Proctor : March 2018
16 PROCTOR | March 2018 It’s yours to use Take a proactive step in maintaining your mental wellbeing LawCare is a QLS member-exclusive service that provides confidential, personal and professional support. It is easy to access, complimentary and available to all Society members, their staff, and their immediate family members. For 24hr confidential information and appointments 1800 177 743 qls.com.au/lawcare Scott Seefeld is a Brisbane barrister. • Defect in interest calculation. Where post- judgment interest is claimed as part of the debt, the prescribed form for a bankruptcy notice requires that the basis of calculation, and statutory provision under which the interest is claimed, be set out in the attached schedule.19 Practitioners should carefully check that interest has been correctly calculated, that the correct statutory provision has been applied and that correct and consistent amounts are recorded in both the schedule and bankruptcy notice itself. If any of these matters are incorrect or could reasonably mislead the debtor, it may provide a basis to set aside the notice. 20 • Attachment of copy of judgment or order. The prescribed form for a bankruptcy notice requires a copy of the underlying judgment or order to be attached. 21 A failure to do so may result in the bankruptcy notice being set aside. 22 • Overstatement of debt. A bankruptcy notice is not invalid simply because the amount of the debt has been overstated. However, a bankruptcy notice may be invalidated if the amount specified in the notice has been overstated, and the debtor gives notice to the creditor that the validity of the notice is disputed on that ground. 23 The amount which must be correctly stated in the bankruptcy notice is the amount of the judgment debt owing at the date of issue.24 Extension of time If a debtor applies to the court to set aside a bankruptcy notice, it is important in most instances to also apply for an interim order extending the time for compliance with the notice pending determination of the application.25 The exception to this is an application to set aside the bankruptcy notice on the basis of a counter-claim, set-off or cross demand, in which case there is a deemed extension of time. 26 The supporting affidavit should set out relevant factors such as any prejudice to the parties, other impacts if the extension is not granted, and should cover any undertakings or conditions which may be made. 27 Additionally, in an application to set aside the notice on the basis that proceedings have been commenced to set aside the underlying judgment or order, the court will not extend time if it considers those proceedings have not been instituted bona fide, or are not being prosecuted with due diligence.28 Conclusion The key consideration for practitioners is to ensure that the bankruptcy notice is responded to within the time fixed for compliance. A failure to do so will constitute an act of bankruptcy. An application to set aside the bankruptcy notice may be because proceedings have been commenced to set aside the judgment, where the debtor has a counter-claim, set-off or cross demand, or due to certain defects in the notice itself. It many cases, it will also be necessary to apply for interim orders extending time for compliance with the notice. It is important that the affidavit in support of the application and extension of time provides fulsome detail in support of the orders sought.