Case: Re Bankruptcy Act 1966 ; Ex parte Commercial Banking Co of Sydney Ltd (1979) 23 ALR 522
Outcome: cited
It is convenient to set out the relevant part of the Notice: Schedule Column 1 Column 2 1. Amount of judgments or orders Judgment 12 June 2003 in Supreme Court proceeding number 6302 of 2003 $569,589.65 plus 2. Legal costs if ordered to be paid and a specific amount was not included in the judgments or orders (See Note 1, below) NIL plus 3. If claimed in this Bankruptcy Notice, interest accrued since the date of judgments or orders (See Note 2, below) $190,167.57 4. Subtotal $759,757.22 less 5. Payments made and/or credits allowed since date of judgments or orders $140,000.00 6. Total debt and interest owing pursuant to declaration made by Justice Whelan in proceeding 5047 of 2005 $619,757.22 (NB: Amounts, where applicable, are to be inserted in column 2) FOR INFORMATION OF THE CREDITOR - Notes to the Schedule Note 1 : Legal costs (item 2 of the Schedule) If legal costs are being claimed in this Bankruptcy Notice, a certificate of taxed or assessed costs in support of the amount claimed must be attached to this Bankruptcy Notice. Note 2 : Interest accrued (item 3 of the Schedule) If interest is being claimed in this Bankruptcy Notice, details of the calculation of the amount of interest claimed are to be set out in a document attached to this Bankruptcy Notice. The document must state: a. the provision under which the interest is being claimed; and b. the principal sum on which, the period for which, and the interest rate or rates at which, the interest is being claimed. (NB: If different rates are claimed for different periods, full details must be shown) 7 The calculation of the interest claimed in item 3 of the schedule was set out by the respondent in a document attached to the Notice in the following terms: CALCULATION OF INTEREST CLAIMED IN ITEM 3 OF THE SCHEDULE Interest is claimed pursuant to Section 101(1) of the Supreme Court Act 1986 which provides: "Every judgment debt carries interest at the rate for the time being fixed under Section 2 of the Penalty Interest Rates Act 1983 from the time the judgement was given." By an order made by the Honourable Justice Whelan in the Supreme Court of Victoria, in proceeding number 5407 of 2005 the court declared that the judgement in proceeding 6302 of 2000 remains enforceable and that the sum of $619,757.22 remains outstanding. The sum of $619,757.22 includes interest in the sum of $190,167.57 pursuant to the Penalty Interest Rates Act 1983 . 8 Annexed to the Notice were the 2003 Orders and 2006 Orders. As indicated above, the 2006 Orders included a declaration of the debt owing by the appellant to the respondent as at 11 October 2006 inclusive of interest, being the sum of $619,757.22. It was not disputed that the declaration of Whelan J was binding on the parties. It would appear that the amount of interest was in fact agreed between the parties in the proceeding before Whelan J, as was noted by the federal magistrate (at [8]): In this case the respondent has not produced a schedule explaining how the figure set out in the declaration by Whelan J was calculated. Indeed, it appears that Whelan J reached that figure as a result of admissions made in the pleadings (the respondent alleged that the judgment debt together with interest as at 12 October 2006 was the sum of $619,757.22, and this allegation was admitted by the applicant in the defence). There is now some dispute as to whether or not this figure is calculated precisely in accord with the relevant statutory provisions that apply to judgments of this type in Victoria. However, it is conceded that the declaration of Whelan J is binding. There has been no appeal, nor is it sought to look behind that judgment. Neither party contended before me that these observations of his Honour were inaccurate. 9 It is convenient to set out the relevant statutory context. Section 40(1) of the Bankruptcy Act 1966 (Cth) ('the Act') so far as is relevant, provides: A debtor commits an act of bankruptcy in each of the following cases: ... (g) if a creditor who has obtained against the debtor a final judgment or final order, being a judgment or order the execution of which has not been stayed, has served on the debtor in Australia or, by leave of the Court, elsewhere, a bankruptcy notice under this Act and the debtor does not: (i) where the notice was served in Australia - within the time specified in the notice; or (ii) where the notice was served elsewhere - within the time fixed for the purpose by the order giving leave to effect the service; comply with the requirements of the notice or satisfy the Court that he or she has a counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt or sum payable under the final order, as the case may be, being a counter-claim, set-off or cross demand that he or she could not have set up in the action or proceeding in which the judgment or order was obtained; 10 Section 41 of the Act, so far as is relevant, provides: (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 $2,000; 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 $2,000. (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; ... 11 Regulation 4.02 of the Bankruptcy Regulations 1996 (Cth) ('the Regulations') provides: (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 s 25C of the Acts Interpretation Act 1901 . 12 Section 25C of the Acts Interpretation Act 1901 (Cth) ('the Acts Interpretation Act ') provides: 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. 13 Section 306(1) of the Act provides: Proceedings under this Act are not invalidated by a formal defect or an irregularity, unless the court before which the objection on that ground is made is of opinion that substantial injustice has been caused by the defect or irregularity and that the injustice cannot be remedied by an order of that court. 35 The High Court of Australia in Adams [2006] HCA 10 ; 225 ALR 396 considered all judgments of the court in Lewis [2000] FCA 1915 ; 109 FCR 33. After considering the minority decisions of Gyles and Lee JJ, the court approved their approach and applied the legislative purpose test applied by Gyles and Lee JJ (at [33] to [34]). I do not conclude, however, that the High Court necessarily approved the comments of Lee J concerning Re Bankruptcy Act 1966 ; Ex parte Commercial Banking Co of Sydney Ltd (1979) 23 ALR 522. Further, his comments in this regard were made concerning the old notice prescribed pursuant to s 41(2) of the Act as it was prior to the amendments made in 1996 where there was no requirement in the same terms as note 2 of the new form of the bankruptcy notice, although reflections were made by his Honour on the new notice which impacts upon his views as to what would be expected by the new notice.