Hudson Junior, Robert v Donald, Thomas James & Anor [1997] FCA 852

FEDERAL COURT OF AUSTRALIA

BANKRUPTCY - application to set aside bankruptcy notice - claim of two defects in the notice - amount of judgment or order overstated by $2.00 - consequently, amount of "total debt owing" overstated by $2.00 - application of Bankruptcy Act 1966 (Cth), subs 41(5) - in the alternative, whether "formal defect or an irregularity" for the purposes of Bankruptcy Act 1966 (Cth), subs 306(1) - whether incomplete attachment of the judgment or order relied upon constitutes a "formal defect or an irregularity" for the purposes of Bankruptcy Act 1966 (Cth), subs 306(1) - application to "go behind the judgment or order".

Bankruptcy Act 1966 (Cth), subss 415(5), 41(6), 306(1)

Bankruptcy Regulation 4.02, Bankruptcy Form 1 (Bankruptcy Notice)

ROBERT HUDSON JUNIOR v THOMAS JAMES DONALD and STEPHEN WILLIAM MICHAEL WHALAN

NG 7501 of 1997

LINDGREN J

SYDNEY

12 AUGUST 1997

IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) NG 7501 of 1997 ) GENERAL DIVISION )

BETWEEN: ROBERT HUDSON JUNIOR

Applicant (Debtor)

AND: THOMAS JAMES DONALD and STEPHEN WILLIAM MICHAEL WHALAN

Respondents (Creditors)

JUDGE: LINDGREN J PLACE: SYDNEY DATED: 12 AUGUST 1997

REASONS FOR JUDGMENT

(ex tempore) INTRODUCTION The applicant ("Mr Hudson") applies to set aside bankruptcy notice NN 639/97 dated 8 April 1997. The respondents ("the Creditors") are the creditors named in that bankruptcy notice. According to the affidavits that were read on the hearing before me, the bankruptcy notice was served on Mr Hudson on 20 April 1997. The proceeding was commenced when Mr Hudson filed an application to set aside on 5 May. In circumstances to which I will refer later, that application was dismissed by consent on 26 May by Deputy District Registrar Quinn. Notwithstanding that fact, on 19 June Mr Hudson filed, also in this proceeding, a second application seeking an identical order setting aside the bankruptcy notice. It is that second application with which I have to deal. The Creditors have not sought dismissal of the second application as an abuse of process or otherwise summarily. The parties have treated the second application as superseding the original one. BACKGROUND The dispute between the parties goes back to an election of members of the Gosford City Council held on 9 September 1995. Mr Hudson was an unsuccessful candidate. On 8 December 1995 he applied in the Local Court at Gosford under s 329 of the Local Government Act 1993 (NSW) for an order dismissing from civic office, five individuals, including the Creditors, who had been successful in the election. Section 330 provided that a person against whom an order of dismissal is made may appeal against the order on a question of law to the Supreme Court. But an unsuccessful applicant for an order of dismissal is given no right of appeal. Following a hearing on 10 and 11 October 1996, Magistrate Cocks dismissed Mr Hudson's substantive application on 11 October. On 24 October he ordered Mr Hudson to pay the costs of the fourth and fifth respondents before him (the Creditors) "in the sum of $5540.00, including their own witness expenses, to be divided equally between those respondents", that is, $2270.00 to each of the Creditors. It is that order on which the bankruptcy notice is founded. On 26 May 1997, the application which Mr Hudson had filed on 5 May 1997 to commence the present proceeding, was before Deputy District Registrar Quinn. Mr Quickenden of counsel appeared for the Creditors and Mr Hudson appeared in person. Consent short minutes were handed up, signed by Mr Quickenden and by Mr Hudson. The Registrar made orders in accordance with them. The Court record is as follows: "[First page] ... Registrar making Order: Quinn. Date of Order: 26 May 97 Where made: Sydney THE COURT ORDERS THAT: 1. Application filed on 5.5.97 is dismissed 2. Each Party bears his or their own costs of the Application. 3. NOTED:(a) The Applicant Debtor acknowledges the debt to the Respondents including interest in the sum of $5,867.54 (Five thousand eight hundred & sixty seven dollars & 54 cents) will be paid to the Respondents solicitors by bank cheque within 28 days from today (26.5.97) (b) The Applicant undertakes to the court not to raise any objection to the Bankruptcy Notice served on him on 20.4.97. R J Hudson (signed) R E Quickenden (signed) ........................................... ......................................... for Applicant [sic] for Respondents. M. Quinn (signed) ................................... REGISTRAR