Re Exell, Judith Ex parte Martin, Susan [1995] FCA 1079

CATCHWORDS

BANKRUPTCY - Bankruptcy notice - creditor unable to issue warrant of seizure and sale without leave - other forms of enforcement of judgment available - whether execution of the judgment has been stayed.

Bankruptcy Act, ss 40(1)(g), 41(3), 54A, 54C, 54E. Judgment Debt Recovery Act 1984 (Vic) ss 6, 9. Supreme Court Rules (Vic) Rr 59.02, 66.02, 68.01, 68.02. Supreme Court Rules (Qld) O 47 r 3, 23, 24. re A Debtor (1908) 1 KB 344. re Pannowitz; ex parte Wilson 38 FLR 184, 6 ALR 287. re Browbank; ex parte Loriplus Pty Ltd 12 FCR 254. Penning v Steel Tube Suppliers Pty Ltd 18 FCR 568. Director of Public Prosecutions v Kunz 43 FCR 374. re Johnson; ex parte Johnson v Tonkin 123 ALR 607. re Overseas Aviation Engineering (GB) Ltd (1963) Ch 24. re Binstead; ex parte Dale (1893) 1 QB 199 re JUDITH EXELL; ex parte SUSAN MARTIN No VP 622 of 1995 Olney J Melbourne 20 December 1995

IN THE FEDERAL COURT OF AUSTRALIA BANKRUPTCY DISTRICT OF THE STATE OF VICTORIA No VP 622 of 1995 Re: JUDITH EXELL Judgment Debtor Ex parte: SUSAN MARTIN Judgment Creditor

Coram: Olney J Place: Melbourne: Date: 20 December 1995 REASONS FOR JUDGMENT On the hearing of the creditor's petition in this matter the debtor has raised by way of a preliminary issue the question of whether the judgment relied upon in the bankruptcy notice which is said to have given rise to an act of bankruptcy was "a judgment or order the execution of which has not been stayed". Central to the matter in issue are the provisions of s 40(1)(g) of the Bankruptcy Act 1996 which entitles a creditor to serve a bankruptcy notice in respect of - a final judgment or final order, being a judgment or order the execution of which has not been stayed and s 41(3) which provides: S 41(3) A bankruptcy notice shall not be issued in relation to a debtor - (a) except on the application of a creditor who has obtained against the debtor a final judgment or final order within the meaning of paragraph 40(1)(g) or a person who, by virtue of paragraph 40(3)(d), is to be deemed to be such a creditor; (b) if, at the time of the application for its issue, execution of the judgment or order to which it relates has been stayed; or (c) ... THE JUDGMENT On 22 July 1985 in action no 2420 of 1985 in the Supreme Court of Victoria, the judgment creditor (as plaintiff) obtained judgment in default of appearance against the judgment debtor for the sum of $58,750 and $340 costs. On 7 July 1987 the judgment debtor filed a summons to have the judgment set aside but on 17 December 1987 Master Mahony dismissed the application with costs. However, the Master ordered that the judgment entered on 22 July 1985 be amended by the substitution of the sum of $54,250 for the sum of $58,750. The matter was then taken on appeal to a Judge of the Supreme Court and on 25 May 1988 Phillips J made orders dismissing the judgment debtor's application to set the judgment aside with costs and allowed the application of the judgment creditor to amend the amount of the judgment to $54,250. The judgment debtor appealed against the decision of Phillips J to the Full Court of the Supreme Court. The appeal was dismissed with costs on 17 February 1989. On 12 September 1989 Master Bruce taxed the costs awarded against the judgment debtor in the proceedings before Master Mahony, Phillips J and the Full Court, in a total sum of $11,253. For a period after the decision of Phillips J on 25 May 1988 a stay of execution was in force but no order or undertaking staying execution on the judgment was in force at the time of the judgment creditor's application for the issue of the bankruptcy notice nor has any such stay been in force at any subsequent date. THE BANKRUPTCY NOTICE The judgment creditor made application for the issue of the bankruptcy notice on 27 January 1995. The bankruptcy notice was issued on the same day. The judgment creditor's claim is recited in the bankruptcy notice in these terms: ... the sum of $128,005.43 and no more is due by you to her under a final order obtained by her against you in the Supreme Court of Victoria at Melbourne in proceeding no 2420 of 1985 on 22 July, 1985 being an order which was amended by the order of the Honourable Mr Justice Phillips on 25 May, 1988 in the Supreme Court of Victoria at Melbourne in proceeding no 2420 of 1985 the execution of which has not been stayed: Details of the amount of the judgment set out in the bankruptcy notice indicate that the judgment creditor's claim is for the sum of $340 for costs ordered on 22 July 1985 plus $54,250 being the amount of the judgment obtained on 22 July 1985 as varied, together with interest on $54,250 calculated from 23 July 1985 at the relevant rate applicable from time to time from that date until 27 January 1995. No claim is made is the bankruptcy notice for the costs taxed on 12 September 1989. The bankruptcy notice required the debtor to comply with the notice within 14 days of service. The judgment creditor asserts that service was effected on 21 March 1995 although due service is denied. The debtor has made no response to the bankruptcy notice. THE PETITION The judgment creditor caused a creditor's petition to be presented on 22 June 1995. The petition was issued on 27 June 1995. It alleges that the judgment debtor committed an act of bankruptcy on 4 April 1995 by her failure to comply with the requirements of the bankruptcy notice said to have been served on 21 March 1995. Service of the petition was effected pursuant to an order for substituted service. On 8 November 1995 the judgment debtor filed notice of her intention to appear at the hearing of the petition and to oppose the petition. The matter came before the Registrar on 9 November 1995 and was adjourned. On 24 November 1995 the judgment debtor filed amended grounds of opposition as follows: 1. That the judgment debtor has not committed an act of bankruptcy in that the Bankruptcy Notice herein has not been served upon her. 2. In the alternative to paragraph 1 hereof if the Bankruptcy Notice has been served upon the judgment debtor which is expressly denied the Bankruptcy notice herein is invalid in that more than six years has elapsed since the said judgment upon which the Bankruptcy Notice is based was obtained. 3. In the alternative to paragraph 1 hereof if the Bankruptcy Notice has been served upon the judgment debtor which is expressly denied and in the alternative to paragraph 2 hereof if the Bankruptcy Notice is valid which is expressly denied the judgment debtor is solvent.