/ Ate. THE FEDERAL COURT OF AUSTRALIA GENERAL DIVISION BANKRUPTCY DISTRICT OF THE STATE OF No.B3638 of 1962 NEW SOUTH WALES AND THE AUSTRALIAN CAPTTAL TERRITORY APPLICATION TO SET ASIDE BANKRUPTCY NOTICE ANTHONY LOCK The Debtor (Applicant) 18 March 1983 EVAIT J. REASONS FOR JUDGMENT This matter was originally listed before the Court seeking an order that the time to comply with a bankruptcy notice duly served upon the applicant Anthony Lock (the debtor) be extended in order that he might apply to the District Court at Lismore to set aside a default judgment recovered against him on 8 July 1982 by Peter Michael Mortimer, the judgment creditor named in the said bankruptcy notice, in a sum totalling $16956.00. As the time for compliance with the bankruptcy notice when the matter was called on had expired no order extending such time was then possible. However the parties agreed that the Court hear and determine an application that the bankruptcy notice be set aside on e1ther or both of two grounds. After hearing argument in regard to these grounds, the Court determined that the bankruptcy notice herein was valid. At that time the Court conmitments were such that full reasons for such determination could not then be given and the Court indicated that 1t would publish such reasons for judgment 1f requested to do so. One of the parties has recently oe/2ee ue -2- made such a request and the Court accordingly publishes these reasons. The two grounds which the debtor claimed invalidated the bankruptcy notice flowed from the wording of the first paragraph thereof. The bankruptcy notice form 1s one printed by Penfolds Stationers. The first paragraph of the notice so far as is relevant reads: " WHEREAS Peter Michael Mortimer (address shown)( hereinafter referred to as "the judgment creditor") has claimed that the balance/sum of $16956.00 together with interest thereon at the rate of Ten(10) per centum per annum on so much of the judgment debt (including costs) as is from time to time unpaid from 8.7.82 (here insert date of judgment) which at the date-ef the-tesue of-this-Hotees amounts to $92.90 making a total of $17,048.00 1s due by you to the judgment creditor under a final judgment/exder obtained by the judgment creditor against you 1n the District Court on the 8th day of July 1982 being a judgment/erdex the execution of which has not been stayed. THEREFORE TAKE NOTICE etc. (underlining of balance/sum added) DATED this 13th day of August 1982. " The first ground on which the debtor relied was that the failure to strike out the word "balance" (where underlined) in the notice "gives the impression that the amount owed is the balance of a judgment debt of a greater amount, the greater amount not being expressed in the notice" and as a consequence "would be such as to mislead a reasonable debtor on that count". It was conceded that the sum set out in the notice was the total judgment and no moneys had been paid by the debtor in respect of the judgment. 'This submission was rejected by the Court. ~-/3.- Lockhart J. in Re Manion;Ex parte Deputy Commissioner of Taxation 23 A.L.R. 270 @ 274 stated: "The test to be applied in determining whether a defect in a bankruptcy notice is a formal defect or irregularity within the meaning of s.306 or a defect that renders the bankruptcy notice a nullity has been stated in many authorities." His Honour then refers to an English authority and @ 275 said: " In my opinion the defects relied on by the debtor in this case are not of such a kind as could reasonably mislead a debtor upon who it was served." Likewise I am of the view that the judgment debtor herein could not, in the circumstances of this case, have considered that the sum of $16,956.00 was other than the total judgment debt and that the failure to delete the word "balance/" was but a defect or irregularity merely of form and not of substance which could not have misled or embarrassed the debtor so as to cause him any substantial injustice. The second submission by counsel for the debtor was that, in respect of the interest claimed, the deletion of the words "date of the issue of this Notice" and substituting the figure "28.7.82" therefore meant that, having claimed less than he was entitled to at the date on which the notice was issued (namely 13 August 1982), the judgment creditor had understated the amount owing to him and such understatement invalidated the notice. It was claimed that if the creditor had wished to claim interest to a specific date not being the date on which the notice was issued, then the words "and no more" (or like words) should have been inserted so as to make it clear to the debtor that the creditor had waived any interest in excess of that which he was claiming. In that regard the debtor relied on ./4.. -4- Re Munson, 29 F.L.R. 479 @ 481; Re The Bankruptcy Act 1966 Ex parte Commercial Banking Company of Sydney Limited, 23 A.L.R. 522 and Re Manion(supra.) and cases therein referred to. Here there 1s no suggestion that the rate of interest claimed was incorrect or that the amount stated to be due as at the date set out was incorrect. In Re Manion (supra.) Lockhart J. @ 274 said 1n respect of a bankruptcy notice : "If interest is claimed, the notice should proceed to provide that interest is claimed at a particular rate from the date of judgment to the date specified in the notice. 'The total sum claimed to be due by the debtor to the petitioning creditor, inclusive of interest, should then be specified." This 1s exactly what the judgment creditor has done in respect of the claim for interest in this case. It is clear in my view that the solicitors preparing the bankruptcy notice, not knowing when it would be issued (cf. Riley J. in Re Munson(supra.) @ 480-1), were endeavouring to comply with the dicta 1n respect of interest of Lockhart J. 1n Re Manion as set out above. In my view 1t was perfectly clear to the debtor that the sum he was required to pay to the Registrar of the District Court at Lismore was $17,048.90. Acoordingly the attack on the validity of the bankruptcy notice fails. The earlier order as to costs being reserved remains. fraetrinn ts acd the three preceding pages are a true copy of the reasons for Judgment herein of The Honourable Mr Justice PR BEVATT Dated 18 lark, /9 73