Re Barnes, K. v Ex parte Deputy Commissioner of Taxation of the Commonwealth of Australia [1995] FCA 160

CATCHWORDS BANKRUPTCY - Bankruptcy notice - whether bankruptcy notice based on final judgment - whether execution of judgment had been stayed - whether bankruptcy notice was misleading - certificate under s 21B(3) Crimes Act, 1914 Cth relating to County Court reparation order - act of filing the certificate gives certificate the character of an enforceable final judgment - no basis upon which bankruptcy notice was invalid. Bankruptcy Act, s 41 Bankruptcy Rules, rule 10 Crimes Act (Cth) 1914, s 19B, s 21B, s 3(1) Taxation Administration Act, s 8Y, s 7 Penning v Steel Timber Supplies Pty Ltd (1988) 18 FCR 568 Deputy Commissioner of Taxation v Marcelle Haddi [unreported; Full Court, Federal Court of Australia, 23 January 1994]. KEITH BARNES Ex parte DEPUTY COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA VP 730/94 Olney J Melbourne 16 March 1995.

IN THE FEDERAL COURT OF AUSTRALIA) GENERAL DIVISION ) BANKRUPTCY DISTRICT OF THE ) STATE OF VICTORIA ) No VP 730/94 RE: KEITH BARNES A Debtor Ex parte: DEPUTY COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA A Creditor Coram: Olney J Place: Melbourne Date: 16 March 1995 MINUTE OF ORDER THE COURT ORDERS THAT:

1. A sequestration order be issued against the estate of the debtor. 2. The petitioning creditor's costs including all reserved costs of and incidental to the petition be taxed and paid in accordance with the statute, and 3. All proceedings under the sequestration order be stayed for a period of 21 days.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA) GENERAL DIVISION ) BANKRUPTCY DISTRICT OF THE ) STATE OF VICTORIA ) No VP 730/94 RE: KEITH BARNES A Debtor Ex parte: DEPUTY COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA A Creditor Coram: Olney J Place: Melbourne Date: 16 March 1995 REASONS FOR JUDGMENT THE PETITION A creditor's petition (the petition) presented by the Deputy Commissioner of Taxation (the Deputy Commissioner) seeking a sequestration order against the estate of Keith Barnes of 17 Heather Grove Kew (the debtor) was issued on 25 July 1994 and served on the debtor on 8 October 1994. The petition asserts that the debtor committed an act of bankruptcy on 23 March 1994 in that he failed on or before that date to comply with the requirements of a bankruptcy notice (the bankruptcy notice) served on him on 12 January 1994 or to satisfy the Court that he had a counter-claim, set off or cross demand equal to or exceeding the sum specified in the bankruptcy notice. Upon the hearing of the petition on 22 February 1995 the Deputy Commissioner sought, and was granted without objection, leave to amend the petition to substitute 27 January 1994 as the date of the alleged act of bankruptcy. The debtor opposes the petition on the grounds that: a) The judgment referred to in the bankruptcy notice is not a final judgment within the meaning of the Bankruptcy Act. b) There is no debt owed by the debtor to the Deputy Commissioner. c) The bankruptcy notice is fundamentally defective in that it is one that could reasonably mislead the debtor, in that it states that he owes to the Deputy Commissioner the sum of $263,461.92 under a final judgment of the Supreme Court of Victoria of 3 December 1993. THE BANKRUPTCY NOTICE The bankruptcy notice was issued on 17 December 1993. It was served on 12 January 1994. The relevant part of the bankruptcy notice recites: WHEREAS Deputy Commissioner of Taxation of the Commonwealth of Australia of 990 Whitehorse Road, Box Hill in the State of Victoria, (hereinafter referred to as 'the judgment creditor') has claimed that the sum of $263,461.91, (which includes the amount for which judgment was entered of $262,512.55 and interest on the judgment debt of $949.36 calculated at the rates of interest as prescribed from time to time, pursuant to section 2 of the Penalty Interest Rates Act 1983 on the judgment debt from 4th day of December 1993 to 13th day of December 1993 inclusive), is due by you to him under a final judgment obtained by him against you in the Supreme Court of Victoria on the 3rd day of december 1993, being a final judgment the execution of which has not been stayed.