ANZ Banking Group v Ha [2002] FMCA 30 (30 January 2002)

Last Updated: 27 March 2002

FEDERAL MAGISTRATES COURT OF AUSTRALIA

ANZ BANKING GROUP LTD v HA

[2002] FMCA 30

BANKRUPTCY - Bankruptcy notice - whether served personally - review of Registrar's sequestration order.

Walsh v The Deputy Commissioner of Taxation [1984] HCA 33; (1984) 156 CLR 337

Applicant:

AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD

Respondent:

BA THI HA

File No:

MZ 337 of 2001

Delivered on:

30 January 2002

Delivered at:

Melbourne

Hearing Date:

30 January 2002

Judgment of:

McInnis FM

REPRESENTATION

Applicant:

In Person

Counsel for the Respondent:

Mr M Gronow

Solicitors for the Respondent:

Freehills

Counsel for the Supoprting Creditor:

Ms M Gojak

Solicitors for the Supporting Creditor:

Ebsworth & Ebsworth

ORDERS

(1) That the time be extended to allow the debtor to make application for review of the registrar's decision to 12 November 2001.

(2) That the application filed 12 November 2001 be dismissed.

(3) Pursuant to the slip rule, the order made by Registrar Wood on 27 September 2001 be amended by deleting 70,000 on the third line of order 1 and inserting 7000, but that the orders therein otherwise be affirmed.

(4) I order that the creditor's and supporting creditor's costs, including any reserve costs, be taxed in accordance with order 62 of the Federal Court Rules and that such costs be paid out of the estate of the debtor in accordance with the statute.

FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE

MZ 337 of 2001

AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD

Applicant

And

BA THI HA

Respondent

REASONS FOR JUDGMENT

1. This is an application by BA THI HA ("the debtor") for a review of a decision made by a registrar of this court on 27 September 2001. On that occasion, the registrar had before him an application by the creditor, AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD ("the creditor"). The creditor had relied upon a Creditors Petition, which in turn had been based upon a bankruptcy notice founded upon a judgment said to have been obtained in the Supreme Court of Victoria at Melbourne on 13 December 1999, where the creditor obtained judgment against the debtor for the amount of $1,036,739.83, less what was said in the creditor's petition to be a sum of $7000, having been credited for payments received pursuant to a stay agreement.

2. When the matter was before the registrar on 27 September 2001, the registrar made the following orders:

(1) That leave be granted to amend paragraph 1 of the petition, to substitute $633,398.80 in lieu of "$1,029,739.83", in line one, and inserting after "$70,000", the following words - "and $396,341.03, being the sale proceeds of 2 William Street Abbotsford."

(2) There be dispensation with reverification and reservice of the petition.

(3) A sequestration order be made against the estate of the respondent, Ba Thi Ha.

(4) The applicant's costs of and incidental to the petition be taxed and paid in accordance with the statute.

3. In the debtor's application, which was filed on 12 November 2001, she seeks review of that decision by the registrar and further seeks an extension of time in which to file the application to seek this review. It is not in dispute that, as a matter of record, there is some error in the order, namely in paragraph 1 of the order of the registrar, where he incorrectly refers to the amount $70,000, which should be $7000. Apart from that error, the debtor claims that the substantive issue is that, in the present case, she has not been served with the bankruptcy notice, and accordingly the foundation stones whereof the order made by the registrar has not been established.

4. In the material before me today, it is clear that, in the event that I were to be satisfied that the bankruptcy notice was served upon the debtor, then the formalities which are otherwise required, pursuant to section 52 of the Bankruptcy Act, have been complied with, and I so find that on the basis of the material before me, those other matters have been established. The real issue before me in this application today, and the one which has attracted a great deal of attention and been the subject of evidence, is whether I can be satisfied on the balance of probabilities that the creditor served the debtor with the appropriate bankruptcy notice, said to have been served on 12 March 2001, at 12 Albert Street, Abbotsford, as alleged by the witnesses relied upon by the creditor.

5. When this matter was before the court on 26 November 2001, I then made orders in relation to the filing and serving of further affidavit material by the parties. Specifically, I made orders that the debtor should file and serve any further affidavit material upon which she intended to rely by 14 December 2001, and also granted her leave to file and serve affidavits in support of her application, which specifically involved ensuring that those affidavits complied with the appropriate interpreter's attestation clause. The creditor was also granted leave to then file affidavits upon which it intended to rely, on or before 17 January 2002. Other requirements were that the parties give notice to each other of any deponent to an affidavit required for the purpose of cross-examination.

6. When the matter was heard this day, the debtor appeared in person. I was prepared to allow her to be assisted, though not represented, by her son, and it should further be noted that throughout the proceedings, the court has been assisted by a Vietnamese interpreter. In support of her application, the debtor has given evidence and has also relied upon an affidavit sworn by her on 14 December 2001, together with evidence called from Mr Hung Pham, who has sworn an affidavit on

13 December 2001. I further granted leave to the debtor to call evidence from Mrs Pham Thi Dung, notwithstanding the fact that that witness had not completed an affidavit, and that a formal objection was made to that witness being permitted to give evidence for and on behalf of the debtor.

7. In my view, in an application of this kind it is appropriate to make due allowance for the fact that the debtor appears unrepresented. I think it is also significant to make due allowance for the fact that the debtor does neither speak nor read English and has required the assistance of an interpreter. The formalities of court and court proceedings, whilst no doubt being the subject of at least a degree of knowledge by this debtor, as a result of her Supreme Court proceedings, about which there is no dispute in terms of their length and the time they no doubt occupied for the debtor - is still nevertheless a person who I should reasonably conclude does not have a familiarity with legal proceedings. To that extent, I was prepared to allow the evidence to be adduced as I gave indicated.

8. It should also be stressed that in this particular application, there is a requirement for an extension of time in which to file this application, which is effectively a review of the decision of the registrar. Whilst not a great deal has been placed before the court as to why I should extend time, it seems to me that given the short period of time that is required, having regard to the fact that the debtor is unrepresented and has the difficulties to which I have referred, together with the fact that at the very least, the core issue in this case being one of an evidentiary nature as to whether she did or did not in fact receive by way of service the relevant bankruptcy notice, combined with the concession, properly made, that there is no prejudice to the creditor, I am prepared to accept that it is appropriate to exercise the discretion I undoubtedly have to grant an extension of time, and I do so.

9. The core issue then in the present case is whether or not the bankruptcy notice in the present case was served. The creditor, in support of its case, has relied upon affidavit material and in particular has relied upon affidavits by Mr Michael John Bookman, a process server who has sworn affidavits on 7 May 2001, 3 August 2001 and 15 January 2002. The creditor further relies upon affidavits of a solicitor, Kelly-Anne McKinnis, sworn 9 May 2001 and 16 January 2002. Further reliance is placed upon, though I do not need to recite them, other affidavits verifying matters in relation to what I would regard as the formalities concerning the creditor's petition, which do not seem, to me, on the material presently before the court to be seriously in issue.

10. As I have indicated a number of times, the key matter in dispute between these parties is whether indeed, as suggested by the creditor, the relevant bankruptcy notice was served upon the debtor on 12 March 2001 at 8.20 pm. It is relevant to note that the key witness, in my view, in support of the proposition that the bankruptcy notice was indeed served, is KELLY-ANNE McKINNIS. In her affidavit before this court, adopted by the witness in evidence, sworn 9 May 2001, Ms McKinnis indicates that she had previously been the instructing solicitor at the trial of the Supreme Court proceedings number 2038 of 1998 between the creditor and the debtor, who was amongst a number of defendants in that proceeding. During the course of those proceedings, the creditor obtained the judgment upon which the bankruptcy notice is based and upon which the bankruptcy proceedings were commenced in this court.

11. The trial, it is said - and this is not in dispute - occurred between April and May of 1999. It is said by Ms McKinnis in her affidavit that during that time, she observed the debtor in court on an almost daily basis. She says in the affidavit that as a result, she has a strong recollection of the physical appearance of the debtor. In her affidavit, Ms McKinnis further states that on 12 March 2001 at 8.20 pm, she attended the premises of the debtor at 12 Albert Street, Abbotsford, with Mr Michael Bookman, the process server. I should indicate at this point that those premises it is agreed were then registered in the name of the debtor as a co-proprietor and were sold, according to the documents before me, by way of transfer on 30 March 2001.

12. In her affidavit, Ms McKinnis goes on to say that Mr Bookman and her attended the premises with the intention of serving bankruptcy notices on, amongst others, the debtor. She indicates that she knocked on the door of the house and that a young female aged in her 20s answered the door. She states that she was soon joined by another woman, aged in her 20s, and a female child of approximately five years of age. It is said in that affidavit that Mr Bookman asked the first young lady if, amongst others, the debtor was present at home, and the person replied to the effect that she did not speak English. A second lady uttered similar words.

13. Mr Bookman, it is said by Ms McKinnis, asked if they knew, amongst others, the debtor, as he had documents to give to the debtor. Whilst this conversation was occurring, Ms McKinnis in her affidavit states that she noticed the debtor sitting on the living room floor at the back of the house. She advised Mr Bookman in relation to her observations. Ms McKinnis says she then called the debtor, called out the name of the debtor, and motioned her to the door. Ms McKinnis says that the debtor then joined the two ladies and young girl at the door, and all three women continued to deny speaking English, and in response to questions by Mr Bookman, denied knowledge of any person named Ba Thi Ha.

14. Ms McKinnis says that she asked the child whether she knew who Ba Thi Ha was, and the child allegedly responded by nodding her head and looked quickly at Ba Thi Ha, the debtor. She said it was her grandmother because she said her grandmother's name started with a "B" and an "A". In the affidavit, Ms McKinnis goes on to then refer to other observations she made in terms of warning expressions allegedly given to the child by adults. She said to the debtor words to the effect,

"I know who you are, Ba Thi Ha. You are Ba Thi Ha, aren't you?" It is said that Ba Thi Ha shook her head and said words to the effect of, "No."

15. The process server and Ms McKinnis then allegedly asked Ba Thi Ha to show identification. It is said that Ba Thi Ha walked away, retrieved a wallet from another room and then returned to the front door, held up an identification card with the name of a person other than Ba Thi Ha, but that identification had no photo identification. She was asked for photo identification and refused. Ms McKinnis said she decided she had sufficiently identified the woman called to the door as Ba Thi Ha, and personally recognised her from the proceedings to which I have referred. The process server was then asked to serve the original of the bankruptcy notice, duly signed by the official receiver for the bankruptcy district of Victoria, to which was annexed a copy of the judgment referred to in the bankruptcy notice. Ms McKinnis says in her affidavit that she watched Mr Bookman personally serve those documents on the respondent debtor. In her further affidavit, which has been sworn 16 January 2002, Ms McKinnis refers to other affidavits, to which I have referred, relied upon by the debtor. I will return to that affidavit in due course. It is sufficient, however, for the present purposes to indicate that Ms McKinnis, both in that affidavit and in her evidence before this court, has continued to maintain that she was satisfied about both the service and identity, which are crucial issues in the present application.

16. Mr Bookman gave evidence and adopted the affidavits to which I have referred. It is significant, however, that in addition to the affidavit evidence, he indicated that by reference to his contemporaneous notes, he was able to identify a symbol, namely "SP", which he explained indicates are notes which indicated "served personally", and that if he did not serve personally, then he had another notation which would indicate that the person refused to accept service. In his affidavit material, Mr Bookman does not suggest that he in fact knew the debtor. In his evidence when cross-examined by the debtor I am satisfied that Mr Bookman was unable to recognise the debtor and candidly indicated that in the course of his employment as a full-time professional process server, he is not able to recall seeing the debtor and, significantly, could not remember the person who he saw on the day when the documents were allegedly served.

17. It should also be noted, however, that in the present case, the process server has indicated that he had with him on the occasion of the service Ms McKinnis, whose role was on that occasion to identify the debtor. It seems to me, therefore, that the crucial evidence in the present case that is being relied upon by the creditor would seem to be the evidence of Ms McKinnis. I should add, lest there be any doubt about the matter, that the surname of Ms McKinnis is not spelt the same as my surname and it is not suggested there is any relation at all. For the sake of completeness though, I should add, relevantly, that Ms McKinnis is currently an employee of the creditor and I take that matter into account.

18. The debtor in the present case, as I have indicated, relied upon her own affidavit evidence. In her evidence she, on a number of occasions, after adopting her affidavit, in clear terms, quite confidently asserted that at no stage had she been at the premises in order to be served with the bankruptcy notice. She denied strongly attending the premises at 12 Albert Street, Abbotsford, on 12 March 2001 and denied emphatically that she had ever received the bankruptcy notice relied upon by the creditor. She further indicated on a number of occasions to this court that although there had been other documents served upon her in the course of litigation, that had there been a bankruptcy notice served, she would have referred the bankruptcy notice to her son, who then would have been able to assist her in understanding its contents and presumably explaining the potential legal effect. It is quite clear that there is a direct conflict, therefore, between the evidence both on affidavit and before this court, between the debtor and principally Ms McKinnis, called for an on behalf of the creditor.

19. Further in support, however, of her claim that she did not receive the bankruptcy notice, the debtor relied upon the evidence, as I have indicated, without affidavit, of Mrs Pham Thi Dung. Mrs Pham gave evidence that she recalls an occasion when a person attended at the premises at 12 Albert Street, Richmond, and attempted to hand documents to her, and the thrust of the evidence, as I understand it, is that she believed the person wrongly believed that she in fact was the debtor. During the course of her evidence, however, it became apparent that Mrs Pham was unable to be precise about the date of this incident and was unable to be precise about the nature and content of the document allegedly handed over.

20. I should add that whilst considering her evidence, it is appropriate for this court to note that I have had the opportunity of hearing the evidence of both Mrs Pham and the debtor, and seeing both parties in the witness box. Mrs Pham confirmed with the court that her appearance has not altered since March 2001. From my own observations which I am able to make, it is clear to me that there is hardly any resemblance at all, either in stature, weight or appearance, between Mrs Pham and the debtor. That fact, which I find, makes it all the more difficult for this court to reconcile, to the extent that it has to, the clear evidence in conflict between the debtor and Ms McKinnis, called for and on behalf of the creditor.

21. In further support of her claim, however, the debtor has also relied upon, and I have regard to, the evidence and affidavit of Hung Em Pham. Again, however, it should be stressed that Mr Pham, in his evidence and affidavit, whilst referring to the suggestion that there had been an attempt of service which had occurred sometime in March 2001, under cross-examination seemed to me to be vague about the precise date when that occurred. It is not necessary for me to recite all the details of how it came to be that Mr Pham was at the premises in March at all, but sufficient to say that his daughter was then resident at those premises, along with his wife, from whom I assume he was then estranged.

22. In any event, he says that on that occasion, there was another person present whom his daughter referred to as "Grandma Ba", and essentially, as I understand it, says that the process server who attended on that occasion attended along with another male and a female person, thereby making three persons, and had left a letter, which was purportedly to be served upon the debtor, on the letterbox at the premises on that occasion. He confirmed that he understood that the man who had left the letter had attended those premises on a number of other occasions. He further confirmed, though, that this attendance was at around 6 pm, and on other occasions the attendances were earlier. I pause at this stage to indicate that Ms McKinnis, in her affidavit, Mr Bookman in his material, indicates that the service that occurred occurred at 8.20 pm.

23. In these circumstances, the court is left with the difficult position of being required to endeavour to make a finding in relation to an issue where there is clearly a significant conflict. In my view, I am able to prefer the evidence that has been provided, both in affidavit form and on oath before me, for and on behalf of the creditor, and I do so for a number of reasons. In my view, it is clear that the solicitor giving evidence on oath in this matter had ample opportunity to become acquainted and familiar with, and thereby identify the debtor. She had been exposed to the debtor on an almost daily basis for a period of a number of days between April and May 1999, during the course of court proceedings. That much is not in dispute. She gave strong and, in my view, persuasive evidence, adopting her affidavit and refuting the suggestion that she had not properly identified the debtor. Her evidence to the extent that it required corroboration was corroborated by Mr Bookman in that he relied upon that identification and carried out service, as indicated in his affidavit and material before me, upon the person whom he was satisfied, and likewise I am satisfied, was the debtor on that occasion.

24. In my view, the most likely explanation for the evidence given by way of contradiction to that material by the witnesses called for and on behalf of the debtor is that another event had occurred, or perhaps even more than one event, relating to service at these premises, where process servers sought out the debtor for reasons not related to this bankruptcy notice.

25. I am satisfied, however, that the debtor's evidence - and in particular I refer to Mr Pham and Mrs Pham - is not evidence upon which I should rely when contrasted with the evidence of the witness Ms McKinnis, corroborated by the process server, Mr Bookman, and also corroborated to a certain extent by contemporaneous notes of the attendance, made and relied upon in the giving of evidence by the process server. In relation to the evidence of the debtor, I am not satisfied, therefore, that in the circumstances, she is correct in indicating she had not received the bankruptcy notice, as indicated in the evidence of the creditors. I do not believe that her version of events is, in the present case, a version which I can find as a matter of fact. I therefore reject her evidence and prefer the evidence given, to which I have referred, by, for and on behalf of the creditor.

26. It follows in those circumstances that the appropriate orders I should make are as follows:

(1) That the time be extended to allow the debtor to make application for review of the registrar's decision to 12 November 2001.

(2) That the application filed 12 November 2001 be dismissed.

(3) Pursuant to the slip rule, the order made by Registrar Wood on 27 September 2001 be amended by deleting 70,000 on the third line of order 1 and inserting 7000, but that the orders therein otherwise be affirmed.

(4) I order that the creditor's and supporting creditor's costs, including any reserve costs, be taxed in accordance with order 62 of the Federal Court Rules and that such costs be paid out of the estate of the debtor in accordance with the statute.

27. To the extent that I am required to make findings, I note that the date of the act of bankruptcy is 2 April 2001.

28. Whilst criticism was made of the registrar's amendment of the creditor's petition, it seemed to me that in essence, that amendment was entirely appropriate, and I do not regard that as being a proper basis for review, as it seemed an entirely appropriate amendment to make in favour of the debtor, and to the extent that I'm required to, I rely upon and take note of the decision to which I have been referred of Walsh v The Deputy Commissioner of Taxation [1984] HCA 33; (1984) 156 CLR 337.

I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of McInnis FM

Associate:

Date: 30 January 2002