Filler v Haskell [2003] FCA 121

FEDERAL COURT OF AUSTRALIA

Filler v Haskell [2003] FCA 121

BANKRUPTCY – Whether bankruptcy notice invalidfor failing to claim interest – notice made no reference to costs payable to debtor by creditor – no question of principle. Bankruptcy Act 1966 – ss 40(1)(g), 41(6A) Kleinwort Benson Australia Ltd v Crowl (1988) 165 CLR 71 applied ERWIN WALTER FILLER v RICHARD HASKELL IN THE MATTER OF ERWIN WALTER FILLER N 7002 of 2003 WILCOX J 11 FEBRUARY 2003 SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N7002 of 2003

BETWEEN: ERWIN WALTER FILLER

APPLICANT

AND: RICHARD HASKELL

RESPONDENT

JUDGE: WILCOX J

DATE OF ORDER: 11 FEBRUARY 2003

WHERE MADE: SYDNEY

THE COURT ORDERS THAT: 1. The application to set aside the bankruptcy notice be dismissed. 2. The applicant on the application, Erwin Walter Filler, pay the costs incurred by the respondent to the application, Richard Haskell, including reserved costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N7002 of 2003

BETWEEN: ERWIN WALTER FILLER

APPLICANT

AND: RICHARD HASKELL

RESPONDENT

JUDGE: WILCOX J

DATE: 11 FEBRUARY 2003

PLACE: SYDNEY

REASONS FOR JUDGMENT WILCOX J: 1 This is an application, pursuant to s 41(6A) of the Bankruptcy Act 1966 ("the Act"), by Erwin Walter Filler to set aside a bankruptcy notice that was served on him, or was deemed to have been served on him, on 20 December 2002. The creditor on behalf of whom the bankruptcy notice was issued was Richard Haskell, the respondent. The contention is that the bankruptcy notice is invalid, on two bases. 2 First, it is said the bankruptcy notice misstates the amount of the judgment debt because it makes no reference to interest that is payable on the judgment debt. In order to put this into context I set out the relevant portions of orders that were made in the Supreme Court of New South Wales on 28 February 2002: "1. There be verdict and judgment for the Plaintiff against the first and second defendants in the sum of $205,000.00. 2. All prior costs orders in the proceedings be vacated. 3. Judgment not be entered until 28 May 2002. 4. In default of the payment of the judgment sum of $205,000 before 28 May 2002, interest is to run on the judgment sum from 28 February 2002." Mr Filler was the second defendant. 3 It will be seen the scheme of the orders, which were apparently made by consent, is that there be a verdict and judgment for the plaintiff, that is Mr Haskell, against both defendants "in the sum of $205,000". Pursuant to para 3, judgment was not to be entered until 28 May 2002, three months after the date of the order. The apparent intention was to allow time for payment of the sum of $205,000. However the parties addressed themselves to the situation that would arise if payment was not made and they provided (in para 4) that, if payment was not made before 28 May 2002, then "interest is to run on the judgment sum from 28 February 2002". 4 It is common ground that payment of the sum of $205,000 was not made before 28 May 2002 and indeed has not yet been made. The bankruptcy notice contained a schedule in the following form: Schedule Column 1 Column 2 1. Amount of judgment or order $205,000.00 plus 2. Legal costs if orders to be paid and a specific amount was not included in the judgment or order plus 3. If claimed in this Bankruptcy Notice, interest accrued since the date of judgment or order 4. Subtotal $205,000.00 less 5. Payments made and/or credits allowed since date of judgment or order 6. Total debt owing $205,000.00