Case: In re A Bankruptcy Notice [1934] 1 Ch 431
Outcome: considered
before the Court is an Application seeking to set aside a Bankruptcy Notice dated 15 January 2007, being Bankruptcy Notice NN 104/07. The Application as filed states that the Bankruptcy Notice was served on the Applicant, Mr Robert Harding, on 17 August 2007. There may be some uncertainty as to whether or not it was served on 17 July 2007 as opposed to 17 August 2007 but, whenever it was served, the Applicant wants it set aside. The form of Bankruptcy Notice as served attaches the " judgments or orders relied upon by the creditor ", being a judgment entered against the present Applicant by the Respondent in the District Court of New South Wales on 9 November 2006 for the principal sum of $373,772.47. A hand-written alteration to the Bankruptcy Notice records that " within 21 days after 17 August 2007 " Mr Harding was required to either pay the Deputy Commissioner the amount of the debt or make an arrangement to her satisfaction for settlement of the debt. The Application as filed in this Court was filed within 21 days, namely on 5 September 2007. Section 41(7) of the Bankruptcy Act 1966 (Cth) provides, in such circumstances, that the time for compliance with the Bankruptcy Notice is " deemed to have been extended ". It is understood that the Applicant contends that the Bankruptcy Notice should be set aside because: (i) the judgment of the District Court is not a " final judgment " within the meaning of and for the purposes of s 40(1)(g) or s 41 of the Bankruptcy Act ; (ii) the Applicant maintains that he has a " counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt " within the meaning of s 40(1)(g) of the 1966 Act; (iii) that " counter-claim, set-off or cross demand " could not have been " set up in the action or proceeding " in which the Deputy Commissioner obtained judgment, namely the District Court proceedings; and (iv) irrespective of whether there was any such " counter-claim, set-off or cross demand " which could have been " set up in the action or proceeding ", there nevertheless remained a discretion in the Court to set aside the Bankruptcy Notice. The conclusion that has been reached is that the judgment of the District Court is a " final judgment " and that no state of satisfaction can be reached within the meaning of s 41(7) of the 1966 Act that the Applicant has a " counter-claim, set-off or cross demand " which has any prospects of success, let alone " a fair chance of success " or one which he is " fairly entitled to litigate ". Nor is it considered that any such " counter-claim, set-off or cross demand " could not have been " set up in the action or proceeding " in which the Deputy Commissioner obtained judgment. Finally, there is not considered to be any separate discretion to set aside the Bankruptcy Notice in circumstances where, relevantly, the requirements of s 40(1)(g) have not been met. The submission as finally advanced on behalf of Mr Harding as to why the judgment of the District Court was not a " final judgment " settled upon a conversation that occurred as between Mr Harding and a solicitor from the Australian Government Solicitor that took place outside the hearing room of the District Court immediately before judgment was entered against him. Mr Harding maintained that he " tried to talk to the Government's Solicitor prior to going into the room " to tell " her about the Malcolm McClure problem ". Whatever was told to the solicitor was not further expanded upon. The solicitor's response was that " she basically said that it had no relevance ". In re-examination, Mr Harding agreed with the proposition that he " tried to talk to the government solicitor and tell her about the McClure problem and she said it had no relevance ". But, whatever the meaning to be given to the term, it has to date been held that an action " must be something sounding in money ": Re Brink; Ex parte Commercial Banking Co of Sydney Ltd (1980) 44 FLR 135 at 138 per Lockhart J. See also: Re Jocumsen (1929) 1 ABC 82 at 85 per Henchman J. An application seeking declaratory relief as to an entitlement to a charge on the proceeds of property has thus been said not to be a " counter-claim, set-off or cross demand ": In re A Bankruptcy Notice [1934] 1 Ch 431. See also: Massih v Esber [2008] FCA 1452 at [22] [24].