Banovich v Repatriation Commission

[1986] FCA 397

Re: JOHN FRANCIS WALKER
Ex parte: JOHN FRANCIS WALKER
No. ART3 of 1986
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA

GENERAL DIVISION
BANKRUPTCY DISTRICT OF THE STATE OF WESTERN AUSTRALIA
Toohey J.

CATCHWORDS

Bankruptcy - application for registration as a trustee under Part VIII Division 1 of Bankruptcy Act - academic and professional requirements prescribed in s.155(3A)(a)(i), (ii) and (iii) - applicant not qualified in terms of sub-para.(ii) - whether requirements in sub-paras.(i) and (ii) alternative or cumulative

Bankruptcy Act 1966 Part VIII Division 1

Bankruptcy Rules r.61A

HEARING

PERTH

#DATE 5:9:1986

JUDGE1

This is an application for registration as a trustee under Part VIII Division 1 of the Bankruptcy Act 1966. It is the first application made to this registry of the Court since ss.155(3A) and 155(3B) came into operation. These sections were part of the substantial amendments made to Part VIII Division 1 by Act No. 21 of 1985 which commenced on 19 May 1986. So far as I am aware, there has been no reported decision of this Court on the implications of those amendments.

1. As Part VIII Division 1 stood before the recent amendments, sub-s.155(2) enabled a person to apply to the Court to be registered as qualified to act as a trustee and empowered the Court to direct that he be so registered upon his entering into a bond as prescribed. No academic or indeed any other qualifications were demanded by the Act and the matter lay very much within the discretion of the Court. Sub-section 155(3A) now spells out a number of requirements where an application is made; they are expressed in the following terms:
   
   

"(a) the applicant -

(i) is a member of a prescribed body;

(ii) holds a degree, diploma or certificate from a prescribed university or another prescribed institution in Australia and has passed examinations in such subjects, under whatever name, as the appropriate authority of the university or other institution certifies to the Court to represent a course of study in accountancy of not less than 3 years' duration and in commercial law (including company law) of not less than 2 years' duration; or

(iii) has other qualifications that, in the opinion of the Court, are equivalent to the qualifications mentioned in sub-paragraph (i) or (ii);

(b) the applicant is not an insolvent under administration;

(c) the applicant resides in Australia; and

(d) the Court is satisfied that the applicant is capable of performing the duties of a trustee and is otherwise a fit and proper person to be registered as a trustee".

1. On the hearing of this application a question arose as to the proper construction of para.(a) and in particular the relationship between sub-paras.(i), (ii) and (iii).

2. The applicant, Mr. Walker, is a member of a prescribed body for he is a member of The Institute of Chartered Accountants in Australia, one of the bodies prescribed by r.61A. He does not hold a degree, diploma or certificate from a prescribed university or from another prescribed institution in Australia. Pursuant to r.61A, prescribed universities are most of the universities in Australia and other prescribed institutions are, broadly speaking, colleges of advanced education. Mr. Walker obtained a diploma in accounting in 1963 following a part-time course lasting some five years. The institution conducting the course was, it appears, the Perth Technical College which is not one of the prescribed institutions. In any event, it was accepted by counsel that the course did not, in the language of sub-para.(ii), represent a course of study in accountancy of not less than three years' duration and in commercial law (including company law) of not less than two years' duration.

3. In my view sub-paras.(i) and (ii) are not cumulative requirements; they are alternatives. It is true that "or" appears only at the end of sub-para.(ii) but this is not an uncommon form of drafting where all components are options. Certainly the repetition of "or" after sub-paras.(i) and (ii) would put the matter beyond doubt. Sub-paragraph (iii) speaks of other qualifications equivalent to those mentioned in sub-para.(i) or (ii). The way is left open for the Court to accept qualifications "equivalent to the qualifications mentioned in sub-paragraph (i) or (ii)". If sub-paras.(i) and (ii) were cumulative, it might of course be the case that a person had qualifications equivalent to (i) or (ii) but not to both. But sub-para.(iii) constitutes a qualification in its own right, a qualification that need be equivalent only to those mentioned in sub-para.(i) or (ii). If the intention of the legislature was that sub-paras.(i) and (ii) be cumulative, one would expect the optional qualifications in sub-para.(iii) to be mentioned as part of each of those sub-paragraphs, not standing as an alternative to them.

4. It is apparent from the explanatory memorandum accompanying the Bankruptcy Amendment Bill 1985 that the intention was not, only to give some indication in the Act as to the criteria to be satisfied for registration, but also to bring the Bankruptcy Act into line with the requirements of the companies legislation relating to the registration of liquidators. See paras.103-105 of the memorandum. Paragraph (a) of sub-s.155(3A) closely resembles para.(a) of sub-s.20(2) of the Companies Act 1981. Interestingly, para.104 of the explanatory memorandum refers to sub-s.20(2) in terms that include "or" after each sub-paragraph. In fact "or" appears only after the first sub-paragraph.

5. However the authors of the CCH Australian Company Law and Practice vol. 1 p.6,301 suggest that the qualifications in sub-s.20(2) of the Companies Act are cumulative. They note that the qualifications required of a person applying for the first time for registration as a liquidator are the same as those required of intending auditors. As to the latter they comment:
   
   

"... an applicant must be a member of the Institute of Chartered Accountants, the Australian Society of Accountants or other prescribed body (reg.20) and must hold a degree or diploma in accountancy (including auditing) and commercial law from an Australian university (reg.21) or prescribed institution: reg.22. Equivalent qualifications will be accepted" (emphasis added).

1. I do not accept this view of sub-s.20(2) but in any event that is not the section with which I am concerned. In Re Bird; Bird v. National Companies and Securities Commission (1985) 3 ACLC 24 Murray J. considered a provision similar to sub-s.20(2). Although the point now at issue was not before him, it is apparent that his Honour regarded the sub-paragraphs as alternatives.

2. The applicant is a member of a prescribed body within sub-s.155(3A) and, in my opinion, he therefore meets the requirements of para.(a) of that sub-section. There is evidence that he is not an insolvent under administration and that he resides in Australia. I am satisfied, by reason of the applicant's evidence on affidavit and orally of his experience in connection with companies in liquidation and under receivership, his long experience as a chartered accountant during which he has been concerned with a number of activities relating to insolvent persons and generally from the evidence of his professional activities that Mr. Walker is capable of performing the duties of a trustee and that he is otherwise a fit and proper person to be registered as a trustee.

3. Sub-section 155(3B) requires the Court to refuse an application for registration as trustee where a person has been convicted of an offence involving fraud or dishonesty and makes application within a period of five years after conviction or release from prison. I am of opinion that a person applying for registration as a trustee must expressly negative the disqualification in sub-s.155(3B). This the applicant has done.

4. I direct that the applicant be registered as a trustee upon his entry into a bond in the amount prescribed for the purposes of sub-s.155(3A) and in the prescribed manner with such surety or sureties as is or are approved by the Registrar.