FEDERAL COURT OF AUSTRALIA Nunn v Citigroup Pty Ltd [2012] FCA 476 Citation: Nunn v Citigroup Pty Ltd [2012] FCA 476 Appeal from: Nunn v Citigroup Pty Ltd [2011] FMCA 1045 Parties: ROGER NUNN v CITIGROUP PTY LTD ABN 88 004 325 080 File number: SAD 339 of 2011 Judge: BESANKO J Date of judgment: 9 May 2012 Catchwords: BANKRUPTCY – appeal from decision of Federal Magistrates Court – service of bankruptcy notice in accordance with rule 16.01(1)(c) of the Bankruptcy Regulations 1996 (Cth) – error in original affidavit of service concerning manner of service – where error corrected in subsequent affidavits and oral evidence of process server – whether error necessitated recommencement of sequestration proceedings. Held: the appeal must be dismissed. Legislation: Bankruptcy Act 1966 (Cth) Federal Magistrates Court (Bankruptcy) Rules 2006 (Cth) Date of hearing: 7 May 2012 Place: Adelaide Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 5 Counsel for the Appellant: The Appellant appeared in person Counsel for the Respondent: Mr S Thomas Solicitor for the Respondent: Finlaysons IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION SAD 339 of 2011 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: ROGER NUNN Appellant AND: CITIGROUP PTY LTD ABN 88 004 325 080 Respondent JUDGE: BESANKO J DATE OF ORDER: 9 MAY 2012 WHERE MADE: ADELAIDE THE COURT ORDERS THAT: 1. The appeal be dismissed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION SAD 339 of 2011 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: ROGER NUNN Appellant AND: CITIGROUP PTY LTD ABN 88 004 325 080 Respondent JUDGE: BESANKO J DATE: 9 MAY 2012 PLACE: ADELAIDE REASONS FOR JUDGMENT 1 This is an appeal from orders made by the Federal Magistrates Court on 8 December 2011. The orders made by that Court were as follows: 1. The application for review filed on 3 November 2011 is dismissed. 2. The sequestration order of Registrar Christie of 20 October 2011 is affirmed. 3. The applicant creditors' costs are to be taxed pursuant to O 62 of the Federal Court Rules and be paid from the bankrupt estate of the respondent debtor in accordance with the Bankruptcy Act. 4. The applicant debtor's application for a stay is refused. 2 In his reasons (Nunn v Citigroup Pty Ltd [2011] FMCA 1045), Simpson FM noted that he had before him an application by the appellant for review of a sequestration order made by Registrar Christie on 20 October 2011. He noted that the requirements of the Bankruptcy Act 1966 (Cth) and Federal Magistrates Court (Bankruptcy) Rules 2006 (Cth) had been complied with. He referred to the only argument put by the appellant on the application for review. He said that the appellant's argument was that no sequestration order should have been made by the Registrar because, as at the time she made the order, no accurate affidavit of service of the bankruptcy notice had been filed. The Federal Magistrate described the argument and the reasons for which he rejected it in the following way: At that particular point in time, the only affidavit of service on the Court file was Mr Cranick's [sic] (Kranich's) affidavit, sworn 23 March 2011 and filed on 16 May 2011. That affidavit stated (wrongly as it turned out) that service had been effected by leaving the bankruptcy notice and other documents contained in an envelope marked with the respondent's name and last known address of Unit 1, 155, Waterfall Gully Road, Waterfall Gully, in the letterbox at that address. Mr Kranich had admitted in a further affidavit and in oral evidence that he gave during the hearing, that the affidavit was not correct. In truth, he had put the bankruptcy notice into an envelope, sealed the envelope and put the respondent's name on the outside of the envelope and slipped the envelope under the door to Unit 1, 155, Waterfall Gully Road, Waterfall Gully. Mr Kranich explained that he had made the mistake because a pro forma (or standard) letter had been used to prepare the affidavit of service and insufficient care was taken to ensure that all appropriate changes to the pro forma affidavit were carried out. Mr Kranich's later affidavits of 25 July and 5 September 2011 clarified that the bankruptcy notice was served by complying with r 16.01(1)(c) of the Bankruptcy Rules [sic] (Bankruptcy Regulations 1996 (Cth)). There was little gained, it seemed to me, in Mr Nunn taking the point about the error in the affidavit, although I should say that it is most unfortunate that a process server should make such a mistake in an affidavit of service. As Mr Nunn admitted in his affidavit, sworn and filed on 20 June 2011, in which he admitted that "bankruptcy notice number BN676 and dated 24th February 2011 was left under my door at Waterfall Gully Road, Waterfall Gully, in the State of South Australia, 5066. It was not served personally". During the hearing I was informed that it was an agreed fact that Mr Nunn did not open the sealed envelope placed under the door to the Waterfall Gully property, that envelope containing the bankruptcy notice. Mr Nunn believed that personal service of the bankruptcy notice was necessary and said that, in any event, if he did not open the envelope that contained the bankruptcy notice, there would not be proper service. Both of these beliefs were incorrectly held. In my opinion, as previously stated, Mr Nunn has been properly served. 3 When the matter came before me on 7 May 2012, the appellant sought to tender an affidavit that he had sworn that morning. In that affidavit, the appellant sought to explain why he had not complied with this Court's practice directions with respect to the preparation of appeal books. In addition, the appellant sought a short adjournment of 4-6 weeks "to enable a debt agreement to be entered into". The respondent opposed the appellant's application for an adjournment. It seemed to me that there was no good reason to adjourn the appeal, and I refused the appellant's application. It was possible to proceed with the hearing of the appeal without appeal books. 4 The appellant made one submission in support of his appeal. It was that the Federal Magistrate had erred because the whole process had been "corrupted" by the fact that the process server had initially stated that service had been effected by leaving the bankruptcy notice and other documents in the letter box at the appellant's address. The appellant argued that it was necessary for the respondent to "start again". 5 The appellant did not explain why the process server's initial mistake could not be corrected by his later affidavits and oral evidence. I do not think that there is any error in the Federal Magistrate's reasoning, and in those circumstances, the appeal must be dismissed. I will order that the appeal be dismissed and I will hear the parties as to any other orders. I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. Associate: Dated: 9 May 2012