JUDGMENT NO. weed - 0. TO7 15 in ae IN THE FEDERAL COUPT OF AUSTRALIA ) BANKRUPTCY NOTICE GENERAL DIVISION ) NO. 1482 of 1984 BANKRUPTCY DISTRICT OF THE SOUTHERN ) DISTRICT OF THE STATE OF QUEENSLAND ) RE: MARILYN JOY GREEN (Applicant) ES PARTE: MARILYN JOY GREEN (Applicant) and OVERDRIVE PROMOTIONS PITY LTD (Respondent) DATE OF HEARING: 29 OCTOBER 1984 DATE JUDGMENT DELIVERED: 29 OCTOBER 1984 COUNSEL : for the applicant Mr A. Heyworth-Smith vith him Mr T. Carmody instructed by Scattini Riaby and Grav. for the respondent Mr F.L. Harrison O.C. with him Ms C. Wadley instructed by Peter Tobin and Co. 29 October 1984 8. KiFT ASSOCIATE TO SPENDER J. CATCHWORDS BANKRUPTCY - application to set aside bankruptcy notice - calculation of amount demanded by notice - notice founded on two or more judgments or orders invalid - notice not invalid. RE: MARILYN JOY GREEN EX PARTE: MARILYN JOY GREEN (Applicant) and OVERDRIVE PROMOTIONS PTY LTD (Respondent) BANKRUPTCY NOTICE NO. 1482 of 1984 SPENDER J. BRISBANE 29 OCTOBER 1984 IN THE FEDERAL COURT OF AUSTRALIA ) BANKRUPTCY NOTICE GENERAL DIVISION ) NO. 1482 OF 1984 BANKRUPTCY DISTRICT OF THE SOUTHERN ) DISTRICT OF THE STATE OF QUEENSLAND ) RE: MARILYN JOY GREEN EX PARTE: MARILYN JOY GREEN (Applicant) and OVERDRIVE PROMOTIONS PTY LTD (Respondent) ORDER JUDGE MAKING ORDER: SPENDER J. DATE OF ORDER: 29 OCTOBER 1984 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. Application to strike out the bankruptcy notice be dismissed. Ww The time within which Marilyn Joy Green has to comply with the bankruptcy notice be extended to 5 November 1984. 3. The applicant pay the respondent's costs, to be taxed. IN THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISION ) BANKRUPTCY NOTICE NO. 1482 OF 1984 BANKRUPTCY DISTRICT OF THE SOUTHERN ) DISTRICT OF THE STATE OF QUEENSLAND } RE: MARILYN JOY GREEN EX PARTE: MARILYN JOY GREEN (Applicant) and OVERDRIVE PROMOTIONS PTY LTD (Respondent) SPENDER J. 29 OCTOBER 1984 EXTEMPORE REASONS FOR JUDGMENT This is an application to set aside a bankruptcy notice. It is part of what I regard as an unedifying history of litigation involving these parties, and I confess my view of the matter has been somewhat influenced by that history; but, on analysis, the question really comes down toa question of construction of the bankruptcy notice. The bankruptcy notice has claimed the amount of $5565.02 as being due by Marilyn Joy Green to the judgment creditor, being "the balance due under a final Judgment and Order obtained by it .e. in the District Court of Queensland held at Brisbane on the 4th February, 1983, being a Judgment for ... $6296.92 and an order that (Marilyn Joy Green) and ... Anthony Christopher Hansen do pay to the judgment creditor its costs ... which costs have been taved and certified at... $1059.67 being a judgment and order the execution of which has not been stayed.". That is the claim, and the bankruptcy notice then proceeds "The said sum of ... $5565.02 is calculated as follows:-" "The abovementioned judgment 6,296.92 The abovementioned order for costs $1,059.67 Sub-total $7,356.59 Less - The amount of taxed costs due and payable to you by the judgment creditor pursuant to an order of the Honourable Mr Justice McGregor in this Honourable Court of Brisbane on the lith August, 1983. 1,806.07 Less - The amount of taxed costs payable by you and the said ANTHONY CHRISTOPHER HANSEN pursuant to an Order of his Honour Judge Heiman made in the District Court held at Brisbane on 17th December, 1982 and taxed and certified on 22nd November, 1983. $314.50 $1,491.51 Sub-total $5,865.02 Less - The amount of costs taxed and payable to you by the Judgment creditor pursuant to the order of the Honourable Mr Justice McGregor in this Honourable Court at Brisbane on 7th December, 1983. $300.00 $5,565.02 Then the bankruptcy notice requires payment of the sum of $5565.02 or, in the alternative, the securing of the payment of that sum. Clyne dg. in Re Application for Issue of a Bankruptcy Notice; Ex parte Tanson (1946) 14 A.B.C. 41 at p.43 said "Now, 1t is settled law that two or more judgments or orders cannot be included in the one notice". His Honour referred to In re Low; Ex parte The Argentine Gold Fields Ltd (1891) 1 Q.B. 147, In re Bassett; Bx parte Lewis (1895) 2 Manson 177 and Re A Bankruptcy Notice (1906) 14 Manson 133 and concluded at p.43: "As the bankruptcy notice before me requires the payment of moneys which became payable in pursuance of two orders, it is not a valid notice." He also indicated in the circumstances of that case he was unable to make an amendment to the bankruptcy notice. In Re Edmunds (1936) 9 A.B.C.1, Lukin J. was concerned with a bankruptcy notice which professed to be based upon a judgment obtained in the Haigh Court but the petitioner also included an amount for taxed costs pursuant to an order of the Full Court of the State of Victoria. Lukin J. said at p.3: "The petitioner obviously has made a mistake in regard to the amount for which he procured the bankruptcy notice to be issued. He has wrongly included the amount of taxed costs of the trial of the petition and of the appeal to the State Full Court, allowed by that Court, as if the High Court had made an order in regard thereto as well as to the costs incurred on appeal to it. This mistake 1s relied upon by the debtor respondent here as an irregularity invalidating the bankruptcy notice, and he relies on the case of In re Low; Ex parte Argentine Gold Fields Ltd (1891) 1 Q.B. 147, and other cases following that authority - In re Collier (1891) 8 Morr. 80 at ».83; In re 0.C.S. (a Debtor) (1904) 2 K.B. 161; In re Bankruptcy Notice (1906) 14 Manson, 133. But since those cases were decided the English Bankruptcy Act has been amended...." He then referred to the change that has occurred in the legislation and which is now to be found in sub-s. 41(5). He said in relation to this (at p.4): "Recqarded as a bankruptcy notice based, as it professes to be, entirely on the Haigh Court's judgment 'the sum specified' therein 'exceeds the amount actually due' within the words of that proviso. The bankruptcy notice does not refer to the State Full Court judgment. If it had the bankruptcy notice would have been irregular but, as it is, I think I must hold that this proviso by its wide terms covers the present case. Therefore in its present form it is not invalid." Mr Heyworth-Smith, who appeared with Mr Carmody for the applicant to set aside the bankruptcy notice, conceded that there would here be a valid bankruptcy notice were there to be no allowances made from the sum of $7356.59. He further conceded that, were the bankruptcy notice to have made no reference to the order of Helman D.C.J. of $314.50, equally no objection could be taken to it. The core of his submissions was that the bankruptcy notice was founded on two judgments, and that conduct or that course was impermissible. Reference was made by Mr Harrison 9.C., for the judgment debtor, to the observations made by Lockhart J. in Re Walsh (1982) 47 A.L.R. 751 at pp. 755-756 where his Honour said: "Before turning to the question whether it is the time of issue or service of a bankruptcy notice that determines the question of overpayment of the amount itself, I propose to make some brief observation pertaining to this case and generally. The law of bankruptcy is not intended to protect rascals, rather it should flush them out and deal with them fairly and according to law. In recent times there is a growing and disturbing tendency of unscrupulous debtors to use the technicalities that traditionally surround bankruptcy law to deliberately exploit the courts and the system they administer. The principles laid down by judges over many years relating to bankruptcy notices did not envisage this development. The courts must not aid the ruthless and cynical exploitation of the laws of insolvency by unscrupulous debtors. I do not suggest for one moment that bankruptcy statutes should not be construed otherwise than according to their ordinary and natural meaning inthe light of their evident purpose and guided by well established principles developed by the courts. But where the application of these principles would necessarily lead to a manitest absurdity or injustice, the courts must strain against it and ensure that the laws of insolvency are interpreted and applied firmly and fairly in the interests of debtors and creditors alike. If this means that some old principles laid down by the courts of yesteryear must go, then so be it. The law does not stand still, impervious to changing times and conditions. If the laws of bankruptcy are allowed to become the haven or refuge of the rascal they have utterly failed the community which they are designed to serve." T hasten to add that there is no suggestion here that Marilyn Joy Green, on any material before me, is a person properly to be characterized as a rascal or a rogue, nor is there any suggestion of a ruthless and cynical exploitation of the law of insolvency by an unscrupulous debtor. The impression I got, quite frankly, is that there has been a prolonged litigious game which has had the effect of postponing the securing of substantial justice between the parties and the aid the courts can give to that end. When one approaches the construction of the bankruptcy natice here, inmy view it is properly to be considered asa claim based on the judgment given in the District Court of Queensland on 4 February 1983 in an amount of $7356.59. The bankruptcy notice then proceeds to recite a calculation by which the balance, a sum of the order of $2,000, is waived on that particular judgment debt. Tt is true that not all of the amount of the first judgment of McGregor J. has been waived. What has been allowed off is the amount of $1806.07 less an amount of $314.50. I acknowledge that there are difficulties in the method by which the bankruptcy notice has been expressed; but, in the light of the concessions which were very fairly and properly made by Mr Heyworth-Smith, I view this not as a bankruptcy notice which is founded on two judgments, but one in which the judgment creditor has allowed to the debtor an amount which does take into account a contra amount of $314.50. I do not think this renders the bankruptcy notice invalid. Were I of the view, however, that the reference to the sum of $314.50 did render the bankruptcy notice invalid, I would have no hesitation 1n the circumstances of this case in allowing an amendment of the bankruptcy notice to take account of that fact. But as I say, my view is that the bankruptcy notice is valid. The application to strike out the bankruptcy notice 1s dismissed. I extend the time within which Marilyn Joy Green has to comply with the bankruptcy notice to 5 November 1984. I order that the applicant pay the respondent's costs, to be taxed. leery we ( yd neersome ' Mareerny , 2 ' , . A a ~ 6 SC MSY