Re Collard, Graham; Ex Parte Australian Guarantee Corp Ltd [1997] FCA 983

FEDERAL COURT OF AUSTRALIA

Bankruptcy - Bankruptcy petition - whether final judgment or final order - whether defect in statement of sum due - whether proof of authority of agents. Bankruptcy Act Section 40, 41, 47, 52. re: Graham Collard

ex parte Australian Guarantee Corporation Limited

NO: VG 7397 OF 1997

Abigroup Limited and Abignano (1992) 39 FCR 74

Broers and Another v Forster (1981) 36 ALR 605

Myer Melbourne Limited v Hammond (1984) VR 40

Excell; ex parte Martin (1995) 134 ALR 597

Hogg v J Isherwood Hicks Pty Ltd (1992) 108 FLR 262

RYAN JR

MELBOURNE

19 SEPTEMBER 1997

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY VG 7397 of 1997

re: Graham Collard

ex parte Australian Guarantee Corporation Limited

JUDicial Registrar: RYAN

DATE OF ORDER: 19 SEPTEMBER 1997

WHERE MADE: MELBOURNE

THE COURT ORDERS THAT: (1) the estate of the Debtor be sequestrated. (2) the Petitioning Creditor's costs (including reserved costs) be taxed and paid in accordance with the Act.

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY VG 7397 of 1997

RE: Graham Collard

EX PARTE Australian Guarantee Corporation Limited

JUDicial registrar: RYAN

DATE: 19 SEPTEMBER 1997

PLACE: MELBOURNE

PETITION FOR SEQUESTRATION ORDER Australian Guarantee Corporation Limited petitioned the Court for a sequestration order against the estate of Graham Collard based on the debtor's failure to pay the sum of $37,637.88 claimed by the petitioning creditor as a judgment creditor in what is claimed to have been a final judgment or order against the debtor in the County Court of Victoria. On 26 August 1997 a notice of intention to oppose the petition was filed by the debtor alleging the following grounds of opposition: 1. That the Judgment Debtor had made application to the Credit Tribunal of Victoria pursuant to Section 146 of the Credit Act 1984 for re-opening of the contract upon which the petitioning creditor relied to obtain the Judgment referred to in paragraph 2 of the Petition. 2.* The County Court order of 10 October 1995 is not a final judgment or order within the meaning of section 40(1)(g) of the Bankruptcy Act 1966. Accordingly no act of bankruptcy has been proved and the petition should be dismissed. *During the course of the hearing leave was granted to amend the notice of objection to include the second ground. APPLICATION TO CREDIT TRIBUNAL Counsel for the debtor did not pursue the first ground of opposition with any vigour. This is not surprising given that Counsel for the petitioning creditor asserted, and the debtor did not deny, that the creditor appeared before the Credit Tribunal but the debtor failed to appear to pursue any application. STATUS OF COUNTY COURT JUDGMENT The second ground of opposition is of more substance. The bankruptcy notice issued 10 September 1996 was founded on a judgment entered against the respondent in the County Court of Victoria at Melbourne on 10 October 1995. In the County Court writ the petitioning creditor as plaintiff claimed that the debtor as defendant had defaulted on obligations pursuant to a hire purchase agreement in which the plaintiff was the owner and the defendant the hirer of a motor vehicle. The defendant filed notice of defence. The plaintiff requested further and better particulars. The defendant filed further and better particulars of defence. On 10 October 1995 the petitioning creditor as plaintiff obtained an order against the debtor. Campbell J ordered that: 1. The Defendant pay the sum of $30,671.20 to the Registry of the County Court, in a form acceptable to the Registry, on or before 24 October 1995, such funds to be held by the Registry until: (a) payment to the Plaintiff in the event of judgment for the Plaintiff, in such sum as is appropriate given the amount of any such judgment; or (b) payment to the Defendant in the event of judgment for the Defendant. 2. If the Defendant defaults in compliance with Order (1) herein, there shall be judgment for the Plaintiff against the Defendant for $32,787.14 plus interest in the sum of $1,174.14 for the period 17 July 1995 until 24 October 1995, and $11.86 for each day thereafter, together with costs to be taxed on Scale "C" and when taxed paid by the Defendant to the Plaintiff. 3. If the Defendant complies with Order (1) herein: (a) the Defendant shall file and serve an Amended Defence on or before 25 October 1995; (b) the proceedings shall be set down for hearing as soon as is convenient after 25 October 1995. Section 40(1)(g) of the Act provides that a debtor commits an act of bankruptcy if a creditor who has obtained against the debtor a final judgment or final order, being a judgment or order the execution of which has not been stayed, has served on the debtor a bankruptcy notice and the debtor does not comply with the requirements of the notice or satisfy the Court of a counterclaim, set off or cross demand equal to or exceeding the amount of the judgment debt or sum payable under the final order. The debtor asserts that the petitioning creditor has failed to prove an act of bankruptcy. The debtor further asserts that the order of 10 October 1995 was made under Rule 24.05 of the County Court Rules and has the effect of putting the plaintiff in a position to apply for judgment upon proof that the act or omission upon which judgment is predicated has occurred. In other words the debtor claims that the judgment is not a final judgment or order within the terms of section 40(1)(g) of the Act. Counsel for the debtor categorises the judgment as one similar to judgments in cases cited in Abigroup Limited and Abignano (1992) 39 FCR 74 at 80 where judgment creditors had not put themselves in the position of being able to issue execution, so execution was deemed or considered to be stayed on the ground that in each case the judgment creditor was not entitled at the date of the issue of the bankruptcy notice to issue immediate execution on the judgment. Counsel also cited Abigroup and Broers and Another v Forster (1981) 36 ALR 605 in support of his proposition that a Registrar of the County Court or Judge Campbell himself needed to enter final judgment to entitle the judgment creditor to issue a bankruptcy notice under section 40(1)(g).