Via Sanantonio Pty Ltd v Commonwealth Bank of Australia

1. The amended application be dismissed.
2. The applicant must pay the respondent's costs, as agreed or assessed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

GRIFFITHS J 1 These four proceedings were all heard together. Two involve applications to set aside statutory demands under s 459E of the Corporations Act 2001 (Cth) (Corporations Act) (NSD 1281 and 1282 of 2018). The other two applications seek to set aside bankruptcy notices issued by the Official Receiver at the request of the respondent, the Commonwealth Bank of Australia (CBA) against Ms Claudia Mastronardo (NSD1286 of 2018) and Mr Antonio Mastronardo (NSD 1287 of 2018) respectively. The statutory demands were issued by CBA. 2 The parties agree that the proceedings relating to the statutory demands must now be dismissed, following the High Court's recent rejection of the applicants' applications for special leave to appeal against a decision of the Court of Appeal of New South Wales (Mastronardo v Commonwealth Bank of Australia Ltd [2018] NSWCA 136 (unreported, 22 June 2018). It will be necessary to make an order for costs in favour of the respondent in NSD 1281 of 2018 and NSD 1282 of 2018. 3 That leaves for determination the remaining two proceedings relating to the bankruptcy notices, to which I now turn. 4 Mr and Mrs Mastronardo claim that the bankruptcy notices are a nullity. The applicants do not contend service of the bankruptcy notices by CBA was defective, or that the final judgment or orders supporting the notices were not provided with service of the notices. Instead they allege that the relevant judgment which supported each bankruptcy notice was not "attached" at the time the bankruptcy notices were issued by the Official Receiver, as required by s 41(2) of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act) and reg 4.02 of the Bankruptcy Regulations 1996 (Cth) (Bankruptcy Regulations) (see Curtis v Singtel Optus Pty Ltd [2014] FCAFC 144: 225 FCR 458 (Curtis) at [29]-[42]). It is desirable to set out those provisions: 41 Bankruptcy notices (1) An Official Receiver may issue a bankruptcy notice on the application of a creditor who has obtained against a debtor: (a) a final judgment or final order that: (i) is of the kind described in paragraph 40(1)(g); and (ii) is for an amount of at least $5,000; or (b) 2 or more final judgments or final orders that: (i) are of the kind described in paragraph 40(1)(g); and (ii) taken together are for an amount of at least $5,000. (2) The notice must be in accordance with the form prescribed by the regulations. (3) A bankruptcy notice shall not be issued in relation to a debtor: (a) except on the application of a creditor who has obtained against the debtor a final judgment or final order within the meaning of paragraph 40(1)(g) or a person who, by virtue of paragraph 40(3)(d), is to be deemed to be such a creditor; (b) if, at the time of the application for the issue of the bankruptcy notice, execution of a judgment or order to which it relates has been stayed; or (c) in respect of a judgment or order for the payment of money if: (i) a period of more than 6 years has elapsed since the judgment was given or the order was made; or (ii) the operation of the judgment or order is suspended under section 37. … 5 Regulation 4.02 of the Bankruptcy Regulations provides: Form of bankruptcy notices (1) For the purposes of subsection 41(2) of the Act, the form of bankruptcy notice set out in Form 1 is prescribed. (2) A bankruptcy notice must follow Form 1 in respect of its format (for example, bold or italic typeface, underlining and notes). (3) Subregulation (2) is not to be taken as expressing an intention contrary to section 25C of the Acts Interpretation Act 1901. Note: Under section 25C of the Acts Interpretation Act 1901, where an Act prescribes a form, then, unless the contrary intention appears, strict compliance with the form is not required and substantial compliance is sufficient; see also paragraph 46(1)(a) of that Act for the application of that Act to legislative instruments other than Acts. 6 Form 1 requires specified information to be set out, including the "Amount as per the attached final judgment/s or final order/s (note A)". Note A states: If an attached final judgment or final order is expressed in an amount of foreign currency, you may pay the amount in that foreign currency or pay an equivalent amount in Australian dollars that has been calculated using the telegraphic transfer rate of [name of institution]…as at [date]… 7 The applicants acknowledge that their primary argument is inconsistent with the Court's judgment in Curtis at [51]-[53] and [57]. The applicants contend that those passages in Curtis are wrong. Alternatively, and presumably in recognition of the fact that this Court is bound by Curtis, they submit that the passages are distinguishable. They say that is because there were express statements on behalf of the Official Receiver in each covering letter attached to the emails dated 27 June 2018, when the relevant bankruptcy notices were issued to the respondent, that it was necessary for the respondent to serve the final judgment or order with the bankruptcy notices. The applicants contended that an inference should be drawn from those express statements that the Official Receiver was aware that the final judgment or order was not relevantly "attached" to the bankruptcy notices sent by the Official Receiver to CBA for service upon the applicants, for the purposes of compliance with the relevant requirements in s 41 of the Bankruptcy Act and reg 4.02 of the Bankruptcy Regulations. They emphasise that the prescribed form expressly requires that the judgment or orders be attached. 8 Accordingly, the applicants submitted that both bankruptcy notices were a nullity or void, citing James v Federal Commissioner of Taxation (1955) 93 CLR 631 at 644, Pillai v Comptroller of Income Tax [1970] AC 1124 at 1131, Kleinwort Benson Australia Ltd v Crowl [1988] HCA 34; 165 CLR 71 (Crowl) at 79-80 and Adams v Lambert [2006] HCA 10; 228 CLR 409 (Adams) at [28]-[29]. They also contended that the non-compliance was incapable of being cured by the operation of s 306 of the Bankruptcy Act. 9 It is unnecessary to summarise the submissions of the CBA in response to these contentions because they are substantially reflected in my reasons for dismissing the relevant applications.