| de anes CATCHWORDS Bankruptcy - bankruptcy notice - change of name of corporate judgment creditor - notice invalid. In Re Howes; Ex parte Hughes [1892] 2 Q.B. 628 - con. RE: ANTHONY CHRISTOPHER HANSEN EX PARTE: ANTHONY CHRISTOPHER HANSEN AND MORTGAGE GUARANTY INSURANCE CORPORATION OF AUSTRALIA No. 2901 of 1984. Beaumont, J. 4 March 1985. Sydney. IN THE FEDERAL COURT OF AUSTRALIA GENERAL DIVISTON BANKRUPTCY DISTRICT OF THE SOUTHERN DISTRICT OF THE STATE OF QUEENSLAND No. 2901 of 1984 RE: ANTHONY CHRISTOPHER HANSEN EX PARTE: ANTHONY CHRISTOPHER HANSEN Applicant MORTGAGE GUARANTY INSURANCE CORPORATION OF AUSTRALIA Respondent ORDER Judge making order: Beaumont, J. Date order made: 4 March 1985. Where made: Sydney. THE COURT ORDERS THAT: 1. Order that bankruptcy notice No. 2901 of 1984 be set aside, 2, Order that the judgment creditor pay the costs of the judgment debtor of this application. IN THE FEDERAL COURT OF AUSTRALIA GENERAL DIVISION BANKRUPTCY DISTRICT OF THE SOUTHERN DISTRICT OF THE STATE OF QUEENSLAND ee ee een No. 2901 of 1984 RE: ANTHONY CHRISTOPHER HANSEN EX PARTE: ANTHONY CHRISTOPHER HANSEN Applicant MORTGAGE GUARANTY INSURANCE CORPORATION OF AUSTRALIA LIMITED Respondent CORAM: Beaumont, J. DATED: 4 March 1985. REASONS FOR JUDGMENT By his application dated 29 January 1985, the judgment debtor seeks to set aside the judgment creditor's bankruptcy notice. In the alternative. the judgment debtor seeks an extension of the time for compliance with that notice. ta The history of the matter, shortly stated, is as follows. Summary judgment for the judgment creditor in the Supreme Court of Queensland in the amount of $19,521.50 for debt and in the amount of $230.90 for costs was entered against the judgment debtor on 16 November 1984 in proceedings commenced in 1981. On the application of the judgment creditor, on 18 December 1984, a bankruptcy notice addressed to the judgment debtor was issued by the Brisbane Registry. The notice, omitting formal parts, was in the following terms: "To: ANTHONY CHRISTOPHER HANSEN Of: 35 Bonney Avenue, Clayfield, Queensland. WHEREAS MORTGAGE GUARANTY INSURANCE CORPORATION OF AUSTRALIA LIMITED a company incorporated according to the law of the State of New South Wales and having its registered office in Queensland at 307 Queen Street, Brisbane (hereinafter referred to as 'the judgment creditor') has claimed that the sum of $19,521.50 and costs in the amount of $230.90 is due by you to the judgment creditor under a final judgment obtained by the judgment creditor against you in the Supreme Court of Queensland (held at Brisbane) on the 16th day of November, 1984 being a judgment the execution of which has not been stayed. THEREFORE TAKE NOTICE that witin 14 days after service of this Notice on you, excluding the day on which this Notice is served on you, you are required: (a) to pay the sum of $19,752.40 so claimed by the judgment creditor to the judgment creditor; or (b) to secure the payment of the sum referred to in the last preceding w paragraph to the satisfaction of the Supreme Court of Queensland or the Federal Court of Australia or other court exercising Federal jurisdiction in bankruptcy, pursuant to the provisions of Section 27 of the Bankruptcy Act 1966, or the judgment creditor, or compound the sum so specified to the satisfaction of the judgment creditor. AND FURTHER TAKE NOTICE that if, within the period set out above, you fail either to comply with either of the abovementioned requirements of this Notice or to satisfy the Supreme Court of Queensland or the Federal Court of Australia or other court exercising Federal jurisdiction in bankruptcy pursuant to the provisions of Section 27 of the Bankruptcy Act 1966 that you have a counterclaim set-off or cross-demand equal to or exceeding the sum specified in paragraph (a) of this Notice, being a counter-claim, set-off or cross-demand that you could not have set up in the action (or proceeding) in which the judgment (or order) was obtained, you will have committed an act of bankruptcy on which bankruptcy proceedings may be taken against you." The notice was served on the judgment debtor on 15 January 1985. The judgment debtor referred the matter to his solicitors on the following day. On 22 January 1985, for reasons which were not made clear, an employee of the judgment debtor's solicitors, Susan Jane Esler, attempted to seek out the judgment creditor at the address shown on the bankruptcy notice, viz., 307 Queen Street, Brisbane. Susan Esler perused the tenants' directory on the ground floor of the building located at 307 Queen Street Brisbane but was not able to find the name of the judgment creditor as shown on the bankruptcy notice. On making enquiries with the attendant at the desk situated in the foyer of the building, she was informed that the name "Mortgage Guaranty Insurance Corporation of Australia Limited" was not included in the tenants' directory. The attendant said that he did not know the whereabouts of any company bearing that name. Further enquiries directed by Susan Esler to an attendant of the tenant occupying the ground floor of the building produced a similar result. Susan Esier''s inability to locate the judgment creditor at the address indicated on the bankruptcy notice was explained by an affidavit of the judgment creditor's Queensland manager, Donald Victor Wood. (The evidence contained in that affidavit is supported by records kept by the Commissioner for Corporate Affairs for the State of Queensiand. ) That affidavit revealed that the judgment creditor was registered as a foreign company in Queensland on 8 October 1965 under the name appearing on the bankruptcy notice. Since 1 October 1979 the principal office in Queensland of the judgment creditor has been, and still is, 16th Level, 307 Queen Street, Brisbane. However, on 19 April 1984, the judgment creditor changed its name from that indicated on the bankruptcy notice to °M.G.I.C.A. Limited". In accordance with s.509(4)(a) of the Companies Code, the judgment creditor has at all material times affixed outside its principal office its name. Further, the name of the judgment creditor has at all material times been displaved on the tenants' directory of the building located at 307 Queen Street, Brisbane. Susan Esler's inability to locate the judgment creditor was presumably the result of the failure on the part of herself and the persons of whom she enquired on 22 January 1985 to associate the name indicated on the bankruptcy notice with "M.G.I.C.A. Limited". At the commencement of the hearing of the application, the judgment debtor's case was rather loosely described as one involving a bankruptcy notice which bore an incorrect address. But it is clear from the facts that the difficuity in the present case stems from a change of name rather than a change of address: at all material times, the judgment creditor maintained an office at 307 Queen Street, Brisbane. Consequently, the authorities dealing with bankruptcy notices bearing incorrect or insufficient addresses to which I was referred are not directly in point (cf. Re Haritos; Ex parte Hill (1968) 15 F.L.R. 378). Strict compliance with the requisites of a bankruptcy notice is essential to its validity and if the notice 1s capable of misleading the debtor in a material respect, the court will not inquire whether the debtor has in fact been misled: it is sufficient that he could be misled (see James v. Federal Commissioner of Tazation (1955) 93 C.L.R. 631 at p.644),. The importance, in this connection, of ensuring that the juagment creditor is correctly named is illustrated by In Re Howes; Ex parte Hughes £18924 2 Q.B. 628. Upon an application to set aside a bankruptcy notice it appeared that the notice required the debtor to pay to "H. and others, trustees of the charity known as St. John's Hospital, Northampton, 2501.," the amount due upon a final judgment obtained by them against the debtor. The judgment upon which the notice was founded was headed, "H. and others, plaintiffs," and did not anywhere describe the plaintiffs as trustees. It was held by the English Court of Appeal that the bankruptcy notice was not in accordance with the terms of the judgment; that it was calculated to perplex the debtor; and that it ought to be set aside. Lord Esher, M.R. said (at ».631): "It is said that the bankruptcy notice follows the terms of the judgment. In my opinion it does not, in the sense in which it ought to follow then. It has made an addition to the judgment which, although it may in law be mere surplusage, is well calculated to perplex the judgment debtor. The judgment was recovered by 'the Rev. Nathaniel Thomas Hughes and others'; the bankruptcy notice requires the debtor to pay 'to the Rev. Nathaniel Thomas Hughes and others (trustees of the charity known as St. John's Hospital, Northampton). '' This, as it seems to me, so far alters the character of the creditors as described in the judgment as to be extremely likely to perplex the judgment debtor. The bankruptcy notice is not, therefore, 'in accordance with the terms of the judgment.' This is a sufficient reason for setting the notice aside. But I go further. In my opinion, if a creditor in obtaining a judgment against his debtor for default of appearance chooses to accept 1t expressed in such terms as this, 'A. B. and others' (he is not compelled to accept it so expressed), and then issues a bankruptcy notice in similar terms, it is so likely to perplex the debtor and so unfair that the Court of Bankruptcy, which has regard to equitable considerations, ought not to enforce it." Bowen, L.J. said (at p.632): "The bankruptcy notice does not follow the terms of the judgment. The addition of the words, 'trustees of the charity known as St. John's Hospital, Northampton,' is either one of which we must take cognisance as material, or one which we must reject as immaterial. If we treat it as material, the bankruptcy notice varies from the judgment. Reading the judgment in the way most favourable to the plaintiffs, we must assume that 'Hughes and others' were formerly the trustees of the charity; and if so, it does not necessarily follow that the addition was a ? description of the same persons as those who brought the action. If, on the other hand, the addition is to be regarded as immaterial, the question 1s, whether the bankruptcy notice ought to be allowed to stand as a notice requiring the debtor to pay 'Hughes and others.' A bankruptcy notice ought to inform the debtor clearly who is the creditor whom he is required to pay. In the present case the judgment gives the debtor no such information, and the bankruptcy notice does not supply the defect. Such a notice would be extremely hard and oppressive. I do not regard this as a merely technical matter, for bankruptcy proceedings are of a peculiar character. They involve quasi-penal consequences to the debtor, and it is essential that all those forms, the object of which is to prevent injustice, should be strictly followed, Such a notice as this would be simply a trap for the debtor." On behalf of the judgment creditor, it is submitted that not only did it follow in the notice judgment upon which the in the notice is saved by 3.65(5) of the Companies Code. provides: "A change of name of a company pursuant to this Code does not operate- (a) (b) (c) (d) to create a new legal entity; to prejudice or affect the identity of the body corporate constituted by the company or its continuity as a body corporate; to affect the property, or the rights or obligations, of the company; or to render defective any legal proceedings by or against the company, and any legal proceedings that could have been continued or commenced by or against the company by its former name may he continued or commenced by or against it by its new name." in my opinion, application here. the terms of the notice is based but that any defect It s.65(5) of the Code has no relevant It is not suggested that the change of name has rendered defective the bankruptcy notice. The argument put on behalf of the judgment debtor is that the name in the notice is not the present name of the judgment creditor with the consequence that the judgment debtor could be materially misled. Further, the second limb of s.65(5) cannot assist here: no question arises of the judgment creditor's seeking to use its new name. In my opinion, the correct manner of description of the judgment creditor for the purposes of the bankruptcy notice is "M.G.I.C.A. Limited (formerly known as Mortgage Guaranty Insurance Corporation of Australia Limited)" or words to that effect (cf. Re Wheelahan; Ex parte Commissioners of the State Bank of Victoria (1981) 58 F.L.R. 91 at p.95). Unless some such description of the judgment creditor were made in the bankruptcy notice, the judgment debtor could, in my view, be misled as to the identity of the judgment creditor for the purposes of complying with the requirements of the notice. It should be noted that there is no room for any suggestion that the judgment debtor was aware of the change of name from extraneous sources (cf. Re Wimborne; Ex parte The Debtor (1979) 24 A.L.R. 494 per Lockhart, J. at p.500). It may be accepted that, for other purposes, the misdescription of the name of a limited company is not necessarily fatal. Thus, in F. Goldsmith (Sicklesmere) Ltd. v. Baxter £19703 1 Ch. 85, specific performance was granted of an agreement to sell land entered into on behalf of a 10. company described as "Goldsmith Coaches (Sicklemere) Ltd." when its correct name was F. Goldsmith (Sicklesmere) Ltd.: Stamp, J. held that because a contract was to be construed by reference to the surrounding circumstances or in the light of the known facts, it was clear that "Goldsmith Coaches (Sicklesmere) Ltd." was an inaccurate description of the plaintiff company; that a limited company, like a natural person, had characteristics other than its name, such as a business, a place of business, directors and shareholders by which it could be identified; and that it was not essential to the validity of a contract made on behalf of a limited company that the company should be described with precision. But, while there may be good reasons for a court to strive to uphold the parties' intentions in a contractual context, a different, stricter approach has always been taken toa bankruptcy notice because of its penal consequences, as James' Case, supra, shows. In my opinion, it is essential to the validity of a bankruptcy notice that the judgment debtor be in no reasonable doubt as to the identity of the judgment creditor. In the present case, the judgment creditor was identified by a name which it had abandoned some considerable time previously. That name was quite different from the name of the judgment creditor at the time of issue of the bankruptcy notice and the judgment debtor could ll. hardly be expected to connect the two corporate names. The judgment debtor could thus have been misled as to the identity of the party with whom he had to deal in order to comply with the requirements of the bankruptcy notice. The notice was accordingly defective (cf. Re Gray; Ex parte Person to Person Financial Services Pty. Limited (1980) 48 F.L.R. 379 per Lockhart, J. at p.382). The judgment creditor further argued that if there was any defect it fell within s.306 of the Bankruptcy Act as a merely formal defect. But 8.306 cannot cure a serious defect and a failure to identify properly the judgment creditor is, in my view, a serious breach of the statutory scheme (see James' Case, supra at p.644). It follows that s.306 can have no application. In my opinion, the bankruptcy notice is bad and should be set aside with costs. I make the following orders: 1. Order that bankruptcy notice No. 2901 of 1984 be set aside. 2. Order that the judgment creditor pay the costs of the judgment debtor of this application. 12. | certify that this and the // preceding pages are a true copy of the reasons for judgment herein of The Honourable Mr Justice Beaumont. free? (kT associate Dated 4 / GeS,