Polain v Sargood Bros

rt would have granted had the petition been pursued. It was not because the judgment debt was paid shortly before the hearing. The petitioner submitted it is entitled to its costs of the sequestration proceeding. The judgment debtor submitted that the misdescription of the act of bankruptcy could not have been remedied in this way and, as a consequence, no sequestration order would have been made on the petition. It follows, it was submitted, that the judgment debtor is entitled to the costs of the sequestration proceedings. Both parties accepted that the resolution of this issue would determine either in whole or in part the costs order that should be made in the matter. I turn to consider whether the misdescription of the act of bankruptcy was remediable in the way submitted by the petitioner. Courts exercising jurisdiction in bankruptcy have drawn a distinction between errors in bankruptcy notices and errors in creditors petitions. The position was summarised by Fisher J in Re Williams; Ex parte Alberton Electrical Service Pty Ltd (1982) 43 ALR 552 at 558: "However, the practice of the courts exercising jurisdiction in bankruptcy is, for good reason, to construe bankruptcy notices strictly and to require strict compliance with the provisions of the relevant Acts and Rules of Court. A more strict compliance is required in the case of a bankruptcy notice than of a petition for a sequestration order, the consequences of non-compliance with a bankruptcy notice are penal or quasi-penal in nature (Re a Debtor [1951] Ch 313 at 318 and Re a Judgment Debtor [1908] 2 KB 474 at 478 and 481) and creditors who avail themselves of proceedings of this nature to enforce payment of debts must be prepared to adhere to the requirements of the Acts and Rules, however technical they may appear to be (Re Wimborne (1979) 24 ALR 494 at 498)." The judgment debtor referred to several authorities where the petition contained a defect that was not viewed as remediable by amendment. In Ex parte Coates; In re Skelton (1877) 5 ChD 979 the petition was dismissed in circumstances where it identified the act of bankruptcy as the departure of the debtor from his dwelling house but did not add that that was done with intent to defeat or delay his creditors: see s40(1)(c)(ii) of the Bankruptcy Act 1966 ("the Act"). A similar defect in a petition was remedied by amendment in Re Fiddian, Squire & Co (1892) 66 LT 203 but on the basis that the amended petition had to be re-served. In Polain v Sargood Bros (No 2) (1908) 10 WAR 160 the Court refused to allow the amendment of a petition that alleged facts that did not, and did not attempt to, allege an act of bankruptcy. In Re Hastings (1985) 1 All ER 885 a petition referred to the service of a bankruptcy notice on 29 June 1983 and failure to comply with it by 12 July 1983. The notice was in fact served on 29 July 1983. An amendment was refused because it would have alleged an entirely different act of bankruptcy. The judgment debtor also referred to Re Leppard; Ex parte Fortune (Aust) Pty Ltd (1974) 5 ALR 556. While Leppard, supra concerned a discrepancy between the debt alleged in the petition filed and the debt alleged in the copy that was served, the following was said by Dunn J: "In bankruptcy proceedings, the court acts not merely inter partes but in the public interest, and in my view it is in the public interest that clear provisions with respect to the form of bankruptcy petitions should be exactly and not carelessly complied with. Whilst a defective statement of an immaterial fact may be excused, material facts should be stated in a clear and unambiguous way."