Rottnest Island Authority v Norman Mel Ashton (In his capacity as joint and several deed administrator of Old Ferry Co Pty Ltd)
[2005] WASC 238
ROTTNEST ISLAND AUTHORITY -v- NORMAN MEL ASHTON (In his capacity as joint and several deed administrator of Old Ferry Co Pty Ltd) [2005] WASC 238
| Link to Appeal : |
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| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2005] WASC 238 | |
| Case No: | COR:322/2004 | 13 OCTOBER 2005 | |
| Coram: | MASTER SANDERSON | 7/11/05 | |
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Appeal allowed Order that proof of debt be admitted | ||
| B | |||
| PDF Version |
| Parties: | ROTTNEST ISLAND AUTHORITY NORMAN MEL ASHTON (In his capacity as joint and several deed administrator of Old Ferry Co Pty Ltd) |
Catchwords: | Corporations Act Appeal against decision of administrator to reject proof of debt Turns on own facts |
Legislation: | Corporations Act 2001 (Cth), s 436A, s 1321 Rottnest Island Authority Act 1987, s 5, s 11(1) Rottnest Island Regulations 1988, reg 4, reg 5(1), reg 5(2)(a), reg 6 |
Case References: | Nil Birch v Allen (1942) 65 CLR 621 Cohns Industries Pty Ltd v Deputy Federal Commissioner of Taxation (1979) 37 FLR 508 Customs & Excise Commissioners v Mechanical Services (Trailer Engineers) Ltd [1979] 1 WLR 305 Dilworth v Commissioner of Stamps [1899] AC 99 Higgins v Nicol (1971) 18 FLR 343 Johnson v Moreton [1980] AC 37 R v Peters (1886) 16 QBD 636 R v Tkacz (2001) 25 WAR 77 Robinson v Local Board of BartonEccles (1883) 8 App Cas 798 Silk Bros Pty Ltd v State Electricity Commission (Victoria) (1943) 67 CLR 1 State Chamber of Commerce and Industry v Commonwealth (1987) 163 CLR 329 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
NORMAN MEL ASHTON (In his capacity as joint and several deed administrator of Old Ferry Co Pty Ltd)
Defendant
Catchwords:
Corporations Act - Appeal against decision of administrator to reject proof of debt - Turns on own facts
Legislation:
Corporations Act 2001 (Cth), s 436A, s 1321
Rottnest Island Authority Act 1987, s 5, s 11(1)
Rottnest Island Regulations 1988, reg 4, reg 5(1), reg 5(2)(a), reg 6
(Page 2)
Result:
Appeal allowed
Order that proof of debt be admitted
Category: B
Representation:
Counsel:
Plaintiff : Mr G T W Tannin SC
Defendant : Mr K J Martin QC
Solicitors:
Plaintiff : State Solicitor's Office
Defendant : Phillips Fox
Case(s) referred to in judgment(s):
Nil
Case(s) also cited:
Birch v Allen (1942) 65 CLR 621
Cohns Industries Pty Ltd v Deputy Federal Commissioner of Taxation (1979) 37 FLR 508
Customs & Excise Commissioners v Mechanical Services (Trailer Engineers) Ltd [1979] 1 WLR 305
Dilworth v Commissioner of Stamps [1899] AC 99
Higgins v Nicol (1971) 18 FLR 343
Johnson v Moreton [1980] AC 37
R v Peters (1886) 16 QBD 636
R v Tkacz (2001) 25 WAR 77
Robinson v Local Board of BartonEccles (1883) 8 App Cas 798
Silk Bros Pty Ltd v State Electricity Commission (Victoria) (1943) 67 CLR 1
State Chamber of Commerce and Industry v Commonwealth (1987) 163 CLR 329
(Page 3)
1 MASTER SANDERSON: Rottnest Island is a popular holiday destination. Most persons journeying to the island do so on one or other of the ferries which depart regularly from Fremantle and Hillarys. Most of those travellers would be unaware that there is a fee payable by every person who sets foot on the island. In the case of ferry passengers, that fee is included in the price of a ticket. This case concerns the question of who is liable to remit the fees collected by the ferry operators.
2 Ostensibly, this is an appeal against the defendant's decision to reject a proof of debt lodged by the plaintiff with the defendant. The appeal is brought under s 1321 of the Corporations Act 2001 (Cth). That section is in the following terms:
"A person aggrieved by any act, omission or decision of:
(a) …
(b) …
(c) …
(ca) an administrator of a deed of company arrangement executed by a company; or
(d) …
may appeal to the Court in respect of the act, omission or decision and the Court may confirm, reverse or modify the act or decision, or remedy the omission, as the case may be, and make such orders and give such directions as it thinks fit."
3 The plaintiff is a body corporate established pursuant to s 5 of the Rottnest Island Authority Act 1987 ("the Act"). It is responsible for the management and control of Rottnest Island: see s 11(1) of the Act. The Old Ferry Co Pty Ltd ("Old Ferry Co") is an Australian proprietary company limited by shares and was incorporated on 10 September 1980. On 30 May 2002 the defendant was appointed voluntary administrator of Old Ferry Co pursuant to a resolution of the relevant board of directors in accordance with s 436A of the Corporations Act.
4 On 13 January 2003 the defendant called for proofs of debt from creditors of Old Ferry Co. On 28 January 2003 the plaintiff submitted a formal proof of debt in relation to Old Ferry Co for an amount of $763,184.95. This claim was for admission fees to Rottnest Island that, according to the plaintiff, Old Ferry Co was required to collect or cause to
(Page 4)
- be collected and to remit to the plaintiff. This requirement to remit the fees is covered by reg 6 of the Rottnest Island Regulations 1988 ("the Regulations"). The Regulations are central to this dispute and I will return to them in due course. However, before doing so, I should wrap up the material facts.
5 On 20 September 2004 the plaintiff received a notice of rejection of formal proof of debt or claim. That notice was dated 16 September 2004 and was directed to the plaintiff by the defendant. The defendant gave the following reasons for rejecting the plaintiff's proof of debt (see annexure "Q" to affidavit of Carol Anne Shannon sworn 5 October 2005):
"My grounds for disallowance of $763,184.95 are that this amount relates to admission fees, which Banwell Pty Ltd was required to deduct from passengers upon landing at Rottnest Island and remit to the RIA. Furthermore, under the Rottnest Island Regulations 1988, Banwell would be considered the owner of the ferries which carried the passengers to Rottnest Island."
6 There is no dispute between the parties that Old Ferry Co was the legal owner of two passenger ferries, the Superflyte and the Starflyte ("the vessels"). Equally there is no dispute that during the relevant period, Banwell Pty Ltd ("Banwell") was the entity that actually utilised the vessels to convey passengers to Rottnest Island. Old Ferry Co charged Banwell a fee for the use of the ferries. These fees were credited to Old Ferry Co through inter-company loan accounts. It was Banwell who charged passengers who travelled on the vessels and accordingly it was Banwell who actually collected the fees due and payable to the plaintiff.
7 Turning then to the legislative background, reg 5(1) of the Regulations provides that an admission fee is payable in respect of every person who enters within the limits of Rottnest Island. Regulation 5(2)(a) of the Regulations provides that in the case of a passenger on a vessel in which persons are usually carried for reward, the admission fee is payable by the owner of the vessel in accordance with reg 6 of the Regulations. Regulation 6 is of central importance in this dispute. It is in the following terms:
"6. Collection of admission fees by transport operators
(1) Subject to regulations 7A, 7B and 7C, the owner of a vessel or aircraft in which persons are carried to the Island for reward shall -
(Page 5)
- (a) collect the admission fee provided for by regulation 5, or cause it to be collected, from each passenger who travels in the vessel or aircraft before he enters within the limits of the Island; and
(b) remit the fees so collected to the Authority, together with a return or returns duly completed in such form or forms as the Authority may provide for that purpose.
…"
"… in relation to a vessel, or aircraft, referred to in regulation 5(3), 6, 7A, 7B, 7C or 7D, includes a charterer, lessee or bailee of the vessel or aircraft".
9 The question here, then, is whether or not Old Ferry Co falls within what might be called the expanded definition of "owner" under reg 3 of the Regulations. As I have said, there is no dispute between the parties that it was Banwell who actually collected the fees including the island entry fee from the passengers on the vessels. There is no doubt that Banwell would be liable to the plaintiff. In fact, the plaintiff has lodged a proof of debt with Banwell (it too having had financial difficulties) and the debt has been admitted. But the plaintiff is seeking to recover the fees from Old Ferry Co. In other words, the question is whether Old Ferry Co is jointly and severally liable with Banwell to the plaintiff for the fees.
10 On behalf of the plaintiff it was submitted that Old Ferry Co falls squarely within the expanded definition of "owner" under reg 3. Moreover, it is said that even allowing for this expanded definition, Old Ferry Co is in fact the owner of the vessels and therefore without anything more is liable to make payment to the plaintiff.
11 On behalf of the defendant, reference was made to the pro-forma proofs of debt lodged against both Banwell and Old Ferry Co. The wording in the proof of debt was as follows (see annexure "L"):
"Admission fees which the Company was required to collect, or cause to be collected, and to remit to the Rottnest Island Authority in accordance with regulation 6 of the Rottnest Island Regulations 1988 during the period 1 January 2002 to
(Page 6)
- 31 January 2002 for passengers travelling to Rottnest Island on the vessels Starflyte and Superflyte. The Company collected these fees but failed to remit them to the Authority, in breach of the Company's personal obligation to account for such fees in accordance with the statutory trust imposed upon a person collecting such fees by regulation 6. Further and alternatively, the amount of fees which the Company was obliged to collect and remit to the Authority is a debt recoverable by the Authority from the Company pursuant to regulation 6."
12 It was said that the assertion that "the Company collected fees but failed to remit them to the Authority" is only accurate for one entity - that is, Banwell. It is said that to run the same claim against Old Ferry Co when Old Ferry Co plainly did not collect passenger fees is "opportunism". The defendant then submitted that as there was an ambiguity in the Regulations, an approach to understanding the proper meaning of the Regulations could be adopted which eventually would lead to the conclusion that it was not open to the plaintiff to make a claim against Old Ferry Co.
13 With respect, there seems to me to be no ambiguity in the Regulations at all. In fact, they are crystal clear. Old Ferry Co is the owner of the vessels and as such it is liable to the plaintiff for the island entry fee. It is not to the point that Old Ferry Co did through an arrangement with Banwell entrust the collection of the fee to Banwell. There is nothing in the Regulations which prevents Old Ferry Co making any arrangements that it wishes as to the manner in which the fee is to be collected. However, it is Old Ferry Co which remains liable for the debt. It is true that the expanded definition of "owner" means that Banwell could also be held liable for the debt. In other words, the liability might be seen as being joint and several. But that does not prevent the plaintiff from recovering the fees from Old Ferry Co.
14 During the course of submissions, there was some discussion as to whether or not the Regulations did, as is suggested in the proof of debt, create a statutory trust upon the person collecting such fees. I have some doubt that any trust is created. The Regulations speak of the amount collected by the "owner" being recovered by the plaintiff as a debt. While there is no question but that whoever collected the fees would be liable to disgorge the amount collected, I see no reason why some form of statutory trust with all that that involves should be imposed upon the money collected. In any event, that argument is of no real moment in the context
(Page 7)
- of this dispute. In my view, it is clear that the plaintiff was entitled to have its proof of debt approved by the defendant.
15 By its originating process, the plaintiff sought an order that the defendant's decision to reject the plaintiff's proof of debt be reversed. That seems to be the appropriate order to be made in the circumstances. However, I will hear counsel as to the precise form of orders and as to costs.
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