Re McDonald, B. v Ex Parte Elder Smith Goldsbrough Mort Ltd [1978] FCA 12

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IN THE FEDERAL COURT OF AUSTRALIA ) NEW SOUTH WALLS DISTRICT REGISTRY )

> GENERAL DIVISION ) 4 Qe .

No. P. 863 of 1977

ih

In the matter of -

THE BANKRUPTCY ACT 1966 And in the matter of -

A CREDITOR'S PETITION RE -

BARRY McDONALD

Ex parte:

ELDER SMITH GOLDSBROUGH MORT LIMITED

ORDER

JUDGE MAKING ORDER: Riley J. DATE OF ORDER 1 March 1978

WHERE MADE: Sydney

THE COURT ORDERS THAT:

1. The petition be dismissed.

2. The petitioning creditor pay the debtor's costs including reserved costs.

DISTRICT REGISTRAR

Date Entered:

. CATCIIWORDS

Bankruptcy - Creditor's petition - Bankruptcy notice - Judgment debt carrying statutory interest - Notice claiming unpaid balance of judgment debt and statutory interest thereon - Amount of balance, rate of interest and amount of interest all understated

in notice ~ Notice invalid.

REASONS FOR JUDGMENT

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This petition for a sequestration order is based on the debtor's failure to comply with a bankruptcy notice. It is opposed by, the debtor on the ground that the bankruptcy notice is invalid.

Though there is some ambiguity in the wording of the certificate of judgment filed with the application for the issue of the bankruptcy notice, 1t is not disputed that the petitioning creditor on 17 February 1975 obtained against the debtor in the Supreme Court of New South Wales a judgment for $10,648.75 for debt and $98 for costs - a total of $10,746.75. By reason of s. 95(1) of the Supreme Court Act 1970 (N.S.W.) and Part 40,

Rule 7(2)(b) of the Supreme Court Rules, interest at the yearly rate of 10% was payable on so much of that sum of $10,746.75 as was from time to time unpaid.

C. A. Sweeney J. has pointed out in Re Mullavey

(8 November 1977 - so far unreported), that where by statute a judgment dept carries interest the judgment creditor may include in his bankruptcy notice a claim for interest (see In re Lehmann (1890), 7 Morr. 181, 183 per Cave J.) but that he need not, and in practice often does not, do so: see Re O'Keefe (1936), 19 A.B.C. 101, 104, where Clyne J. remarked that to amend the bankruptcy notice by striking out an impermissible claim for interest "would be to turn what is a basically invalid notice into a valid notice".