FEDERAL COURT OF AUSTRALIA

Trihakis v Official Receiver (Vic) [1999] FCA 1426

BANKRUPTCY – filing statement of affairs – whether statement of affairs filed with Registrar in Bankruptcy as required.

Bankruptcy Act 1966 (Cth) s 54(1), s 149, s 306(1)

Acts Interpretation Act 1901(Cth)s 28A

Sofia v Pattison (unreported, Finkelstein J, 20 October 1997) referred

Carpenter v Carpenter Grazing Co Pty Ltd (1987) 5 ACLC 506 referred

Tsingaris v Official Receiver [1999] FCA 1389 referred

Nilant v Macchia (1997) 78 FCR 419 referred

Rosenfeldt v Official Trustee in Bankruptcy (1997) 79 FCR 340 distinguished

Re Van-Minnen; ex parte Harrison [1999] FCA 43 distinguished

DESPINA TRIHAKIS v THE OFFICIAL RECEIVER IN BANKRUPTCY & ANOR

V 7631 of 1999

KENNY J

18 OCTOBER 1999

MELBOURNE

THE COURT DECLARES THAT:

            The applicant has complied with s 54(1) of the Bankruptcy Act 1966 (Cth) by filing her statement of affairs with the Registrar in Bankruptcy for the District of Victoria on 20 May 1996.

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

EX TEMPORE REASONS FOR JUDGMENT

1                     This is an application by Ms Despina Trihakis, a bankrupt, who seeks a declaration that a statement of affairs signed by her on 17 May 1996 be deemed to have been filed in the office of the Registrar of Bankruptcy on 20 May 1996.  At the hearing Ms Trihakis was represented by her solicitor, Ms H Mastos.  There was no appearance for either respondent.  By affidavit sworn 8 October 1999, Mr M J Ennis, an officer of the first respondent authorised to make the affidavit on behalf of both respondents, deposed that the second respondent “neither supports nor opposes the orders sought by the Applicant which would discharge him (sic) from his bankruptcy”. 

2                     The outcome of the application is important because, by virtue of s 149 and s 54(1) of the Bankruptcy Act 1966 (Cth) (“the Act”) as it stood in May 1996, the bankrupt is discharged from bankruptcy at the end of the period of three years from the date on which she filed her statement of affairs in the office of the Registrar.  In May 1996, s 54(1) of the Act provided:

Where a sequestration order is made, the person against whose estate it is made shall, within 14 days from the day on which he is notified of the bankruptcy:

(a)     make out and file in the office of the Registrar for the District in which the sequestration order was made a statement of his affairs; and

(b)     furnish a copy of the statement to the trustee.

Section 54(1) has since been amended so as to substitute for the Registrar in Bankruptcy the Official Receiver as the person with whom the bankrupt’s statement of affairs is to be filed.

3                     The facts, as best they can be ascertained, are as follows.  Ms Trihakis was made bankrupt on 8 May 1996 upon the presentation of a creditor’s petition by the Commonwealth Bank of Australia.  The judgment debt in the sum of $17,705 which founded the petition arose out of a loan advanced by the bank to Ms Trihakis and her husband in respect of the purchase of property at Rowville.  Plainly enough, more than three years have now elapsed since a sequestration order against Ms Trihakis was made.

4                     On or about 16 May 1996 Ms Trihakis received a letter dated 15 May 1996 from the Insolvency and Trustee Service Australia (“ITSA”).  The letter relevantly stated:

TAKE NOTICE that your estate having been sequestrated by an order dated 8^th May 1996, you are required by Section 54 of the Bankruptcy Act 1966 to file a Statement of Affairs, within fourteen days (14) of the date hereof, on the prescribed form.

TAKE FURTHER NOTICE that the term of your bankruptcy, under which you would be eligible for an automatic discharge after 3 years, will not commence until you have filed your Statement of Affairs with the Registrar.

…

When the forms have been completed you are required to:

1.      Forward the original Statement of Affairs to the Registrar in Bankruptcy, 450 Little Bourke Street, Melbourne, Vic 3000.

2.      Forward the Statement of Affairs copy to this office. 

(Emphasis original)

In an affidavit sworn on 22 September 1999 in support of her application, Ms Trihakis deposed:

Shortly after receiving the letter I completed the Statement of Affairs which was enclosed.  Although I am able to read and write basic English I did not feel confident reading the letter and completing the Statement of Affairs without any assistance.  Accordingly, I asked my brother to explain the contents of the letter to me and assist me to complete my Statement of Affairs.  I recall that I gave my completed and signed Statement of Affairs to my Husband to deliver to the relevant authorities.

5                     In early May 1999, Ms Trihakis applied to ITSA for a certificate of discharge from bankruptcy.  On or about 14 May 1999, she received a letter dated 13 May 1999 from the first respondent, stating:

[O]ur records show that no original statement of affairs has ever been filed [with the Registrar in Bankruptcy], so that your period of bankruptcy will not be concluded until three years after you have filed such a statement of affairs.

A subsequent letter from the first respondent dated 19 July 1999 informed Ms Trihakis that:

I have been provided with the trustee’s file of your bankruptcy and can confirm that an original of your statement of affairs dated 27 May 1996, was received by the trustee on 29 May 1996.  There is no indication that this had been previously received by the Registrar in Bankruptcy.

In a further affidavit filed after the hearing of the application, Ms Trihakis deposed that the date of 27 May 1996 was incorrect, and that the correct date of her signing her completed statement of affairs was 17 May 1996.

6                     Ms Trihakis gave evidence before me to the effect that (1) in May 1996, she had, with her brother’s help, completed the documents that had come from ITSA, including her statement of affairs; (2) she had left the documents with her husband and when she had asked him subsequently what he had done with them, he had answered, “yes, it’s everything organised”; and (3) when she had again asked him recently what he had done with the documents, he had said “I did the right thing, whatever they asked me to do I’ve done”.  Mr Trihakis did not give evidence.  Ms Trihakis said that she and her husband, who had become bankrupt in April 1996, had separated shortly after the sequestration orders against them were made, and there had been no subsequent reconciliation.

7                     I accept that Ms Trihakis left her completed and signed statement of affairs with her husband on or about 17 May 1996 and that he told her, and she believes, that he forwarded her statement of affairs to the Registrar in Bankruptcy for filing, as directed by ITSA’s letter of 15 May 1996.  Given the first respondent’s statement in his letter of 19 July 1999 that Ms Trihakis’s original statement of affairs came into the possession of the trustee on 29 May 1996, I am satisfied, on the balance of probabilities, that Mr Trihakis did indeed forward by post the original and a copy of his wife’s statement of affairs to the authorities referred to in ITSA’s letter of 15 May 1996.  It is not said in this case that the bankrupt’s obligation under s 54(1)(a) could not be discharged by posting a completed original statement of affairs to the Registrar:  cf Sofia v Pattison (unreported, Finkelstein J, 20 October 1997) pp 2-3 (“Sofia”);  Acts Interpretation Act 1901(Cth), s 28A.

8                     At the hearing, Ms Mastos produced to the Court the bankruptcy files of Mr and Ms Trihakis.  Mr Trihakis’s original statement of affairs is contained on his bankruptcy file.  It would appear to have been signed by him on 29 April 1996 and to have been filed with the Registrar in Bankruptcy on 20 May 1996.  An envelope on the file indicates that the Registrar received Mr Trihakis’s statement of affairs by post. 

9                     I am satisfied, on the balance of probabilities, that a day or so prior to 20 May 1996, Mr Trihakis posted his original statement of affairs to the Registrar in Bankruptcy in compliance with ITSA’s direction.  Presumably, he also posted a copy to ITSA as he had been requested.  On the evidence of Ms Trihakis, she signed and left her statement of affairs with her husband on 17 May 1996 (i.e. at or about the same time as her husband forwarded his own documents).  Accordingly, if (as I find) Mr Trihakis forwarded his wife’s documents to the relevant authorities, he did so at or around the same time as he sent his own.

10                  Further, given that his own statement of affairs was posted to the correct person, namely, the Registrar in Bankruptcy, I am satisfied, on the balance of probabilities, that Mr Trihakis also posted the original of his wife’s statement of affairs to the same person.  As already noted, Ms Trihakis’s original statement of affairs came into the hands of the trustee on 29 May.  If (as I find) Mr Trihakis posted that document between 17 and 20 May, it seems inherently unlikely that the trustee would not have received the document until 29 May had it been directly posted to the trustee.  I infer from this circumstance (and the others already mentioned) that Mr Trihakis sent his own and his wife’s statement of affairs by post to the Registrar in Bankruptcy and that, in the case of Ms Trihakis, her statement of affairs was subsequently forwarded in error to the trustee.

11                  I am not persuaded to the contrary view by the fact, if it be one, that there is no indication on the trustee’s file that the original statement of affairs was previously received by the Registrar in Bankruptcy. The situation which arises in this case is not dissimilar from that considered in Carpenter v Carpenter Grazing Co Pty Ltd (1987) 5 ACLC 506 (“Carpenter”).  The proceeding in Carpenter arose out of a dispute between family members as to their rights and interests in a private company.  Under the Companies Act 1961, which was then applicable, company membership in the case of a person who was not a subscriber depended on the entry of the person’s name in the register of members.  A question arose as to whether the relevant register existed.  Hope JA, with whom Samuels and Priestley JJA concurred, said at p 514:

For the defendant it has been submitted that the presumption of regularity applies only when there is no evidence as to the fact in question.  As I understand it, the true rule is that the presumption may reasonably be drawn where an intention to do some formal act is established, when the evidence is consistent with that intention having been carried into effect in a proper way, the observance of the formality has not been proved or disproved and its actual observance can only be inferred as a matter of probability:  Harris v Knight (1890) L.R. 15 P&D 170 at pp 179-180; In the Estate of Bercovitz (1962) 1 WLR 321 at p 327.  There was no evidence in the present case that there was no register; the evidence was simply that no one had seen it or knew of its existence.  This does not prove that it did not exist, and is consistent with the person to whom its keeping was left … having duly carried out his responsibility. … In my opinion his Honour was correct in applying the presumption to find that the share register did in truth exist, and that the transfer signed by Karen which had been made out in favour of Kenneth was entered in that register.

In the present case, there is no evidence that the statement of affairs of Ms Trihakis did not exist or that it was not duly filed.  The evidence is that it did exist, that it was forwarded by Mr Trihakis to the authorities, coming eventually into the hands of the trustee.  There is no evidence that the Registrar in Bankruptcy did not receive it before it came into the hands of the trustee.  In these circumstances, it would, I think, be open to me to apply the presumption of regularity to find that the original statement of affairs of Ms Trihakis had been filed in the office of the Registrar as s 54(1) required, and that such filing was effected on 20 May 1996.

12                  I note in passing that it would not seem to matter much whether it was the original or a copy of his wife’s statement of affairs that Mr Trihakis sent to the Registrar.  If it was a copy, then that is an irregularity which may be excused under s 306(1) of the Act.  That provision reads:

Proceedings under this Act are not invalidated by a formal defect or an 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 that court.

13                  In Sofia, Finkelstein J held that the word “proceedings” in s 306 should be construed so as to include a defect in the filing of a statement of affairs, and that s 306(1) could be invoked to cure an irregularity arising from the failure of a bankrupt to provide the Registrar in Bankruptcy with an original statement of affairs, although the Registrar had been provided with a copy.  In Tsingaris v Official Receiver [1999] FCA 1389 Weinberg J held that the failure of a bankrupt to provide to the Official Receiver an original statement of affairs (as now required by s 54(1) of the Act) in circumstances where a copy had been provided was an irregularity of a kind which may be excused pursuant to s 306:  pars 13-16.  No injustice would result in the circumstances of this application from the fact (if it be one) that Mr Trihakis filed a copy of his wife’s statement of affairs on her behalf, and s 306(1) would apply to cure the irregularity.

14                  I am cognisant of the fact that there are authorities which have limited the power of the Court to afford relief to a bankrupt who has failed to comply with s 54(1) of the Act.  I refer first to the decision of the Full Court of this Court in Nilant v Macchia (1997) 78 FCR 419 which does not, in my opinion, preclude the relief that Ms Trihakis seeks.  In that case, the Full Court held that s 33(1)(c) of the Act does not confer power on the Court to abridge the period of bankruptcy under s 149.  Such relief is not sought here.  Further, the decisions of Foster J in Rosenfeldt v Official Trustee in Bankruptcy (1997) 79 FCR 340 and of R D Nicholson J in Re Van-Minnen; ex parte Harrison [1999] FCA 43 are distinguishable.  It was conceded in both those cases that the bankrupt had not filed an original statement of affairs with the Registrar within the fourteen-day period referred to in s 54(1).  The Courtheld that, in that particular circumstance, it was unable to grant relief under either s 33(1)(c) or s 30(1)(b) of the Act. 

15                  I propose to declare that Ms Trihakis has complied with s 54(1) of the Bankruptcy Act 1966 (Cth) by filing her statement of affairs with the Registrar in Bankruptcy for the District of Victoria on 20 May 1996.

16                  This case demonstrates again the very real need for Parliament to address the injustice which may be occasioned by the provisions of the Act as they presently stand.  The account given by Ms Trihakis of her present circumstances is a sad one.  She should not have had to suffer the additional anxiety occasioned by the matters out of which the present application arose.

Associate:

Dated:              18 October 1999