Case: American Express International Inc v Held [1999] FCA 321 ; (1999) 87 FCR 583
Outcome: cited
The High Court found that the mistake in the bankruptcy notice was not a breach of an essential requirement of the Act and that s 306 applied to remedy the default (at [32]-[34]): In Lewis [at [95]] , Gyles J accurately identified the question as whether correct completion of the form prescribed by the regulations in every respect is a requirement made essential by the Act. Bearing in mind that, in the present case, the error could not have misled the respondent as to what it was necessary to do in order to comply with the requirements of the notice, it is difficult to understand how, consistently with Kleinwort Benson , the respondent could succeed without an affirmative answer to that question. In their dissenting reasons in Lewis , Lee J and Gyles J both gave a detailed account of the 1996 amendments to the Act and Regulations. It is unnecessary to repeat what they said in that respect. Lee J concluded [at [93]] : Properly construed, the Act and Regulations do not express an intention to create a new regime of strict compliance imposed on a judgment creditor issuing a bankruptcy notice. The tenor of the Act and Regulations is not consistent with that conclusion. An attempt has been made to recast the process of issue of a bankruptcy notice in terms more understandable to a judgment debtor, but the essential requirements of a bankruptcy notice remain as they have been stated by bankruptcy legislation over many years. Lee J also said [at [97]] : It cannot be correct that amendments to the Act that left undisturbed s 41(5) and (6) which state that a notice that demands payment of a sum that is unjustified or excessive is only invalid if a debtor gives notice within a prescribed period, introduced a new regime in respect of bankruptcy notices under which a judgment debtor could have such a notice set aside where the amount claimed is due in fact and there is no prospect that the debtor could be misled as to the steps to be taken to comply with the notice. The amending Act could not have contemplated that a mistaken citation of the source of entitlement to claim interest would be a substantive defect or irregularity in the notice so as to exclude the operation of s 306 of the Act. That view of the legislative purpose is persuasive. The effect of the majority view in Lewis is to attribute to the legislature an overwhelming preference for form over substance. That should not be done. Given that s 306 relieves against the invalidating consequences of some mistakes in the preparation of bankruptcy notices, the mistake that was made in this case falls within its terms. 41 In Bendigo Bank Ltd v Gard [1999] FCA 1179 ; (1999) 92 FCR 560, North J in an ex tempore decision considered an appeal from a decision of the registrar regarding the failure to make a sequestration order for non-compliance with a bankruptcy notice, by reason that the notice was defective in that it did not include an interest calculation. His Honour considered the decision of Kenny J in American Express International Inc v Held [1999] FCA 321 ; (1999) 87 FCR 583 where her Honour found that failure to attach a copy of the judgment to the bankruptcy notice was a breach of an essential requirement of the Act. At [11], North J held that even though there was no precise analogy between the purpose for which the copy judgment is required by the form, and the purpose for which the interest calculation is required, the interest calculation was nevertheless an essential requirement of the Act. His Honour found that the bankruptcy notice contained a substantive defect by reason of failing to contain an interest calculation.