Master Painters Australia Limited v Master Painters, Decorators and Signwriters Association of Western Australia
[2013] FCA 507
FEDERAL COURT OF AUSTRALIA
Master Painters Australia Limited v Master Painters, Decorators and Signwriters Association of Western Australia [2013] FCA 507
Citation: Master Painters Australia Limited v Master Painters, Decorators and Signwriters Association of Western Australia [2013] FCA 507 Parties: MASTER PAINTERS AUSTRALIA LIMITED ACN 082 605 347 v MASTER PAINTERS, DECORATORS AND SIGNWRITERS ASSOCIATION OF WESTERN AUSTRALIA ABN 43 549 527 856 File number: QUD 111 of 2013 Judge: LOGAN J Date of judgment: 10 May 2013 Catchwords: CORPORATIONS LAW – application to set aside a statutory demand pursuant to s 459G of the Corporations Act 2001 (Cth) – the defendant, an unincorporated association, had undertaken work as the secretariat for the plaintiff – where parties have differing evidence as to the true commencement date of the defendant’s engagement as secretariat – where plaintiff claimed the defendant overcharged for its services – where plaintiff claimed that the defendant paid amounts from a bank account operated by the plaintiff without the plaintiff’s authority – whether there is a genuine dispute or an off-setting claim per s 459H of the Corporations Act 2001 (Cth)
Held: statutory demand set aside – genuine dispute and off-setting claim – consideration of whether an unincorporated association can be a “person” for the purposes of s 459E of the Corporations Act 2001 (Cth)
Legislation: Acts Interpretation Act 1901 (Cth) s 2C
Companies Act 1981 (Cth) s 364
Corporations Act 2001 (Cth) ss 9, 57A, 459E, 459G, 459H, 459J
Companies Act 1961 (Vic) s 222Cases cited: Bailey v Victorian Soccer Federation [1976] VR 13 cited
Collins Bros Stationers Pty Ltd v Zebra Graphics Pty Ltd (1985) 10 ACLR 267 cited
Dennis Hanger Pty Ltd v Kanambra Pty Ltd (1992) 10 ACLC 284 considered
Deputy Commissioner of Taxation v Players Entertainment Network Pty Ltd (1988) 13 ACLR 541 considered
Executive Council of Australia Jewry v Scully (1998) 79 FCR 537 cited
Hall v Job (1952) 86 CLR 639 considered
John v Rees [1970] Ch 348 considered
Leahy v Attorney-General (NSW) (1959) 101 CLR 611 considered
McJannett, Re; Ex parte Minister for Employment, Training and Industrial Relations (1995) 184 CLR 620 considered
Poulos v Adelaide University Union (1981) 29 SASR 78 cited
Re Independent Schools’ Staff Association (ACT); Ex parte Hubert (1986) 60 ALJR 458 considered
Re Morris Catering (Australia) Pty Ltd (1993) 11 ASCR 601 considered
Spacorp Australia Pty Ltd v Myer Stores Ltd [2001] VSCA 89 considered
Willis v Association of Universities of the British Commonwealth [1965] 1 QB 140 cited
Worthing Rugby Football Club Trustees v Inland Revenue Commissioners [1985] 1 WLR 409 consideredDate of hearing: 6 May 2013 Date of last submissions filed by the Defendant: 7 May 2013 Date of last submissions filed by the Plaintiff: 10 May 2013 Place: Brisbane (via video-link to Perth) Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 35 Counsel for the Plaintiff: Mr DC Kissane Solicitor for the Plaintiff: Hemming & Hart Lawyers Counsel for the Defendant: Mr A Searle Solicitor for the Defendant: Doyles Construction Lawyers
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
QUD 111 of 2013
BETWEEN: MASTER PAINTERS AUSTRALIA LIMITED ACN 082 605 347
PlaintiffAND: MASTER PAINTERS, DECORATORS AND SIGNWRITERS ASSOCIATION OF WESTERN AUSTRALIA ABN 43 549 527 856
Defendant
JUDGE:
LOGAN J
DATE OF ORDER:
10 MAY 2013
WHERE MADE:
BRISBANE (VIA VIDEO-LINK TO PERTH)
THE COURT ORDERS THAT:
1.The statutory demand dated 31 January 2013 is set aside.
2.Questions of costs are reserved to 2.15pm on 27 May 2013.
3.Any further affidavits or material to be relied upon by the plaintiff are to be filed and served by 15 May 2013.
4.Any further affidavits or material to be relied upon by the defendant, in reply, are to be filed and served by 23 May 2013.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
QUD 111 of 2013
BETWEEN: MASTER PAINTERS AUSTRALIA LIMITED ACN 082 605 347
PlaintiffAND: MASTER PAINTERS, DECORATORS AND SIGNWRITERS ASSOCIATION OF WESTERN AUSTRALIA ABN 43 549 527 856
Defendant
JUDGE:
LOGAN J
DATE:
10 MAY 2013
PLACE:
BRISBANE VIA VIDEO-LINK TO PERTH
REASONS FOR JUDGMENT
The Master Painters, Decorators and Signwriters Association of Western Australia (the West Australian Association), has served on the plaintiff, the Master Painters Australia Limited (MPA), what at least purports to be, a statutory demand under s 459E of the Corporations Act 2001 (Cth) (Corporations Act). It is necessary to add the qualifier, “at least purports to be”, for reasons which will emerge later in these reasons for judgment. On its face, the demand requires the MPA to pay to the West Australian Association, or secure or compound, the amount of the demand to its reasonable satisfaction, the sum of $16,666.68.
The notice is dated 31 January 2013 and signed by Doyles, being Doyle Construction Lawyers, in that firm’s capacity as solicitors for the creditor. The notice concerned is in form 509H, which is the form prescribed for the purposes of s 459E(2)(e) of the Corporations Act. MPA has applied, under s 459G of the Corporations Act, for an order setting aside that statutory demand.
Originally, there was a question raised as to whether the MPA had served the application for the setting aside of the statutory demand as required by the Corporations Act. That particular controversy dissipated in the course of the hearing. There is no doubt, on the evidence, that the application came to the attention of the West Australian Association and its solicitor within the 21 day period.
Also, originally, there was a controversy arising from whether the statutory demand had specified the correct address for service of notices upon the West Australian Association. The question was whether the specification of a West Australian address, as opposed to a New South Wales address, was required. That, too, proved, in the end, not controversial. In any event, having regard to s 459J(1)(a) and s 459J(2) of the Corporations Act, the circumstances of the case are not such as to persuade me that there has been any substantial injustice flowing from the specification of the address in Western Australia.
That leaves for resolution the more fundamental question as to whether or not there is a basis upon which the statutory demand should be set aside. The two bases upon which a statutory demand may be set aside that are at large, are those set out in s 459H(1), namely:
(1) … the Court is satisfied of either or both of the following:
(a)that there is a genuine dispute between the company and the respondent about the existence or amount of a debt to which the demand relates;
(b) that the company has an off-setting claim.
MPA submits that, on the evidence, I would be satisfied that, taken in combination, each of these grounds supplies a basis upon which to set aside the statutory demand.
Before considering that question further, it is necessary to give some indication as to why I have used the qualification “purported”.
The West Australian Association, at least according to some of the titles of documents on the court file, has an Australian Business Number. The effect of legislation governing Australian business numbers, is that one may be an “entity” for the purposes of that legislation, even though, under the general law, the body concerned is not a separate legal entity. At most, on the evidence, it appears that the West Australian Association is an unincorporated association. That is in contradistinction to MPA, which is a company limited by guarantee and, by virtue of the same, a legal entity in the eyes of the law.
Upon noticing the unincorporated status and the reference in s 459E(1) to “a person”, I raised with the parties whether or not the West Australian Association was competent, at least in the name Master Painters, Decorators and Signwriters Association of Western Australia, to serve a statutory demand at all?
I also raised as another question, one which sometimes arises in relation to bodies which have branches in the various states, as to whether the West Australian Association was nothing more than a subset of the MPA, having no legal personality separate from the MPA. Illustrations of that kind of conundrum can be found in McJannett, Re; Ex parte Minister for Employment, Training and Industrial Relations (1995) 184 CLR 620 and Hall v Job (1952) 86 CLR 639. The latter issue was not one explored, one way or the other, in submissions. Nor was it possible, on the evidence presented, for it to be answered. That then left a question in my mind as to whether the West Australian Association was competent to serve a statutory demand.
This question not being the subject of initial submission, I made provision by direction after hearing the case initially for supplementary submissions to be filed in writing by each of the parties. Each filed such submissions. I shall return later to the question of whether the West Australian Association is a person, and indeed, whether it is, in the end, necessary to resolve that question.
To return then to the question of whether there is a genuine dispute and offsetting claim, it is first necessary to set out some matters of principle.
There have been many statements made by courts exercising jurisdiction under the Corporations Act and, for that matter, its predecessors, as to what constitutes a genuine dispute and as to the task of the court in deciding whether or not to be satisfied that there is such a dispute, such that a statutory demand should be set aside. Two statements in particular commend themselves to me. In Re Morris Catering (Australia) Pty Ltd (1993) 11 ASCR 601 at 605, Thomas J observed:
The specified limits of the court’s examination are the ascertainment of whether there is a “genuine dispute” and whether there is a “genuine claim”.
It is often possible to discern the spurious, and to identify mere bluster or assertion. But beyond a perception of genuineness (or the lack of it) the court has no function. It is not helpful to perceive that one party is more likely than the other to succeed, or that the eventual state of the account between the parties is more likely to be one result than another.
The essential task is relatively simple - to identify the genuine level of a claim (not the likely result of it) and to identify the genuine level of an offsetting claim (not the likely result of it).
In Spacorp Australia Pty Ltd v Myer Stores Ltd [2001] VSCA 89, Brooking and Charles JJ at [3] and [4] stated:
3.The only question for us is whether the judge erred in determining that there was no genuine dispute. One can of course differ from the judge without deciding that the debt [dispute] did not exist. A great range of states of mind on what we call the ultimate question - the existence of the debt, may - accompany the view that there is a genuine dispute, ranging from a clear conviction that the debt does not exist to the opinion that a genuine dispute hurdle has only just been cleared.
4.We think, if we may say so, that, except in a case in which it is as plain as a pikestaff that there is no debt (where bluntness may be in the interests of both sides), judges should, in general at all event, in dealing, whether at first instance or an appeal, with the question of genuine dispute, be at pains to perform the admittedly delicate task of disposing of that question without expressing a view on what we have called the ultimate question. For otherwise, on an application which resembles if it is not in law an interlocutory one, things may be said which embarrass the judge before whom the ultimate question comes.
What is put on behalf of the MPA is that the Western Australian Association, overcharged it for services in the undertaking of a secretariat function for an additional period of six months. This equates, so it is said, to an overcharging of $12,500. The evidence discloses that the practice of the MPA is to rotate national secretariat functions amongst the various branches.
Next it is put on behalf of the MPA that the Western Australian Association paid an invoice number 00110029 without its authority by way of a cheque, cheque number 10, in the amount of $20,000. There is evidence from the MPA that that cheque was drawn on its funds which were provided, so it is said, to the Western Australian Association for a different purpose.
It is then also put on behalf of the MPA that the Western Australian Association paid five amounts from a bank account operated by the Western Australian Association on behalf of the MPA without the MPA’s authority. Those five amounts are these:
·$43,60.66 on 18 June 2012;
·$4,565.85 on 18 June 2012;
·$2,197.45 on 26 July 2012;
·$4,385.69 on 8 August 2012; and
·$5,447.32 on 28 August 2012.
It is further put for the MPA that the Western Australian Association failed to forward an amount of $3,206.22, being a balance held in a bank account operated by the Western Australian Association on behalf of the MPA during the time when the Western Australian Association acted in the role of the secretariat for the MPA.
Finally, it is put that when one looks in aggregate at the amount in dispute and the other matters that I have mentioned, the proper state of accounts is that the Western Australian Association is indebted to the MPA in the amount of $19,996.52. That is calculated by the MPA in this way: $49,163.19, being the total payments received and funds retained by the Western Australian Association, less $29,166.67, being what is said to be the correct amount that the Western Australian Association is entitled to charge the MPA for services provided by that association when acting in the role of the secretariat.
As to the period during when the Western Australian Association was to act as the secretariat for the MPA, there is a controversy, when one has regard to various minutes of meeting of the board of the MPA, as to when the secretariat period to be undertaken by the Western Australian Association was to commence. It is said on behalf of Western Australian Association that, upon closer examination of the minutes in evidence, there is, in fact, no controversy. I disagree. It is by no means plain to me that there was a settled, final adoption of particular minutes giving rise to a particular approval for a period during which the Western Australian Association would act as the secretariat.
It is put thought that on behalf of the Western Australian Association that all of the controversy about period of secretariat emerged, but late. It is also put that other grounds upon which the statutory demand is sought to be set aside also emerged late. As against this, it must be realised that the occasion for having to give closer scrutiny seems to have crystallised upon, firstly, an unfortunate dissension which has emerged as between the West Australian Association and the national body, the MPA, and, further, that, for a good deal of time, the precise authorised extent of which is controversial, the control of various books of account, was in the hands of the Western Australian association. It has only latterly been possible for that to be the subject of scrutiny by others.
When all is said and done, what emerges is an absence of satisfaction on my part, or perhaps put more correctly, a satisfaction on my part that there is a dispute and that it is a genuine one, having regard to the authorities which I have mentioned. It would not in any way be appropriate for me to make any further pronouncement than that. I was invited on behalf of the Western Australian Association to reach a conclusion based on the late emergence, so it was said, of controversy that there was something of a “smoke-and-mirrors” quality about the dispute. That is not the impression which I have of the evidence.
Further, the evidence does provide a basis for a view that there is an offsetting claim having the particular components mentioned. Once again, it is not in those circumstances appropriate, having regard to the authorities that I have mentioned, to do anything other than indicate satisfaction that there exists an offsetting claim of that nature. That in no way is indicative of the strength of that claim or, indeed, whether if pressed to litigation in a court of competent jurisdiction that the MPA would, or even more probably than not would, succeed. Those, truly, are matters for other days, in the event that those involved in the MPA and, derivatively, the Western Australian Association, take the view that members’ money is better expended in litigation of that nature, as opposed to other matters which some might think would better serve the interests of a trade which is valuable in our society. That, though, is most emphatically not the subject upon which to pronounce in any way today. Such matters are for the mature reflection and good sense and judgment of those involved in the MPA and its constituent bodies.
The result of that particular conclusion is that there is something of an academic quality about whether the West Australian Association should be regarded as a person for the purposes of s 459E. The question is one not without difficulty. It arises in this way. Section 459E uses the term “person” in relation to who may serve on a company a statutory demand. The term “person” is defined by s 9 of the Corporations Act in this way:
“person”, when used in Division 2 of Part 2D.2 (sections 200 to 200J), includes a superannuation fund.
Part 2D.2 of the Corporations Act is not material in this case. Thus, save for the inclusion provided for in the definition, which includes within the term “person” what is nothing more than an accumulation of money to which equitable and statutory obligations attach, namely, a superannuation fund, there is nothing on the face of the definition in the Corporations Act which would indicate that “person” is being used in a way other than that for which provision is made generally, and in the absence of statutory indication to the contrary in Commonwealth statute by the Acts Interpretation Act 1901 (Cth) (Acts Interpretation Act). It is there provided by s 2C that:
References to persons
(1)In any Act, expressions used to denote persons generally (such as “person”, “party”, “someone”, “anyone”, “no-one”, “one”, “another” and “whoever”), include a body politic or corporate as well as an individual.
(2)Express references in an Act to companies, corporations or bodies corporate do not imply that expressions in that Act, of the kind mentioned in subsection (1), do not include companies, corporations or bodies corporate.
The Western Australian Association is certainly not a body politic, even on the evidence to hand. A body politic would be an entity such as the Commonwealth of Australia or a State. The Western Australian Association is not an individual, though it, as an unincorporated association, could be regarded as a collection of individuals. It is most certainly not a company.
The Corporations Act, for its own purposes, uses three terms: company, body corporate and corporation. Of these, s 57A provides that:
(1)Subject to this section, in this Act, corporation includes:
(a) a company; and
(b)any body corporate (whether incorporated in this jurisdiction or elsewhere); and
(c)an unincorporated body under the law of its place of origin, may sue or be sued, or may hold property in the name of its secretary or of an office holder of the body duly appointed for that purpose.
That particular definition does embrace a certain kind of unincorporated body, but only for limited purposes, and then only for the purposes of the Corporations Act. Notably, it is not that term as defined which is taken up in the definition of “person” for the purposes of the Act. Rather, it appears that, subject to the exception in the definition of “person” noted, the general definition found in s 2C of the Acts Interpretation Act is applicable.
That being the case, the question then is whether there is some other basis upon which one might regard the West Australian Association as a “person”? The question is not one, as I see it, which goes merely to whether there has been a defective signing of the statutory demand; rather, it is more fundamental, whether there can be an application in the name of the West Australian Association and a service of a statutory demand in that name at all.
As to the signing aspect, there is a difference of authority in relation to whether that kind of defect can be excused under section 459J and, indeed, whether there is any defect at all. In this Court, Heerey J in Dennis Hanger Pty Ltd v Kanambra Pty Ltd (1992) 10 ACLC 284, adopted with approval an observation, admittedly obiter, which Gobbo J had made in Deputy Commissioner of Taxation v Players Entertainment Network Pty Ltd (1988) 13 ACLR 541 at 543-544. There, Gobbo J had remarked of contrary authority, namely, Collins Bros Stationers Pty Ltd v Zebra Graphics Pty Ltd (1985) 10 ACLR 267:
With respect I do not agree with the view that, where the notice of demand is signed by a solicitor, that necessarily then calls for express evidence of authority of the solicitor to sign the notice on behalf of the creditor. It would seem to me that the document, where it is signed by a person describing himself as the solicitor of the creditor, carries with it an assertion of agency. It would not seem necessary to have explicit evidence of authority which is, as it were, claimed and prima facie made out on the face of the document.
Here, the notice is signed by a solicitor. Were it only a matter of adequate signing, I would accept that the notice had been signed on behalf of a creditor.
The difficulty is that the statute uses the term “person”. In that regard it differs, although perhaps not to any particular end, from “creditor”. The equivalent provision in the Companies Act 1961 (Vic), s 222(2)(a) used the term “creditor”; so, too, did s 364(2)(a) of the Companies Act 1981 (Cth).
In Assaf F, Statutory Demands and Winding Up in Insolvency (LexisNexis Butterworths, 2012), p 37 at para 2.9, the learned author observes:
It is unclear why the legislature chose to replace the specific expression “creditor”, used under the previous statutory regime, with the general term “person”.
I agree. As a matter of construction, one might apprehend that the “person” referred to in s 459E will be a creditor. That does not resolve the question as to whether the West Australian Association is a “person”.
In Leahy v Attorney-General (NSW) (1959) 101 CLR 611 at 619, Viscount Simonds made reference to:
... the artificial and anomalous conception of an unincorporated society which, though it is not a separate entity in law, is yet for many purposes regarded as a continuing entity and, however inaccurately, as something other than an aggregate of its members.
Later in time, but to no different effect, is a statement by Megarry J in John v Rees [1970] Ch 345 at 398:
A ‘party’ or a ‘club,’ if unincorporated, is not an entity separate from its members; and action against the collective unit takes direct effect against the individuals comprising that unit.
Yet later, in Worthing Rugby Football Club Trustees v Inland Revenue Commissioners [1985] 1 WLR 409 at 413, Peter Gibson J opined that there was no doubt that:
[A]part from statute, an unincorporated association such as a club is not a legal entity however real it may seem to the club members and to the man in the street.
That absence of separate legal personality can lead to very particular difficulties in the absence of ameliorating provision in statute or, as the case may be, rules of court. So far as an ability on the part of an unincorporated association to sue or be sued, though not explored in submissions, it is not impossible to find authority which, even in the face of the pronouncements which I have mentioned, might support a conclusion that, exceptionally, the Western Australian Association should be regarded as having a separate legal status. I refer, in this regard, to Willis v Association of Universities of the British Commonwealth [1965] 1 QB 140 at 142; Bailey v Victorian Soccer Federation [1976] VR 13; Poulos v Adelaide University Union (1981) 29 SASR 78; and, in this Court, to Re Independent Schools’ Staff Association (ACT); Ex parte Hubert (1986) 60 ALJR 458; and Executive Council of Australian Jewry v Scully (1998) 79 FCR 537.
Of these authorities, the one closest to the apparent circumstances of the Western Australian Association is Re Independent Schools’ Staff Association(ACT);Ex parte Hubert (1986) 60 ALJR 458. In that case, the High Court decided that an unincorporated school board could be a party to an industrial dispute.
In the face of the statutory definition of “person” as enlarged by the Acts Interpretation Act, my inclination is to doubt that the Western Australian Association is a “person”. As I have said, though, it is not necessary, in light of my conclusion that there is a genuine dispute and an off-setting claim, to reach a concluded view on that subject. Further, there are authorities, as mentioned by me, which at least admit of a contrary argument. That also underscores why it is not desirable to make any particular pronouncement in the circumstances of this case.
For the reasons which I have given, the statutory demand will be set aside. I will hear the parties as to costs.
I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan. Associate:
Dated: 27 May 2013
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