COURT
IN THE FEDERAL COURT OF AUSTRALIA
BANKRUPTCY DISTRICT OF THE STATE OF NEW SOUTH WALES
GENERAL DIVISION
Davies J.(1)

CWDS
  Bankruptcy - bankruptcy notice - calculation of interest - whether amount of
interest claimed was excessive - whether a failure to take into account a leap
year - Federal Court Rules Order 62 Rule 45 - meaning of "taxations taking
place on or after 4 June 1990" - whether referring to taxations commenced on
or after 4 June 1990 or to taxations completed by the issue of a certificate
of taxation on or after 4 June.
  Bankruptcy Act 1966 (Cth) - ss.41(5), 306
  Federal Court Rules Order 62, Rule 45
  Re Clubb; ex parte Clubb v Westpac Banking Corporation (1990) 93 ALR 123
  Doro v Victorian Railway Commissioners (1960) VR 84
  Robertson v City of Nunawading (1973) VR 819

HRNG
SYDNEY
#DATE 8:3:1991
  Counsel for the debtor:      Mr J. Simpkins
  Solicitors for the debtor:   Swaab and Solicitors
  Counsel for the creditor:    Mr D.M. Yates
  Solicitors for the debtor:   Sly and Weigall

ORDER
  The bankruptcy notice be set aside.
  The respondent, Collins Marrickville Pty Limited, pay the costs of the
application.

NOTE:  Settlement and entry of orders is dealt with in Rule 124 of the
Bankruptcy Rules.

JUDGE1
  This is an application brought on behalf of Henry Saade, a judgment debtor,
seeking an order that a bankruptcy notice dated 2 October 1990 issued in
favour of Collins Marrickville Pty Limited, the judgment creditor, be set
aside.  The bankruptcy notice recited:-
    "WHEREAS Collins Marrickville Pty Limited of 3 South Avenue, Double
    Bay, New South Wales (hereinafter referred to as `the judgment
    creditor') has claimed that the sum of $80,651.70 together with
    interest thereon at the rate of fifteen per centum per annum from 26
    February 1988 to 11 March 1990 which amounts to $24,659.53 and at
    the rate of seventeen per centum per annum from 12 March 1990 which
    as at 27 September 1990 amounts to $7,475.20 making a total of
    $112,786.43 is due by you to the judgment creditor under an Order
    obtained by the judgment creditor against you in the Federal Court
    of Australia New South Wales District Registry General Division on
    the 21st day of September 1990 being an Order the execution of which
    has not been stayed:..".
The notice then went on to require Mr Saade, inter alia:-
    "(A) to pay the sum of $112,786.43 so claimed by the judgment
         creditor to the judgment creditor".
2.  The application is brought on the ground that the sum claimed was
overstated.  The $80,651.70 claimed was the amount of the taxed costs ordered
to be paid by Mr Saade and Henjo Investments Pty Limited to Collins
Marrickville Pty Limited pursuant to an order made by the Full Federal Court
on 26 February 1988 (reported (1988) 79 ALR 83.  The certificate of taxation
issued on 5 July 1990.
3.  This present application arises out of the calculation of interest.
4.  Two overstatements in the notice have been alleged.  The first is that the
period in respect of which the interest was calculated, 26 February 1988 to 11
March 1990, was a period of 2 years and 13 days in respect of which interest
at 15% on the taxed costs amounted to $24,626.34, a difference of $33.19.  The
difference arose from the fact that the interest was calculated on the days
which had elapsed and failed to observe that an additional day, 29 February,
occurred in the leap year 1988.
5.  The relevant authorities on this point were fully examined by Burchett J.
in Re Clubb; ex parte Clubb v Westpac Banking Corporation (1990) 93 ALR 123
and I need not add to his Honour's careful expositions.  His Honour held at p
129:-
    "There is nothing nominal about 29 February; it takes its place in
    the succession of days of the week as a Sunday or other designated
    day - there are not two Sundays (allowing the added day to be
    nominal) because one is an intercalary day.  It is the year which is
    conventional, its length being adjusted artificially to correct an
    error of approximation in the calendar."
It follows that, as the interest payable was an annual interest, it was not to
be calculated in respect of periods of 365 days but in respect of periods of
12 months.  As the bankruptcy notice did not do this, the interest was
overstated by $33.19.
6.  The second issue, and one in respect of which a notice was given under
s.41(5) of the Bankruptcy Act 1966 (Cth) involves an interpretation of the
Federal Court Rules.  Order 35 Rule 8 provides that a judgment debt shall
carry interest at the rate per annum which it specifies.  Over the subject
period, the rate was 15% until increased to 17% by Statutory Rule 72 of 1990
as from 12 March 1990.  At the date when the order was pronounced, 26 February
1988, Order 62, Rule 45(4) provided:-
    "Interest calculated in accordance with Order 35, Rule 8 is payable
    from the date the order is pronounced."
However, Statutory Rule 102 of 1990, which commenced on 4 June 1990, amended
Order 62 Rule 45 by, inter alia, inserting the following sub-rules:-
    "(5)  Sub-rule (4) shall not apply to taxations taking place on or
    after 4 June 1990.
    (6)  Every award of costs under a judgment of the Court shall carry
    interest calculated in accordance with Order 35 Rule 8 from the date
    of the certificate of taxation quantifying the same.
    (7)  Sub-rule (6) shall apply to taxations taking place on or after
    4 June 1990."
In the taxation of the costs, hearings before the Deputy Registrar took place
on several dates commencing on 8 August 1989 and concluding on 14 June 1990.
The certificate of taxation issued on 20 July 1988.  The issue therefore
arises whether the interest should have been calculated from the date the
order was pronounced, 26 February 1988 or from the date of the certificate of
taxation.
7.  There is no doubt that the amendment to the Rules had and was intended to
have retrospective effect in the sense of affecting the entitlement to
interest on judgments pronounced before 4 June 1990. Statutory Rule No. 102 of
1990 specifically provided that its provisions were to commence on 4 June 1990
and the amendments made to Order 62 Rule 45 were expressed to "apply to
taxations taking place on or after 4 June 1990."  The question is what does
that provision mean.  Counsel for the judgment creditor, Mr D.M. Yates,
submitted that it refers to taxations commenced on or after 4 June 1990.  Mr
J. Simpkins, counsel for Mr Saade, has submitted that the provision refers to
taxations which were completed by the issue of a certificate on or after 4
June 1990.  I prefer the submission put on behalf of Mr Saade.
8.  It should be noted in the first instance that proceedings to enforce
payment of costs ordered to be paid could not be taken until the bill of costs
has been taxed, indeed until, in the event of non-payment, the Registrar has
drawn up, signed and sealed an order in favour of the party for the sum shown
on the certificate of taxation. See Order 62 Rule 45(3).  Thus, if the
amendment applied to taxations which had not been completed by the issue of a
certificate of taxation, it would not offend the presumption against
retrospectivity.  It is sufficient in this regard, for present purposes, to
refer to and adopt the examination of the presumption made by Adam J. in Doro
v Victorian Railways Commissioners (1960) VR 84 and by Winnecke C.J., Gowan
and Starke JJ. in Robertson v City of Nunawading (1973) VR 819.
9.  Secondly, the amending rules speak of taxations "taking place on or after
4 June 1990".  The ordinary meaning of that expression is that of taxations
which have not been completed by the issuance of a certificate of taxation
prior to 4 June 1990 and to taxations commenced on or after that date.  That
interpretation provides a clear determinant and accords both with the ordinary
use of the language of the amendment and with its clear intendment.
10.  It follows that, as the interest claimed was interest from 26 February
1988, there was an overstatement to the extent of $29,542.83.  As the
overstatement was a substantial one and could not be corrected by the
operation of s.306 of the Bankruptcy Act 1966 (Cth), it follows that the
bankruptcy notice should be set aside.
11.  The application will be granted with costs.