Stankovic v Footers Pty Ltd [2002] FMCA 24 (5 February 2002)

Last Updated: 30 April 2002

FEDERAL MAGISTRATES COURT OF AUSTRALIA

STANKOVIC v FOOTERS PTY LTD

[2002] FMCA 24

BANKRUPTCY - Bankruptcy Notice - application to set aside - invalidity of bankruptcy notice because of incorrect interest calculation - statutory right to interest on judgment debt - no grounds on which to set aside bankruptcy notice.

Applicant:

SLAVKO STANKOVIC

Respondent:

FOOTERS PTY LTD

File No:

AZ 17 of 2002

Delivered on:

5 February 2002

Delivered at:

Adelaide

Hearing Date:

5 February 2002

Judgment of:

Raphael FM

REPRESENTATION

For the Applicant:

Mr Slavko Stankovic in person

Solicitors for the Applicant:

Ms M Hutchins of Marshalls Solicitors

ORDERS

(1) Application dismissed.

(2) Applicant to pay Respondent's costs pursuant to the Federal Court Rules.

FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ADELAIDE

AZ 17 of 2002

SLAVKO STANKOVIC

Applicant

And

FOOTERS PTY LTD

Respondent

REASONS FOR JUDGMENT

1. In this matter, by application dated 21 January 2002, Mr Slavko Stankovic seeks to set aside bankruptcy notice numbered 544 of 2001, issued on 10 December 2001. The application is said to be made pursuant to section 41(2) of the Bankruptcy Act. There is no issue raised that the application is out of time or otherwise defective.

2. This is the second bankruptcy notice with which I have had to deal between these parties. In December 2001 I gave judgment in an action of the same name in which I set aside a decision of the registrar in which he upheld the validity of a previous bankruptcy notice. Mr Stankovic argues that the bankruptcy notice 544 is invalid because it incorrectly states the amount of interest payable under the judgment. In the schedule to the bankruptcy notice, the amount of judgment or order is stated to be $3301 and the interest $390.93, making a total for the whole bankruptcy notice of $3691.93.

3. In accordance with the requirements of the bankruptcy rules, there is an interest calculation set out and annexed to the bankruptcy notice. It says that:

"Interest is being claimed pursuant to section 35 of the Magistrates Court Act 1991 and rule 124 of the Magistrates Court (Civil) Rules 1992 at the rate of 10 per cent per annum on the principal sum of $3046 on 24 August 2000 until 7 December 2001 (471 days by 83 cents) equals $390.93.

4. The principal sum of $3046 is the amount claimed in the original Local Court statement of claim issued on 17 April 2000. The balance of the sum of $3301 is made up of practitioner's fee and lodgment fee, for which no interest is claimed.

5. Mr Stankovic argues that the figure contained in the interest calculation annexure of $390.93 is incorrect because it includes the period during which the previous bankruptcy notice was in existence. He says that as the previous bankruptcy notice was held by me to be invalid he should not have to pay interest for that time and therefore the interest contained in this bankruptcy notice is incorrect.

6. Mr Stankovic also says that he has tried very hard to come to an arrangement with the creditor to pay off the debt and he has been unable to do so. He says that he has applied to a number of courts for an opportunity to pay by instalments but he has been told they have no jurisdiction in the matter. He tells me that he is shortly to commence work and when this happens he will be in a position to repay the debt.

I note in this regard that the debt claimed is not large.

7. The right to interest on a judgment debt is a statutory right which continues whilesoever the debt is unpaid. The fact that a method of enforcement taken by a creditor is found to have been incorrect does not exempt the debtor from liability to pay interest on the still outstanding sum. Mr Stankovic was not in receipt of any judgment which impugned the amount of the judgment debt and therefore the amount of the judgment debt remained outstanding at all times and interest was due thereunder. I am unable to set aside the bankruptcy notice on those grounds.

8. The second ground advanced by Mr Stankovic, namely that he has made every effort to try and repay the money, is unfortunately for him not available. Bankruptcy is a matter not only between the debtor and his creditor but between the debtor and all his creditors. It is not in the power of the bankruptcy court to make orders for payments by instalment, garnishee or otherwise in respect of the judgment debt for which a bankruptcy notice has been issued. Of course Mr Stankovic could prevent the issue of a bankruptcy petition based upon an alleged act of bankruptcy, that of his failing to comply with this bankruptcy notice, by ensuring that the amount that remains due under the bankruptcy notice is less than $2000, and that would be done, presumably, by a payment of $1692.93.

9. As Mr Stankovic has impressed me with his willingness to make some payment of this small debt, indeed to make payment of it all, I will extend the time pursuant to which payment must be made under the bankruptcy notice until 5 pm on 8 February 2002, but I otherwise dismiss the notice and I order that Mr Stankovic shall pay the respondent's costs pursuant to the Federal Court Rules.

I certify that the preceding nine (9) paragraphs are a true copy of the reasons for judgment of Raphael FM

Associate:

Date: