Mr. Hubert Elrington for Appellant.
Mr. Rodwell Williams for Respondent.

Civil Appeal - Bankruptcy Notice - Application to set aside Bankruptcy Ntoce dismissed by trial judge - Appeal against order of trial judge - Court of Appeal Rules, 1967 - Failure to serve copy of Notice of Appeal as prescribed by Order I Rule 8, Court of Appeal Rules - Application to amend Notice of Appeal granted - Failure to seek leave to appeal to Court of Appeal as prescribed by section 15 of Court of Appeal Act - Whether order granted by trial judge was final - Application to set aside Bankruptcy Notice failed - Appeal dismissed.

J U D G M E N T

On July 24 1991 the Respondent entered judgment in default of appearance against the Appellant and Belize Trans Air Limited for $328,437.60 and interest thereon at 16% per annum from June 11, 1991 and costs to be taxed.

On December 19, 1991 the Respondent issued against the Appellant a bankruptcy notice in the following terms:

"TAKE NOTICE that within (15) fifteen days after the service of this notice on you, excluding the day of such service, you must pay to The Belize Bank Limited of 1 Market Square, Belize City, the sum of $328,437.60 claimed by the company as being the amount due on a final judgment obtained by the said company against you and Belize Trans Air Limited in the Supreme Court, dated 24th July, 1991 in action No. 173 of 1991 whereon execution has not been stayed, or you must secure or compound for the said sum to the Company's satisfaction or the satisfaction of the Court; or you must satisfy the Court that you have a counterclaim, set-off, or cross demand against The Belize Bank Limited which equals or exceeds the sum claimed by the said company and which you could not set up in the action in which the Judgment was obtained."

That notice was served on December 31, 1991.

On January 15, 1992 the Appellant filed an affidavit in support of an application to set aside the bankruptcy notice. That application it appears was not by a notice of motion and the Appellant was given leave to file the motion and a supporting affidavit which he did on February 19, 1992. At the conclusion of the hearing the learned trial judge dismissed the application. This is an appeal against that order.

At the hearing of the appeal three points were raised by way of preliminary objection by the Respondent. The first is that, in breach of order II rule 4(2) of the Court of Appeal Rules, 1967 ("the Rules") a copy of the notice of appeal was not served on the Respondent. Order 1 rule 8 of the Rules provides for the service of documents to be effected either by personal service on the party or his authorised agent or by registered post to an address given for service, or by leaving the document at that address with a person resident or belonging there. None of these prescribed methods of service was adopted. However counsel for the Respondent was informed by the Registrar that an appeal had been filed and he attended both at the settling of the record of the appeal and to oppose an application for stay pending the hearing of the appeal. In the circumstances we are of the view that the irregularity involved in the failure to serve the notice of appeal in the prescribed manner has been waived and the Respondent has not been prejudiced as a result of that failure.

The second point argued is that the notice of appeal, contrary to order II rule 1(1) of the Rules, fails to state the nature of the relief sought and is generally irregular in that it is not properly dated and the paragraphs are incorrectly numbered. These are defects which consider may properly be remedied by amendment and we grant the Appellant's application to amend the notice of appeal -

(a) by renumbering paragraph 2 (4) as paragraph 5.

(b) by remnumbering paragraphs 1 and 2 as 2 and 3 respectively.

(c) by inserting as paragraph 4 the following:

"4. That the order of the learned judge be set aside and a new trial ordered and that the court make such further or other order as may be just."

(d) by inserting in the last line "29th" before the words"day of March, 1992".

The third point argued is that, in breach of section 15(3)(b) of the Court of Appeal Act no leave has been obtained to appeal to the Court of Appeal. Section 15 of the Court of Appeal Act, in so far as is relevant, provides:

"15(1) An appeal shall lie to the Court in any cause or matter from any order of the Supreme Court or a judge thereof where such order is -

(a) final and is not such an order as is referred to in paragraph (f) or (g);
(b) ........
(c) ........
(d) ........
(e) ……
(f) …….
(g) …….

(h) an order not referred to elsewhere in this subsection.

(3) NO appeal shall lie from any order referred to in paragraph (g) or (h) of subsection (1),

(a) .…....

(b) in any other case, except with the leave of the Supreme, or, if it refuses, of the Court."

Counsel for the Respondent submits that the order in this case is one which falls within section 15(1) (h) because it is not one referred to elsewhere in subsection 15(1) and it falls as such within section 15(3) because it is not one of those described in subsection 15(3) (a). Consequently, he submits, no appeal lies except with the leave of the Supreme Court, or, if it refuses, of the Court.

Counsel for the Appellant on the other hand submits that the order falls within section 15(l)(a).

It is not in dispute that, if the order is final, it is not such an order as is referred to in paragraph (f) or (g) of section 15(l). Nor is it in dispute that, if the order is one referred to in section 15(l)(h), it is not one of those referred to in section 15(3)(a). Consequently this question turns on whether or not the order is final.

This is a question which has given rise to conflicting decisions in the past. In Shubrook v Tufnell (1882) 9 Q.B.D. 621 it was held that an order is final if it finally determines the matter in litigation. Accordingly the issue of final or interlocutory depended on the nature and effect of the order made. This was referred to by Sir John Donaldson in White v Brunton (1984) 570 as the "order approach", in contrast to the "application approach" in Salaman v Warner (1891) 1 Q.B. 734 where it was held that a final order is one made on such an application or proceeding that for whichever side the decision is given it will, if it stands, finally determine the matter in litigation. This latter approach is the one which ultimately has come to be accepted. But in accepting it Lord Denning in Salter Rex & Co. v Ghosh (1971) 2 QB 597 observed at p. 601: "This question of final or interlocutory is so uncertain that the only thing for practitioners to do is to look up the practice books and see what has been decided on the point."

In the present case we are of the view that the order is final because the "matter in litigation" - (the bankruptcy notice) - will be finally determined by it irrespective of the party in whose favour it is made. We are fortified in this view by note (m) appearing at p. 62 of Atkin's Court Forms 2nd Ed. vol. 7 which reads: "See Re Phillips, ex p. Phillips (1888), 5 Morr. 253, deciding that orders refusing to set aside a bankruptcy notice ……. Are not interlocutory." For these reasons the preliminary objection fails.

In so far as the substantive appeal is concerned the essential ground argued is that the learned trial judge erred by failing to deal with the issue before him, namely whether by virtue of a prior agreement between the parties relating to payment of the debt, the Respondent was precluded from levying execution against the Appellant and was therefore precluded from issuing the bankruptcy notice. Counsel for the Appellant submitted that in his ruling the learned trial judge dealt rather with the question of whether there had been compliance with the requirements of the bankruptcy notice and whether any of the grounds contained in section 4(l)(g) of the Bankruptcy Act had been established.

It is perhaps not surprising that the learned trial judge did so. In Halsbury's Laws of England 3rd Edition Vol. 2 paragraph 526 at page 282 the following statement appears:

"on the hearing of the application [to set aside a bankruptcy notice] the court will not go behind the judgment on which the notice is founded, but is confined to the consideration of the matters contained in the provisions as to set-off; an order setting aside a bankruptcy notice which the judgment creditor was entitled to issue cannot be made on any other grounds (s)".

Note (s) to this statement refers to Re Easton, Ex parte Dixon (1893) 10 Morr. 111 and indicates that although the application is confined to the grounds contained in s. l(l)(g) of the Bankruptcy Act, 1914, on the hearing of the petition the court will allow the debtor to take any other objections to the notice. It is open to a debtor to apply to set aside a bankruptcy notice on the ground that there has been a stay of execution (Vide Re Ford; Ex parte C. Ford 56 L.T. Rep. N. S. 116; Re Bates; Ex parted Lindsey 1887 57 L.T. Rep. N.S. 417). It was however by no means clear either from the Appellant's affidavits or from the submissions made to the learned trial judge on his behalf that this was the basis of his application. In his original affidavit the Appellant stated:

"1. …….
2. ..……
3. ..……

4. The said Judgment Creditor from before the date on which the said judgment was entered against me, entered into an arrangement whereby the following was agreed:

i. I would pay to the said Judgment Creditor the sum of $2,000.00 monthly commencing on the 31st day of September, 1991 and continuing for a period of one year after which the arrangement would be reviewed.

ii. I would provide the said Judgment Creditor with security to cover the full amount of the said debt. 1 have provided to date security covering a substantial portion of the said debt, and I attempted to provide the full security agreed, but due to the intervention of persons acting on behalf of the said judgment creditor, my efforts were either deliberately or negligently frustrated thus constituting bad faith and or breach of agreement on the part of the Bank or its Agents.

5. I am now in the process of providing the said Creditor with the remaining security.

6. 1 have continued to pay the monthly sum agreed and the Bank has continued to accept the said sum under the said agreement."

In his affidavit on February 19, 1992 the Appellant stated:

" 1. . . . . . .
2. ………

3. Prior to the entry of this said judgment, my total liability to the said Bank was in excess of $600,000.00 plus interest.

4. I had succeded in getting this liability reduced by $300,000 when a surety of mine agreed to come forward and pay off $300,000.00.

5. The Bank and I then agreed that, in consideration of my agreeing to pay the sum of $2,000.00 per month for 12 months, and providing them with suitable security(s) within a reasonable time, in respect of the outstanding balance, they would (a) allow me a 12 months period during which I would be required to pay only $2,000.00 each month.

(b) That thereafter, they would enter into another agreement with me, giving me 8 years to 10 years to pay off the outstanding balance.

6. Relying on this agreement, I obtained two sureties one for $50,000.00 and the other for $250,000.00.

7. 1 visited the Belize Bank Limited and informed the Manager, Mr. Swasey that I was ready with my sureties. That was between the month of August and September, 1991.

8. During the course of executing the necessary documents, one of my sureties withdrew after a private conversation between herself and the Bank's Attorneys, held in my absence.

9. When my surety withdrew I immediately told the Bank that I would replace that surety or obtain sureties in lieu, within a reasonable time. This was in late September or in early October of 1991.

10. I commenced paying the agreed instalment from September 30th, 1991 and I have to date adhered scrupulously to the said agreement in this respect.

11. I have since October when the surety withdrew, looked for a replacement surety, and have kept the Bank informed of all my efforts in their behalf, I have now provided the Bank.with a list of names of sureties to cover an additional $150,000.00.

12. Having regard to all the circumstances I am of the view that I have substantially complied with my part of the agreement to date. I have every intention Counsel for the Appellant is recorded as having subittitted as follows:

13. It is therefore my contention that I have made adequate arrangements to pay off my debt and that the Bankruptcy Notice ought to be discharged."

Counsel for the Appellant is recorded as having submitted as follows:

"Mr. Elrington says that there was a composition between the creditor/debtor.

Mr. Elrington states that his point is that there was a binding agreement which constituted a composition. And that was entered into before the Bankruptcy Notice was served. This agreement is enforceable at the present time."

At all events the learned trial judge concluded:

"I find that the applicant-debtor has not complied with the terms of the bankruptcy notice to secure or compound the sum due on the judgment to the satisfaction of the creditor and accordingly I dismiss his application to set aside the bankruptcy notice with costs, to be taxed."

Counsel for the Appellant submits that the only proper course is for the matter to be referred to the Supreme Court for retrial. We do not agree.

The letter from the Respondent on which the Appellant relied as evidence of the agreement between them confirmed the Respondent's "acceptance to carry the Belize Trans Air loan for another twelve months provided monthly instalments of $2,000 are made as promised and mortgages to the value of $300,000 are put in place". The monthly payments proposed represented little more than interest on the judgment debt and could not in our view by themselves constitute a stay of execution even if they were duly made. Such a stay in our view could only arise if and when mortgages to the value of $300,000 and approved by the Respondent were put in place. It is clear from the Appellant's affidavits that on the date of issue of the bankruptcy notice this had not occurred. The provision of partial security would not in our view be sufficient to operate as a stay of execution. The evidence before the learned trial judge was entirely by affidavit and this court is in a s good a position as the trial judge to make the relevant findings of fact from it.

If, we find from the evidence, there was no stay of execution, the application to set aside the bankruptcy notice on this ground must fail, as must the Appellant's appeal against the learned trial judge's order dismissing the application.

The appeal is therefore dismissed. In the circumstances however we make no order as to the costs of the appeal.

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