Kostezky, N.I. v Milder Elfman Szmerling Krycer Pty Ltd [1995] FCA 186

Kostezky, N.I. v Milder Elfman Szmerling Krycer Pty Ltd [1995] FCA 186

The bankruptcy notice did not comply with s 41(1)(a), s 41(2) of the Bankruptcy Act 1966 Cth and Form 4 because it failed to notify the debtor that he could secure payment of the debt to the satisfaction of the Court as an alternative to securing payment to the satisfaction of the creditor. That defect was one of substance, not a formal defect or irregularity, was not capable of amendment, and rendered the notice a nullity; no consequences could flow from its service on the debtor.

Jurisdiction
Australia
Judgment Date
31 March 1995
Procedural Posture
Bankruptcy / Debtor's Application to Set Aside a Bankruptcy Notice and Extend Time for Compliance
Outcome
Bankruptcy notice set aside.
Legal Topics
['bankruptcy Notice' 'formal Defects or Irregularities' 'non Compliance With Prescribed Form' 'validity of Bankruptcy Notice' 'costs']
['bankruptcy'] ['bankruptcy Notice' 'formal Defects or Irregularities' 'non Compliance With Prescribed Form' 'validity of Bankruptcy Notice' 'costs']

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Procedural Posture

Bankruptcy / Debtor's Application to Set Aside a Bankruptcy Notice and Extend Time for Compliance

Legal Issues

  1. 1 ['Whether the bankruptcy notice complied with Bankruptcy Act 1966 Cth, s 41 and Form 4 of the Bankruptcy Rules when it omitted the alternative of securing payment to the satisfaction of the Court.' 'Whether the defect in the bankruptcy notice was a formal defect or irregularity capable of amendment, or rendered the notice a nullity.' 'What costs order should be made where the successful debtor raised the decisive defect only on the day before the hearing.']

Ratio Decidendi

The bankruptcy notice did not comply with s 41(1)(a), s 41(2) of the Bankruptcy Act 1966 Cth and Form 4 because it failed to notify the debtor that he could secure payment of the debt to the satisfaction of the Court as an alternative to securing payment to the satisfaction of the creditor. That defect was one of substance, not a formal defect or irregularity, was not capable of amendment, and rendered the notice a nullity; no consequences could flow from its service on the debtor.

Court Disposition

Bankruptcy notice set aside.

Orders

  • ['The bankruptcy notice must be set aside.' "The debtor is to pay the creditor's costs, including any reserved costs, up to and including 21 March 1995." "The creditor is to pay the debtor's costs of the hearing on 22 March 1995."]