Authority v Kiri
[2005] FMCA 921
•30 June 2005
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| QUEENSLAND BUILDING SERVICES AUTHORITY v KIRI | [2005] FMCA 921 |
| BANKRUPTCY – Penalty imposed pursuant to Queensland Building Tribunal Act 2000 – whether penalty is imposed by a Court for the purpose of the Bankruptcy Act 1966 – whether there has been proper registration of the order – nullity of Bankruptcy Notice. |
Bankruptcy Act 1966 (Cth)
Queensland Building Tribunal Act 2000 (Qld)
Magistrates Courts Act 1921 (Qld)
Justices Act 1886 (Qld)
Attorney-General v Chirchill (1841) 10 LJ Ex 314 at 319; 151 ER 997
Chircher v Edwardstown Carpets (1993) 60 SASR 503
Swenson v Shire of Drayton [1932] St R Qd 98
Theiler v Fitzgerald (1900) 25 VLR 517
Mark and Sons Pty Ltd v Ridd Milking Machine Co Ltd (1923) VLR 432
Hamburg v Fromm [1951] SASR 97
State of Victoria v Mansfield (2003) 199 ALR 395
Mathers v Commonwealth (2004) FCA 217
Amos v Brisbane TV Ltd (2000) 100 FCR 82
QBSA v Coburn (2001) FMC 17
| Applicant: | QUEENSLAND BUILDING SERVICES AUTHORITY |
| Respondent: | ROBIN CHARLES KIRI |
| File No: | BRG 325of 2003 |
| Delivered on: | 30 June 2005 |
| Delivered at: | Brisbane |
| Hearing date: | 27 July 2004 |
| Judgment of: | Baumann FM |
REPRESENTATION
| Counsel for the Applicant: | Mr Rangiah |
| Solicitors for the Applicant: | SL Van Eyk |
| Counsel for the Respondent: | Mr Coulsen |
| Solicitors for the Respondent: | McCullough Robertson |
ORDERS
To be pronounced.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRG 325 of 2004
| QUEENSLAND BUILDING SERVICES AUTHORITY |
Applicant
And
| ROBIN CHARLES KIRI |
Respondent
REASONS FOR JUDGMENT
Introduction
On the 20 August 2001, the Queensland Building Tribunal (“QBT”) decided that proper grounds existed for disciplinary action against Robin Kiri (“the Respondent”). Pursuant to s.111(1) of the Queensland Building Tribunal Act 2000 (Qld) imposed a penalty of $25,000 payable to the Queensland Building Services Authority (“the Petitioning Creditor”) payable within 30 days.
On the 28 March 2002 the petitioning Creditor registered the Order made by the QBT in the Magistrates Court of Queensland purportedly pursuant to s.85 of the QBT Act 2000. Subsequently on 30 January 2003 the Official Receiver issued Bankruptcy Notice Q/N99/2003 which was served upon the Respondent on 12 February 2003. Attached to the said Bankruptcy Notice at the time of service was a certified copy of the QBT Order dated 20 August 2001. The Bankruptcy Notice was not complied with by the Respondent.
A Creditor’s Petition was presented on 12 June 2003. It was asserted at paragraph 1, incorrectly, that the:-
“Respondent debtor owes the applicant creditor the amount of $25,000 being the amount of monies due and owing pursuant too a judgment ordered by the Magistrates Court at Brisbane dated 28 March 2003.”
The said Creditor’s Petition was served upon the Respondent on
18 June 2003. At the same time an Affidavit verifying paragraphs 1, 2 and 3 of the Petition was also served.
On 4 July 2003 the Respondent filed in this Court a Notice opposing the Petition on grounds that:-
“I am not indebted to the Applicant Creditor in the amount of $25,000 being the amount due and owing pursuant to a judgment ordered by the Brisbane Magistrates Court dated 28 March 2003.”
An amended creditors petition was filed 27 July 2004 correcting the typographical order, without objection by the pro bono Counsel for the Respondent, Mr Coulsen.
Issues
Although no amended Notice of Opposition has been filed, the Respondent raised some technical preliminary issues which were agitated before me on 27 July 2004 namely:-
“the Bankruptcy Notice is a nullity in that the order supporting the bankruptcy notice is not a final judgment or order.”
Legislative Framework under Queensland Building Tribunal Act 2000
If the QBT decides proper grounds exist for taking disciplinary action against a person the Tribunal may, amongst other orders:-
“…make an order imposing a penalty on the person…” (s.111(2))
Further the Act provides under s.111 that:-
“(5)The authority may recover an amount ordered by the Tribunal to be imposed as a penalty as a debt due to it in the appropriate Court.
(6)In this section:-
(a) The Magistrates Court if the amount ordered by the Tribunal’s decision is within that Court’s jurisdictional limit; or
(b) In any other case, the District Court.”
In that Division of the Act entitled “Registration and enforcement of decisions” it provides as follows:-
“85.(1)A person (the “registrant”) may register a decision by the tribunal by filing in the registry of the appropriate court—
(a) a copy of the decision certified as correct by the registrar; and
(b) the registrant’s affidavit deposing to—
(i) service of a certified copy of the decision on the party against whom the decision was given; and
(ii)noncompliance, or the extent of noncompliance, with the decision by that party.
(2)On registration of the decision in the appropriate court—
(a) the decision has, for the purposes of enforcement, the same force and effect; and
(b) proceedings may be taken on the decision; and
(c) the amount, if any, for which the decision is registered carries interest; and
(d) the appropriate court has the same control over the enforcement of the decision;
as if the decision had been originally given as a judgment of the appropriate court and entered on the day of registration.
(3) No court fee is payable for filing the decision and affidavit in the appropriate court’s registry.
(4)In this section—
“appropriate court” means—
(a) the Magistrates Court if the tribunal’s decision is within that court’s jurisdictional limit; or
(b) in any other case—the District Court.
(5) For subsection (2), the appropriate court is taken to have had jurisdiction to make the decision.”
The Act, as can be seen, defines “appropriate court” differently for the purpose of s.111 and s.85 by the use, in s.111(6) of the word “amount”. I will return to this difference shortly.
The QBT may decide building disputes between parties and has the power to order payment of an amount found to be owing (s.93(2)(a)); award damages and interest on the damages (s.93(2)(c)); order restitution (s.93(2)(d)); and award costs (s.93(2)(h)). This means when a party with the benefit of a decision under s.93 desires to enforce that decision, it is also required to register the decision in the “appropriate court” defined by s.85(4) before enforcement.
It follows that clearly there are a number of decisions made by the tribunal that can be made, principally under s.93 (inter party) and s.111 (disciplinary actions). It is also clear that a necessary step to be taken before a decision can be enforced is to register the decision under s.85.
Bankruptcy Act 1966
Section 40(1)(g) of the Bankruptcy Act 1966 (“the Act”) provides that a debtor commits an act of bankruptcy:-
“(g) if a creditor who has obtained against the debtor a final judgment or final order, being a judgment or order the execution of which has not been stayed, has served on the debtor in Australia or, by leave of the Court, elsewhere, a bankruptcy notice under this Act and the debtor does not:
(i) where the notice was served in Australia—within the time specified in the notice; or
(ii) where the notice was served elsewhere—within the time fixed for the purpose by the order giving leave to effect the service;
comply with the requirements of the notice or satisfy the Court that he or she has a counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt or sum payable under the final order, as the case may be, being a counter-claim, set-off or cross demand that he or she could not have set up in the action or proceeding in which the judgment or order was obtained;”
and further that s.40(3)(b) provides:-
“(b) a judgment or order that is enforceable as, or in the same manner as, a final judgment obtained in an action shall be deemed to be a final judgment so obtained and the proceedings in which, or in consequence of which, the judgment or order was obtained shall be deemed to be the action in which it was obtained;”
Section 82(3) of the Act provides that:-
“(3) Penalties or fines imposed by a Court in respect of an offence against a law, whether a law of the Commonwealth or not, are not provable in bankruptcy.”
Even though, in this case, the penalty was not imposed by a Court, I am satisfied that a penalty imposed by the QBT, but ultimately payable under s.85, should be regarded as a “penalty imposed by a Court” for the same reasons that the Full Court in the State of Victoria v Mansfield (2003) 199 ALR 395 held that parking fines imposed by a local authority were “fines imposed by a court”. (see also Mathers v Commonwealth (2004) FCA 217 where Heeny J, considering equivalent provisions of the Corporations Act 2001, found that the “offence against the law” for which the penalty or fine was imposed need not be criminal in nature).
Can a decision under section 111 be registered in a Magistrates Court
Both parties agree that registration of the decision may only occur under s.85 of the QBT Act. It does not occur under s.111.
It was also not in issue that for s.40(1)(g) of the Act to be complied with, it is necessary for their to be “a final judgment or final order, being a judgment or order the execution of which must not be stayed”. In other words, if the Bankruptcy Notice must be founded on an order upon which execution can be levied and has not been stayed.
It follows, in my view, that if registration of the QBT decision has not been properly registered then it cannot be the subject of execution or enforcement.
When the question is “whether there is a judgment sufficient for the purposes of s 40(1)(g) of the Bankruptcy Act, the Bankruptcy Court is not concerned with technicalities, for example, with whether it has been obtained in accordance with the procedural requirements of the Court which pronounced it, or whether it has been given in the wrong form” (Drummond J in Amos v Brisbane TV Ltd (2000) 100 FCR 82 at 89). I agree with Mr Coulsen’s submission that if this Court finds that the decision was not registered in accordance with law, that is a matter which goes to jurisdiction, not a mere technicality.
The Respondent contends that:-
a)Pursuant to s.4 of the Magistrates Courts Act 1921 (Qld), the jurisdiction of the Magistrates Courts is prescribed as follows:-
“4. Subject to this Act--
(a) every personal action in which the amount claimed is not more than $50 000, whether on a balance of account or after an admitted set off or otherwise; and
(b) every action brought to recover a sum of not more than
$50 000, which is the whole or part of the unliquidated balance of a partnership account, or the amount or part of the amount of the distributive share under an intestacy or of a legacy under a will; and(c) every action in which a person has an equitable claim or demand against another person in respect of which the only relief sought is the recovery of a sum of money or of damages, whether liquidated or unliquidated, and the amount claimed is not more than $50 000;
may be commenced in a Magistrates Court, and all Magistrates Courts shall within their respective districts have power and authority to hear and determine in a summary way all such actions.”
b)Recovery of penalty is not a “personal action”. No expanded jurisdiction is conferred on the Magistrates Court in respect of s.111 decisions either by the Justices Act 1886 (Qld) or by the Queensland Building Tribunal Act.
c)As a result there has been no proper registration of the order.
d)That the penalty imposed is not provable under s.82(3) of the Act.
e)Registration can’t change a penalty into a debt. Section 85(4) makes it clear that if the decision cannot be appropriately registered in the Magistrates Court, because it is not within the Courts “jurisdictional limit” in it must be registered in the District Court. Mr Coulsen conceded that much of his underlying argument would have no force if, in fact, the decision in this case had been registered in the District Court. This was the case in my decision of QBSA v Coburn (2001) FMC 17.
In response, Mr Rangiah for the petitioning creditor submits:-
a)Sections 111(5) and (6) of the QBT Act “contemplate that the Magistrates Court has or is deemed to have jurisdiction to give judgment against the relevant person for the amount of the penalty as a debt owed to the Authority”.
b)The penalty imposed by the QBT is within the “jurisdictional limit” of the Magistrates Court for one or more of the following reasons:-
(i)Sections 111(5) and 111(6) give the Court jurisdiction in respect of the recovery of the amount ordered to be imposed as a penalty;
(ii)Sections 111(5) and 111(6) deem a proceeding for the recovery of the amount ordered to be imposed as a penalty to be a “personal action” within s 4 of the Magistrates Court Act;
(iii)Under s.19 of the Justices Act (Qld), the Magistrates Court has jurisdiction to impose a penalty.
Discussion
I do not believe s.19 of the Justices Act 1886 has any application in this matter. That provision confers power on the Magistrates Court to hear or determine at trial matters where no other provisions are made in an Act for the trial of that person.
Defining the term “personal action” has been the subject of a commentary in the Queensland District Court Practice where the authors say:-
“[68.30] Personal actions A personal action is a claim founded on contract or tort by which it is sought to recover a debt or chattel or damages for injury to person or property, eg actions of account, assumpsit, covenant, debt, trespass, negligence, detinue, replevin; Halsbury’s Laws of England, 3rd ed, Vol 1, p 24.
“Personal actions are such whereby a man claims a debt or personal duty, or damages for some injury done to his person or property. The former are said to be founded on contracts, the latter all actions for trespasses, nuisances, assaults, defamatory words, and the like”: Blackstone’s Commentaries on the Laws of England, Vol 3, p 117. See also Attorney-General v Chirchill (1841) 10 LJ Ex 314 at 319; 151 ER 997; Chircher v Edwardstown Carpets (1993) 60 SASR 503 at 513-14.
They include and action for damages for unlawful impounding: Swenson v Shire of Drayton [1932] St R Qd 98; and an action for damages for wrongful use of a trade name: Theiler v Fitzgerald (1900) 25 VLR 517. See also Mark and Sons Pty Ltd v Ridd Milking Machine Co Ltd (1923) VLR 432; Hamburg v Fromm [1951] SASR 97 (money had and received).”
In my view, recovery of a penalty is not a “personal action”.
I do not agree that, even though s.111(5) of the QBT Act says that the Authority may recover the penalty as a debt, that it has the effect of “converting” the action to “a claim founded on contract or tort”.
Once a “penalty” it remains “a penalty”, even if, for the purposes of recovery it is deemed to be a debt.
I also take the view that the exclusion of the word “amount: in s.85(4) (when it is included in s.111(6)), is significant.
I agree that its exclusion in s.85(4) adds force to the submission of Counsel for the Respondent that the words “jurisdictional limit” in s.85(4) is not referable to monetary limits, but more properly to the jurisdiction defined in s.4 of the Magistrates Court Act.
As a result I have come to the conclusion that the decision under s.111 of the QBT could not be registered in the Magistrates Court and, as a result, is not an order which could be enforced or the subject of execution. Decisions under s.93 referred to paragraph 12 of these reasons could be so registered if under $50.000.
Accordingly, it is not an order which meets the requirements of s.40(1)(g) of the Bankruptcy Act.
I am compelled to find that the Bankruptcy Notice is a nullity and would dismiss the Creditor’s Petition. In that regard, whilst preparing these reasons it came to my attention that the Creditors Petition actually lapsed on 12 June 2005.
Consistent with these reasons, I will hear submissions as to the form of order.
I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of Baumann FM
Associate:
Date:
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