Lindholdt v Merritt Madden Printing Pty Ltd

REASONS FOR JUDGMENT 1 This is an appeal from a decision of a Federal Magistrate ("the Magistrate") who on 21 August 2001 dismissed an application by the appellant to set aside a Bankruptcy Notice. The facts which give rise to the appeal are in short compass and were not significantly contentious. 2 On 31 January 2001 the respondent obtained judgment for the sum of $25,313.14 against the appellant in the Local Court at the Downing Centre in Sydney. On 15 March 2001 the appellant made application to a Registrar, to be permitted to pay the judgment debt by instalments. That application was made ex parte, in accordance with the Rules of the Local Court. The Registrar made orders in the following terms: "I order that the unpaid amount of the judgment debt be paid by instalments: of: $600 per: MONTH commencing on: 06/04/2001 Payments must be sent to the Judgment Creditor at: C/- DUFFIELD & DUFFIELD SUITE 6, LEVEL 3 154 ELIZABETH STREET SYDNEY 2000" 3 The Registrar ordered that if before the expiration of fourteen days after service of the instalment order notice, the judgment creditor filed a notice of objection to the order made on 15 March 2001, the question of payment by instalments would be set down for determination by the Court. The Registrar further ordered that if the judgment debtor was late in making or failed to make any one payment, the judgment creditor could request the Registrar to cancel the instalment order. 4 On 3 April 2001 the respondent filed a notice of objection seeking to have the instalment order rescinded. 5 On 4 April 2001, the appellant forwarded by registered post a cheque drawn in favour of the judgment creditor for the sum of $600. The cheque was enclosed within an envelope which bore the address of Messrs Duffield & Duffield, the solicitors for the judgment creditor, at Suite 6, Level 3, 154 Elizabeth Street Sydney 2000. In other words, the cheque was sent to the judgment creditor care of its solicitors at the address specified in the instalment order made by the Registrar. 6 On the evening of Thursday, 5 April 2001, the envelope containing the cheque (the "registered article") was received at the GPO Private Box Centre at 310 George Street in Sydney. GPO records reveal that it was scanned at 11.33 pm that evening. A GPO employee then caused a card entitled "registered post delivery receipt" to issue. That card was addressed simply to "1216", that being the post office box held by the solicitors for the respondent. It advised that two articles had been received by Australia Post as registered articles, and that they were available for collection. Why the card was addressed to "1216", and not to Messrs Duffield & Duffield at their Elizabeth Street address was not the subject of any evidence before the Magistrate. However, it is clear that the registered post delivery receipt was placed in the box at some time during the day on 6 April 2001. 7 It appears that the solicitors for the respondent had a practice of emptying the contents of their post office box each weekday morning at between 9.00 and 9.30 am. There was uncontradicted evidence that that practice had been followed on 6 April 2001 and that the registered post delivery receipt was not yet in the box when it was inspected on that morning. 8 It seems that the box was not inspected again until Monday, 9 April 2001. The employee of the solicitors for the respondent who emptied the box on that morning took the registered post delivery receipt to the counter and signed for, and received, both registered articles. It follows that the envelope containing the cheque for $600 did not come into the physical possession of the solicitors until 9 April 2001 although it had been available for collection some three days earlier. 9 On 24 April 2001 the respondent's solicitors banked the appellant's cheque. On the same day they wrote to the Registrar in the following terms: "Dear Sir, MERRITT MADDEN PRINTING PTY LIMITED -v- LINDHOLDT PROCEEDINGS NO. 1270087 OF 2000 We act for the Plaintiff and note that an Instalment Order was made on 15 March 2001. We also note that a Notice of Objection to payment by instalments was filed on 3 April 2001 within the fourteen (14) day period allowed pursuant to the Registrar's Notice. At the time of writing, we have not yet received notification of a hearing date in respect of the Instalment Application but this may now be irrelevant, given the following. We enclose:- 1. Affidavit of Non-Compliance. 2. Application for Certificate of Judgment. You will see from the writer's Affidavit that the Judgment Debtor has failed to comply with the Instalment Order by making payment of $600.00 on or before 6 April 2001. In these circumstances, it is our view that the Instalment Order should be rescinded and any proposed hearing date of the Application to pay by instalments should be vacated. We request that you adopt this course of action and thereafter issue a Certificate of Judgment. We enclose cheque for $11.00 in payment of an Application fee on the Certificate of Judgment. Should you wish to discuss any matter please telephone Grant Pritchard of this Office. Yours faithfully, DUFFIELD & DUFFIELD Encl" 10 The affidavit of non-compliance to which the solicitors referred in this letter and which was said to have been enclosed within it was actually sworn on 26 April 2001. It was in the following terms: "1. I am the Solicitor for the Plaintiff herein. 2. I refer to the Registrar's Instalment Order made on 15 March 2001 and say that the Judgment Debtor has failed to comply with that Instalment Order in that Judgment Debtor failed to pay the sum of Six hundred dollars ($600.00) on or before 6 April 2001. 3. I respectfully request that the Instalment Order be rescinded." 11 It is important to note that the solicitors for the respondent made no mention, in either the letter or the enclosed affidavit, of any of the following facts: · on the morning of 9 April 2001 the solicitors had collected from their post office box a registered post delivery receipt showing that on 5 April 2001 two registered articles had been received by Australia Post on their behalf; · immediately after discovering that these registered articles were being held, they were signed for and collected; · one of those registered articles consisted of an envelope which was correctly addressed to them at their Elizabeth Street office; · that envelope had contained the appellant's cheque for $600; and · on 24 April 2001 they had banked that cheque. 12 On 7 May 2001 the Registrar, acting in response to the letter of 24 April 2001 and the affidavit of non-compliance of 26 April 2001, issued a Certificate of Judgment for the judgment debt. He also cancelled the instalment order which had been made on 15 March 2001. He did so without having given the appellant any opportunity to be heard, apparently in accordance with the relevant Rules of the Local Court. 13 On the same day he wrote to the appellant in the following terms: "THE PLAINTIFF FILED AFFIDAVIT OF NON-COMPLIANCE AND APPLICATION FOR CERTIFICATE OF JUDGMENT. OBJECTION HEARING ON 25/5/2001 HAS BEEN CANCELLED. 14 The reference to an objection hearing seems to have been a reference to a hearing which had been scheduled in response to the respondent's notice of objection, filed on 3 April 2001, to the instalment order. 15 Not surprisingly, the Registrar's action provoked a heated response from the appellant. On 11 May 2001 he wrote to the Registrar in the following terms: "Dear Sir, RE: Civil Claims File No: 127087/00 Merritt Madden Printing v Peer Lindholdt The lawyers for the Plaintiff, on 24 April 2001, filed an Affidavit of Non-Compliance with your order of Payment by Instalment. This claim is blatantly untrue. The April instalment was sent by registered mail on 4 April (see attached receipt) to Duffield & Duffield and was banked and credited to the account by the Plaintiff on 24 April 2001 (see attached copy of their April Statement). Your urgent attention to this matter will be greatly appreciated." Sincerely yours PEER LINDHOLDT" 16 On 16 May 2001 the Registrar replied: "Dear Sir/Madam, Civil Claims File No: 127087/00 Plaintiff: MERRITT MADDEN PRINTING PTY LTD Ref: Defendant: PEER LINDHOLDT Ref: