Re Curmi, Brian Ex Parte McLennan, Ross Norman [1995] FCA 981

IN THE FEDERAL COURT OF AUSTRALIA EXERCISING FEDERAL JURISDICTION No VP 791 of 1995 IN BANKRUPTCY BANKRUPTCY DISTRICT OF THE STATE OF VICTORIA RE: BRIAN CURMI Debtor EX PARTE: ROSS NORMAN McLENNAN Petitioner AND: BRIAN CURMI Respondent COURT: NORTHROP J PLACE: MELBOURNE DATE: 25 OCTOBER 1995 REASONS FOR JUDGMENT I propose to express my opinion on the objections raised by the judgment debtor at this stage. This is the return of a petition seeking a sequestration order against the debtor, Brian Curmi. The petition is based upon an act of bankruptcy consisting of the non-compliance with a bankruptcy notice. Under paragraph 40(1)(g) of the Bankruptcy Act 1966, a debtor commits an act of bankruptcy: "(g)if a creditor who has obtained against the debtor a final judgment or final order, being a judgment or order the execution of which has not been stayed, has served on the debtor in Australia or, by leave of the Court, elsewhere, a bankruptcy notice under this Act and the debtor does not comply with the requirements of the notice ... " I need not read the rest of the paragraph since it is not relevant for present purposes. In the present case the bankruptcy notice, which is dated 19 April 1995, is addressed to the judgment debtor and the relevant part is as follows: Whereas ROSS NORMAN McLENNAN of 47 Cole Street, Brighton, in the State of Victoria, (hereinafter referred to as "the Judgement Creditor"), has claimed that the sum of $173,000.00 and no more is due by you to him under a Final Judgement obtained by him against you in the Supreme Court of Victoria at Melbourne on the 15th day of December 1993, being a Judgement, the execution of which has not been stayed: THEREFORE TAKE NOTICE ... " I need not read the rest of that bankruptcy notice. In support of the granting of that bankruptcy notice reliance was had on a certified copy of an order of the Full Court of the Supreme Court of Victoria made on 15 December 1993, by which the following orders were made: "1. The appeal is allowed as to quantum of damages only and is otherwise dismissed. 2. The Appellant's costs of the Appeal be taxed and that the Respondent pay an amount equal to one-third such costs. 3. The verdict of the jury as to quantum of damages is set aside. 4. Paragraphs 1 and 2 of the Judgment below are set aside and in lieu thereof it is ordered that Judgment be entered for the Plaintiff against the Defendants in the sum of $173,000.00 being $140,000.00 damages together with $33,000.00 agreed damages in the nature of interest, and the Defendants as between themselves shall contribute to the said Judgment and to costs of the proceeding in the proportions of 10% by the Firstnamed Defendant and 10% by the Secondnamed Defendant and 80% by the Thirdnamed Defendant. 5. ... " It is not necessary to set out the other orders made. It is noted that Ross Norman McLennan, the judgment creditor, was the respondent to the appeal in the Supreme Court but the plaintiff in the proceedings from which the appeal was taken and Brian Curmi, the judgment debtor, was the appellant in the Supreme Court appeal but a defendant in the other proceedings. Pursuant to the provisions of the Bankruptcy Rules, the judgment debtor has given notice of intention of the debtor to appear at the hearing of the petition and to oppose the granting of the petition on the following grounds: "1. The Bankruptcy Notice upon which the petition is based is bad in that it refers to the judgment or order of the Full Court of the Supreme Court of Victoria dated 15 December 1993 which judgment or order is not a final judgment or order. 2. The Bankruptcy Notice upon which the petition is based is bad in that it refers to the judgment or order of the Full Court of the Supreme Court of Victoria dated 15 December 1993 which judgment or order is not an order pursuant to which the debtor is liable to pay money to the Creditor. 3. The judgment or order of the Full Court of the Supreme Court of Victoria dated 15 December 1993 amends the order of the County Court of Victoria dated 8 May 1992 which Country Court order is a final judgment or order. 4. The defect in the Bankruptcy Notice upon which the petition is based is not a formal defect or irregularity. 5. The Bankruptcy Notice was improperly issued by the Registrar in that at no time did the Creditor provide to the Registrar a copy of the order of the County Court dated 8 May 1992." In support of these grounds of objection, the debtor, Brian Curmi, has filed an affidavit which refers to the facts which give rise to the present issue before the Court. It appears that on 2 March 1992, following a jury trial in the County Court of Victoria, a jury had returned a verdict in favour of the plaintiff, Ross Norman McLennan, against three defendants, Peter Anthony Mobillia, Andres Gajatem Curmi and Brian Curmi. Pursuant to that verdict certain orders were made and it is desirable to read out the whole of the relevant part of the order. The first part relates to the verdict of the jury and contains eight paragraphs: "The jury found the following: 1. The Firstnamed Defendant intentionally assaulted the Plaintiff causing the Plaintiff injury, loss and damage. 2. The Secondnamed Defendant with a common purpose intentionally assaulted the Plaintiff causing injury, loss and damage to the Plaintiff. 3. There was negligence on the part of the Thirdnamed Defendant which was a cause of injury, loss and damage to the Plaintiff. 4. There was a breach of Statutory Duty on the part of the Thirdnamed Defendant which was a cause of injury, loss and damage to the Plaintiff. 5. The Plaintiff's damages be assessed at $198,000. 6. That the Firstnamed Defendant is responsible for the Plaintiff's injury, loss and damage to the extent of ten percentum (10%). 7. That the Secondnamed Defendant is responsible for the Plaintiff's injury, loss and damage to the extent of ten percentum (10%). 8. The Thirdnamed Defendant is responsible for the Plaintiff's injury, loss and damage to the extent of eighty percentum (80%)." It should be noted that the present judgment debtor is the third defendant in that matter. As I said, those orders are a recording of the verdict of the jury. The order then continues and I quote: "THE JUDGE'S ORDER IS THAT: 1. That judgment be entered. 2. That interest be fixed in the sum of $22,200.00. 3. The Defendants pay the Plaintiff's costs to be taxed ... " I need not read the rest of that order. Certificates were then given as to certain other matters. One can make the comment that the orders made do not require the defendants to pay anything at all to the plaintiff, except costs. To that extent the order appears to be defective, but it is still on the record and until rectified according to law, it would have effect. The judgment debtor appealed that judgment. The appeal came on before the Full Court, which then made the order I have already referred to. The effect of the order of the Full Court is that it allowed the appeal as to the quantum of damages only, otherwise the appeal was dismissed. The second order of the Full Court was dealing with the costs of the appeal which required the respondent, Ross Norman McLennan, to pay an amount equal to one-third of the appellant's, that is the judgment debtor's, costs. The verdict of the jury as to quantum of damages was set aside. The effect of that order is that the whole of paragraphs 1 to 8 inclusive of what appears in the order of the County Court are set aside. There is then the following orders of the Full Court. The Full Court order then sets aside orders 1 and 2 of the orders of the County Court; that is the orders that judgment be entered and that interest be fixed in the sum of $22,200.00 were set aside. In lieu thereof, the Full Court ordered that judgment be entered for the plaintiff against the defendants in the sum of $173,000.00, being $140,000.00 damages, together with $33,000.00 agreed damages in the nature of interest and then the apportionment which was the same as the verdict of the jury. On its face, that order of the Full Court is still in existence and must be acted upon. It is an order of the Supreme Court. The argument on behalf of the judgment debtor in the present case was that, in truth and in reality, the only operative order here is the order of the County Court, and that the order of the Full Court in varying that order does not constitute a separate final judgment or order for the purposes of the Bankruptcy Act, but merely varies the County Court order so that any action to be taken to enforce the judgment of the Full Court, or any action purporting to rely upon it for the purposes of founding a bankruptcy notice, must be on the basis that one assumes that the County Court judgment, by some reason or other, must be amended to incorporate the form of the judgment of the Full Court and then action taken to enforce that County Court judgment as it stands as amended. In my opinion, there is no substance to such a submission. On its face the judgment of the Full Court is clear and explicit. It is a judgment for an actual amount, a specified amount of damages of $173,000.00. That is the amount which is the amount of the judgment and it can be enforced in any way at all open to a successful party in Supreme Court proceedings. It is also a final judgment within the meaning of the word as appearing in paragraph 40(1)(g) of the Bankruptcy Act. Counsel for the debtor referred to a judgment of the Federal Court of Australia, constituted by Lockhart J in Clyne v Deputy Commissioner of Taxation (1982) 42 ALR 703. In that case a debtor challenged the validity of a bankruptcy notice on two grounds: (i) that the time specified for compliance was ambiguous and could not be understood; and (ii) that the judgment was not a final judgment within paragraph 40(1)(g) of the Bankruptcy Act. There a judgment of the Supreme Court of New South Wales had been entered for a specified amount. The debtor had appealed to the Court of Appeal of New South Wales. There had been no stay of operation of the judgment of the single judge and the appeal had not been heard and determined. In those circumstances it was argued on behalf of the debtor that the judgment appealed from was not a final judgment. That argument was rejected by Lockhart J as appears at pages 712 to 713 of the report. That authority does not assist the present debtor in any way whatsoever. I can see no reason at all to accept the submissions made on behalf of the judgment debtor. In these circumstances the objections made on behalf of the debtor must be rejected. I certify that this and the preceding seven (7) pages are a true copy of the Reasons for Judgment of The Honourable Justice R.M. Northrop. Associate: Date: