Patten, Errol & Anor v Raadlund, Ida Agnes [1995] FCA 1145

IN THE FEDERAL COURT OF AUSTRALIA) GENERAL DIVISION ) BANKRUPTCY DISTRICT OF THE ) No. NN2871 of 1995 STATE OF NEW SOUTH WALES ) RE: ERROL & ROSALIND PATTEN Debtors EX PARTE: IDA AGNES RAADLUND Creditor

5 DECEMBER 1995 REASONS FOR JUDGMENT LOCKHART J. The matter before the Court today raises the question whether two affidavits filed by Mr and Mrs Patten fall within s. 40(1)(g) and s. 41(7) of the Bankruptcy Act 1966. Mr Patten was personally served with a bankruptcy notice and before the expiration of the time for compliance therewith he filed his affidavit to which I shall refer in a moment. Mrs Patten also filed her affidavit at the same time, but she asserts that she was not served personally with the bankruptcy notice. I understand that in issue is whether the process server is telling the truth in his affidavit; or whether what Mr Patten has said from the bar table occurred, namely, that he was served with the notice directed to himself and the notice directed to his wife, and she was not served with the notice. In any case, this is not an issue which the Court deals with today. It may become a live issue on the hearing of the petition. I have no idea what will happen. Solely for the purposes of the argument today, I will assume that a further bankruptcy notice will be served upon Mrs Patten personally, on the presumption that it has not yet been so served. The facts which are asserted by Mr and Mrs Patten, and that are said to ground a counter-claim or cross-demand that equals or exceeds the amount of the judgment debt held by Mrs Raadlund against them, are extensive; and they suggest on their face, if true, that they may have a counter-claim or cross-demand that equals or exceeds the amount of the judgment debt. Whether they in fact have it or not, of course, I have no idea. But what emerges clearly enough from the evidence, and from what has been said in address, is that it is not a counter-claim or cross-demand - it is a counter claim or cross-demand which could have been set up in the original hearing in the local court at Gosford, where Mrs Raadlund's claim against Mr and Mrs Patten was defended and heard. The relevant facts that ground the counter-claim or cross-demand were in existence before that hearing; even though Mr and Mrs Patten have said, and I, for today's purposes, accept the truth of it, that they did not know at the time that they could have raised these matters by way of a counter-claim or cross-demand against Mrs Raadlund. Nevertheless, they were advised by a solicitor and represented by a solicitor at that time; although that does not appear to have been a relationship which produced advice to them concerning their ability to raise a counter-claim or cross-demand, assuming the truth of what I have been told today. It is my view that the counter-claim or cross-demand ought to have been set up in the proceedings in the local court; therefore the application today must fail. Whether Mr and Mrs Patten now proceed to sue Mrs Raadlund, or whether they do not, and rely on the matters which are the subject of their affidavits in opposition to the petition, if and when it is presented against them, is a matter they will have to consider. The Court declares that the affidavits which have been filed by Mr and Mrs Patten under s. 41(7) are not affidavits complying with that subsection and orders Mr and Mrs Patten to pay the creditor's costs of the s. 41(7) affidavits and of today. I certify that this and the preceding two (2) pages are a true copy of the reasons for judgment herein of the Honourable Justice Lockhart. Associate Dated: 5 December 1995 Solicitors for the Creditor : Sally Nash & Co Debtors appeared in person. Date of Hearing : 5 December 1995 Date of Judgment : 5 December 1995