Nugent, M.T. v. Brialkim Pty Ltd & Anor [1985] FCA 416

Federal Court of Australia|1985-07-17|Before: Lockhart J, Pincus J, Beaumont JJ, Northrop J

Bankruptcy - bankruptcy notice - statement of address of creditor in bankruptcy notice - authority to receive payment - proof of inadequacy

MARK T. NUGENT v. BRIALKIM PTY. LTD. and OWEN PTY, LTP.

) ) QUEENSLAND DISTRICT REGISTRY ) No. QLD G27 of 1985 ° ) GENERAL DIVISTON )

AUSTRALIA BETWEEN : MARK T.. NUGENT Appellant AND: BRIALKIM PTY. LTD. and OWEN PTY. LTD. Respondent

JUDGES MAKING ORDERS: NORTHROP, LOCKHART and BEAUMONT JJ. DATE OF ORDER: 17 July 1985

The appeal be dismissed;
The appellant pay the respondent's costs of the appeal;
The date for compliance with the bankruptcy notice be extended

NOTE: Settlement and entry of orders is dealt with in Order 36 of the

IN THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY No. QLD G27 of 1985 GENERAL DIVISION

AUSTRALIA BETWEEN: MARK T. NUGENT Appellant AND: BRIALKIM PTY. LTD. and OWEN PTY. LTD. Respondent CORAM: NORTHROP, LOCKHART and BEAUMONT Jd. DATED: 17 July 1985 REASONS FOR JUDGMENT NORTHROP J.: I would also dismiss the appeal with costs and i agree

} ) QUEENSLAND DISTRICT REGISTRY ) No. QLD G27 of 1985 ) GENERAL DIVISION )

AUSTRALIA BETWEEN : MARK T. NUGENT Appellant AND: BRIALKIM PTY. LTD. and OWEN PTY. LTD. Respondent

This appeal froma judgment of a single judge of this Court (Pincus J.) involves a short, but interesting, question of bankruptcy

Qn 14 February 1985 a bankruptcy notice was issued by the Registrar in Bankruptcy for the Bankruptcy District of the Southern District of Queensland against the debtor ('Mark T. Nugent) /"the appellant") at the request of Brialkim Pty. Ltd. and Owen Pty. Lrd..

two tampanies which had signed judgment against the appellant (I shall

refer toa he companies as "the respondents") on 12 Tune 1984 in the

Magistrates Court of Queensland in the sum of $1,760.75. The

bankruptcy notice recited that the respondents had "their registered

office at c/- Messrs. Lyons, Dunlop and Pratt, 3th Level, MLC Centre,

Cnr. George & Adelaide Streets, Brisbane in the State of Queensland".

The notice required the appellant, within fourteen days after service of the notice upon him excluding the date of service, to pay the said sum of $1,760.75 to the respondents or to secure the payment of that sum to the satisfaction of the Supreme Court of Queensland or this Court, or other Court exercising Federal jurisdiction in bankruptcy or to the respondents, or to compound it to the

The appellant applied to this Court to set aside the bankruptcy notice on the ground that 1t failed to give an address at

which there was present a person or persons with the authority of the

respondents to receive payment or to secure or compound.

The learned primary Judge considered in the light of the decided cases that the relevant question was whether the bankruptcy notice gave an address at which it was reasonably practicable for the appellant tc make payment or to offer to secure or compound. His Honour held that the appellant failed to establish that the address of che respondents given in the notice was one at which 1t was not reasonably practicable to make payment or to secure or compound, and that the application to set aside the notice therefore failed. His Honour dismissed the application with coasts. The apoellant appealed

Counsel for the appellant submitted that, for the address which is stated in a bankruptcy notice as the address of a judament creditor to support a valid notice, there must be some person or persons present at the address stated in the notice at all reasonably practicable times having authority from the judgment creditor during the currency of the notice to receive payment or ta enter into an arrangement to secure or compound in each case at that address. Counsel did not go so far as to say that such a person must be present

at the address at all times during the currency of the notice.

Neither the Bankruptcy Act 1966 itself nor the Bankruptcy

Rules contain any provision requiring the address of the creditor to be stated in the bankruptcy notice. That requirement 15 contained in Form No. 4 in Schedule 1 to the Bankruptcy Rules, and is not in terms & requirement that 1t state the judgment creditor's address at which payment may be made by the debtor or where he may secure or compound. It simply provides, in what 1s for convenience sometimes called the recital to the bankruptcy notice, for the insertion of the name and address of the judgment creditor. However. the prescribed form does make provision in the operative part of the notice for the debtor to pay the amount claimed by the judgment creditor to the judgment creditor or, if the judgment or order requires payment to be made tc a

Court or a person other than the judgment creditor, the name and

address of the Court or the other person to whom payment is required

Tudamentsa of lona standing have held in relation ¢

comparable provisions in the bankruptcy legislation of England and the Australian Bankruptcy Act 1924 that a judgment creditor must give an

address or addresses where he, or, if more than one, they, or one of

them. or some agent authorised on his or their behalf, may be found:

see In re Beauchamp ex parte Beauchamp (1904) 1 K.B., 572 and James v.

Federal Commissioner of Tazation (1955) 93 C.L.R. 631 at p. 639. The

question before this Court must be considered in the light of the

bound to pay the creditor at one particular place."

As I rerceive it. the rationale of these and other decisions 1s that the address of the creditor must te stated in order to comply with the prescribed form of netice and because nen-compliance with the requirements of a tankruptcy notice constitutes an act of bankruptcy

It is not sufficient that a creditor merelv qive an address where he 1s known. It must be an address at which he can be paid or where an agreement may be made with him or on his behalf tc secures or compeund it. If the creditor gives his home as his address he is net

bound to remain there all day and night during the currency of the

notices. Obviously that would be absurd. fimilarly, if he gives his

business address he if net bound to remain there always, or even

throughout the whole of normal business hours (whatever that

expression may mean these days) during the currency of the notice.

However, I agree with the primary Judge that, where the creditor is a company, it is desirable that there be someone present at the address given in the notice during ordinary business hours with authority to receive payment immediately and without having to get in touch with the Board or any other person capable of conferring authority. I would add that it is desirable, though not essential, that such a person also have authority to secure or compound the debt if that is the wish of the creditor and he does not merely insist, as

he may if he wishes, upon payment of the debt in full.

In my opinion 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. t may be that in certain circumstances, although he may make arrangements to secure or compound by calling at the address stated in the notice, he will do so by speaking to persons who are themselves not physically at that address, but are, for example, available on the telephone. The examples of the

possibilities are manifold and need no elaboration.

The test must satisfy the demands of commonsense in the highly ordered and busy world in which we live, tempered by a cansideration of the implications of a bankruptcy notice and the

serious consequences that can flow from non-compliance with its

requirements. I respectfully agree with the primary Judge that the basic principle is that the address given should be one at which

during the relevant period it is reasonably practicable for the debtor

Counsel for the appellant relied in his argument hefore this

Court on the judgment of the Enaqlish Ccurt of Appeal In re Stogdon Ex

parte Leigh (1895) 2 9.B. 534, In that case a bankruptcy notice stated the address of the creditor to be "White's Club, St. James S.W.". The creditor did not in fact reside at the club and was not in England during the whole of the seven days limited by the notice for the payment of the debt. There was evidence that if the debtor had gone to the club he would have been referred to the creditor's London solicitor who held a general power of attorney for the creditor and could have received payment of the debt on his behalf. It was held hy the Court that an addrass at which the creditor could not be found. but at which he could only be heard of, was not an address as was required by the Bankruptcy Act 1883 and the Bankrugtcy Rules 1886. that the notice was consequently invalid and further, that the non-payment of the debt within the pericd of seven days did not

In Beauchamp s Case (supra) Vaughan Williams L.J., when

delivering the judoment of the Court of Appeal, said at p. 504:

"IT wish to add that the decision of the Court of Appeal in In re Stoaqdon seems to me, 30 far as the observations centained in the judaments are concerned, to ke difficult of practical

application. Perhaps it might be considered whether the rules and forms might not be somewhat altered."

In my opinion, Stoqden's Case must be read in the light of

its svecial facts. The views which I have expressed are not

inconsistent with any principles that may be gleaned from it.

Those are the principles which. in my view, govern the present case. The facts may be dealt with briefly. The evidence in the case was reviewed carefully by the primary Judge, and I. see no

reason to repeat it. His Honour concluded that the appellant had not

established that the address of the creditor given in the notice was one at which it was not reasonably practicable to make payment or te secure or compound. In my opinion, no ground has been established for disturbing those findings of his Honour. I would dismiss the appeal

preceding pages are a true copy of the Reasons for Judgment herein of his Honour

) ) QUEENSLAND DISTRICT REGISTRY ) No. QLD G27 of 1985 ) GENERAL DIVISTON )

AUSTRALIA BETWEEN : MARK T. NUGENT Appellant AND: BRIALKIM PTY. LTD. and OWEN FTY. LTD. Respondent CORAM NORTHROP, LOCKHART and BEAUMONT JJ. DATED 17 July 1985

BEAUMONT J.: I agree with the reasons given by Lockhart J. and agree

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Judgment (70 paragraphs)