Case: Seovic Civil Engineering Pty Ltd v Groeneveld [1999] FCA 255 ; (1999) 87 FCR 120
Outcome: distinguished
for the creditor seeks to maintain the orders on other bases. The first is that a separate notice is required under s 41(5). The application to set aside the bankruptcy notice was not such a notice. Counsel was not able to refer to any authority which establishes that proposition. It was suggested that assistance may be gained from a passage from the judgment in Seovic Civil Engineering Pty Ltd v Groeneveld [1999] FCA 255 ; (1999) 87 FCR 120 as follows (at [37]): 'The object of a debtor's notice under s 41(5) is to inform the creditor that the debtor disputes the bankruptcy notice and does so on the ground of a misstatement contained in that notice. The point of the notice is to draw to the creditor's attention the misstatement, thereby giving the creditor the opportunity to consider, for example, whether the bankruptcy notice should be withdrawn and a fresh notice, correcting the misstatement, issued. If the creditor is given no hint in the notice as to the nature of the misstatement, there is a considerable risk that the debtor will be able to take unmeritorious advantage of minor errors (such as the small mistake in the present case) and that unnecessary and wasteful litigation will eventuate. It is no answer to say that the creditor can ask for particulars, since the debtor would not be obliged to give any until after litigation had been instituted. Indeed, a debtor wishing to take advantage of the technicalities of the law of bankruptcy might be well-advised to say as little as possible for as long as possible about the true nature of the alleged misstatement in the bankruptcy notice.' The notice in that case was a separate letter. Subsection 41(5) is silent as to the method of giving notice. I can see no reason why it cannot be done by service of an application to set aside a bankruptcy notice in an appropriate form. It was faintly argued that this application was not in a form to give the necessary notice. I do not agree. Furthermore, it seems to me that the passage relied upon from Seovic Civil Engineering Pty Ltd v Groeneveld is neutral as to the point which arises here. As the application was served within the time allowed for payment, the subsection is satisfied. Failure to expressly advert to s 41(5) is not of any significance. It is true that 'notice' and 'application' are different words and that each is used in different parts of the Act. However, the two are not mutually exclusive. The section requires the giving of notice, not serving of a notice in any particular form. Counsel for the creditor contends that the failure on the part of the debtors to serve the process within three days as required by r 30.02(4) was fatal to the application. That failure certainly weighed with the learned Federal Magistrate, although he described that rule as being 'almost mandatory' in the events which had happened. The point had been taken, albeit briefly, in the written submissions for the creditor at the hearing. It is submitted that the Act is silent as to the procedure for setting aside a bankruptcy notice. That procedure is found only in the Federal Magistrates Court Rules 2001 as they then stood. Rule 30.02(4) was undoubtedly not complied with. No explanation was proffered for the failure to comply with that rule. Rule 30.02 is as follows: ' Requirements of application to set aside, or extend time for complying with, notice (1) This rule applies to: (a) an application to set aside a bankruptcy notice; or (b) an application for an extension of the time for complying with a bankruptcy notice. (2) An application must be accompanied by: (a) a copy of the bankruptcy notice; and (b) an affidavit stating: (i) the grounds in support of the application; and (ii) the date when the bankruptcy notice was served on the applicant; and (c) a copy of any application to set aside the judgment or order in relation to which the bankruptcy notice was issued and any material in support of that application. (3) If the application to set aside a bankruptcy notice on the ground that the debtor has a counter-claim, set-off or cross-demand mentioned in paragraph 40(1)(g) of the Bankruptcy Act , the affidavit must also state: (a) the date when the bankruptcy notice was served on the debtor; and (b) the full details of the counter-claim, set-off or cross-demand; and (c) the amount of the counter-claim, set-off or cross-demand and the amount by which it exceeds the amount claimed in the bankruptcy notice; and (d) why the counter-claim, set-off or cross-demand was not raised in the proceeding that resulted in the judgment or order in relation to which the bankruptcy notice was issued. (4) The application and accompanying documents must be served on the respondent creditor within 3 days after the application is filed. ' [emphasis added]