Re George William Hatchett and Gary Neil Mattingley Ex Parte: the Shell Company of Australia Limited [1985] FCA 269 (23 July 1985)

FEDERAL COURT OF AUSTRALIA

Re: GEORGE WILLIAM HATCHETT and GARY NEIL MATTINGLEY
Ex parte: THE SHELL COMPANY OF AUSTRALIA LIMITED
No. QLD PET 470 of 1985
Bankruptcy

COURT

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

CATCHWORDS

BANKRUPTCY - service of bankruptcy notice - nature of copy served - affidavit of service - requirement that copy be signed and stamped.

ADMINISTRATIVE LAW - Act requiring matters to be treated as irregular - regulation inconsistent - validity.

Bankruptcy Act, s.306(1)

Bankruptcy Rules, Rules 7, 15, 16

HEARING

BRISBANE
23:7:1985

ORDER

The petition as against George William Hatchett be dismissed.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

DECISION

This is a petition for a sequestration order under the Bankruptcy Act. There are two judgment debtors, Messrs Hatchett and Mattingley, but the petitioning creditor is at this stage proceeding only against the former. It has been drawn to my attention that the affidavit of service of the bankruptcy notice may not comply with the Rules, in that it has annexed to it a photocopy of the bankruptcy notice, not bearing either the original signature of the Registrar, or the original registry stamp; both of those are on the document as part of the photocopy.

The first question is one of the construction of Rule 16 of the Rules under the Bankruptcy Act which reads as follows:-

"Due service of a bankruptcy notice or petition shall be deemed not to have been provided by affidavit unless -

(a) in the case of a bankruptcy notice - a copy of the bankruptcy notice signed and stamped by the Registrar is marked as an annexure to the affidavit; or

(b) in the case of a petition - an official copy of the petition and a copy of the affidavit or each affidavit verifying the petition are marked as annexures to the affidavit."

Mr Low who appeared for the petitioning creditor argued that the expression "a copy of the bankruptcy notice signed and stamped by the Registrar" should not be read as requiring that there be annexed a piece of paper signed and stamped by the Registrar. He said that it is enough that there be annexed a photocopy of a notice, the latter but not the former being signed and stamped. Mr Low's argument relied on the contrast between the two paragraphs of Rule 16, pointing out that (b) requires that there be an "official copy of the petition", whereas (a) makes no mention of an official copy. As to that, the explanation is simply that the "official copy" of the petition has to have a certain note on it, in Form 6, intended to give the debtor some information as to how he should respond to the petition.

I think it likely that the words "a copy of the bankruptcy notice signed and stamped by the Registrar" have the same meaning in Rule 16, which deals with proof of service, as they have in Rule 15, which deals with the mode of service. It is provided by Rule 15 that service of a notice is to be effected "by delivering to the debtor personally a copy of the bankruptcy notice signed and stamped by the Registrar". It would seem pretty clear that there the intention is that the document the debtor receives has on it an official signature and an official stamp, not merely a copy of each. Both Rules 15 and 16 were amended in 1980 so as to add the words "and stamped" after "signed" in the provisions dealing with service and proof of service of a bankruptcy notice: see Statutory Rule No. 386 of 1980. Prior to that amendment, Rule 15 had been considered by Rogerson J. in Re De Ieso (1978) 24 A.L.R. 701 in the Court of Insolvency of the State of South Australia. His Honour held that reading Rule 15(a) with Rule 7, the former required "that the document served on the debtor must itself bear the Registrar's own signature, and not a reproduction of it". The assistance his Honour received from Rule 7 was that it required the furnishing to the Registrar for signature by him of enough copies for service and annexure to affidavits of service. His Honour also thought Rule 7 to be of assistance in other ways mentioned in the report at p.703.

I agree, with respect, with the decision of Rogerson J. and with the view he expressed at p.704 that the copy of the notice served on the debtor and the copy annexed to the affidavit of service must bear "authentication by signature". In view of the amendments to the Rules made in 1980, the authentication must be by stamping as well as signature.

The next question is the effect of a breach of Rule 16. Mr Low relied, of course, on s.306(1) which reads as follows:-

"Proceedings under this Act are not invalidated by a formal defect or any irregularity, unless the court before which the objection on that ground is made is of opinion that substantial injustice has been caused by the defect or irregularity and that the injustice cannot be remedied by an order of the court."

Mr Low argued, and I agree, that the description "formal defect or . . . irregularity" is well satisfied by the matter complained of. I can well understand why the copy of the bankruptcy notice served on the debtor should have the signature and stamp on it, and not merely a copy of the signature and a copy of the stamp. It is not so clear why the copy annexed to the affidavit of service need, as a practical matter, have the original signature and stamp. Whatever the reason is, the absence of the original signature and stamp does not matter much, and cannot, of course, possibly have misled the debtor. It appears to me that it is of no more real importance than, for example, the failure to serve the verifying affidavits which Riley J. treated as covered by s.306(1) in Re Chu; ex parte R.S.L. Permanent Building Society Ltd. (1976) 15 A.L.R. 173. The debt here is a very large one, but I do not think that makes a difference.

However, the matter is not quite so simple, because Rule 16, in contrast with Rule 15, appears to require the Court to deem service not to have been proved unless the Rule has been complied with. Should service be deemed not to have been proved, in accordance with the requirements of Rule 16, there appears to be no room for the application of s.306(1).

If, as appears to me to be the case, Rule 16 has the absolute effect just mentioned, it is in conflict with s.306(1). An analogous attempt by the executive to require a particular outcome, by regulation, failed in Australian Jam Co. Pty. Ltd. v. Federal Commissioner of Taxation [1953] HCA 52; (1953) 88 C.L.R. 23; see especially at pp.35-36. It is not within the competence of the Governor-General, under a regulation-making power in such a form as s.315, to require the Court to hold that what is in truth a mere formal defect or irregularity is invalidating, contrary to the clear injunction in s.306.

In the result, then, I hold that the matter drawn to my attention is not invalidating.

But that is not the end of the case. The affidavit of service of the bankruptcy notice swears that the deponent served the debtor "with a copy of the bankruptcy notice signed by the Registrar . . .". That is not a compliance with Rule 15(a) which says that the copy must be one signed and stamped by the Registrar. The question is whether I should, as a matter of common sense, treat this as a mere slip on the part of the deponent, for the reason that he presumably served such a copy as Rule 15 requires. On reflection, I have decided that I should not take that course. As mentioned above, in the discussion of the first point, the affidavit annexed, contrary to the requirements of Rule 16, a photocopy on which neither the original stamp nor an original signature appears. It would seem to me quite unsafe to assume that the deponent served a document of a kind different from that which is annexed. That is, whereas the affidavit does not make clear whether there was compliance with Rule 15 as to the nature of the copy served, that obscurity is not cleared up by reference to the copy annexed; rather, the probability that a copy of the wrong sort was served is enhanced.

In the end, then, I hold that it is not established that such a copy as is required by Rule 15 was served. Following the reasons of Rogerson J. in Re De Ieso, I hold that that defect does not fall within s.306.

In summary, the views of the law on which I have acted are as follows:-

1. The copy of the bankruptcy notice served must be proved to be one on which the original signature and stamp of the Registrar appear; non-compliance with that requirement is neither a formal defect nor an irregularity.

2. Failure to annex to the affidavit of service of the notice such a copy as Rule 16 requires is not necessarily fatal; if and insofar as Rule 16 purports to make it so, Rule 16 is invalid.