Alzheimer's Association of Queensland Inc and Australian Securities and Investments Commission - [2018] AATA 2403

Alzheimer's Association of Queensland Inc and Australian Securities and Investments Commission [2018] AATA 2403 (20 July 2018)
Administrative Appeals Tribunal
ADMINISTRATIVE APPEALS TRIBUNAL )
) No: 2017/4136

Taxation and Commercial Division )
Re: Alzheimer's Association of Queensland Inc
Applicant

And: Australian Securities & Investments Commission
Respondent
And: Dementia Australia Ltd
Other Party
DIRECTION
TRIBUNAL: Deputy President R I Hanger AM QC
DATE OF CORRIGENDUM: 26 July 2018
PLACE: Brisbane

The Tribunal directs the Registrar, pursuant to subsection 43AA(1) of the Administrative Appeals Tribunal Act 1975 (Cth), to alter the text of the decision in this application as follows:
1.The second-last sentence in paragraph [48] should be changed to read:
“Before one strains the language of section 24(1) to infer the word “may” in the place of “must”, there should be a clear indication as such in the provision or the legislation as a whole.”

2. On page 15, the words “Sparke Helmore” should be replaced by the words “Australian Securities and Investments Commission”.

................................................[sgd]...................
Deputy President

Division:TAXATION & COMMERCIAL DIVISION
File Number(s): 2017/4136
Re:Alzheimer's Association of Queensland Inc
APPLICANT

AndAustralian Securities and Investments Commission
RESPONDENT

AndDementia Australia Limited
OTHER PARTY

Decision
Tribunal:Deputy President R I Hanger AM QC
Date:20 July 2018
Place:Brisbane

The Tribunal affirms the decision under review.
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Deputy President R I Hanger AM QC
Catchwords
Transfer of business name – identical or nearly identical business name – whether business name available to an entity – whether discretion available to ASIC to refuse to transfer and register business name – decision under review affirmed
Legislation
Acts Interpretation Act 1901
Business Names Registration Act 2011
Business Names Registration (Transitional and Consequential Provisions) Act 2011
Corporations Act 2001
Cases
Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28
REASONS FOR DECISION
Deputy President R I Hanger AM QC
20 July 2018
BACKGROUND
Introduction

This case concerns the validity of the transfer of a registered business name, which is identical to another registered business name, from one entity to another entity within the context of the national business name registration scheme.
Prior to 2012, each State and Territory of the Commonwealth had its own system of registering business names. In 2008, the Council of Australian Governments (COAG) resolved to establish a national scheme, with each state surrendering its power to the Commonwealth pursuant to section 51(xxxvii) of the Constitution of Australia Act (1899) (‘Constitution’).[1] The object of the scheme was to establish a register of business names so that a business only had to register its name once with the national body rather than having to register it in each State.[2] A further object was to avoid confusion, by ensuring that business names which are identical, nearly identical or undesirable were not registered.[3]
[1] Exhibit 1, Annexure RW-1, Council of Australian Governments, Intergovernmental Agreement for Business Names Agreement, 2 July 2009.
[2] Exhibit 1, Annexure RW-1, Council of Australian Governments, Intergovernmental Agreement for Business Names Agreement, 2 July, 1.1(2).
[3] Business Names Registration Act 2011, s 16(3)(a) (‘The Act’).
The COAG appreciated that initially there would be many businesses in different States with the same registered name. Those businesses would be automatically registered (‘grandfathered’)[4] under the Commonwealth scheme and the intention was that such businesses would continue to be entitled to transfer that name to another business. The Act was not intended to give any proprietary rights over a registered name.[5]
[4] Business Names Registration (Transitional and Consequential Provisions) Act 2011, Part 5 (‘Transitional Act’).
[5] Explanatory Memorandum, Business Names Registration Bill 2011 (Cth), page 4.
The Business Names Registration Act 2011 (‘the Act’) was accompanied by the Business Names Registration (Transitional and Consequential Provisions) Act 2011 (‘Transitional Act.’) The Act and Transitional Act allowed for business names, already registered on a State or Territory Register, to automatically be registered on the national system once transferred. The date on which the registration of business names transitioned from the individual States to the Commonwealth was 28 May 2012 (‘change-over day’).[6]
[6] See Transitional Act, Part 1-Preliminary, 2 Commencement, Table at line 3.
Part 5 of the Transitional Act applied if two or more business names that are identical or nearly identical were registered under that Act.[7] Part 5 essentially allowed the Australian Securities and Investments Commission (‘ASIC’) to nominate a word or expression to be entered on the Business Names Register for the business name registered to that entity, to differentiate it from the other entity with the identical or nearly identical business name.[8]
[7] Transitional Act, s 18(1).
[8] Transitional Act, s 18(4); Explanatory Memorandum, Business Names Registration (Transitional and Consequential Provisions) Bill 2011, at 4.1, 4.2.
Relevant facts
Alzheimer’s Association of Queensland Inc (‘the Applicant’) was incorporated on 13 May 1985.[9]
[9] Applicant’s Statement of Facts, Issues and Contentions dated 2 November 2017 at para 2(a).
On 25 January 2001 the Applicant registered the name Dementia Australia pursuant to the provisions of Business Names Act 1962 (Qld).[10]
[10]Ibid at para 2(b).
On 4 July 2002, Alzheimer’s Association (South Australia) Inc (‘AASA’) was incorporated pursuant to the Associations Incorporation Act 1985 (SA).[11]
[11] Applicant’s Statement of Facts, Issues and Contentions dated 2 November 2017 at para 1(e).
On 1 November 2006, upon application by AASA, the business name Dementia Australia was registered to AASA.
Accordingly, prior to the development and implementation of the national scheme, the name ‘Dementia Australia’ had been separately registered to both the Applicant and to AASA. The name was previously distinguishable due to the different State Registration numbers.[12] Hence, on changeover day, the name Dementia Australia automatically became registered to the Applicant and also to AASA under the grandfathering provisions of the Transitional Act.[13]
[12] T-documents, T6 at page 224 Business name extract summary for ‘Dementia Australia’ former identifier BN04695835; T7 at page 225, Business name extract summary for ‘Dementia Australia’ former identifier NB17531573.
[13] Respondent’s Statement of Facts, Issues and Contentions dated 14 December 2017 at para 7.
On 17 September 2015, Alzheimer’s Australia Ltd (the Other Party) was incorporated under the Corporations Act2001.[14]
[14] Applicant’s Statement of Facts, Issues and Contentions dated 2 November 2017 at para 1(j).
On 18 April 2016, AASA applied to cancel its registration of the name Dementia Australia and transfer it to the Other Party pursuant to section 31 of the Act.[15] Consequently, on 21 May 2016, the name Dementia Australia, owned by AASA was cancelled by the Respondent under section 42(1) of the Act.[16]
[15] Respondent’s Statement of Facts, Issues and Contentions dated 14 December 2017 at para 9; Other Party’s Submissions dated 25 June 2018 at [10(a)].
[16] Respondent’s Statement of Facts, Issues and Contentions dated 14 December 2017 at para 10.
On 26 May 2016 the Other Party lodged an application for registration of the name Dementia Australia, and on 31 May 2016 the name Dementia Australia was registered to the Other Party under section 24(1) of the Act.[17]
[17] T documents, T8, page 226, Business name extract summary for ‘Dementia Australia’ ABN 79625582771.
On 5 April 2017 the Applicant requested an internal review of that decision.[18]
[18] T documents, T10, page 326, Statement of reasons for decision – Alzheimer’s Association of Queensland Inc dated 26 June 2017.
On 26 June 2017 the decision was affirmed.[19]
[19] T documents, T1, Application for review, page 1, dated 13 July 2017.
On 13 July 2017, the applicant applied to this Tribunal to review the decision pursuant to section 58 of the Act. There are no facts in dispute between the parties.[20] This decision turns simply on the correct interpretation of the Act.
[20]Respondent’s Statement of Facts, Issues and Contentions dated 14 December 2017, para 29; Other Party’s Statement of Facts, Issues and Contentions dated 25 June 2018 at para 1
LEGISLATIVE FRAMEWORK
Section 22 of the Act imposes an obligation on ASIC to establish and maintain a business names register (‘BNR’). Section 23 deals with applications by an entity to register a business name.
Section 24 provides as follows (emphasis added):
“(1) ASIC must register the business name to the entity if ASIC is satisfied that:
(a)       the entity has an ABN; and
(b) the registration fee has been paid; and
(c)       the name is available to the entity; and
(d)        the entity is not disqualified.
(2) ASIC may request the entity in writing to give ASIC, within the period specified in the request, information or a document that is of a kind specified in the request and that ASIC needs to be satisfied of the matters mentioned in sub section (1).
(3) if the entity does not comply with the request within the time specified, ASIC may refuse the application.
(4) subsection (3) does not limit the grounds on which ASIC may refuse an application to register a business name to an entity”.
In this case, there is no issue arising out of section 24(1)(a), (b) or (d). The issue arises in relation to subsection 24(1)(c), as to whether the name Dementia Australia was “available to the entity”. There can be little doubt that the word “entity” is referring only to the entity that has made the application (the Other Party) and not to another entity.
The term “available” is defined in section 3 in the following terms:
“a business name is available to an entity in the circumstances set out in:
(a) section 25 and subsection 31 (3) of this act; and
(b) item 21 of Schedule 1 to the Transitional Act.”
Section 25 of the Act provides, relevantly, that a business name is available to an entity if the name is not identical or nearly identical to a business name registered to another entity, or a name that is reserved or registered under the Corporations Act 2001 for another body, and the name that is identical or nearly identical is not held under section 54 of the Act or a provision of the Transitional Act, and no other entity has priority over a name that is identical or nearly identical.[21]
[21] The Act, s 25. See subsections 25(a)(i),(ii), (b) and (c).
Section 31 of the Act deals with consent applications.
Section 31(1) provides that an entity to which a business name is registered can, by notice in accordance with subsection (2), consent to the registration of the business name to another entity. The note to this section refers to the transfer of a business name when a business is sold.
Section 31(2) of the Act deals with the prescribed manner and form of the consent notice.
Section 31(3) provides as follows (emphasis in original):
“If:
(a) an application under section 23 for registration of a business name to an entity (the applicant) is lodged with ASIC; and
(b) each of the following notices is lodged with ASIC:
(i) a notice under subsection (1) by the entity to whom the business name is registered consenting to the registration of the business name to the applicant;
(ii) a notice under subsection 42(1) by the entity to whom the business name is registered requesting ASIC to cancel the registration of the business name to the entity;
the business name is taken to be available to the applicant.
Section 31(4) provides as follows (emphasis in original):
“If an entity to whom a business name is registered gives notice under subsection (1) consenting to the registration of the business name to another entity (the potential applicant), the potential applicant may notify ASIC in accordance with subsection (5) that the consent has been given”.
Section 31(5) deals with the prescribed manner and form of the notice.
Section 31(6) permits the potential applicant to carry on business under the business name for 3 months without committing an offence.
In this case, the applicant under section 23 is the Other Party. The entity giving consent under section 31(1) is AASA. Under the Act, AASA was required to file a notice pursuant to section 31(3)(b)(i) consenting to the registration of ‘Dementia Australia’ to the Other Party, and a notice under subsection 42(1) requesting ASIC to cancel the registration of the business name to AASA.
Section 42 requires ASIC to cancel the registration if the notice is lodged, and it also required ASIC to give 28 days’ notice to AASA that it intended to cancel the registration.
Section 54 of the Act provides that once the registration of a business name is cancelled by ASIC, the business name is held during the review period of that decision and the entity does not commit an offence under section 18(1) by carrying on the business under the business name during the review period. Subsection 54(2) specifies that a review period regarding the decision to cancel the registration of the business name is either a period of 4 months, beginning on the day on which the entity was notified of the decision to cancel the business name registration, or, if ASIC determines a longer review period in writing, that longer period.
It is not in dispute that all of those relevant notices were in fact given.
issues
As mentioned earlier, there are no factual issues in dispute. In order for this Tribunal to arrive at the correct and preferable decision, it must resolve the following legal issues:
(a)Was the business name ‘Dementia Australia’ available to be registered on the BNR; and
(b)If the circumstances in sections 24(1)(a)-(d) of the Act were satisfied, did the Respondent have a discretion under section 24 of the Act to refuse to transfer or re-register the business name; and
(c)If such a discretion existed, whether it ought to have been exercised.
CONSIDERATION
The Applicant in these proceedings argues that on 21 May 2016, when ASIC cancelled the registration of the name Dementia Australia held by AASA, only one body in Australia held the registered business name ‘Dementia Australia,’ being the Applicant in these proceedings. The Applicant contended that once the registration was cancelled on 21 May 2016, anybody seeking to register that name would be confronted with the difficulty that the name was already registered, and that therefore an application to register the name would be rejected under Section 25 as the name was not available to another party.
The Applicant submits that for there to be an effective transfer of the name, the cancellation and new registration should occur simultaneously.
The Respondent submits that nothing in the Act necessarily contemplates the existence of a simultaneous process, and the Act requires two documents to be submitted by the transferor and one by the transferee.[22] In fact, it is clear from the provisions of section 31 (4)-(6) that the Act instead contemplates and makes provision for a two-step process – that is, for consent to be lodged, and then for the name to be transferred.
[22] Respondent’s Statement of Facts, Issues and Contentions dated 14 December 2017 at para 52.
Further support for the Respondent’s argument is gained from an examination of the provisions of section 25(b) in conjunction with section 54, which provides that if ASIC cancels the registration of a business name to an entity, the business name is held during a review period, but the entity does not commit an offence if it carries on a business under the business name during the review period. The Act clearly contemplates there being a period after cancellation when the name is, in effect, held in escrow, pending the happening of certain events but can be used by the parties and no one else.
I accept the Respondent’s submissions that the Act does not require simultaneous cancellation and new registration, and instead allows for a two-part transfer process.
Was the business name available to be registered on the Business Names Register?
The Applicant submits that given the definition of ‘is available’ in section 3, a business name is not available unless it becomes available under both sections 25 and subsection 31(3) of the Act.[23] For the reasons expounded below, such a proposition is inconsistent with the scheme of the Act.
[23] Applicant’s Statements of Facts, Issues and Contentions dated 2 November 2017 at para 3.
Sections 25 and 31(3) each individually confer the availability of the business name once either section is fulfilled. Section 25 provides that “a business name is available if…..”; and section 31(3) provides “…..the business name is taken to be available”. Having established that a name is available under section 25 or deemed to be available under section 31(3), one may then apply under section 24 for registration. Section 25 does not refer to section 31, and section 31(3) does not mandate section 25 to be fulfilled as a prerequisite to its application. The sections provide distinct rules for determining availability under section 24(1)(c) according to the existence of specific circumstances dealt with separately by each section. Furthermore, section 3 defines a name as being available in the circumstances set out in sections 25 and 31(3) of the Act and item 21 of Schedule 1 to the Transitional Act. Having regard to the construction of sections 3, 25 and 31(3) of the Act, it is clear that the definition of ‘available’ in section 3 is to be interpreted disjunctively.
The submission that to be “available” under section 3 one must satisfy the provisions of section 25 and subsection 31(3) is inconsistent with the provisions of the Act. Section 29 of the Act corresponds to section 25(c), and outlines that where two applications for the registration of business names that are nearly identical are made, and neither is a consent application, the first in time will have priority. If Parliament had intended for business names to meet the criteria in both sections 25 and 31(3) in order to be available, there would be no need to deal with priority in section 29(1)(b).
Section 31 read with section 3 of the Act is clearly intended to specify the process by which a name is taken to be available in the situation when it is being transferred by consent, independent of the process when the circumstances of section 25 of the Act or item 21 of Schedule 1 of the Transitional Act arise. Indeed, so much is envisaged in the note to Section 31(1) of the Act.
Furthermore, documents circulated by the Department of Innovation, Industry, Science and Research providing information regarding the (then) proposed National Business Name Registration System indicate that for a business name which was grandfathered on the BNR and which is identical to another business name, the registration for that Business Name was intended to be transferrable to a new owner.[24] While this document does not form part of the policy framework regarding the national business name registration scheme, it is indicative of the discrete conferral operation of section 31 of the Act.
[24] Exhibit 1, Annexure RW-2, Fact Sheet entitled “Proposed National Business Name Registration System” dated 10 March 2011.
To put it simply, and as submitted by the Other Party and the Respondent, Parliament intended to create two pathways in which a Business Name can be available under the Act.[25] For new business names, being those not previously registered on the BNR, registration occurs through the operation of section 25 of the Act. For those business names already recorded on the BNR, through the operation of the Transitional Act, and which are the subject of a consent application, availability is to be determined by the operation of section 31 of the Act. The rule against identical names therefore only applies to business names available under section 25.
[25] Respondent’s Statements of Facts, Issues and Contentions dated 14 December 2017 at [63]; Other Party’s Submissions dated 25 June 2018 at [27]..

Therefore, if it is established that AASA and the Other Party complied with the provisions of section 31, the business name is taken to have been available to the Other Party, without having to simultaneously consider availability under section 25.
It is not in dispute that AASA and the Other Party complied with the provisions of section 31. Accordingly, ‘Dementia Australia’ was deemed to be available to the Other Party and section 24(1) of the Act is satisfied.
Does s 24 of the Act require the Respondent to register the business name if satisfied of the criteria set out in that section?
Upon satisfaction of section 24(1)(c), section 24 of the Act provides that ASIC must register the business name to Alzheimer’s Australia. The applicant submits that the word “must” in the context of this provision means “may”. The Applicant also relies on section 24(4) of the Act to suggest that the Respondent had discretion to refuse the application by the Other Party to register the business name.[26] At hearing, Counsel for the Respondent and the Other Party submitted that it had no such discretion.
[26] Applicant’s Statement of Facts, Issues and Contentions dated 2 November 2017 at para 3(c).
Occasionally the word “must” means “may” but that is rare.[27] The High Court has held that the test for distinguishing between whether a legislative requirement is directive or mandatory is to ask whether it was a purpose of the legislation that an act done in breach of the provision is to be invalid. The Court directed regard to be had to the language of the relevant provision and the scope and object of the whole statute,[28] however ultimately accepted that there is no decisive rule.[29] “Must” and ‘may” are used repeatedly and deliberately throughout this Act and bear their ordinary grammatical meaning (see for example sections 22, 27 and 47 where both “may” and “must” are used). Before one strains the language of section 24 to infer the word “must” in the place of “may”, there should be a clear indication as such in the provision or the legislation as a whole. There is not.
[27] Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355
[28] Ibid
[29]Project Blue Sky v ABA (1998) 194 CLR 355 per McHugh, Gummow, Kirby and Hayne JJ at [91] citing Howard v Bodington (1877) 2 PD 203 at 211.
The Applicant submits that, as Section 24(4) provides that section 24(3) does not limit the grounds on which ASIC may refuse an application to register a business name to an entity, there is therefore a discretion to refuse to register the business name.[30] The Applicant further submits that the discretion should have been so exercised because inter alia, the name has been used extensively by the Applicant since at least 2006, and not by the Other Party, and that they have suffered significant harm as a result of the decision.[31]
[30] Applicant’s Statement of Facts, Issues and Contentions dated 2 November 2017 at para 3(c).
[31] Exhibit 3, Affidavit of Mr Jack Henry Longley dated 26 April 2018 at [5]. Exhibit 2, Affidavit of Stephen McNally dated 26 April 2018 at [84]-[86].
At hearing, the Respondent submitted that to the contrary, where the Act contains provisions that have the effect of depriving an entity of a business name, the Act specifically requires the decision maker to accord procedural fairness. There is no such provision for procedural fairness to be accorded in section 24.
Section 24(4) must be read in the context of Section 24(3) which relates to section 24(2). Accordingly, it must relate to the situation where ASIC requires more information before it can be satisfied that the name must be registered, for example where the entity may have failed to comply with a request at all; or where the entity complying with the request provided insufficient information or complied with the request in part only. At hearing, the Respondent submitted that section 24(4) of the Act was intended to “cure the mischief” that would ensue if the only ground to refuse registration to an entity that ASIC requested further information from under section 24(2) of the Act existed in relation to information tendered out of time.
To regard ASIC as having a broad discretion to be exercised in every application would be to frustrate the purpose of the Act. The evidence before me indicates that there are roughly 2.24 million business names on the BNR at present.[32] If there was a discretion available in relation to each application, the burden imposed on ASIC would be oppressive. Even if that discretion was limited to identical grandfather business names being transferred under subsection 31(3) of the Act, this would still entail thousands of names to be examined as at November 2017. No reference was made in the explanatory notes to the Act regarding an undertaking of this nature. Furthermore, such a discretion would undermine Parliament’s intention of using an automated system to manage this register. Such a construction would oblige ASIC to undertake complex investigations as to which party is better entitled to a Business Name and it would make the Tribunal a forum for ventilating misleading and deceptive conduct, trademarks, branding and passing off actions. As mentioned previously, the Explanatory Memorandum explicitly states that the Act is not a mechanism under which proprietary rights to a name can be conferred.[33]
[32] Exhibit 1, Annexure RW11, Copy of Table 1, dated 23 May 2018.
[33] Explanatory Memorandum, Business Names Registration Bill 2011 (Cth), page 4.
Finally, the Applicant submitted that discretion arises under section 56 of the Act, which allows an entity in relation to whom there is a real risk of substantial detriment to review a decision made under section 24 of the Act.[34] The Applicant argues that they are entitled to a full merits review of the decision as they have suffered, or have a real risk of suffering substantial detrimental due to the decision to register ‘Dementia Australia’ to the Other Party. The Applicant put forward that the language of the section, granting a full merits review to certain parties gives “effect and colour” as to how the statute should be interpreted.
[34] Applicant’s Statement of Facts, Issues and Contentions dated 2 November 2017 at para 3(l).
Section 15AA of the Acts Interpretation Act 1901 (Cth) provides as follows:
“In interpreting a provision of an act, the interpretation that would best achieve the purpose or object of the act (whether or not that purpose or object is expressly stated in the act) is to be preferred to each other interpretation.”
In Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28, McHugh, Gummow, Kirby and Hayne JJ said:
“[69] the primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined “by reference to the language of the instrument viewed as a whole.”
A reading of sections 16 and 17 of the Act, and the second reading speech indicates that Parliament clearly intended an automated system of registration to simplify and unify the registration of business names throughout the Commonwealth. Section 16(2) of the Act provides that the objectives divulged in section 16(1), to ensure that if an entity carries on business under a certain name, those who engage with the business can identify the entity and to eliminate the inconvenience caused by registering business names in each State or Territory, are achieved by the establishment and maintenance of the national register. Section 16(4) of the Act provides that the objects mentioned in subsection (3), relevantly in this matter, to avoid confusion by ensuring business names that are identical are not registered, are achieved by the rules dealing with the availability of business names.
The Act simply provides for the grandfathering of business names from the existing State registers to the Commonwealth register, and seeks to ensure that, despite the existence of identical names that were grandfathered under the Transitional Act, the registered owner of a business name remains entitled to transfer the name of that business to another. I accept the Respondent and Other Party’s submissions that, pursuant to the provisions of section 24, ASIC had no choice but to register the business name upon being satisfied that the requirements of section 24(1) had been met. Accordingly, I do not need to consider whether discretion should have been exercised to refuse to transfer the business name.
The decision under review is affirmed.

I certify that the preceding 58 (fifty-eight) paragraphs are a true copy of the reasons for the decision herein of Deputy President R I Hanger AM QC.

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Associate
Dated: 20 July 2018

Date(s) of hearing: 25 June 2018

Counsel for the Applicant:

Solicitors for the Applicant:

Mr Mark Plunkett

Hall Payne Lawyers

Counsel for the Respondent: Ms Susan Forder

Solicitors for the Respondent:
Sparke Helmore

Counsel for the Other Party: Mr Jason Ward
Solicitors for the Other Party: HWL Ebsworth Lawyers

Date(s) of hearing:	25 June 2018
Counsel for the Applicant: Solicitors for the Applicant:	Mr Mark Plunkett Hall Payne Lawyers
Counsel for the Respondent:	Ms Susan Forder
Solicitors for the Respondent:	Sparke Helmore