Re De Pellegrin, Stephen & Anor v Ex Parte Boral Resources (Vic) Pty Ltd t/as Boral Concrete [1996] FCA 832

IN THE FEDERAL COURT OF AUSTRALIA) GENERAL DIVISION ) No VP 865 of 1995 BANKRUPTCY DISTRICT IN THE STATE ) OF VICTORIA ) RE: STEPHEN DE PELLEGRIN (First Debtor) AND: DAVID DE PELLEGRIN (Second Debtor) EX PARTE:BORAL RESOURCES (VIC) PTY LIMITED (ACN 004 620 731) trading as BORAL CONCRETE (Petitioning Creditor) CORAM: Ryan J DATE: 11 September 1996 PLACE: Melbourne REASONS FOR JUDGMENT RYAN J: This is a creditor's petition arising from non-compliance with a bankruptcy notice based on judgments or orders against each of the debtors in the Magistrates Court at Melbourne. Those judgments or orders were by way of enforcing guarantees given by the debtors against the default of a company, of which they were directors, De Pellegrin Pty Ltd ("the Company"). The guarantees were against default of the Company in the discharge of its liabilities to each member of the Boral Ltd group of companies. It is not disputed that the petitioning creditor is a member of that group. The guarantee was dated 30 July 1993, and it is accepted by the first debtor, Stephen De Pellegrin, who appears in person and on behalf of his brother, the second debtor, David De Pellegrin, that goods were supplied by the petitioning creditor on credit to the Company after that date.

By their notice of opposition to the making of a sequestration order, the debtors have contended first that each of them is able to pay his debts. I am satisfied, having regard to the extent of the liability of each of them under the guarantees which they have given for the performance of the Company's obligations to various creditors, that neither of them is presently able to pay his debts as they fall due. It is next contended that the first debtor, Stephen De Pellegrin, was not personally served with the bankruptcy notice, nor in accordance with the orders made by Registrar Agnew on 19 May 1995. That order was an order for substituted service which directed that the bankruptcy notice be served: (a) by posting a letter stating the date of posting and enclosing a copy of the bankruptcy notice signed and stamped by the Registrar and a copy of today's order by ordinary mail addressed to the debtor at 26 Orion Street, North Balwyn in the State of Victoria. (b) and by handing a letter addressed to the debtor containing a copy of the bankruptcy notice signed and stamped by the Registrar and a copy of today's order to a person apparently over the age of sixteen years apparently residing at the said address or in the event that no one is in attendance by leaving the documents in the letter box at the said address. I am satisfied that the first debtor did, in fact, receive a copy of the bankruptcy notice, and accordingly, ground 3 of the notice of opposition has not been made out. Ground 4 contends that the creditor's petition makes reference to a David De Pellegrin as a judgment creditor, (that should perhaps read "judgment debtor") while the judgment entered on 24 August 1994 refers to a David Paul De Pellegrin. It is not otherwise disputed that the secondnamed judgment debtor is the person indebted on the guarantee to the petitioning creditor and, if it be necessary, I would grant leave to amend the petition to insert the name "Paul" between the names David and De Pellegrin. I do not regard ground 4 of the notice of opposition as raising any matter of substance. It is then sought in ground 5 to dispute the judgment debt based on the orders of the Magistrates Court of 24 August 1994. It is pointed out the debtors did not appear at the hearing of the complaint in the Magistrates Court and judgment was obtained in their absence. However, there is affidavit material indicating that the debtors were represented at a pre-trial hearing of some sort and had notice of the hearing at which a final judgment or order was entered. In the same context, it is contended that the debtors did not receive any consideration for the supply of a guarantee to Boral Ltd. I have already indicated, in outlining the facts underlying this petition, that the guarantee was given to each member of the Boral Ltd group of companies. As I have said, it is clear that the petitioning creditor, Boral Resources (Vic) Pty Limited trading as Boral Concrete, is a member of the Boral Ltd group of companies, and did supply goods or credit to the debtors in a way to attract the operation of the guarantee. I therefore consider that no part of ground 5 has been made out, and I am accordingly not persuaded to go behind the orders of the Magistrates' Court on which the bankruptcy notice was founded. It is finally contended that the Form 6 notice, attached to the creditor's petition, was not that required to be served on the debtors in that it was not a copy sealed by the Court. The evidence disclosed that there was also an order for substituted service of the petition which was to be effected in two ways, one by sending by post an official copy of the petition and accompanying documents to each of the debtors and, secondly, by leaving an ordinary copy of the relevant documents in the letter box at 26 Orion Street, North Balwyn. I am satisfied, on an examination of the comprehensive affidavits of service, that the order for substituted service was complied with. Accordingly, as none of the grounds of opposition has been made out, there should be a sequestration order against the estate of each of the debtors. I order that the costs of the petitioning creditor and the supporting creditor, including any reserved costs, and the supporting creditor's costs of 14 August 1996, be taxed and paid out of the estates of the bankrupts in accordance with the statute. I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment of his Honour Justice Ryan. Associate: Date: Counsel for First Debtor : - Solicitors for First Debtor : Debtor in person Counsel for Second Debtor : - Solicitors for Second Debtor: First Debtor appears Counsel for Petitioning : Miss A. Wardell Creditor Solicitors for Petitioning : Fitzgeralds Pty Creditor Counsel for Supporting : Mr R. Ashley Creditor Solicitors for Supporting : Fitzgeralds Pty Creditor Date of Hearing : 11 September 1996 Date of Judgment : 11 September 1996