Edwards v State Bank of New South Wales Limited, in thematter of Edwards [2001] FCA 749 (12 June 2001)

Last Updated: 2 July 2001

FEDERAL COURT OF AUSTRALIA

Edwards v State Bank of New South Wales Limited, in the matter of Edwards

[2001] FCA 749

BANKRUPTCY - application to set aside bankruptcy notice under s 41(7) of the Bankruptcy Act 1966 (Cth) due to the existence of a counter-claim, set-off or cross demand - whether counter-claim, set-off or cross demand could have been raised in the proceeding that resulted in the judgment or order in relation to which the bankruptcy notice was issued

Bankruptcy Act 1966 (Cth) s 41(7)

Federal Court Rules O 77 r 13

Thomas v St George Bank Ltd [1999] FCA 166 followed

Crimmins v Glenview Home Units [1999] FCA 515 followed

IN THE MATTER OF REX EDWARDS

REX EDWARDS v STATE BANK OF NEW SOUTH WALES (ACN 003 963 228)

N 7207 of 2001

STONE J

12 JUNE 2001

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 7207 OF 2001

IN THE MATTER OF REX EDWARDS

BETWEEN:	REX EDWARDS APPLICANT
AND:	STATE BANK OF NEW SOUTH WALES LIMITED (ACN 003 963 228) RESPONDENT
JUDGE:	STONE J
DATE OF ORDER:	12 JUNE 2001
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

the application be dismissed with 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	N 7207 OF 2001

IN THE MATTER OF REX EDWARDS

BETWEEN:	REX EDWARDS APPLICANT
AND:	STATE BANK OF NEW SOUTH WALES LIMITED (ACN 003 963 228) RESPONDENT

JUDGE:	STONE J
DATE:	12 JUNE 2001
PLACE:	SYDNEY

REASONS FOR JUDGMENT+

1 The applicant in this matter was served with a bankruptcy notice on 17 April 2000, and it was subsequently extended to 17 April 2001. On 1 May 2001, the applicant filed an application to set aside the bankruptcy notice. The application is supported by two affidavits sworn by the applicant on 1 May 2001 and 31 May 2001.

2 The applicant's claim to set aside the bankruptcy notice is made pursuant to s 41(7) of the Bankruptcy Act 1966 (Cth) ("the Act"), and is based on the existence of a counter-claim, set-off or cross demand. Section 41(7) of the Act provides

"Where, before the expiration of the time fixed for compliance with the requirements of a bankruptcy notice, the debtor has applied to the Court for an order setting aside the bankruptcy notice on the ground that the debtor has such a counter-claim, set-off or cross demand as is referred to in paragraph 40(1)(g), and the Court has not, before the expiration of that time, determined whether it is satisfied that the debtor has such a counter-claim, set-off or cross demand, that time shall be deemed to have been extended, immediately before its expiration, until and including the day on which the Court determines whether it is so satisfied.'

3 It is important to note that this section requires the application to the Court for an order setting aside the bankruptcy notice to be made before the bankruptcy notice expires.

4 In earlier cases in this Court it has been decided that in order to make an application under s 41(7), there must be at the very least a bona fide assertion of a genuine counter-claim, set-off or cross demand that the applicant could not have established in the action or proceeding in which the judgment order was obtained. These matters have been considered by Lindgren J in Thomas v St George Bank Ltd [1999] FCA 166, and also by Branson J in Crimmins v Glenview Home Units [1999] FCA 515. Both of those authorities refer to the necessity of complying with O 77 r 13 of the Federal Court Rules. This rule requires that if there is an application to set aside a bankruptcy notice on the ground that the debtor has a counter-claim, set-off or cross demand, then the affidavit with accompanies that application must contain certain details, namely

* the date on which the bankruptcy notice was served on the debtor,

* full details of the counter claim, set-off or cross demand,

* the amount of the counter-claim, set-off or cross demand as well as the amount by which it exceeds the amount claimed in the bankruptcy notice, and

* why the counter-claim, set-off or cross demand was not raised in the proceeding that resulted in the judgment or order in relation to which the bankruptcy notice was issued.

5 Those requirements have not been met in this case. In particular, Mr Edwards is not able to satisfy me that the counter-claim set-off or cross demand was not able to be raised in the proceeding which resulted in the judgment or order in relation to which the bankruptcy notice was issued.

6 The respondent submitted by way of an exhibit to the affidavit of Ms Penelope Jane McKew sworn on 6 June 2001, a transcript of proceedings before the District Court of New South Wales before his Honour Judge Patten. It is not necessary for me to go into details of the transcript, however, on my reading of the transcript and bearing in mind the matters to which Ms McKew referred me, it is clear to me that the issues sought now to be raised by Mr Edwards were raised in that proceeding and therefore the requirement of s 40(1)(g) is not met.

7 In my opinion the issues raised by Mr Edwards are an attempt to revisit the merits of the application made earlier without giving me any reason why I should go behind the judgment of the District Court. For those reasons the application must be dismissed with costs.

I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Stone.

Associate:

Dated: 22 June 2001

Counsel for the Applicant:	The applicant appeared in person
Solicitor for the Respondent:	Abbott Tout
Date of Hearing:	12 June 2001
Date of Judgment:	12 June 2001