BIR CATCHWORDS . BANKRUPTCY - debtor's petition - acceptance restrained until discharge of order for security - setting aside of order for security - whether abuse of process - right in debtor to acceptance. HIGH COURT - practice - judgment not yet entered - whether effective. Bankruptcy Act 1966 Ex parte: Sterlin Industries Limited (Receivers and Managers Appointed) Re: John William Jackson & Anor. Qld P452 of 1986 Re: John William Jackson and Maxene Susan Jackson Ex parte: National Westminster Finance Australia Limited Qid P788 of 1986 Re: John William Jackson Ex parte: National Westminster Finance Australia Limited Qld P1337 of 1986 PINCUS J. BRISBANE 6 JULY 1987 IN THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISION ) BANKRUPTCY DISTRICT OF THE SOUTHERN ) DISTRICT OF THE STATE OF QUEENSLAND ~ No. P452 of 1986 EX PARTE: STERLING INDUSTRIES LIMITED (RECEIVERS AND MANAGERS APPOINTED) Applicant/Creaitor RE: JOHN WILLIAM JACKSON First Respondent/Debtor THE REGISTRAR IN BANKRUPTCY FOR THE SOUTHERN DISTRICT OF THE STATE OF QUEENSLAND Second Respondent QLD P788 of 1986 RE: JOHN WILLIAM JACKSON and MAXENE SUSAN JACKSON EX PARTE: NATIONAL WESTMINSTER FINANCE AUSTRALIA LIMITED QLD P1337 of 1986 RE: JOHN WILLIAM JACKSON EX PARTE: NATIONAL WESTMINSTER FINANCE AUSTRALIA LIMITED MINUTES OF ORDER JUDGE MAKING ORDER: PINCUS J. DATE OF ORDER: 6 JULY 1987 WHERE _MADE: BRISBANE THE COURT ORDERS THAT: The debtor's petition be accepted subject to the Registrar being satisfied as to the questions of form in s.55(3). NOTE: Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules. IN THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISION ) BANKRUPTCY DISTRICT OF THE SOUTHERN ) DISTRICT OF THE STATE OF QUEENSLAND ) 'No. P452 of 1986 EX PARTE: STERLING INDUSTRIES LIMITED (RECEIVERS AND MANAGERS APPOINTED) Applicant/Creditor RE: JOHN WILLIAM JACKSON First Respondent/Debtor THE REGISTRAR IN BANKRUPTCY FOR THE SOUTHERN DISTRICT OF THE STATE OF QUEENSLAND Second Respondent QLD P788 of 1986 RE: JOHN WILLIAM JACKSON and MAXENE SUSAN JACKSON EX PARTE: NATIONAL WESTMINSTER FINANCE AUSTRALIA LIMITED QLD P1337 of 1986 RE: JOHN WILLIAM JACKSON EX PARTE: NATIONAL WESTMINSTER FINANCE AUSTRALIA LIMITED PINCUS J. 6 JULY 1987 EX _TEMPORE REASONS FOR JUDGMENT The question in this case is whether a debtor's petition should be accepted. On 23 April 1986 Sheppard J., in proceedings brought under s.52 of the Trade Practices Act 1974 by Sterling Industries Limited (Receivers and Managers Appointed) against the debtor and others, ordered that the debtor provide security in the sum of $3 million. On 30 April 1986 Beaumont J. made two orders on the application of Sterling Industries Limited (Receivers and Managers Appointed), the first being that the debtor be restrained until 1 May 1986 from presenting a petition against himself pursuant to s.55 of the Bankruptcy Act, and the second being that the Registrar in Bankruptcy for the Southern District of the State of Queensland be restrained up to 1 May 1986 from accepting such a petition. Subsequently, those orders were extended by Burchett J., after a contested hearing. His Honour's order was that the debtor be restrained from presenting a petition against himself and that the Registrar be restrained for a like period from accepting any such petition until the earliest of three nominated events. The second of those nominated events was the discharge of the order of Sheppard J. mentioned above. The petition by the debtor which 1s currently in question was presented on the same day as the order of Mr. Justice Beaumont, that is, 30 April 1986. On 11 June 1987, the High Court of Australia allowed an appeal from the Full Court of this Court, which had upheld the order of Sheppard J.; the High Court set aside the order of Sheppard J. The High Court's order has not yet been taken out, but counsel for the debtor, Ms. Atkinson, says that the debtor is entitled, there being no relevant restraint, to have the petition accepted. ' we Section 55(1) of the Bankruptcy Act says: "Subject to this section, a debtor may present to the Registrar a petition against himself accompanied by a statement of his affairs, verified by affidavit, and a copy of that statement." Under subs.(2) a form is prescribed, and under subs.(3) where the form is complied with and the statement of affairs is in the prescribed form, the petition "shall be accepted by the Registrar »..". Acceptance is not discretionary. If the petition is accepted, the result will be that the debtor will become bankrupt by virtue of the presentation of the petition on 30 April 1986: s.55(3)(b). According to an affidavit of Mr. W.J. Weir, the solicitor for the debtor, on 16 May 1986 an authority was signed in favour of Mr. A.R. Taylor, trustee, under s.188 of the Bankruptcy Act. Apparently no meeting of creditors has yet been held, but Mr. Weir's affidavit, which was sworn on 22 June 1987, says the meeting 1s now being called for Wednesday, the twenty-fourth day of June at 3.00 p.m." The affidavit says, "Our client 1s desirous of having his own petition processed prior to that meeting." Since that reason has gone, it 1s not clear why 1t is that the debtor wants his petition accepted. There is also a creditor's petition for sequestration before me set down for hearing later this morning and Mr. Sullivan has appeared on behalf of the petitioning creditor, and initially asked that I not accede to Ms. Atkinson's request on behalf of the debtor. He has, however, abandoned that stance, and the only question is whether or not, leaving that initial opposition aside, the Registrar should or should not accept the petition. The question is, as it seems to me, simply from what date the order of the High Court, setting aside the relevant order of Sheppard J., became effective. There is no doubt, fron communications from that Court, that the order has been made, and the only reason it has not been taken out is that in a respect unrelated to the order for security there is a dispute as to the proper form of order. Order 43 r.3(1) of the Rules of the High Court says: "When a judgment is pronounced by the Court, the entry of the judgment shall, subject to the next succeeding sub-rule, be dated as of the day on which the judgment is pronounced, unless the Court otherwise orders, and the judgment shall take effect from that date." Order 44 r.19 of the same rules says: "An order which is drawn up shall be dated as of the day on which it was made, unless the Court or a Justice otherwise directs, and shall take effect accordingly." Neither rule makes it absolutely clear, in my view, whether an order of the High Court is effective from the day on which it is made, in advance of its being entered. A question of that sort arose before Atkin J., as he then was, in Hambleton v. Brown £19171] 2 K.B. 93. In that case, a judgment for costs had been recovered. The costs were taxed, but the amount of the costs had not at the date of Atkin J.'s judgment been entered on the record. There was an assignment of the judgment, and various points were taken about it, only one of which is presently relevant. At p.98 Atkin J. said: "Thirdly, the further point was made that in any case, whether validly assigned or not, the debt was not payable at the date of the writ because of the failure to enter. I think this is based upon a misapprehension. In an action on a judgment it appears necessary to prove the judgment by production of the record. The ordinary traverse of the existence of the judgment sued on is "nul tiel record." The point, however, is one not of liability but of evidence." The judge accordingly held that an assignment made before the amount had been entered was effective, following Holtby v. Hodgson (1890) 24 Q.B.D. 103. In that case, the Court of Appeal held that a garnishee order absolute attaching a judgment debt which had not been entered was effective. Hambleton v. Brown seems to go a little further than Holtby v. Hodgson, because in the earlier case the question arose after entry, as to the date upon which the attached judgment was effective. What Atkin J. described as a purely technical point as to proof should not, I think, be taken to detract from the debtor's rights under the Bankruptcy Act, although, in my view, the Deputy Registrar acted rightly and prudently in not proceeding without reference to the Court. A second point is whether I should direct the Deputy Registrar not to accept the debtor's petition until the creditor's petition is heard. In view of the absence of opposition from the petitioning creditor, this point must be one to be resolved ex parte. In Clyne v. Deputy Commissioner of Taxation (1984) 55 A.L.R. 143 at 152, the judgment of the then Chief Justice and of Murphy, Brennan and Dawson JJ., reads as follows: "It 1s a purpose foreign to the bankruptcy laws, and an abuse of process, for a debtor to present a petition for the purpose of making it impossible for a creditor to obtain a sequestration order ona pending petition and with the further purpose of shortening the period of relation back, possibly placing beyond the reach of the trustee property which would otherwise vest in him." Here 1t has been held in interlocutory proceedings that the presentation of a petition was prima facie an abuse of process, but the reason for that holding, namely, the order of Sheppard J., no longer has effect. Burchett J., in his reasons of 5 September 1986, held that there was such a prima facie case on the basis that the purpose of presentation was to make it impossible "for an order of this Court, which it is within his capacity to obey, to be enforced by contempt proceedings against him." That prima facie finding still stands, but the peculiarity of the matter is that the purpose mentioned by Burchett J. must now have gone. The debtor''s current efforts to have his petition accepted presumably must have some other purpose. Although some might well suspect that the purpose is perhaps still a bad one, the dicta of the High Court in Clyne's case (quoted above) cannot be held to apply, particularly in view of the absence of any opposition from the petitioning creditor. It seems to me that the proper course is to direct that the debtor's petition be accepted, subject, to satisfaction as to the matters mentioned in s.55(3); that is, I direct that it be accepted if the Registrar is satisfied as to the questions of form mentioned in that provision. i certify that this and the 6 preceding pages are a true copy of the reasons for judgment herein of His Honour Mr. Justice Pincus Ace) Associate Dated 6 Fly (97 Counsel for the Applicant: Ms. R. Atkinson Solicitors for the Applicant: Messrs. Gilshenan & Luton Counsel for the Respondent: Mr. J. Sullivan Solicitors for the Respondent: Messrs. Cleary & Hoare Date of Hearing: 6 July 1987