FEDERAL COURT OF AUSTRALIA St.George Bank Ltd v Baldwin (In the matter of Baldwin) [2001] FCA 161 BANKRUPTCY – validity of Bankruptcy Notice – incorrect section of the District Court Act 1973 (NSW) cited in one part of the notice but correct section cited in another part – Act and Regulations complied with – no overall misleading quality of the notice – reasonably diligent debtor would be directed to one correct and one incorrect section of the Act and would not be misled. ST.GEORGE BANK LIMITED v NOELLE RAE BALDWIN (IN THE MATTER OF NOELLE RAE BALDWIN) N8011 of 2000 MADGWICK J 20 FEBRUARY 2001 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N8011 of 2000 BETWEEN: ST.GEORGE BANK LIMITED APPLICANT AND: NOELLE RAE BALDWIN (IN THE MATTER OF NOELLE RAE BALDWIN) RESPONDENT JUDGE: MADGWICK J DATE OF ORDER: 20 FEBRUARY 2001 WHERE MADE: SYDNEY THE COURT DECLARES THAT: 1. The Bankruptcy Notice is valid. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N8011 of 2000 BETWEEN: ST.GEORGE BANK LIMITED APPLICANT AND: NOELLE RAE BALDWIN (IN THE MATTER OF NOELLE RAE BALDWIN) RESPONDENT JUDGE: MADGWICK J DATE: 20 FEBRUARY 2001 PLACE: SYDNEY REASONS FOR JUDGMENT (revised from transcript) HIS HONOUR: 1 In this case, the Bankruptcy Notice contains, in accordance with the ordinary prescribed form, a "Schedule" which describes the claimed debt of $386,671.40, shown as a claim in para 1 of the Bankruptcy Notice. The Schedule refers to the amount of the judgment as being $361,911.94, and it continues: "Plus 3. If claimed in this Bankruptcy Notice, interest accrued $24,759.46 since the date of judgment or order (see Note 2 below)" "Note 2 below" contains the following text: "If interest is being claimed in this Bankruptcy Notice, details of the calculation of the amount of interest are to be set out in a document attached to this Bankruptcy Notice. The document must state: (a) the provision under which the interest is being claimed; and (b) the principal sum on which, the period for which and the interest rate or rates at which, the interest is being claimed." 2 There is more than one document attached to the Bankruptcy Notice. The first of these at page 6 reads as follows: "Interest is being claimed by the creditor against the debtor pursuant to s83A of the District Court Act and Part 14A rule 1(3) of the District Court Rules; Supreme Court Rules, Schedule J: · on the principal sum of $361,911.94 · for the period 8 June 1999 to 25 February 2000 · at the rates prescribed by Schedule J to the Supreme Court Rules." The second is a Certificate of Judgment made out by the Registrar of the New South Wales District Court. The Registrar referred therein to the amount of the judgment debt and also to the following: "Interest is payable per annum on so much of the judgment debt (including costs) as is from time to time unpaid - see attached schedule." 3 That schedule is in the following form: "S.85 INTEREST SCHEDULE FROM DATE TO DATE RATE 01/01/60 06/09/74 5.00 07/09/74 08/10/82 10.00 09/10/82 31/12/83 15.50 01/01/84 31/12/84 14.50 01/01/85 31/12/85 13.50 01/01/86 31/12/86 18.25 02/07/86 01/11/87 19.50 02/03/88 28/02/89 15.00 01/03/89 31/08/89 17.00 01/09/89 31/08/90 21.00 01/09/90 28/02/91 19.00 01/03/91 31/08/91 17.00 01/09/91 28/02/92 15.00 29/02/92 31/08/92 13.00 01/09/92 31/08/93 11.25 01/09/93 28/02/95 10.50 01/03/95 28/02/97 12.00 01/03/97 31/08/97 10.50 01/09/97 31/08/98 10.00 01/09/98 29/02/00 9.50 01/03/00 TO DATE OF PAYMENT 10.00" 4 The difficulty in this matter is this. Section 83A of the District Court Act 1973 (NSW) ("the DC Act") allows for interest up to judgment and prescribes various rates, being the provisions referred to in the "Schedule of Interest" at page 6 of the Bankruptcy Notice to which I have referred. The correct section is s 85 of the DC Act, which of course is referred to in the body of the Certificate of Judgment and in the second reference to the "Interest Schedule", to which I have also referred. For the relevant period, there was no difference in the rates prescribed by virtue of s 83A or s 85. 5 There is, in my opinion, a document attached to the Bankruptcy Notice, which states: "the provision under which the interest is being claimed and … the interest rate ... at which the interest is being claimed." 6 It seems to me therefore that there has been a compliance with the legal requirements of the Bankruptcy Act 1966 (Cth) and the Bankruptcy Regulations 1996 embodied in the form of a notice and that the question does not really arise as to whether any non compliance should be regarded as a failure to comply with an "essential" requirement of the legislation; c.f. Australian Steel Company (Operations) Pty Ltd v Lewis [2000] FCA 1915. 7 The question, rather, is whether there is overall some misleading quality of the Bankruptcy Notice for the debtor. A reasonably diligent debtor acting with reasonable prudence in his or her own interests would be directed to the relevant Act and to the two provisions of it, one correct and one incorrect. Reasonable prudence, to my mind, indicates that both provisions would be checked by the debtor. Accordingly, I do not think that, overall, the Bankruptcy Notice is misleading; c.f. Farrugia v Farrugia [2000] FCA 129, a case in which I took a different view (and which, fortunately, would not have been decided differently as to principle after Lewis' case). 8 In these circumstances, I declare that the Bankruptcy Notice is valid and refer the matter back to the Registrar to deal with administrative matters such as substituted service. There will be no order as to costs. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Madgwick. Associate: Dated: 5 March 2001 Counsel for the Applicant: M S White Solicitor for the Applicant: Henry Davis York No appearance for the Respondent. Date of Hearing: 20 February 2001 Date of Judgment: 20 February 2001