zs \9 CATCHWORDS BANKRUPTCY - bankruptcy notice - address of creditor - authority to receive payment - proof of inadequacy of address - notice not set aside. RE: MARK T. NUGENT EX PARTE: THE ABCVENAMED (Applicant) AND: BRIALKIM PTY LTD AND OWEN PTY LTD (Respondents) Bankruptcy Notice No. 395 of 1985 PINCUS J. BRISBANE 29 MARCH 1985 IN THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISION ) BANKRUPTCY NOTICE NO. 395 OF 1985 BANKRUPTCY DISTRICT OF THE SOUTHERN ) DISTRICT OF THE STATE OF QUEENSLAND ) RE: MARK _T. NUGENT EX PARTE: THE ABOVENAMED (Applicant) AND: BRIALKIM PTY LTD AND OWEN PTY LTD (Respondents) ORDER JUDGE MAKING ORDER: PINCUS J. DATE OF ORDER: 29 MARCH 1985 WHERE MADE: BRISBANE THE COURT ORDERS THAT: The application to set aside Bankruptcy Notice No. 395 of 1985 is dismissed with costs. IN THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISION ) BANKRUPTCY NOTICE NO. 395 OF 1985 BANKRUPTCY DISTRICT OF THE SOUTHERN ) DISTRICT OF THE STATE OF QUEENSLAND ) RE: MARK T. NUGENT EX PARTE: THE ABOVENAMED (Applicant) AND: BRIALKIM PTY LTD AND OWEN PTY LTD (Respondents) PINCUS J. 29 MARCH 1985 REASONS FOR JUDGMENT On 11 February 1985 Brialkim Pty Ltd and Owen Pty Ltd requested the issue of a bankruptcy notice addressed to Mr Mark T. Nugent. They produced an office copy of a judgment against Mr Nugent, in which the two companies were said to have a registered office at c/- Lyons, Dunlop and Pratt, 8th Level, M.L.C. Centre, corner of George and Adelaide Streets, Brisbane. The Registrar issued a bankruptcy notice dated 14 February 1985 which recited that the two companies had their registered office at the place that I have mentioned and required Mr Nugent to pay the sum in question to them or to secure the payment of 1t or compound for it. In the respects I have mentioned, the notice appears to me to follow Form 4 in Schedule 1 to the Rules; in particular, the requirement that the sum be paid to the judgment creditors makes no mention of any address and the only reference to an address 1S in the recital. Mr Nugent has made application that the bankruptcy notice be set aside and supported it by affidavits of one Susan dane Esler. Miss Esler said in her first affidavit that on 5 February 1985 she went to the office of the creditors mentioned in the bankruptcy notice. When she gave oral evidence she corrected that date to 5 March. According to that affidavit, the receptionist, the only person in attendance, was unable to help when enquiries were made about payment of the monies mentioned in the notice. Miss Esler said that on 8 March she telephoned Messrs Lyons, Dunlop and Pratt, and spoke to a Mr Dunlop who said he was a partner. Miss Esler gave evidence that she mentioned the bankruptcy notice and asked Mr Dunlop what authority he had to act on behalf of the companies; he replied that he did not know what authority he had and that he would have to contact the directors of the company to see what they would like him to do. He gave the names of the directors. Mr Dunlop also made an affidavit and gave oral evidence; he appeared to have rather a different recollection of his conversation with Miss Esler. I do not think it is critical in the end, but I gained the impression that Miss Esler's recollection was somewhat better than that of Mr Dunlop and I would, in general, prefer her evidence as to the content of the conversation. However, it is clear that no offer to pay Mr Dunlop was made and I think the enquiry as to authority did not direct his attention to the question of giving a receipt for monies or taking any other specific step. Mr Dunlop did not claim before me that he had any immediate authority to accept payment. Paragraph 6 of his affidavit 1s as follows:- "Miss Esler stated that she was acting with regard to a 'bankruptcy' with respect to BRIALKIM PTY LTD and OWEN PTY LTD. Miss Esler then asked what authority I had to act on those companies' behalf. I anformed Miss Esler that I did not know what authority I had and that she could contact ALAN WELLER and AZENA WELLER the Directors of BRIALKIM PTY LTD and OWEN PTY LTD who could be contacted at the Embassy Hotel." It is, however, a problem for the debtor that there was no proof that if payment had been offered there would have been any difficulty about getting authority to accept 1t. As a matter of common sense, it seems to me likely that such authority would have been readily available. In addition to the material mentioned, an affidavit by Daniel Anthony Hargraves was relied on by the creditors. It shows that for some months prior to the events just referred to there had been contact between solicitors on behalf of the creditors, on the one hand, and Mr Nugent and solicitors acting on his behalf, on the other, with respect to the judgment debt. It does not appear to me, however, that those circumstances help the creditors with respect to the point taken, which is that the bankruptcy notice is bad as not giving what might be called for short a proper address. It was submitted on behalf of the debtor, that the notice is bad if it fails to give an address at which there is present, for at least part of the relevant time, a person with authority to receive payment. It may seem odd that the validity of the notice can depend upon events subsequent to its issue. I am in no doubt that I have jurisdiction to determine the point at this stage, prior to the hearing of the petition, but it appears to me, nevertheless, to be important to keep in mind that the notice on its face is perfectly good and that there 1s nothing intrinsically wrong with the address given. It was argued for the debtor that in considering the validity of a bankruptcy notice the question is not whether the debtor has in fact been misled, but whether the defect is such as could reasonably mislead a hypothetical debtor; reliance was placed on James v. The Federal Commissioner of Taxation (1955) 93 C.L.R. 631 at p.644. I do not think that principle is of any assistance where the complaint is one of the absence of a person authorised to receive payment on behalf of creditors, rather than a complaint as to misleading wording. The onus, in my opinion, is on the applicant to prove facts showing that the notice should be set aside. Although no one at the address given had prior authority to accept payment, 1t 1s not proved that 1f the debtor had really desired to pay 1t would have been impossible, or even difficult, for him to do so. The question is whether in these circumstances there is any invalidity in the proceedings. Nothing in the present Act or Rules expressly requires that the address shown be one at which someone with authority to receive payment is present. The form simply requires that the name and address of the judgment creditor (in this case, creditors) be given in the recital. However, under other bankruptcy statutes, it had come to be accepted that some implication in favour of the debtor had to be made, with respect to the availability at the address given of a person authorised to receive payment. That was 30, despite the absence in those statutes of any express statement as to what conditions had to prevail at that address. It seems to me clear that a similar implication should be made under the 1966 Act; see Re Mullavey; ex parte Australia and New Zealand Banking Group Ltd (1977) 32 P.L.R. 1 at pp.7-8. In James Case tabove) which was decided under the 1924 Act, it was said that:- "The creditors, in order to comply with the form in the schedule ... would have to give an address or addresses where they or one of them, or some agent authorised on their behalf, could be found ..." (93 C.L.R. 639) This passage, and the fact that the judgment treats In_ re Beauchamp (1904) 1K.B. 572 as authoritative, constitute clear authority for the view that the address given in the notice is not necessarily sufficient if it is the creditor's true address and that its propriety must be judged by reference to the opportunity afforded to the debtor to pay, or to arrange to secure or compound, there. I am inclined to think that the basic principle, in accordance with which most of the authorities are capable of being reconciled, is that the address given should be one at which, during the relevant period, it is reasonably practicable to make payment or offer to secure or compound. There may be quite a number of reasons why difficulty in making payment at the address given arises: for example, because it is 1n some remote place, or otherwise physically difficult of access, or because it 1s, during part of the relevant time, unattended. In re Beauchamp (above) shows that "occasional absence of the creditor from that address, even for a whole day" is not fatal: see (1904) 1 K.B. 572 at p.583. The qualification the court added was that the notice would be "inefficient" if "the absence is such as to deprive the debtor of a reasonable opportunity of paying the debt or securing for it or compounding for it according to the terms of the notice". The test of "reasonable opportunity of paying" is roughly equivalent to the test of reasonable practicability mentioned above. On that test, in my ato era EAL tS Ant itlleatya tie - opinion, the evidence does not go quite far enough to enable the debtor to succeed. It would obviously be desirable, where the creditor is a company, that there be someone present at the address given during ordinary business hours with authority to receive payment, immediately and without having to contact the board or any other person capable of giving authority. It does not appear to me, however, that the proceedings are invalidated by the circumstance that Mr Dunlop would, if the debtor had attempted to pay, presumably have held the debtor up while he obtained specific authority to receive the money. The debtor did not prove that there was any substantial practical difficulty about paying or offering to give security, at the address given. He did not establish that the situation was any worse for him, in a practical sense, than that of a debtor who receives a bankruptcy notice giving an address of the creditor which is left unattended for significant periods of time; that, on the authority of In re Beauchamp, (above) does not necessarily make the notice bad. In summary the applicant failed to prove to my satisfaction that the address of the creditors given in the notice was one at which it was not reasonably practicable to make payment or secure or compound and, applying that test, the application to set the notice aside fails and is dismissed with costs. , leertify chat this and the - pre Pager abe vAdrue Copy ef the mons judgment herein of the Court ey) bis. Bhs ve t tee yes whe