Radnor Enterprises Pty Ltd v Nicholls (as trustee of the Property of Boniface, a Bankrupt and Trustee of the Property of Ogston, a Bankrupt)
[2017] FCCA 2313
•22 September 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| RADNOR ENTERPRISES PTY LTD & ORS v NICHOLLS (AS TRUSTEE OF THE PROPERTY OF BONIFACE, A BANKRUPT AND TRUSTEE OF THE PROPERTY OF OGSTON, A BANKRUPT) | [2017] FCCA 2313 |
| Catchwords: BANKRUPTCY – Application for separate determination of question whether power to extend time conferred by s.33(1)(c) of the Bankruptcy Act 1966 (Cth) (Act) is capable of extending the time limited by s.139ZS(1A) of the Act for the making of an application under s.139ZS(1) of the Act – question answered in the affirmative. |
| Legislation: Bankruptcy Act 1966, s. 33(1)(c), 120, 121, 128C, 139ZQ, 139ZQ(1), 139ZQ(8), 139ZR, 139ZS(1), 139ZS(1A), 139ZS(2), 139ZT Federal Circuit Court Rules 2001 (Cth), r. 17.02 |
| Cases cited: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27 Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia (1932) 47 CLR 1 Australian Education Union v Department of Education and Children's Services [2012] HCA 3 Catlow v Accident Compensation Commission [1989] HCA 43; (1989) 167 CLR 543 CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; (1997) 187 CLR 384 Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 Re McLernon; Ex parte SWF Hoists and Industrial Equipment Pty Ltd v Prebble (1995) 58 FCR 391 Rose v Hvric (1963) 108 CLR 353 |
| First Applicant: | RADNOR ENTERPRISES PTY LTD ACN 010 185 814 |
| Second Applicant: | MARK ANDREW BONIFACE |
| Third Applicant: | MARGARET FIONA OGSTON |
| Respondent: | ALAN RICHARD NICHOLLS, AS TRUSTEE OF THE PROPERTY OF MARK ANDREW BONIFACE, A BANKRUPT AND TRUSTEE OF THE PROPERTY OF MARGARET FIONA OGSTON, A BANKRUPT |
| File Number: | SYG 210 of 2014 |
| Judgment of: | Judge Manousaridis |
| Hearing date: | 28 August 2017 |
| Date of Last Submission: | 28 August 2017 |
| Delivered at: | Sydney |
| Delivered on: | 22 September 2017 |
REPRESENTATION
| No appearance by or on behalf of the first applicant. Counsel for the Second and Third Applicants: | Mr D Allen |
| Solicitors for the Second and Third Applicants: | Proctor Phair Lawyers |
| Counsel for the Respondent: | Mr S Golledge |
| Solicitors for the Respondent: | McLean & Associates Solicitors |
ORDERS
Pursuant to r.17.02 of the Federal Circuit Court Rules 2001 (Cth) the Court determine as a separate question the following:
Is the power to extend time conferred by s.33(1)(c) of the Bankruptcy Act 1966 (Cth) (Act) capable of extending the time limited by s.139ZS(1A) of the Act for the making of an application under s.139ZS(1) of the Act?
The Court determines that question as follows:
Yes.
The costs of the determination of the separate question are reserved.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 210 of 2014
| RADNOR ENTERPRISES PTY LTD ACN 010 185 814 |
First Applicant
| MARK ANDREW BONIFACE |
Second Applicant
| MARGARET FIONA OGSTON |
Third Applicant
And
| ALAN RICHARD NICHOLLS, AS TRUSTEE OF THE PROPERTY OF MARK ANDREW BONIFACE, A BANKRUPT AND TRUSTEE OF THE PROPERTY OF MARGARET FIONA OGSTON, A BANKRUPT |
Respondent
REASONS FOR JUDGMENT
Introduction
On 24 November 2016 a delegate of the Official Receiver, on the application of the trustee in bankruptcy (Trustee) of the estates of Mr Boniface and Ms Ogston (debtors), issued a notice (Notice) under s.139ZQ of the Bankruptcy Act 1966 (Cth) (Act). The Notice requires the trustee of a superannuation fund of which the debtors are beneficiaries to pay to the Trustee amounts paid to the superannuation fund under transactions the Notice asserts are void under s.120, s.121, and s.128C of the Act.
Subsection 139ZS(1) of the Act provides that a person to whom a notice has been given under s.139ZQ (s.139ZQ Notice) may apply to this Court or to the Federal Court of Australia for an order setting aside the notice. Subsection 139ZS(1A) of the Act provides that an application under s.139ZS(1) “must be made” by the person who has been given the notice not later than 60 days after the person has been given it or by any interested person not later than 60 days after the interested person becomes aware of the notice having been given.
The debtors filed an application with this Court to set aside the Notice. They filed their application, however, more than 60 days after they became aware the Notice had been given to the trustee of their superannuation fund. The debtors contend that this failure is not fatal to their ability to invoke the jurisdiction of the Court to consider the validity of the Notice. The debtors submit the Court has power under s.33(1)(c) of the Act to extend the 60 day period prescribed by s.139ZS(1A) of the Act, even though that period has expired. The Trustee, on the other hand, contends s.33(1)(c) of the Act does not apply to s.139ZS(1A), and that the requirement imposed by s.139ZS(1A) of the Act that an application to set aside a s.139ZQ Notice be made within 60 days of the notice being given is an essential precondition to the Court’s jurisdiction to exercise the power under s.139ZS(1) to set aside a s.139ZQ Notice.
In these circumstances the debtors and Trustee jointly applied to the Court that there be set down for hearing the determination of the following question:
Does the Application filed by the Applicants on 20 April 2017 fail for being filed out of the time stipulated by section 139ZS(1A) of the Bankruptcy Act?
I agreed to that application and, on 28 August 2017, I heard submissions. In these reasons for judgment I consider the determination I should give to the question that was debated before me. The answer turns entirely on the answer to a question of statutory construction; and that is whether, on its proper construction, s.33(1)(c) of the Act applies to s.139ZS(1A) of the Act.
Approach
As with all questions of statutory construction, analysis must begin with the statutory text, in this case s.33(1)(c) and s.139ZS(1A) of the Act, viewed in the statutory (and, on the submission of counsel, wider) context in which the text appears. I will therefore proceed as follows.
a)First, I will identify what seem to me to be the more relevant principles of statutory construction I should bear in mind when determining the question of construction that is before me.
b)Second, I will set out the relevant provisions of the Act.
c)Third, I will consider whether, having regard only to the text of s.33(1)(c) and s.139ZS(1A) of the Act, s.33(1)(c) applies to s.139ZS(1A).
d)Finally, I will consider the submissions of the parties.
Principles
The basic rule of statutory construction was restated by the High Court in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue:[1]
This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself. Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy.
[1] [2009] HCA 41 at [47]; (2009) 239 CLR 27 at 46-49 (Hayne, Heydon, Crennan and Kiefel JJ), cases referred to omitted.
Also relevant is the following passage from the judgment of the plurality in Project Blue Sky v Australian Broadcasting Authority:[2]
The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined “by reference to the language of the instrument viewed as a whole”. In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that “the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed”. Thus, the process of construction must always begin by examining the context of the provision that is being construed.
[2] [1998] HCA 28 at [69]; (1998) 194 CLR 355 at 381 (McHugh, Gummow, Kirby and Hayne JJ), cases referred to omitted.
The notion of “general purpose and policy of a provision” has been explained by the High Court in Australian Education Union v Department of Education and Children's Services.[3] Speaking of the Education Act 1972 (SA), the plurality said:[4]
In construing a statute it is not for a court to construct its own idea of a desirable policy, impute it to the legislature, and then characterise it as a statutory purpose. The statutory purpose in this case was to be derived from aconsideration of the scheme of the Act as a whole, the respective functions of Pts II and III of the Act, and the regulatory requirements of Pt IV of the Act.
[3] [2012] HCA 3
[4] [2012] HCA 3 at [28]
The meaning of the notion of “context” is also important:[5]
[T]he modern approach to statutory interpretation . . . uses ‘context’ in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means such as those just mentioned, one may discern the statute was intended to remedy.
[5] CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; (1997) 187 CLR 384 at page 408
One consequence of beginning the task of statutory construction by considering the text is that, if that consideration yields a meaning that is not doubtful, “there is no occasion to look to the extrinsic material”.[6] That means “it is erroneous to look at extrinsic materials before exhausting the application of the ordinary rules of statutory construction”.[7]
[6] Catlow v Accident Compensation Commission [1989] HCA 43 at [6]; (1989) 167 CLR 543 at 550 (Brennan and Gaudron JJ)
[7] Saeed v Minister for Immigration and Citizenship [2010] HCA 23; (2010) 241 CLR 252 at 265 ([33]) (French CJ, Gummow, Hayne, Crennan and Kiefel JJ) referring to Catlow v Accident Compensation Commission [1989] HCA 43 at [6]; (1989) 167 CLR 543 at 550 (Brennan and Gaudron JJ). Heydon J noted (at 277 ([74])) that “as is very common, reading the Explanatory Memorandum and the Second Reading Speech is much less helpful than reading the legislation itself.”
These principles may be regarded as among the foundational rules of statutory interpretation in Australia. They describe the task a court is required to undertake when there is a dispute about the meaning of a particular statutory provision. The court’s task is to ascertain the intention of Parliament in enacting the provision in question; that intention is to be ascertained from the meaning of the words that comprise the provision; and the meaning of the words of the provision is to be ascertained by giving to them their ordinary meaning or meanings, it always being in the forefront of consideration, however, that the meaning that a word or group of words bear will usually depend on the context in which the word or words appear, and on the purpose or purposes of the statute (also to be ascertained, at least in substantial part, from the meaning of the words used in the statute) of which the provision in question forms part; and that, where the words are capable of yielding a range of meanings, the court is to give the words the meaning that best promotes the purpose or purposes of the provision viewed in the context of the Act as a whole.
Apart from these foundational principles of statutory interpretation, there exist what are often described as “rules” of statutory construction.[8] These, however, are not so much rules as presumptions capable of carrying more or less weight depending on the circumstances in which they are applied, and always subject to their being outweighed by competing inferences that are available to be drawn from the statutory text in question, or the context in which the text appears, or the purpose of the statute. The High Court has counselled that in “the area of statutory interpretation and construction, courts must be wary of propounding rigid rules”.[9] There are, however, two such “rules” that may be relevant in the case before me.
[8] These are identified and discussed in D C Pearce & R S Geddes Statutory Interpretation in Australia Eighth ed. 2014 LexisNexis Butterworths
[9] Collector of Customs v Agfa Gevaert Ltd [1996] HCA 36; (1996) 186 CLR 389
First, where general words are used, they will be given their plain and ordinary meaning unless the contrary is shown.[10] This principle finds expression in provisions that confer broad discretionary powers on courts or administrative bodies. For example, it is “quite inappropriate to read provisions conferring jurisdiction or granting powers to a court by making implications or imposing limitations which are not found in the express words”.[11] And in R v Australian Broadcasting Tribunal; Ex Parte 2HD Pty Ltd the High Court said:[12]
The general rule is that a discretion expressed without any qualification is unconfined except so far as it is affected by limitations to be derived from the context and scope and purpose of the statute.
[10] See, for example, Cody v J H Nelson Pty Ltd (1947) 74 CLR 629 at page 647 (Dixon J):” But standing as a caution against a too ready use of these counsels there is yet another Latin canon, generalia verba sunt generaliter intelligenda, which is as much as to say words although general should be understood in their primary and natural signification unless there are sufficient indications of some other meaning.
[11] Owners of “Shin Kobe Maru” v Empire Shipping Co. Inc (1994) 181 CLR 404 at page 421
[12] (1979) 144 CLR 45
The second rule is that provided for by s.11B(1) of the Acts Interpretation Act 1901 (Cth) (Interpretation Act), which provides that “[e]very Act amending another Act must be construed with the other Act as part of the other Act”. Under s.2(2) of the Interpretation Act, however, s11B(1) is subject to a contrary intention.
The statutory provisions
It is appropriate that I begin with s.139ZQ(1) of the Act:
If a person has received any money or property as a result of a transaction that is void against the trustee of a bankrupt under Division 3, the Official Receiver:
(a) if the Official Trustee is the trustee--on the initiative of the Official Receiver; or
(b) if a registered trustee is the trustee--on application by the trustee;
may require the person, by written notice given to the person, to pay to the trustee an amount equal to whichever of the following is applicable:
(c) if:
(i) the transaction is void against the trustee under section 128B or 128C; and
(ii) the transaction is by way of a contribution to an eligible superannuation plan for the benefit of a person (the beneficiary) who may or may not be the bankrupt; and
(iii) the beneficiary is a member of the eligible superannuation plan;
whichever is the lesser of the following:
(iv) the money or the value of the property received;
(v) the beneficiary’s withdrawal benefit in relation to the eligible superannuation plan;
(d) in any other case--the money or the value of the property received.
The issuing of a s.139ZQ Notice has a number of legal consequences. One is that the property that is the subject of the notice becomes charged with the liability of the person to make payments to the trustee as required by the notice.[13] Another is that, under s.139ZQ(8), the amount payable under s.139ZQ is recoverable by the trustee as a debt by action against the person in a court of competent jurisdiction. Yet another consequence is that the person to whom the s.139ZQ Notice is given will be guilty of a criminal offence if he or she refuses or fails to comply with the s.139ZQ Notice.[14] That is subject to the power of the Court to set aside the notice if an application is made for such order under s.139ZS(1) of the Act, which provides as follows:
If the Court, on application by a person to whom a notice has been given under section 139ZQ or by any other interested person, is satisfied that this Subdivision does not apply to the person on the basis of the alleged facts and circumstances set out in the notice, the Court may make an order setting aside the notice.
[13] Act, s.139ZR
[14] Act, s.139ZT
Subsection 139ZS(1A) provides:
The application must be made:
(a)not later than 60 days after the day the notice under section 139ZQ was given to the applicant; or
(b)if the applicant is another interested person—not later than 60 days after the day the applicant became aware that the notice has been given.
Subsection 139ZS(2) provides that if a 139ZQ Notice is set aside, the notice will be taken not to have been given.
Finally, there is s.33(1)(c) of the Act, which provides:
The Court may:
. . . .
extend before its expiration or, if this Act does not expressly provide to the contrary, after its expiration, any time limited by this Act, or any time fixed by the Court or the Registrar under this Act (other than the time fixed for compliance with the requirements of a bankruptcy notice), for doing an act or thing or abridge any such time.
Having set out the relevant provisions, I now consider whether, on the basis of the text of these provisions, s.33(1)(c) of the Act applies to s.139ZS(1A) of the Act. I begin with s.33(1)(c).
Answer suggested by the text
Subsection 33(1)(c) of the Act is directed to authorising the Court to do two things. One is to “extend . . . any time limited by this Act, or any time fixed by the Court or the Registrar under this Act . . . for doing an act or thing”. The other thing is to abridge any such time. The only part of s.33(1)(c) of the Act that is relevant to the case before me is that which permits the Court to “extend . . . any time limited by this Act . . . for doing an act or thing”. In these reasons, therefore, I will only construe this expression.
The first matter to consider is the meaning of the word “limited”. Although “limited” is not defined in the Act, its meaning is clear from the context of s.33(1)(c). It refers to the fixing of time by the Act for the doing of an act or thing.[15] More particularly, it refers to provisions of the Act that specify a time – that is to say, provisions that limit the time – for doing an act or thing. This meaning is consistent with the use of the word “limitation” that has appeared in statutes of limitation since the first general statute of limitations affecting personal actions was enacted in 1623.[16] That statute provided that the personal actions to which it applied “shall be commenced and sued within the time and limitation hereafter expressed and not after” the particular times specified in the statute.[17]
[15] Jacob’s Law Dictionary, the first American edition from the second London edition, 1811, Vol IV, pg. 163, defined “limitation” as a “certain time, assigned by statute, within which an action must be brought”.
[16] 21 Jac I c 16 (1623)
[17] Quoted in J. George, N. Darby and Frederick Albert Bosanquet A Practical Treatise on the Statutes of Limitations in England and Ireland. London, 1867 at page 3.
The second matter to consider is that which s.33(1)(c) of the Act authorises the Court to do in relation to “any time limited by this Act . . . for doing an act or thing”; and that is to “extend” such time. That presupposes a provision or provisions in the Act that establishes or establish a time or times by which a particular act or thing is to be done.[18] Subsection 33(1)(c) of the Act authorises the Court to alter the time provided for by the Act for the doing of an act or thing by extending (or abridging) the time for the doing of the act or thing.
[18] I consciously do not use the word “must” because, as I will shortly discuss, counsel for the trustee relies on the presence of this word in s.139ZS(1A) as a reason for submitting s.33(1)(c) does not apply to s.139ZS(1A).
The third matter to note is the time at which the Court may extend the time limited by the Act for the doing of an act or thing. Subsection 33(1)(c) provides the Court may extend such time before the time expires. That power is not subject to any qualification. The subsection, however, also authorises the Court to extend the time limited by the Act for the doing of an act or thing after the time expires. But this power is subject to a qualification; it is available only “if this Act does not expressly provide to the contrary”.
The fourth, and final matter to note is that s.33(1)(c) of the Act excludes from its operation the “time fixed for compliance with the requirements of a bankruptcy notice”.
Having considered s.33(1)(c) of the Act, the next question is whether it applies to s.139ZS(1A). The answer to that question, at least in the first instance, depends on whether s.139ZS(1A) may properly be characterised as a provision of the Act that limits the time for the doing of an act or thing; and the answer is “yes”. The 60 day period referred to in s.139ZS(1A) cannot but be characterised as a “time limited by this Act . . . for doing an act or thing”, namely, the making of an application under s.139ZS(1) of the Act to set aside a s.139ZQ Notice.
If the 60 day period referred to in s.139ZS(1A) is a “time limited by this Act . . . for doing an act or thing”, it must at the very least follow that the Court may before the 60 day period expires extend the period. Whether or not the Court may also extend the 60 day period after it has expired depends on whether “this Act does not expressly provide to the contrary”. In other words, it depends on whether the Act “expressly provides” otherwise. There is nothing in s.139ZS(1A), or in any other provision, of the Act which in terms provides that the time limited by s.139ZS(1A) may not be extended after the time limited by that subsection has expired. And it is not apparent that s.33(1)(c) is inconsistent with s.139ZS(1A) of the Act. On the contrary, s.33(1)(c) and s.139ZS(1A) appear to complement each other. Subsection 139ZS(1A) of the Act is a provision that limits the time for doing an act or thing, being the very type of provision to which s.33(1)(c) of the Act is intended to apply.
Thus, considered alone, the text appears to provide a clear answer to the question whether the Court may under s.33(1)(c) of the Act extend the time limited by s.139ZS(1A) of the Act to make an application to set aside a notice issued under s.139ZQ of the Act: the Court does have power. Counsel for the debtors so submits.[19] Counsel for the Trustee, on the other hand, submits the Court has no such power even though counsel accepts the Act does not by its terms provide the Court cannot extend the time limited by s.139ZS(1A) of the Act.
[19] Applicants’ Submissions for Separate Question, [9]
Trustee’s submissions
The Trustee’s contention that s.33(1)(c) of the Act does not apply to s.139ZS(1A) of the Act rests on two submissions. The first is that the use of the word “must” in s.139ZS(1A) of the Act imports a mandatory obligation that defines the extent of the Court’s jurisdiction.[20] The second is that the mandatory obligation of s.139ZS(1A) of the Act manifests a contrary intention for the purposes of s.33(1)(c) of the Act:[21]
The expression “must” directly contradicts the availability of a power to extend time so as to allow for the filing of an application later than the time by which, according to section 139ZS, one “must” be filed. To conclude otherwise . . . would nullify the express mandatory condition as to timing imposed by section 139ZS(1A) and would grant the Court a jurisdiction which the specific provision in section 139ZS denies.
[20] Outline Submissions on behalf of the Respondent in respect of the Separate Question, [3]
[21] Outline Submissions on behalf of the Respondent in respect of the Separate Question, [8]
Counsel for the Trustee further submits that that which is plain from the text of s.139ZS(1A) is supported by a broader examination of the Act. Counsel refers to s.139ZS being part of Division 4B of the Act which, in turn, forms part of an overall scheme to facilitate the recovery of property and income into the bankrupt estate by administrative steps rather than by legal action. To construe s.33(1)(c) as applying to s.139ZS(1A) of the Act “would introduce a substantial degree of uncertainty surrounding the operation of these provisions”.[22] Counsel further submits s.139ZT “is difficult to reconcile with any residual power to retrospectively reinstate a Notice that has expired so as to expunge a criminal offence which has already been committed”.[23]
[22] Outline Submissions on behalf of the Respondent in respect of the Separate Question, [9]
[23] Outline Submissions on behalf of the Respondent in respect of the Separate Question, [9]
Counsel for the Trustee referred me to a number of cases, and it is appropriate that I here refer to them. First, counsel took me to the following passage from the judgment of Williams J in Posner v Collector for Inter-State Destitute Persons (Victoria):[24]
“Must” is a word of absolute obligation and occurs in a section a section which is concerned with a fundamental principle of justice. It is not merely directory. Compliance is essential to an effective hearing of the summons.
[24] (1946) 74 CLR 461 at page 490
Next, counsel referred to the judgment of Millhouse J in Kosovich v Mancini and, in particular, to the following passages from his Honour’s judgment:[25]
It seems to me that “must be determined” imposes an obligation which cannot be regarded as directory only. . . . The appropriate meaning of “must” in the Shorter Oxford English Dictionary is: “expressing necessity: Am (is are) obliged or required to; have (has) to; it is necessary that (I, you, he, it, etc) should”. “In ordinary usage, ‘may’ is permissive and ‘must’ is imperative” . . . .
If the wish of Parliament had been to make the subsection directory it could easily have done so by using the word “may” instead of the word “must”.
[25] (1982) 31 SASR 272 at pages 275 and 276
Third, counsel relied on the decisions of the High Court in David Grant & Co Pty Ltd v Westpac Banking Corporation.[26] The issue in that case was whether the general power to extend time conferred by s.1322(4)(d) of the Corporations Law (Vic) was displaced by the time prescribed by s.459G for applying to set aside a statutory demand issued under s.459E of the Corporations Law (Vic). In a judgment with which all other members of the High Court agreed, Gummow J concluded the general provision had been displaced by s.459G. His Honour’s reasoning may be summarised as follows:
[26] (1995) 184 CLR 265
a)The question of construction arose from the interrelationship between two provisions in circumstances where the enactment of s.1322 preceded the enactment of s.459G, and the earlier section is general whereas the later section is specific in its operation.[27]
b)Although as a general precept it is inappropriate to read down provisions which confer jurisdiction by implying limitations not found in the express words of the legislative provision, s.459G applied to a particular class of application to which there was attached a specific limitation as to the time within which an application may be made.[28]
c)There is a rule of construction to the effect that where “the Legislature explicitly gives a power by a particular provision which prescribes the mode in which it shall be exercised and the conditions and restrictions which must be observed, it excludes the operation of general expressions in the same instrument which might otherwise have been relied upon for the same power”.[29]
d)The “temporal requirements” prescribed by s.459G “operate to define the jurisdiction of the court in respect of an application to set aside a statutory demand”.[30] Here:[31]
the phrase “[a]n application may only be made within 21 days” should be read as a whole. The force of the term “may only” is to define the jurisdiction of the court by imposing a requirement as to time as an essential condition of the new right conferred by s 459G. An integer or element of the right created by s 459G is its exercise by application made within the time specified. To adapt what was said by Isaacs J in The Crown v McNeil . . . it is a condition of the gift in sub-s (1) of s 459G that sub-s (2) be observed and, unless this is so, the gift can never take effect. The same is true of sub-s (3).
e)It is significant the scheme created by Part 5.4 “itself contains specific provisions conferring upon the court an express power to extend time”.[32]
f)The presumption of insolvency provided for by s.459C(2) of the Corporations Law (Vic) would arise if an application to set aside a statutory demand were not made within the time specified by s.459G even if it were possible under s.1322(4)(d) to apply to set aside the statutory demand outside the period prescribed by s.459G.[33]
[27] (1995) 184 CLR 265 at page 275.8
[28] (1995) 184 CLR 265 at page 275-276.1
[29] (1995) 184 CLR 265 at page 276.3 quoting Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia (1932) 47 CLR 1 at page 7
[30] (1995) 184 CLR 265 at page 276.6
[31] (1995) 184 CLR 265 at page 277.2
[32] (1995) 184 CLR 265 at page 277.6
[33] (1995) 184 CLR 265 at page 278.6
Fourth, counsel referred to Rose v Hvric[34] as authority for the proposition that a later provision can express an intention that an earlier provision does not apply without expressly referring to the earlier provision. Rose concerned s.74(1) of the Justices Act 1958 (Vic) which provided that, “[e]xcept where otherwise expressly enacted”, where a court of petty sessions had authority to impose imprisonment for an offence punishable on summary conviction but had no authority to impose a penalty for the offence, the court of petty session could impose a penalty instead of imprisonment if the court thought the justice of the case would be better met by imposing a penalty. The question was whether s.154(1) of the Licensing Act 1958 (Vic) “otherwise expressly enacted” by providing that, on a first offence against that Act for selling liquor without a licence, a court of petty sessions could either imprison or impose a penalty but on a second or further offence against that Act for selling liquor without a licence the court of petty session was to imprison. The High Court considered what cases have said about the construction of the expression “otherwise expressly enacted” and concluded:[35]
The general provision of s.74(1) of the Justices Act is accordingly prefaced by words which have a saving effect as regards earlier enactments and serve as a reminder in relation to later, meaning in regard to both that the general provision which follows is not to be denied any of its operation save by something actually inconsistent with it in the operation of another enactment.
[34] (1963) 108 CLR 353
[35] (1963) 108 CLR 353 at page 359
Fifth, counsel referred to the judgment of McGregor J in Re John Draper Ex parte: Brosalco Pty Limited.[36] One of the issues in that case was whether s.33(1)(c) of the Act was available to permit the Court to make an order under s.52(5) of the Act to extend to up to 24 months the twelve month period allowed by s.52(4) of the Act before a creditor’s petition will lapse. His Honour found s.33(1)(c) was available. Counsel referred me to Draper because McGregor J adopted the view expressed by Lord Blackburn in The Metropolitan District Railway Company v Sharpe H.L. that “because the words used in this Act are “expressly varied” it is essentially necessary that there should be express words saying, This particular section or provision shall not apply”.[37]
[36] [1983] FCA 128
[37] 50 LJNS 14 at page 21. In Re Young; Ex parte Smith (1985) 5 FCR 204 the Full Federal Court overruled Re Draper.
Sixth, counsel referred to Public Service Association of New South Wales v Industrial Commission of New South Wales which concerned the construction of the expression ‘[u]nless otherwise expressly provided”.[38] Street CJ referred to Rose v Hvric as holding that whether or not a provision “otherwise expressly provided” is to be determined by asking whether there “[i]s an implied contradiction such that “the two cannot live together””.[39]
[38] (1985) 1 NSWLR 627
[39] (1985) 1 NSWLR 627 at page 635A
Seventh, counsel referred to two conflicting cases concerning the time limit provided under s.178 of the Act. The first is the judgment of Jagot J in Kerr (Trustee), in the matter of Cross (Bankrupt) v Bechara.[40] That case concerned an application under s.178(1) of the Act that was made more than the 60 days within which s.178(2) of the Act provided for such applications to be made. Jagot J rejected the submission that the 60 day period prescribed by s.178(2) expressly provided to the contrary of s.33. Her Honour said:[41]
Section 178(2) does not provide to the contrary of s 33(1). Section 178(2) merely provides a time limit of 60 days which is then amenable to extension under s 33(1). The submissions for Mr Kerr did not point to any authority to support the proposition that s 178(2) provides to the contrary for the purposes of s 33(1) and I am unable to see how the provisions can be construed in this manner.
[40] [2015] FCA 284
[41] [2015] FCA 284 at [44]
The second case is the judgment of Katzmann J in Samootin v Official Trustee in Bankruptcy.[42] In that case, her considered whether her Honour should determine as a separate question whether the bankrupt had commenced proceedings under s.178(1) of the Act within 60 days after the day on which she became aware of the Trustee in bankruptcy’s act, omission, or decision of which she complained. In the course of considering that question, Katzmann J said:[43]
If the Official Trustee is right, then the application will have to be dismissed, for it will have been made outside the time prescribed by the Act. No application has been made for an extension of time. In any event, there is no power to extend time. Ms Samootin did not argue to the contrary. Section 33(1)(c) of the Bankruptcy Act confers a general power on the Court to extend any time limited by the Act, even after its expiration, in the absence of any provision to the contrary. But the general power must give way to the specific restriction in s 178(2), which was inserted into the Bankruptcy Act on 5 May 2003 – after the commencement of s 33. See David Grant & Co Pty Ltd (rec apptd) v Westpac Banking Corporation [1995] HCA 43; (1995) 184 CLR 265. (“David Grant v Westpac”), which deals with analogous provisions of the Corporation Law. For the reason given in that case, the requirement in s 178(2) for the application to be made within 60 days of the day the person affected by the trustee’s act, omission or decision becomes aware of it, should not be treated as qualified by the operation of s 33(1)(c).
[42] [2012] FCA 64
[43] [2012] FCA 64 at [18]
Finally, counsel refers to the judgment of Burley J in Sampson (Trustee) v Taboada.[44] That case concerned an application to set aside a default judgment that was entered on an action based on s.139ZQ(8) which, as I have already noted, provides that the Trustee in bankruptcy may apply under that subsection to recover as a debt an amount payable under s.139ZQ of the Act. Counsel for the persons bound by the notice accepted “that the provisions of section 139ZS” of the Act, “and in particular” s.139ZS(1A), “precluded the respondents from mounting a challenge to the Notice under” the Act.[45] In relation to counsel’s acceptance, Burley J said:[46]
Subsection 139ZS(1A) was introduced by amendment made to the Bankruptcy Act which was effective on 14 October 2015 (introduced by the Civil Law and Justice (Omnibus Amendments) Act 2015 (Cth)). The respondents accept, and it was not in dispute, that the mandatory language of that subsection is such that no application can be brought later than 60 days after the day the Notice under section 139ZQ was given. Nor is it in dispute that neither of the respondents sought to set aside the Notice.
[44] [2017] FCA 79
[45] [2017] FCA 79, [30]
[46] [2017] FCA 79, [42]
I now turn to the submissions counsel for the debtors makes. First, the use of the “must” to define a time limit is a word regularly and naturally used when imposing a time limit. There could be no time limit without the employment of mandatory language.[47] Second, the legislature can be taken to have had knowledge of s.33(1)(c) when it introduced s.139ZS(1A) of the Act. If the legislature, therefore, truly intended that s.139ZS(1A) not be subject to s.33(1)(c) it could have used express language to express that intention.[48] Third, that the time limitation has been inserted to facilitate the timely administration of bankruptcies is a matter relevant to discretion, not to denying the application of s.33(1)(c) of the Act.[49]
[47] Applicants’ Submissions for Separate Question (1 August 2017), [7]
[48] Applicants’ Submissions for Separate Question (1 August 2017), [12]
[49] Applicants’ Submissions for Separate Question (1 August 2017), [13]
Are s.33(1)(c) and s.139ZS(1A) incompatible?
The question that arises on the competing submissions is whether there is an “implied contradiction” between s.33(1)(c) and s.139ZS(1A) of the Act such that “the two cannot live together”. [50] The basis of the Trustee’s contention that the two provisions are incompatible is the mandatory terms in which s.139ZS(1A) is expressed.
[50] Public Service Association of New South Wales v Industrial Commission of New South Wales (1985) 1 NSWLR 627 at page 635A
That s.139ZS(1A) is expressed in mandatory terms does not imply any contradiction or incompatibility between that subsection and s.33(1)(c) of the Act. That can be seen from the language of the two provisions. Subsection 33(1)(c) applies to provisions of the Act that limit the time for doing an act or thing. Subsection 139ZS(1A) clearly is a provision that limits the time for the doing of an act or thing, namely, making an application under s.139ZS(1) of the Act. Subsection 33(1)(c) of the Act, therefore, applies to s.139ZS(1A) so as to empower the Court to extend the time limited by s.139ZS(1A) of the Act for making an application under s.139ZS(1) of the Act.
The absence of any incompatibility between s.33(1)(c) and s.139ZS(1A) of the Act can be explicated in another way. Subsection 139ZS(1A) has as its object the limiting of a particular time for the doing of a particular act, namely the making of an application under s.139ZS(1) of the Act. Subsection s.33(1)(c) of the Act, on the other hand, has as its object provisions, of which s.139ZS(1A) is an example, that limit times for the doing of an Act or thing.
Not only is the mandatory terms in which s.139ZS(1A) is expressed not incompatible with s.33(1)(c) of the Act; it is the mandatory language of s.139ZS(1A) that in fact engages s.33(1)(c) of the Act. That is so because s.33(1)(c) applies to provisions of the Act – of which s.139ZS(1A) is an example - that limit times for the doing of an act or thing. Such provisions must of necessity be mandatory, for otherwise there would be no need for the Court to make any order extending the times limited by such provisions. If, therefore, s.139ZS(1A) were not expressed in mandatory language, s.33(1)(c) would not apply to that subsection, because, not being mandatory, there would be no time limited by s.139ZS(1A) for the doing of an act which could be extended. Stated more broadly, if the mandatory nature of a provision that limited the time for doing an act or thing were sufficient to take such provision out of the operation of s.33(1)(c) of the Act, s.33(1)(c) would be incapable of applying to “any time limited by this Act”.
Further, to characterise the time limited by s.139ZS(1A) of the Act as a mandatory requirement that defines the jurisdiction of the Court, as counsel for the Trustee seeks to do, cannot by itself give rise to any contradiction or incompatibility between s.139ZS(1A) and s.33(1)(c) of the Act, or otherwise prevent s.33(1)(c) applying to s.139ZS(1A) of the Act. A time limit for commencing proceedings that is liable to be extended by court order is as capable of constituting a jurisdictional precondition as is a time limit that is not capable of so being extended.
In any event, it is doubtful that s.139ZS(1A) of the Act can be said to define the jurisdiction of the Court to set aside a 139ZQ Notice, at least in the sense the High Court in David Grant held that the time limit in s.459G of the Corporations Law (Vic) defined the jurisdiction of the court in that case to set aside a statutory demand. The basis on which the High Court in David Grant held s.459G defined the jurisdiction of the court was that it was a precondition to the exercise of the “new right” conferred by s.459G of the Corporations Law (Vic). To the extent, however, the ability to apply under s.139ZS(1) of the Act to set aside a s.139ZQ Notice could be regarded as a “new right”, such right was created in 1991, and it formed no part of the creation of that right that it be exercised within any time period. The requirement that action under s.139ZS(1A) be taken within 60 days was introduced in 2015. For this reason, the time limited by s.139ZS(1A) of the Act has more the character of “typical statutes of limitation which operate to impose a limit of time upon an existing right of action” rather than “imposing a condition which is the essence of a new right”.[51]
[51] WACB v Minister for Immigration and Multicultural and Indigenous Affairs [2004] HCA 50 at [32]
Quite apart from the notion of a time limit constituting a jurisdictional precondition of a “new right” in the sense considered in David Grant, it is doubtful that, given the nature of s.139ZQ Notices, s.139ZS(1A) can be viewed as a jurisdictional precondition to the Court considering the validity of such notices. The issuing of a s.139ZQ Notice is an administrative act by the Official Receiver that does not purport to involve the exercise of the judicial power of the Commonwealth.[52] Further, “the power to issue the [s.139ZQ Notice] is conditioned not upon the Official Receiver’s opinion or satisfaction that the transaction is void against the Trustee but upon the existence of the facts and circumstances that produce such a result”.[53] That means a s.139ZQ Notice is not conclusive of the facts it asserts or of the legal consequences that it claims flows from the facts it asserts. That, in turn, means the jurisdiction of the Court can be invoked to rule on the validity of a 139ZQ Notice by means other than those provided for by s.139ZS(1) of the Act.[54] One means is by an application under s.30 of the Act for a declaration of invalidity or for an injunction to restrain action on the basis of an invalid notice. [55] Another is to challenge a s.139ZQ Notice collaterally. That could be done as a defence to an action brought under s.139ZQ(8) of the Act, or as a defence to a criminal prosecution brought under s.139ZT.[56]
[52] Re McLernon; Ex parte SWF Hoists and Industrial Equipment Pty Ltd v Prebble (1995) 58 FCR 391 (Cooper J)
[53] Halse v Norton (1996) 76 FCR 389 at page 392E (Black CJ)
[54] Halse v Norton (1996) 76 FCR 389 at page 392F (Black CJ): “Clearly, too, s.139ZS is not the exclusive means of challenging a notice under s 139ZQ”.
[55] Re McLernon; Ex parte SWF Hoists and Industrial Equipment Pty Ltd v Prebble (1995) 58 FCR 391 at page 403
[56] Re McLernon; Ex parte SWF Hoists and Industrial Equipment Pty Ltd v Prebble (1995) 58 FCR 391 at page 403
Contextual and other matters
In my opinion, the text of s.33(1)(c) and s.139ZS(1A) is sufficiently clear to permit me to conclude that s.33(1)(c) applies to s.139ZS(1A) and, for that reason, it is not necessary to refer to the various contextual and other matters on which counsel for the Trustee relied. Nevertheless, I will consider them.
First there is the purpose for which subdivision J of which s.139ZS(1A) is a part was introduced. I was taken to the explanatory memorandum which stated that the purpose of subdivision J was to “provide an administrative mechanism for the setting aside of transactions which are void against the trustee, thus making the recovery of funds into bankrupt estates simpler and more cost effective and ensuring a better return to creditors”. This stated purpose has no bearing on the construction of s.139ZS(1A) because at the time subdiv. J of Div. 4B of Part VI of the Act was introduced it did not include any provision that limited the time for making an application under s.139ZS(1). Even if such provision had been introduced at the time, the purpose of simplifying and reducing the cost of the Trustee’s recovery of funds into bankrupt estates would not necessarily require reading the 60 day time limit as incapable of extension.
Second, as I have already noted, counsel submitted that to construe the 60 day period limited by s.139ZS(1A) as being capable of extension under s.33(1)(c) would introduce a substantial degree of uncertainty surrounding the operation of these provisions. That submission cannot be given any weight, given that for over twenty years s.139ZS(1) has not been subject to any time limit. The explanatory memorandum that accompanied the amendments that introduced s.139ZS(1A) into the Act does not refer to their having been any substantial degree of uncertainty surrounding the operation of s.139ZS(1). The explanatory memorandum simply referred to their being no time limit for the making of an application to set aside s.139ZQ Notices, that this was “inconsistent with other provisions in the Act and can cause undue delays for the Official Receiver and for the administration of a bankruptcy”.[57] Further, as I have also already noted, s.139ZS(1) is not the only means by which the validity of a s.139ZQ Notice can be challenged. It can be done under s.30 of the Act and collaterally. In those circumstances, construing s.33(1)(c) as being capable of extending the time provided by s.139ZS(1A) will not add any uncertainty.
[57] Civil Law and Justice (Omnibus Amendments) Bill 2015, Explanatory Memorandum [92]
Third, counsel for the Trustee appears to submit that construing s.33(1)(c) of the Act as applying to s.139ZS(1A) may lead to the Court retrospectively reinstating a notice that “has expired so as to expunge a criminal offence which has already been committed”.[58] I do not agree that this would or could be the result of so construing s.33(1)(c) of the Act. Whether or not the 60 day period limited by s.139ZS(1A) is extended can have no effect on whether the person to whom it is issued will fail or refuse to comply with a s.139ZQ Notice; and whether or not such refusal or failure to comply with a s.139ZQ Notice will amount to a contravention of s.139ZT will depend on the outcome of any challenge that may be mounted under s.139ZS(1) or under s.30 of the Act or in any collateral defence the recipient may raise in any action brought under s.139ZQ(8) or any prosecution brought under s.139ZT.
[58] Outline Submissions on behalf of the Respondent in respect of the Separate Question, [9]
Finally, there is the decision of Burley J in Sampson v Taboada. In my opinion, his Honour cannot be taken to have considered, let alone to have decided, that s.33(1)(c) of the Act does not apply to s.139ZS(1A) of the Act. Counsel for the recipients of the s.139ZQ Notice that was issued in that case accepted that the language of s.139ZQ was such that no application could be brought after the 60 day period limited by s.139ZS(1A) expired. It does not appear, however, that is Honour was directed to s.33(1)(c) of the Act. Nor was his Honour directed to Re McLernon; Ex parte SWF Hoists and Industrial Equipment Pty Ltd v Prebble where Carr J held that a challenge to the validity of a s.139ZQ Notice could be made under s.30 of the Act or collaterally in a defence to an action brought under s139QZ(8) of the Act.
Determination
The question for separate determination the parties framed was not the substance of the question that was debated before me. The substance of the question that was debated was whether the power to extend time conferred by s.33(1)(c) of the Act is capable of extending the time limited by s.139ZS(1A) of the Act. That question is to be answered in the affirmative.
I propose, therefore, to make an order under r.17.02 of the Federal Circuit Court Rules 2001 (Cth) that the Court state as a separate question the substance of the question that was debated before me, and an order noting that the answer to that question is in the affirmative. I also propose to order that the costs of the determination of the separate question be reserved.
I certify that the preceding fifty-five (55) paragraphs are a true copy of the reasons for judgment of Judge Manousaridis
Date: 22 September 2017
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