Nikoglou v Official Receiver in Bankruptcy

Federal Court of Australia|2000-01-14|Before: Marshall J

REASONS FOR JUDGMENT 1 On 13 December 1999 the Court heard an application by the applicant, Ms Aristea Nikoglou in which Ms Nikoglou sought an order deeming the date of filing of the Applicant's statement of affairs with the Registrar in Bankruptcy to be the date the statement of affairs was filed with the Trustee in Bankruptcy. 2 After the completion of submissions by counsel the Court made the order set out below. The parties were informed the Court would publish its reasons for deciding to make that order as soon as was reasonably practicable. What follows are those reasons for making an order in the following terms: "1. It is declared that the statement of affairs signed by the applicant on 6 September 1996 and received by the Official Trustee in Bankruptcy on 23 September 1996 be deemed to have been filed in the office of the Official Receiver on 16 December 1996 in compliance with the requirements of s54(1) of the Bankruptcy Act 1966 (Cth). 2. There be no order as to costs."

Factual background 3 On 25 July 1996 a sequestration order was made against the applicant's estate by Registrar Young. Ms Nikoglou, on the evidence before the Court, "is a humble lady of considerable integrity" whose bankruptcy arose "as a result of a failed Dry-Cleaning business venture". Greek is her first language and she required assistance to deal with letters written to her in English relevant to this matter. 4 On 7 August 1996 Ms Rivo wrote to Ms Nikoglou on behalf of the Official Receiver advising that pursuant to s 54 of the Bankruptcy Act 1966 (Cth) ("the Act") she was required to file a statement of affairs within 14 days and that the term of her bankruptcy would not commence until the statement of affairs had been filed. Ms Rivo further advised Ms Nikoglou of the requirement to forward the original statement of affairs to the Registrar in Bankruptcy at the Federal Court and a copy "to this office", meaning the Official Receiver's Office, Level 9, 360 Elizabeth Street, Melbourne. 5 By 29 August 1996 Ms Nikoglou had not complied with that advice. As a consequence Ms Rivo again wrote to Ms Nikoglou, by letter dated 29 August 1996, and, inter alia, stated the following: "If you do not file a Statement of Affairs in the office of the Registrar within ten (10) days of the date hereof, and furnish the Official Receiver with a copy, the Official Receiver may without further notice forthwith make application for your committal to prison." 6 On 6 September 1996 Ms Nikoglou attended on her solicitor, Mr Anthony of Katsis Purcell Anthony in Oakleigh so that Mr Anthony, who is fluent in Greek, could explain to Ms Nikoglou the meaning of the letters she had received from Ms Rivo in the Official Receiver's office. Mr Anthony assisted Ms Nikoglou to compile her statement of affairs and undertook to send the statement of affairs "to the appropriate parties". 7 On or about 18 September 1996, Mr Anthony sent a letter to Ms Rivo advising that Katsis Purcell Anthony acted for Ms Nikoglou. The letter concluded in the following way: "On behalf of our client we apologise for the delay in responding and returning the Statement of Affairs to your office, however, [we] now enclose Statement of Affairs together with Statement of Income for your records. Kindly advise whether you require any further documentation to be provided by our client." 8 Mr Anthony received no response to that letter from Ms Rivo or anyone else at the Official Receiver's Office. The statement of affairs was received in the Official Receiver's office on 23 September 1996. The original statement as distinct from a copy thereof is what was received by the Official Receiver. No one in the Official Receiver's Office advised Mr Anthony or Ms Nikoglou that the statement of affairs should have been sent to the Registrar in Bankruptcy. The Official Receivers Office remained silent on that issue. The next Ms Nikoglou heard from the Official Receiver was when she received a letter dated 14 October 1996 from Ms Rivo. That letter included the following statements: "EARLY DISCHARGE From information available, it appears that you do not qualify for an early discharge from bankruptcy on the following grounds: Your unsecured debts exceed 150% of your income in the year prior to bankruptcy, as disclosed in your Statement of Affairs" Enclosed with the letter was a copy of an application made in another proceeding and orders made in that proceeding by Merkel J in which his Honour deemed a bankrupt to be discharged from bankruptcy under the Act as of the date of the order. 9 As a result of correspondence dated 28 July 1999 from the Official Receiver, Katsis Purcell Anthony filed an application in the Victoria District Registry of the Court on 4 October 1999. The Court dealt with that application on 13 December 1999.

The statutory context 10 Section 54(1) of the Act, prior to 16 December 1996, provided as follows: "Where a sequestration order is made, the person against whose estate it is made shall, within 14 days from the day on which he is notified of the bankruptcy: (a) make out and file in the office of the Registrar for the District in which the sequestration order was made a statement of his affairs; and (b) furnish a copy of the statement to the trustee." 11 On 16 December 1996 the Act was amended substantially. One of the amendments was to s 54(1)(a) in which the reference to "office of the Registrar" was deleted and replaced with the words "office of the Official Receiver". 12 Section 306(1) of the Act provides that: "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."

Consideration 13 In Tsingaris v Official Receiver for the Bankruptcy District of the State of Victoria [1999] FCA 1389, Weinberg J held that: "…a failure by a bankrupt to provide to the Official Receiver an original statement of affairs in circumstances where a copy has been provided is an irregularity of a kind which may be excused pursuant to s 306(1) of the Act." 14 I agree with that view. It has not been demonstrated to me by counsel for the respondents that in so holding his Honour was clearly wrong. Consistently with Weinberg J's view there is no reason why a failure by a bankrupt to provide an original statement of affairs to a Registrar in Bankruptcy where an original was provided to the Official Receiver prior to 16 December 1996 should not also be considered to be an irregularity of a kind which may be excused pursuant to s 306(1) of the Act. 15 Counsel for the respondents contended however that the correspondence generated by Ms Rivo was written on behalf of the Official Trustee and not on behalf of the Official Receiver. This submission is contrary to the evidence. The 7 and 29 August 1996 letters were signed, "S RIVO FOR OFFICIAL RECEIVER". 16 It defies reality to assert that the statement of affairs was not filed with the Official Receiver. Whether or not the Official Receiver was then empowered to receive it is a completely different issue. The document was obviously filed in the wrong place but that is the type of problem that s 306(1) of the Act was designed to remedy. 17 There is no evidence before the Court to show that any creditor or anyone else with any relevant interest in the affairs of Ms Nikoglou complained of any lack of opportunity to inspect the statement of affairs in the office of the Registrar in Bankruptcy or elsewhere. The contention of counsel for the respondents that substantial injustice occurred is not supported by any evidence. 18 Counsel for Ms Nikoglou submitted that for her client to remain bankrupt for a further three years would "be manifestly unjust". Counsel for the respondents did not disagree. The only injustice that would have arisen in the instant circumstances would have been a refusal or failure by the Court to make the first order it made on 13 December 1999.

Orders 19 Having regard to the foregoing, I considered it appropriate to make the first of the orders I made on 13 December 1999. The second order concerning costs was made because on the one hand the applicant was seeking an indulgence but on the other hand the respondents pressed before the Court their opposition to the applicant's claim in a prolix way in support of an unsustainable proposition seeking, with use of public money, to achieve a patently unjust result, which would have forced Ms Nikoglou to recommence her period of bankruptcy ab initio.

I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall.

Solicitor for the Applicant: Katsis Purcell Anthony

Solicitor for the Respondents: Australian Government Solicitor

Bankruptcy Act 1966(Cth)ss 54, 306(1)

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