FEDERAL CIRCUIT COURT OF AUSTRALIA
| CURTIS v SINGTEL OPTUS PTY LTD & ANOR | [2014] FCCA 1286 |
| Catchwords: BANKRUPTCY – Validity of a Bankruptcy Notice issued by the Official Receiver electronically – attachment of the judgment/order at the time of issue – whether electronically issued bankruptcy notice is invalid as it does not “attach” judgment/order founding the notice – whether defect in bankruptcy notice can be cured by s.306 of the Bankruptcy Act 1966 (Cth). |
| Legislation: Bankruptcy Act 1966, ss.41(1), 41(2), 306 Electronic Transactions Act 1999 (Cth), ss.3, 8, 11, 15C |
| Adams v Lambert (2006) 228 CLR 409 Frenchmans Lodge Nursing Home Pty Ltd v Kim Lutman [2014] FCCA 287 |
| Applicant: | LEON CURTIS |
| First Respondent: | SINGTEL OPTUS PTY LTD |
| Second Respondent: | OFFICIAL RECEIVER |
| File Number: | SYG 924 of 2014 |
| Judgment of: | Judge Lloyd-Jones |
| Hearing date: | 13 May 2014 |
| Delivered at: | Sydney |
| Delivered on: | 19 June 2014 |
REPRESENTATION
| Counsel for the Applicant: | Mr J Johnson |
| Solicitor for the Applicant: | Mr J Prowse of MCW Lawyers |
| Counsel for the First Respondent: | Mr D Mackay |
Solicitor for the First Respondent: | Ms Hannah Mcleod of Minter Ellison |
| Counsel for the Second Respondent: | Mr M Heath |
| Solicitor for the Second Respondent: | Ms L Buchanan of Australian Government Solicitor |
ORDERS
The application filed on 4 April 2014 be dismissed.
The applicant is to pay the respondents’ costs of and incidental to the application.
The time for compliance with Bankruptcy Notice BN 169768 of 2014 be extended up to and including 21 days from the date of today’s date.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 924 of 2014
| LEON CURTIS |
Applicant
And
| SINGTEL OPTUS PTY LTD |
First Respondent
| OFFICIAL RECEIVER |
Second Respondent
REASONS FOR JUDGMENT
Introduction
In this matter the applicant debtor, Leon Curtis, filed an application in this Court on 4 April 2014 seeking to set aside Bankruptcy Notice BN 169768 of 2014 (the “Bankruptcy Notice”) which had been served on him by the respondent creditor. The application seeks various orders and significantly the following:
2. A declaration that the document entitled Bankruptcy Notice, numbered issued and dated No BN 169768 25 February 2014 was not at the time of its issue a valid and effectual Bankruptcy Notice issued pursuant to s.41 of the Bankruptcy Act 1996 and Bankruptcy Regulation 4.02 and the prescribed form of Bankruptcy Notice as at the time of issue the Bankruptcy Notice did not have attached to it a…
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- AGLC
- Curtis v Singtel Optus Pty Ltd [2014] FCCA 1286
- Case
- [2014] FCCA 1286
- Decision Date
CaseChat Overview and Summary
The legal issue before the Federal Circuit Court of Australia was whether the Bankruptcy Notice was invalid at the time of its issue due to the absence of an attached copy of the final judgment or order. While it was not disputed that such a copy was attached at the time of service, the applicant contended that this omission at the point of issue rendered the notice fundamentally flawed. The respondents argued that the requirement was for the judgment or order to be attached at the time of service, not necessarily at the time of issue.
Lloyd-Jones J considered the *Bankruptcy Act*, the *Bankruptcy Regulations*, and the *Electronic Transactions Act 1999* (Cth). His Honour noted that while a literal interpretation of the applicant's argument might suggest invalidity, a contextual approach to statutory interpretation, particularly in light of the *Electronic Transactions Act* and the conventional approach to statutory construction, led to a different conclusion. The court found that the online system for issuing bankruptcy notices, which involved uploading the judgment or order for attachment to the electronically generated notice, complied with the legislative requirements. The prescribed form itself referred to "attached final judgment/s or final order/s," and the court interpreted "attached" in its ordinary sense of physical presence or close proximity.
The application to set aside the Bankruptcy Notice was dismissed, and the applicant was ordered to pay the respondents' costs. However, the time for compliance with the Bankruptcy Notice was extended by 21 days from the date of the judgment.
Orders
Orders of the court
1.
The application filed on 4 April 2014 be dismissed.
2.
The applicant is to pay the respondents’ costs of and incidental to the application.
3.
The time for compliance with Bankruptcy Notice BN 169768 of 2014 be extended up to and including 21 days from the date of today’s date.
FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY
SYG 924 of 2014
LEON CURTIS
Applicant
And
SINGTEL OPTUS PTY LTD
First Respondent
OFFICIAL RECEIVER
Second Respondent
REASONS FOR JUDGMENT
Introduction
1.
In this matter the applicant debtor, Leon Curtis, filed an application in this Court on 4 April 2014 seeking to set aside Bankruptcy Notice BN 169768 of 2014 (the “Bankruptcy Notice”) which had been served on him by the respondent creditor. The application seeks various orders and significantly the following:
2. A declaration that the document entitled Bankruptcy Notice, numbered issued and dated No BN 169768 25 February 2014 was not at the time of its issue a valid and effectual Bankruptcy Notice issued pursuant to s.41 of the Bankruptcy Act 1996 and Bankruptcy Regulation 4.02 and the prescribed form of Bankruptcy Notice as at the time of issue the Bankruptcy Notice did not have attached to it a copy of the final judgment or order relied upon.
The respondent creditor, Optus Singtel Pty Ltd (“Optus”) opposed the application.
2.
Leave was granted for the Official Receiver to intervene in these proceedings given the nature of the claim made by the applicant.
3.
In the affidavit of Danny Roland Klopovic affirmed 12 May 2014 (the “Klopovic Affidavit”), Mr Klopovic states that he is employed by the Australian Financial Security Authority (“AFSA”) as the Assistant Director of the National Registry and excises powers delegated by the Official Receiver under the Bankruptcy Act 1966 (Cth) (the “Bankruptcy Act”). At [18] of the Klopovic Affidavit he states that AFSA is of the view that the current proceedings raise an issue of public interest and, in particular, an untested issue of the construction of the Act and the Bankruptcy Regulations 1996 (Cth) (the “Bankruptcy Regulations”) which could impact on the administration of the Bankruptcy Act by AFSA, particularly in respect of the current method of issuing bankruptcy notices by the Official Receiver.
4.
The thrust of the argument advanced on behalf of the applicant was that the Bankruptcy Notice at the date of its issue was not a valid bankruptcy notice in that it did not comply with the requirements of s.41(2) of the Bankruptcy Act, Reg. 4.02 of the Bankruptcy Regulations and the prescribed form of a bankruptcy notice. The contention is that for the purported Bankruptcy Notice to be valid it was required to have attached to it a copy of the final judgment/order founding the Bankruptcy Notice and at the time of its issue, the Bankruptcy Notice did not have attached to it a copy of the final judgment/order.
5.
It is not disputed between the parties that at the time of service of the Bankruptcy Notice on the applicant (debtor) a copy of the final judgment/order was attached to the Bankruptcy Notice.
6.
I have formed the view that the argument advanced on behalf of the applicant that if taken in isolation a bankruptcy notice, issued electronically, is invalid because it does not strictly comply with s.41 of the Bankruptcy Act and Bankruptcy Regulation 4.02. However, when considered in context of the complete Bankruptcy Act, the operation of the Electronic Transactions Act 1999 (Cth) (the “Electronic Transactions Act”) and the conventional approach to statutory interpretation this claim cannot be sustained for the reasons discussed below.
Material before the Court
7.
The Applicant Debtor relied on the following material at the hearing:
a) Form 2 Application filed 4 April 2014;
b) Applicant’s Genuine Steps Statement;
c) The Affidavit in Support of Application to set aside Bankruptcy Notice of Jonathon Craig Prowse affirmed 3 April 2014;
d) The Affidavit of Jonathon Craig Prowse affirmed 24 April 2014; and
e) Exhibit “A1” – a colour print out of Screen Format Subject: Bankruptcy Notice accepted for Leon Curtis and attachments.
8.
Optus relied on the following material:
a) The Affidavit of Service of Bankruptcy Notice sworn by Mark Slater on 20 March 2014;
b) Notice Stating Grounds of Opposition to Application filed 28 April 2014; and
c) The Affidavit of Angela Faye Watts sworn 24 April 2014 (the “Watts Affidavit”).
9.
AFSA relied on the following material:
a) The Klopovic Affidavit.
Background
10.
In setting out the following background material I have quoted directly from the various affidavits filed in these proceedings as set out above. Where this information is extracted from an affidavit, each item contains a reference for that material. I have not made further attributions as this would make the background summary unwieldy. This section is not included to establish any evidentiary basis, but rather as a general introduction to the issue.
11.
The Klopovic Affidavit indicates at [3]-[6]:
3. I am delegated to perform the powers and functions of the Official Receiver under s.15(4) of the Bankruptcy Act 1966 (the Act and Bankruptcy Regulations 1996 (the Regulations). I have oversight of the Registry teams based in Melbourne and in Sydney who conduct the process of Notices.
4. The Official Receiver has issued approximately 9,800 Bankruptcy Notices in the past year.
5. There are two ways in which a Creditor can apply to have a Bankruptcy Notice issued by the Official Receiver. The first is by sending a completed approved form by post to an office of the AFSA. The second is by completed an online application using the online services contained on the AFSA website: https://www.afsa.gov.au/online-services.
6. The online system has operated since 11 February 2013. In the past year about 95 per cent of the Bankruptcy Notices issued are applied for online using the website of AFSA.
12.
The Klopovic Affidavit then outlines the procedures involved the in issuing of a bankruptcy notice where an application is made online at [9]-[14] where he states:
9. If a creditor wishes to use the online service they must register their details with AFSA through its website.
10. Once registered, a creditor can use the online service to submit a bankruptcy notice for approval. The online service requires the creditor or their agent to complete a number of on screen ‘fields’ which correspond with the details required to complete a prescribed Bankruptcy Notice as set out in Form 1 of Schedule 1 to the Regulations. The first screen requires a creditor to complete details of the judgment or order of a Court upon which they rely for the issuing of the notice. A required step for the completion of the online form is fir the creditor to upload a copy of the sealed or certified judgment or order of a Court evidencing the debt owed to the creditor by the debtor.
…
11. Prior to the creditor being able to submit the applicant online, the online service asks the creditor to review the details entered. The review screen allows for proof reading and editing of the online form. The service also allows the user to view a draft copy of the Bankruptcy Notice prior to submission. Payment of the prescribed fee must also be made.
12. Upon receipt of an electronic application a delegate of the official Receiver will review the online application. The delegate will ensure that all requirements under the Act and Regulations for the issuing the notice have been met and, if the form appears to comply with those requirements, the notice is approved and endorsed by6 the delegate of the Official Receiver. If any errors are detected by the delegate, the application is not processed and the creditor is notified by email of the errors and advised to revise and resubmit their application.
13. Upon approval by the delegate, the system automatically generates a covering letter to the creditor and a bankruptcy notice in the prescribed form containing the details as entered into the online fields by the creditor and the signature of the Official Receiver. The system then automatically creates and sends an email to the address supplied by the creditor with their application. Attached to the email is the covering letter, the endorsed bankruptcy notice and the judgment or order which the creditor uploaded with their application for a bankruptcy notice as documents in .pdf format. The system inserts into the endorsed bankruptcy notice a unique Bankruptcy Notice number, issued date and signature of the Official Receiver in the ‘Office use only” field.
14. Each bankruptcy notice has its own online file which acts as a correspondence history for that application. The online file contains several ‘folios’. The ‘folios’ mark a correspondence events such as an application being received, assessed, approved, and any file notices. Any supporting documentation received are also attached to the appropriate folio.
Legislative Requirements
13.
Section 41(2) of the Bankruptcy Act states:
Bankruptcy notices
…
(2) The notice must be in accordance with the form prescribed by the regulations.
14.
Regulation 4.02 of the Bankruptcy Regulations states:
Form of bankruptcy notices
(1) For the purposes of subsection 41(2) of the Act, the form of bankruptcy notice set out in Form 1 is prescribed.
(2) A bankruptcy notice must follow Form 1 in respect of its format (for example, bold or italic typeface, underlining and notes).
(3) Subregulation (2) is not to be taken as expressing an intention contrary to section 25C of the Acts Interpretation Act 1901.
Note: Under section 25C of the Acts Interpretation Act 1901, where an Act prescribes a form, then, unless the contrary intention appears, strict compliance with the form is not required and substantial compliance is sufficient; see also paragraph 46(1)(a) of that Act for the application of that Act to legislative instruments other than Acts.
Procedure followed to obtain the Curtis Bankruptcy Notice electronically
15.
In the Watts Affidavit at [9], Ms Watts describes the procedure she followed to log on to the AFSA website and complete a bankruptcy notice form which included the uploading of a copy of the final judgment/order upon which the notice was founded. Subsequently, in the Watts Affidavit at [19], Ms Watts indicates that she receives from AFSA an email automatically attached which attaches:
a) A letter from the Australian Financial Security Authority;
b) The Bankruptcy Notice signed by the Official Receiver; and
c) A copy of the final judgment/order.
16.
The interim steps performed internally by the Official Receiver to ensure compliance with the Bankruptcy Act and Bankruptcy Regulations is not relevant to this application and is not commented on further.
Mode of Electronic Delivery of Curtis Bankruptcy Notice
17.
The applicant tendered an exhibit, identified as “A1” and the front page of the exhibit is a coloured screen-shot/screen-capture from a computer of the email account of Ben Pascoe from svc-resolve-smtp@afsa.gov.au. The Watts Affidavit at [14] identifies Ben Pascoe as the Business Services Melbourne Disbursement Manager of Minter Ellison. The firm of solicitors requesting the issue of the Curtis Bankruptcy Notice is Minter Ellison. The Portable Document Format (“PDF”) files identified in the exhibit:
a) A covering letter from AFSA;
b) The Bankruptcy Notice; and
c) Orders from the Supreme Court dated 17 October 2013.
18.
The email which was sent Tuesday 25 February 2014 at 16:35 is an automatically generated email from AFSA. The subject heading of the email is “Bankruptcy Notice Accepted for Leon Curtis. Bankruptcy Notice Number 169768, Issued on 25-Feb-2014 [SEC=UNCLASSIFIED]”.
19.
Attached to the email are three separate PDF (Portable Document Format) files. The PDF files are titled:
a) C169768_CORR-BN001R-01_5_1.pdf (28 KB);
b) BankruptcyNotice.pdf (11 KB); and
c) ORDERS – 17 October 2013 – Leon Mark Curtis.pdf (292 KB).
20.
The message contained in the email states:
Please find attached correspondence from the Australian Financial Security Authority.
This email was sent via an automated system, please do not reply to this email address. Contact details for reply are included in the attached correspondence.
IMPORTANT: This email is intended for the use of the addressee and may contain confidential or legally privileged information. If you are not the intended recipient, you are notified that any use or dissemination of this communication is strictly prohibited. If you have received this email in error, please reply to this email address immediately and advise AFSA.
Important: If you have received this transmission in error please notify us immediately by return email and delete all copies. If this email or any attachments have been sent to you in error, that error does not constitute waiver of any confidentiality, privilege or copyright in respect of information in the email or attachments.
Mandatory Requirements of the Act at the time of issue
21.
The argument advanced on behalf of the applicant is that the requirement of the attachment of the final judgment/order to a bankruptcy notice at the time of issue is a matter made essential by the Bankruptcy Act having regard to the use of the word “must” in s.41(2). The alternative position, taken by the respondents, is that there is no requirement at the time of issue of a bankruptcy notice that a copy of the judgment/order has to be attached, as all that is required is that the judgment/order be attached at the time of service. The respondents’ contention is addressed below.
22.
As the challenge in this application is restricted to the electronic application and issue, the procedures adopted for a manual application will be ignored. Pursuant to reg.4.01 of the Bankruptcy Regulations in order to apply for the issue of a Bankruptcy Notice, a person must lodge online with the Official Receiver (AFSA) a draft Bankruptcy Notice in electronic form on the AFSA online services web page (https://www.afsa.gov.au/online-services) and upload a sealed copy of the judgment/order founding it. Section 41(2) of the Bankruptcy Act provides that a bankruptcy notice must be in accordance with the form prescribed by the Bankruptcy Regulations. Regulation 4.02 of the Bankruptcy Regulations provides that for the purposes of s.41(2) the form of a bankruptcy notice set out in Form 1 is prescribed and the Bankruptcy Notice must follow Form 1, with the specific issue being the attaching of the judgment/orders to the notice.
23.
Turning to the face of Form 1, there are only two references within that document that specifically refers to “attached final judgment/orders” on the first page of the form it reads “claim/s that you owe the following debts”:
The amount as per the attached final judgment/s or final order/s (Note A)
Further down the page, the box that is headed “Notes” states:
A – if an attached final judgment or final order is expressed in an amount of foreign currency you may pay the amount in that foreign currency or pay an equivalent amount in Australian dollars that has been calculated using the opening telegraphic transfer rate of …
(emphasis added)
The question of being attached
24.
A convenient starting point in respect of the meaning of the word “attached” is found in the Shorter Oxford English Dictionary, Sixth Edition 2007, which provides a number of different circumstances where the word can be used, including the following:
5. Fasten, to join (a thing to another);
6. Join or connect functionally to.
The Oxford Dictionary also gives a definition associated with the law as seize (a person or property) by legal authority. The use of the word attached in the context of the issue before this Court is used in a normal, non-technical sense with the meaning of a physical presence or close proximity. This can also be expressed as “attached to”. Mr Heath in his submissions describes in the following way as to “attach” something is to fasten, join or cause it to adhere to something (Macquarie Dictionary).
25.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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