prescribed form, and that prescription 1s made by rule 12(2), which refers to form 5. That form has not itself any title, but immediately under the heading ""Creditor's Petition" has the word "title" in brackets, and that is in my view a reference back to form 1 which requires that the name of the

court be in the title immediately under the words "Bankruptcy

The body of this petition makes no reference to the name of the court, but the document contains a notice in form 6 which informs the debtor that the petition will be heard "At the Federal Court of Australia, Level 8, MLC Court, 15-23 Adelaide

In James v. Deputy Commissioner of Taxation (1957) 97

C.L.R. 23 at p.31, the High Court touched on a similar point.

There, an order was made which purported to be one of "The Court of Bankruptcy, District of Southern Queensland". It was pointed out by the High Court that no such court as the Court of Bankruptcy, District of Southern Queensland existed, but it was not, as I read the case, determined whether the misdescription of the court was fatal in itself. In Pillai v. Comptroller of Income Tax (1970) A.C. 1124, the Privy Council had to consider legislation of the Federation of Malaysia which required that a bankruptcy notice be expressed to be issued by the Chief Justice of the High Court, issuing the same in the name of Yang di-Pertuan Agong. The notice in question was simply expressed to be issued by the High Court. The Privy Council was plainly concerned that the effect had some constitutional significance. Nevertheless, 1t was held to be a "formal defect or irregularity" within the meaning of the Malaysian bankruptcy legislation. It appears to me _ that the Pillai case 15 authority that a substantial misdescription of the issuing judicial authority is not fatal to the validity of a bankruptcy notice, and it tends to support the view that the absence of reference in the title to

any court may not be fatal. On the other hand, it was held in In

re A Debtor (1951) 1 Ch. 313, referred to in Pillai's case, that a bankruptcy notice headed in the name of a county court from

which 1t was not issued, although bearing the seal of the court

I am concerned here with a petition and not a notice.

It does not seem that the question which was regarded as decisive

in the two cases just mentioned can determine this case; that question was whether the defect was likely to mislead the debtor.

I think that, whether or not it was likely to mislead anyone,

this petition is bad unless it is clear on the face of it that

the document is one instituting proceedings in this court.

Although with some hesitation, I have come to the view that it is not outside the scope of 5.306. In doing so, I have taken into account the fact that the petition not only has the

note referred to above, but 1t bears the court's stamp.

I am therefore of the view that the defect in question

cannot be held fatal and I will make a sequestration order.

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Judgment (31 paragraphs)

Cited By (6)