CATCHWORDS BANKRUPTCY - service of bankruptcy notice - interlocutory orders regarding manner in which service to be effected - application to appeal from orders - not proper case for grant of leave to appeal - proof of effective service can be proved by creditor at hearing of petition - premature to consider validity of service at interlocutory stage - leave to appeal refused. Cases considered: Ginnane v Diners Club Limited (1993) 42 FCR 90 Nguyen; Ex parte Commissioner of Taxation (1995) 54 FCR 403 CLIFTON GEORGE VINCENT v STATE BANK OF NEW SOUTH WALES LIMITED No. NN 1821 of 1995 BEAUMONT, EINFELD AND TAMBERLIN JJ. SYDNEY 20 SEPTEMBER 1995 IN THE FEDERAL COURT OF AUSTRALIA ) ) GENERAL DIVISION ) No NN1821 of 1995 ) BANKRUPTCY DISTRICT OF THE STATE ) ) OF NEW SOUTH WALES ) ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: CLIFTON GEORGE VINCENT Applicant AND: STATE BANK OF NEW SOUTH WALES LIMITED Respondent CORAM: BEAUMONT, EINFELD AND TAMBERLIN JJ. DATE: 20 SEPTEMBER 1995 REASONS FOR JUDGMENT BEAUMONT J. The applicant, Mr. Vincent, seeks leave to appeal from interlocutory orders made by Foster J. on 28 July 1995 which varied certain orders of Registrar Quinn, in relation to the service of a bankruptcy notice on him, the debtor, by the judgment creditor, the State Bank of New South Wales Limited. The history of the matter is as follows. On 12 July 1995, Registrar Quinn made orders dispensing with personal service of the bankruptcy notice. The Registrar then directed that a copy of the notice and a sealed copy of the order be served in the following ways: "2. A true copy of the bankruptcy notice signed and stamped by the Registrar or a Deputy Registrar in Bankruptcy together with a sealed copy of this order be served on or before 20 July 1995 as follows: (a) by pre-paid ordinary post addressed to the judgment debtor at 2 Petrarch Avenue, Vaucluse, NSW; (b) by personal service on the judgment debtor's solicitors, Tribe Conway & Co, Level 10, 155 Castlereagh Street, Sydney; (c) by personal service on any person apparently over the age of 16 years at 2 Petrarch Avenue, Vaucluse, NSW. It was then further ordered that service in accordance with the order would be deemed good and sufficient service of the bankruptcy notice upon the debtor. The Registrar also ordered that the notice be deemed to have been served on the debtor on 3 August 1995. Other consequential orders were made. On 28 July 1995, an application was made, ex parte, to Foster J. on behalf of the judgment creditor, seeking in substance a review of the orders made by the Registrar. Specifically, an order was sought that compliance with her order 2(c) no longer be necessary. The basis of the application was that it had been shown to be impracticable to achieve service in accordance with that subparagraph. On 28 July 1995, Foster J. made the following orders: First, that the order made on 12 July 1995 be varied by deleting the requirements set forth in para.2(c) of that order. Secondly, that compliance with paras.2(a) and (b) of the earlier order be sufficient service of the bankruptcy notice; and thirdly, that the bankruptcy notice be deemed to be served on the debtor on 3 August 1995. A further direction was given as to the service of the order made by his Honour. On 16 August 1995, an application was lodged in the Registry in the form of a notice of motion on behalf of the judgment debtor seeking leave to appeal from the orders made on 28 July 1995. This is the application now before the Court. It is opposed by the judgment creditor. We have had the benefit of extensive argument from counsel for each of the parties. In my opinion, this is not a proper case for the grant of leave to appeal. It is true, as counsel for the debtor has submitted in argument, that a question could conceivably arise on the hearing of the petition, assuming that one is presented, as to the power of Foster J. to make either of the two main orders made on 28 July 1995. His Honour was exercising jurisdiction conferred by s.14(5) of the Bankruptcy Act 1966 ("the Act") which empowered his Honour to review, on a summary application, any order made by a Registrar. The source of the Court's power to order service for present purposes is found in s.309(2) of the Act. It is there provided that where a notice or other document is required by the Act to be served on or given to a person the Court may, in a particular case, order that it be given or served in a manner specified by the Court, whether or not any other manner of giving or serving the notice or other document is prescribed. Questions have arisen in other cases as to the scope of the review hearing undertaken by Foster J. (see, for instance, Ginnane v Diners Club Limited (1993) 42 FCR 90 at 94). Difficult questions have arisen in other contexts as to the appropriateness, or otherwise, of a Judge exercising the review power; and, in particular, whether it is appropriate to rescind a Registrar's orders ab initio, or as Heerey J. found in Nguyen; Ex parte Commissioner of Taxation (1995) 54 FCR 403, to order that the Registrar's order be varied, that is, prospectively. But, in my opinion, it is not appropriate now to consider, let alone decide, any of those questions. It is not contested that, at the hearing of the petition, when and if presented, unless personal service was effected, service must be proved to have been effected in accordance with the Court's directions under s.309(2) of the Act. By its opposition to the present application, the creditor has clearly indicated that it wishes to undertake that burden of proof. For his part, the debtor has clearly signalled his intention to submit, upon the hearing of any petition, his opposition to the making of a sequestration order on the ground that the bankruptcy notice was not served. That issue will thus clearly be joined. What is not so clear, however, is how that issue will be resolved. It could conceivably be resolved in a number of ways. One may be by adoption of the argument of counsel for the debtor that there was no power in the Court to make the order of 28 July since it was, in substance, a retrospective order. On the other hand, it is plain that the judgment creditor will not only join issue on that point of law but will seek to make further and different responses. For instance, it will no doubt be argued on behalf of the creditor that the provisions of s.306 of the Act are available if needed. So far as s.306 is concerned, the question for the Judge hearing the petition is essentially one of discretion. Those circumstances indicate, to me, that this matter is not an appropriate vehicle, at this stage at least, for the grant of special leave. In my view, it is not now possible to isolate a discrete legal point which will, in all probability, be determinative of the issue of service which will arise on the hearing of the petition. There are a number of possible ways the question could be resolved, some of which are discretionary. I would propose, therefore, that the application for leave be refused. I should add, however, that, as discussed in the course of argument, I would not wish it to be thought that the terms of Order 2 made by Foster J. or Order 3 made by the Registrar, deeming service to be good service, should be assumed to be any adjudication on the point, let alone a final adjudication. It is plain that what is there involved is no more than a statement by way of direction. It was made ex parte. It was interlocutory in form and in substance. I would not take that matter into consideration in favour of granting leave as that point is clearly beyond argument. On the question that was presented before us as to the reason why leave ought to be granted, I am of the view that it is not an appropriate vehicle for the consideration of the Full Court. I would refuse the present application. EINFELD J: All the matters which the debtor has advanced here, including the possible applicability of ss.306 and 309 to the orders of Foster J., can be raised at the hearing of any petition which is presented. This fact seems to me to underline the views and conclusions of the learned presiding Judge with which I entirely agree. TAMBERLIN J: I agree that it is premature to embark on a consideration of the questions arising as to the validity of service at an interlocutory stage in the circumstances of this case. I agree that leave should be refused. BEAUMONT J. The formal order of the Court is that the application for leave to appeal is refused, with costs. I certify that this and the preceding five (5) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Beaumont, Justice Einfeld and Justice Tamberlin. Associate Dated: 20 September 1995 Counsel and Solicitors Mr. R.E. Montgomery instructed for Applicant: by Tribe, Conway & Co. Counsel and Solicitors Mr. R.B.S. Macfarlan Q.C. with for Respondent: Mr. L. Aitken instructed by Minter Ellison Date of hearing: 20 September 1995 Date Judgment delivered: 20 September 1995