Fulton v Bank of W.A.
[2002] FMCA 103
•31 May 2002
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| FULTON v BANK OF W.A. & ANOR | [2002] FMCA 103 |
| BANKRUPTCY – Bankruptcy Act 1966 – s.49 substitution of petitioning creditor – Review of Registrar’s decision – s.4A of Stamp Act 1984 (Qld) – admissibility of certain documents. Section 49 of the Bankruptcy Act 1966 (“the Act”) Section 13A of the Stamp Act (Qld) (1984) (“the Stamp Act”) Hoggett v O’Rourke (2000) QSC 387) |
| Applicants: | JONATHAN GORDON FULTON and MARK FULTON |
| First Respondent: Second Respondent: | BANK OF WESTERN AUSTRALIA LIMITED SALMON & SON PTY LTD |
| File Nos: | BZ 499 of 2001 BZ 500 of 2001 |
| Delivered on: | 31 May 2002 |
| Delivered at: | Brisbane |
| Hearing Date: | 30 October 2001 |
| Judgment of: | Baumann FM |
REPRESENTATION
| Counsel for the Applicant: | Mr R J Anderson |
| Solicitors for the Applicant: | Morgan Conley |
| Counsel for the Respondent: | Mr D Marks |
| Solicitors for the Respondent: | Freehills |
ORDERS
The application for review be dismissed.
The Applicant pay the Respondent’s costs including reserved costs as agreed, and failing agreement as taxed.
An advocacy certificate be granted pursuant to R21.15.
The question of the priority of payment of the First Respondent’s costs be reserved.
DIRECTIONS
Creditor’s petition BZ 277 of 2001 be listed for hearing in the Registrar’s list at 9.30 am on 7 June 2002.
ORDERS
The application for review be dismissed.
The Applicant pay the Respondent’s costs including reserved costs as agreed, and failing agreement as taxed.
An advocacy certificate be granted pursuant to R21.15.
The question of the priority of payment of the First Respondent’s costs be reserved.
DIRECTIONS
Creditor’s petition BZ 278 of 2001 be listed for hearing in the Registrar’s list at 9.30 am on 7 June 2002.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BZ 499 of 2001
| JONATHAN GORDON FULTON |
Applicant
And
| BANK OF WESTERN AUSTRALIA LIMITED First Respondent SALMON & SON PTY LTD |
Second Respondent
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BZ 500 of 2001
| MARK GORDON FULTON |
Applicant
And
| BANK OF WESTERN AUSTRALIA LIMITED First Respondent SALMON & SON PTY LTD |
Second Respondent
REASONS FOR JUDGMENT
Introduction
The Application for Review before me relates to two separate creditor’s petitions before the Court, both filed on 18 June 2001 by SALMON & SON PTY LTD (the “petitioning creditor”) against different debtors, namely:
BZ 277 of 2001 against JONATHAN GORDON FULTON
BZ 278 of 2001 against MARK JAMES FULTON
Both petitions arise from the same set of circumstances and the same issue for determination by me applies.
Registrar Baldwin considered an application by BANK OF WESTERN AUSTRALIA LIMITED (“the Bank”) pursuant to s49 of the Bankruptcy Act 1966 (“the Act”) for its substitution for the petitioning creditor in both petitions.
Registrar Baldwin published reasons on 7 September 2001 for ordering that the Bank be substituted (“the decision”).
JONATHAN GORDON FULTON and MARK JAMES FULTON (the Debtor) both filed Applications for Review of the decision, on the same grounds namely:
“1.The learned Registrar erred in ordering the First Respondent be substituted for the Second Respondent on the creditor’s petition in circumstances where:
(a)it was contrary to law to find that duty had been paid on the chattel lease;
(b)the finding that duty had been paid on the chattel lease was unsupported by, or alternatively against the weight of the evidence;
(c)it was contrary to law to find that the first respondent had complied with the requirements of the Stamp Act 1894 (Qld);
(d)the finding that the first respondent had complied with the requirements of the Stamp Act 1984 (Qld) was unsupported by, or alternatively against the weight of the evidence;
(e)the learned Registrar failed to have proper regard to the provisions of the Stamp Act 1984 (Qld).”
An Application for Review of a Registrar’s decision is a hearing de novo (Rule 20.03 of the Federal Magistrates Court Rules 2001).
Issue
The Debtors (who were the Applicants on the Review) essentially argue that a hiring agreement relied upon by the Bank to prove a debt due to the Bank, cannot be relied upon, because it is unstamped. In such circumstances, without proof of the debt, the application for substitution by the Bank, they say, must fail. It is acknowledged by the Bank that, even though another course of proof of a debt may be available, they rely on the document as the simplest course.
The Hiring Agreement
The relevant documents are exhibited to the affidavit of MICHAEL WALTER JOHN (filed 20 August 2001) in BZ 278 of 2001, being:
a)Contract No 20368012 entitled “Lease Agreement” between the Bank (as Lessor), FULTON CONSTRUCTIONS PTY LTD (the Lessee) and the Debtors, dated to commence on 30 July 1999; and
b)Incorporated in the Lease Agreement was a guarantee signed by the debtors.
Collectively these two documents are referred to as the “contentious exhibits”.
Accepted facts
The parties before me agree that:
a)to succeed in this application under s49 of the Act, the Bank must be able to rely on the contentious exhibits;
b)the contentious exhibits do not bear stamp duty marking;
c)at all material times the Bank was registered as a “rental business” in accordance with s35A of the Stamp Act 1894 (Qld) (“the Stamp Act”);
d)the contentious exhibits, read together, fall within the definition of a “hiring agreement” as defined in the Stamp Act (at the time of execution – s2).
s4A(I) of the Stamp Act, which provides that:
“An instrument changeable with stamp duty (whether under this Act or under any prior Act) shall not, except in criminal proceedings, be given in evidence, or be available for any purpose whatever, unless it is duly stamped”
would render the contentious exhibits inadmissible (see also Hoggett v O’Rourke (2000) QSC 387).
The competing contentious exhibits
I had the benefit of clear and considered written submissions expanded by some oral submissions by Counsel. I was greatly assisted by them.
The debtor says
(a) The contentious exhibits are chargeable with stamp duty;
(a)It is irrelevant that duty may have been paid, the question of stamping being a distinct issue from the payment of revenue (see Backstop Nominees v Goscor Pty Ltd (1990) VR 468 at 472);
(b)The contentious exhibits have not been “duly stamped”;
(c)No proof of payment, in any event, has been provided to the Court.
The bank says
(a) Section 4A does not apply to an instrument which is not chargeable with stamp duty (see Prime Holdings Pty Ltd v Shigeyuki Kanemaru 92 ATC 4126 @ 4133);
(b)Section 35B of the Stamp Act does not charge the agreements themselves. It charges duty on a “statement” filed by a registered rental business;
(c)Schedule 1 of the Stamp Act contains a head charge for “Hiring Agreement”, however Exemption 1 exempts from stamp duty, under that heading:
“A hiring agreement, the amount received in respect of which is to be received by a person who is registered under s35A of the Act as carrying on a rental business.”
The contentious exhibits are, as a result exempt from duty, and s4A does not apply, as an exempt document is not a document that is “chargeable with duty”.
(d)No proof of payment of duty is required because the instrument is exempt from duty;
(e)No marking of the contentious exhibits is required under s13A of the Stamp Act, as it only applies to instrument based duty. As a result of the payment of duty under s35B of the Stamp Act, it cannot apply to these contentious exhibits.
Conclusion
I am satisfied that:
(a)the contentious exhibits are exempt, as instruments, from being charged with duty because of Exemption 1 of Schedule 1;
(b)because the documents are exempt from duty, it is not necessary for them to be stamped with any impression, even to be stamped with a notation of “no duty payable”;
(c)The whole structure and intent of proscribing entities to be registered as a “rental business” is to ensure proper collection of revenue under the Stamp Act on all income derived from a rental business under hiring agreements, and rather than denoting the duty paid on the instrument, the duty is “denoted on the statement” (see s35B(2) of the Stamp Act);
(d)The decision of Hoggett v O’Rourke relied upon by the Debtor, has no application to the facts of this matter. In that case the Court was considering the effect of an unstamped share sale agreement between entities. The exemptions and effect of registration of a person in a “rental business”, upon which this matter turns did not apply in that case.
I therefore conclude that s4A of the Stamp Act 1894 (Qld) does not apply to the contentious exhibits as they are not instruments “chargeable with stamp duty” nor are they required to be “duty stamped”.
As a result they may be relied upon by the Bank in its applications under s49 of the Bankruptcy Act.
The grounds of review do not take issue with the other findings of Registrar Baldwin in the decision so far as it relates to the substantive application.
Nonetheless, as the Application for Review is a hearing de novo, I have considered the material before Registrar Baldwin and the additional material before me in respect of the s49 Application and I adopt her reasons for finding it is appropriate to substitute the Bank as the petitioning creditor in the place of Salmon & Son Pty Ltd in petitions BZ 277 of 2001 and BZ 278 of 2001.
I make the orders set out at the beginning of these reasons.
I certify that the preceding nineteen (19) paragraphs are a true copy of the reasons for judgment of Baumann FM
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