Re Stolpe, Virginia & Anor Ex Parte Helnor Trading Co Pty Ltd (t/as Gosford Business Machines) [1996] FCA 920

NOT FOR DISTRIBUTION IN THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISION ) NN 478 of 1996 BANKRUPTCY DISTRICT OF NEW SOUTH WALES) RE: VIRGINIA and OWEN STOLPE Debtors EX PARTE: HELNOR TRADING CO PTY LIMITED (trading as GOSFORD BUSINESS MACHINES) Creditor CORAM: SACKVILLE J. PLACE: SYDNEY DATE: 10 SEPTEMBER 1996

REASONS FOR DECISION This is an application under s.31A(6) of the Bankruptcy Act 1966 (Cth) ("the Act") to review an order made by a Registrar of this court on 19 July 1996. The Registrar dismissed an application by one of the debtors, the present applicant, Mr Stolpe, to set aside a bankruptcy notice issued against him on 19 February 1996 by Helnor Trading Company Pty Ltd, trading as Gosford Business Machines ("Helnor"). Section 31A(6) and (7) of the Act provides as follows: "(6) A party to a proceeding in which a Registrar has exercised any of the powers of the Court under subsection (1) may, within the time prescribed by the rules, or within any further time allowed in accordance with the rules, apply to the Court to review that exercise of power. (7) The Court may, on application under subsection (6) or of its own motion, review an exercise of power by a Registrar pursuant to this section and may make such order or orders as it thinks fit with respect to the matter with respect to which the power was exercised."

An application brought pursuant to s.31A(6) is by way of rehearing, based on the evidence before the Registrar supplemented by such evidence as the parties choose to adduce in the proceedings before this Court: Re Kwiatek and Kwiatek; Ex parte BIG J Ltd v Pattison (1989) 21 FCR 374 (FCA/Northrop J), at 381. On this application, the applicant, who represented himself, relied upon one additional affidavit beyond the affidavit read on his behalf before the Registrar. The applicant was also cross-examined by Mr Andrews, who appeared for the creditor. The sequence of events is admirably set out in the judgment of the Registrar who made the order on 19 July 1996. I take the sequence of events in substance from the Registrar's reasons for decision. On 20 October 1993 Helnor commenced proceedings against Virginia Stolpe in the Local Court at Redfern. Mrs Stolpe is also a debtor in the present proceedings and is the wife of the applicant. In these proceedings Helnor claimed the amount of $5659.36 as moneys owing by Mrs Stolpe to Helnor in relation to the purchase of a photocopier and facsimile machine on 23 June 1993. Mrs Stolpe filed a defence to the proceedings on 22 December 1993. By a change of venue order made on 21 January 1994 the proceedings were transferred from the Local Court at Redfern to the Local Court at Gosford. The matter was then referred for hearing to an arbitrator pursuant to the Arbitration (Civil Actions) Act 1983 (NSW). On 7 November 1994, the arbitrator determined the proceedings in favour of Helnor, holding that there was a contract between Helnor and Mrs Stolpe for the purchase of the machinery. The arbitrator entered an award in favour of Helnor against Mrs Stolpe in a sum totalling $6457.60. At the hearing before the arbitrator, Helnor was represented by a firm of solicitors. Mrs Stolpe herself did not appear. The Registrar records that the applicant appeared for her as a witness. (In the witness box the applicant today indicated that he had actually conducted the case on Mrs Stolpe's behalf.) On 24 November 1994, following the entering of the award, the applicant filed on behalf of his wife an application for rehearing of the arbitrated action. It appears that the matter was listed for rehearing on or about 30 May 1995 at the Gosford Local Court. At that time a handwritten document bearing an endorsement appropriate to local court proceedings and headed "Terms of Settlement" was executed on behalf of Helnor and by both Mrs Stolpe and the applicant. The document, as the applicant acknowledged in the witness box, bears his signature. The terms of settlement were as follows: 1. By consent, Statement of Claim herein be amended by the addition of Owen Stolpe of 117 Karalta Road, Erina as second defendant. 2. By consent, verdict and judgment for the plaintiff against the second defendant in the sum of $4,0000.00 payable in full by 5 pm, Friday 9 June 1995. 3. Provided the said sum of $4,000.00 is paid in full by 5 pm, Friday 9 June 1995, the plaintiff will forthwith discontinue against the first defendant. 4. The first defendant agrees that if the said sum of $4,000.00 is not paid, in full, by 5 pm Friday 9 June 1995, a verdict for the plaintiff and judgment for $4,000.00 will immediately be entered against the first defendant. 5. The parties acknowledge that in these terms the sum of $500.00 has been agreed as the proper value of goods, being fax machine and answering phone, sold by the plaintiff on behalf of the defendants and that the said sum of $500.00 retained by the plaintiff, has been credited to the defendants. The Registrar found that Helnor was represented by a firm of solicitors at the proceedings on 30 May 1995. The applicant was, of course, present as he acknowledged in the witness box today, and, as I have mentioned, his signature appears on the terms of settlement. The evidence shows that the applicant was indeed added as a defendant in the Local Court proceedings. His name appears as the judgment debtor in a number of subsequent documents, including the certificate of judgment issued by the registrar of the Local Court which was admitted into evidence. No payment was made in respect of the judgment entered against Mrs Stolpe and the applicant. On 5 September 1995, Helnor applied to the Local Court at Gosford for the issue of a Writ of Execution in relation to the judgment debt. Pursuant to that writ certain property was seized from Mrs Stolpe and the applicant by the sheriff and was subsequently sold at auction apparently for a total sum of $230. On 19 February 1996, a bankruptcy notice was issued against Mrs Stolpe and the applicant at the request of Helnor. The notice was served on the applicant on 19 March 1996. At the time the proceedings were determined by the Registrar, Mrs Stolpe had not yet been served. The applicant informed me today that Mrs Stolpe had been very recently served with a notice. However, nothing turns upon this for present purposes. The bankruptcy notice was in the following terms: "To: VIRGINIA STOLPE and OWEN STOLPE, both of 117 Caralta Road ERINA NSW 2250 WHEREAS HELNOR TRADING CO. PTY LTD T/AS GOSFORD BUSINESS MACHINES (ACN 001 007 870) a company duly incorporated and having its registered office at 176 The Entrance Road, Erina NSW 2250 (hereinafter referred to as "the judgment creditor") has claimed that the balance of $3,770 together with interest on the following amounts at the rate of 12 per cent per annum: (a) on the sum of $4000 from 31 May 1995 to 24 January 1996 inclusive which amounts to $314.30; and (b) on the sum of $3770 from 25 January 1996 to 15 February 1996 inclusive which amounts to $27.26 together with a judgment creditor's costs incurred in attempting to enforce the judgment in the sum of $155 making a total of $4266.56 and no more is due by you to it under a final judgment obtained by it against you in the Local Court at Redfern on the 30th day of May 1995, being a judgment the execution of which is not being stayed".