Re Malcolm Kenneth Brown Ex Parte: the Bankrupt [1983] FCA 99 (27 May 1983)

FEDERAL COURT OF AUSTRALIA

Re: MALCOLM KENNETH BROWN
Ex parte: THE BANKRUPT
No. Qld.543 of 1981
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA
GENERAL DIVISION
BANKRUPTCY DISTRICT OF THE SOUTHERN DISTRICT OF THE STATE OF QUEENSLAND
Fitzgerald J.

CATCHWORDS

BANKRUPTCY - application seeking an annulment of a sequestration order - alleged failure of service of the petition upon the debtor - petitioning creditor's debt paid in full - further proofs of debt lodged by putative creditors - credibility of witnesses - application dismissed.

Bankruptcy Act 1966 (Cwlth), s.154(1)(c)

HEARING

BRISBANE
27:5:1983

ORDER

1. The application is dismissed

2. The bankrupt must pay the costs of the petitioning creditors who appeared to oppose the application, such costs to be taxed.

DECISION

A sequestration order was made against Malcolm Kenneth Brown in the Supreme Court of Queensland on the petition of William McEwans Pty Limited on 11 November 1981. The matter came before a learned judge of the Supreme Court of Queensland. The material sequestration order included an affidavit by one Barry James McCosker, a process server, who swore that he served the petition on Mr Brown at 6.45 a.m. on 8 October 1981 by delivering it to him personally at his residential address although that was not the address shown on the petition.

Paragraph 2 of Mr McCosker's affidavit was as follows:

"I identified the person I served by inquiring of him, 'what is your full name?' to which he replied, 'Malcolm Kenneth Brown'. I then asked him, 'Are you the person mentioned and referred to in this creditor's petition from William McEwans Pty Limited?' and he replied, 'Yes, I am'."

A further affidavit dealing in more detail with the circumstances of service, which was sworn by Mr McCosker on 1 December 1981, has now been filed and Mr McCosker has been cross-examined.

On 17 November 1981 an application was filed on behalf of the debtor in the Supreme Court of Queensland seeking an order that the sequestration order be annulled on the ground that service of the petition was not effected upon Mr Brown pursuant to the bankruptcy rules or at all. That application was adjourned on at least one occasion but was not contested.

The petitioning creditor's debt has now been paid, although it is suggested not by the bankrupt or out of his estate, but other proofs of debt have been lodged. The bankrupt disputes that he is indebted to any of the putative creditors who have lodged proofs. His statement of affairs asserts that he has assets of a very considerable value and no liabilities. No decision has been made by the trustee of the estate of the bankrupt whether or not to admit the proofs of debt.

The bankrupt's public examination under section 69 of the Bankruptcy Act 1966 ("the Act") has been partially completed but adjourned indefinitely until the Official Trustee decides whether or not the proofs are to be admitted.

On 9 May 1983, approximately a year and a half after the sequestration order had been made, the bankrupt made a further application for the annulment of the sequestration order made against him on 11 November 1981.

The grounds of that application were that the creditor's petition had not been served and that the unsecured creditors have been paid in full. Service of the application has been effected on the bankrupt's trustee and also on the creditors who have lodged proofs of debt, other than the petitioning creditor, which, as I have said, has been paid.

In support of his application the bankrupt has asserted that he was not served with the petition and was not at home at the time when it is alleged he was served but "was engaged in the pursuit of my horse breeding business at the race course at Southport".

Further, within the last week, on 25 May 1983, the bankrupt's wife swore an affidavit in which she says she recalls that at approximately 5.30 a.m. on 8 October 1981 her husband left their residential property with a horse float and that she observed no person in or about the property between 6 and 9 a.m. on that day other than her brother and "others who are normally carrying out their employment with the various activities carried on on the property".

The brother of the bankrupt's wife swore an affidavit yesterday, 26 May 1983, that he was at the bankrupt's property between about 6 a.m. and 9 a.m. on 8 October 1981 although for the most part not in the house but in or on his truck which was parked near the stables located not far from the house and that the bankrupt was not on the property during that period. The bankrupt's wife and her brother were both cross-examined.

The only ground on which the bankrupt's application is now prosecuted is that he was not served with the petition. Thus, it is submitted, the sequestration order ought not have been made (s.154(1)(c) of the Act).

It is common ground that the issue is neither more nor less than one of credibility and I have no hesitation in rejecting the evidence of the bankrupt and accepting the evidence of Mr McCosker.

Further, I am satisfied that, whether deliberately or mistakenly after this period of time, the bankrupt's wife and her brother are not accurate in their recall of the events of 8 October 1981, at least in relation to times. It would not be surprising that even an honest witness would be mistaken when first asked, as they were about 1 1/2 years after the event, to give evidence of what they recall. It is unnecessary to go further and voice suspicions that, consciously or unconsciously, their recall has been cast by the bankrupt.

According to the bankrupt there are others who could attest to his absence at the relevant time from his property but they were not called. There was a suggestion that some could not be found and that one who was to attend had failed to arrive.

In any event, I have no hesitation in concluding that the bankrupt was duly served and that no basis exists for annulling the sequestration order on the ground that it was not.

The application is dismissed. The bankrupt must pay the costs of the petitioning creditors who appeared to oppose the application, such costs to be taxed.