Sheidow, B.D. v Laboratories Credit Union Ltd

[1990] FCA 624

Re: BRUCE DEWAR SHEIDOW
Es parte: LABORATORIES CREDIT UNION LIMITED
No. P899 of 1990
FED No. 624
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA

BANKRUPTCY DISTRICT OF THE STATE OF NEW SOUTH WALES
GENERAL DIVISION
Gummow J.(1)

CATCHWORDS

Bankruptcy - s. 308 of the Bankruptcy Act 1966 - whether creditor's petition signed by a duly authorised agent of petitioning credit union.

Bankruptcy Act 1966

Commercial Agents and Private Inquiry Agents Act 1963 (N.S.W.)

Credit Union Act 1969 (N.S.W.)

Deputy Commissioner of Taxation v Boxshall (1988) 19 FCR 435

Mobbs v Powell (1965) VR 222

Hawkins v Hughes (1979) 2 NSWLR 178

Yango Pastoral Company Pty Limited v First Chicago Australia Limited (1978) 139 CLR 410

Doe d. Mann v Walters (1830) 8 LJ KB (OS) 297

Bedford Insurance Co. Ltd v Instituto de Resseguros do Brasil (1984) 3 All ER 766

HEARING

SYDNEY

#DATE 9:11:1990

Solicitor for the petitioner: Mr V.A. Bizannes

ORDER

That the application filed 12 June 1990 is dismissed.

That the petitioner have its costs of the application up to and including 25 September 1990. Otherwise, no order as to the costs of the application.

That the petition be re-listed before a Registrar as soon as practicable.

Note: Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules.

JUDGE1

By Application filed 12 June 1990, the debtor seeks an order that the creditor's petition presented by the petitioning creditor filed 26 April 1990 be dismissed. The act of bankruptcy founding the petition is non-compliance with a bankruptcy notice issued 19 August 1988, which in turn was based upon a default judgment recovered by the petitioning creditor in the District Court of New South Wales at Sydney on 13 November 1987.

1. The petitioning creditor is a credit union which is a body corporate by force of sub-s. 10 (1) of the Credit Union Act 1969 (N.S.W.) ("the Credit Union Act"). The petition is signed by Miss Narelle Smedley "as authorised and delegated officer of Laboratories Credit Union Limited and the proper officer". In her affidavit sworn 20 April 1990, Miss Smedley verified paras. 1, 2 and 3 of the petition and also said that she was the authorised officer of the petitioning creditor; she annexed what she there said was a true copy of her authorisation in writing under the seal of the petitioning creditor. However, the document annexed to this affidavit is an authority dated 13 October 1987 authorising Miss Smedley to issue process and prosecute any necessary action on behalf of the petitioning creditor "in the LOCAL COURT, BURWOOD". The document goes on to state that the authority "shall remain in force until a notice revoking it has been deposited with the Registrar of the Court".

2. Paragraph 308 (a) of the Bankruptcy Act 1966 ("the Act") states that subject to the Act, a corporation may, for the purposes of the Act, "act by any person duly authorized in that behalf by the corporation". The expression "duly authorized" as used in s. 308 was considered by the Full Court in Deputy Commissioner of Taxation v Boxshall (1988) 19 FCR 435; see also, in a different context, Mobbs v Powell (1965) VR 222 at 223. "Due authorisation" involves the giving by the corporation of formal approval to the acts in question.

3. In his affidavit sworn 12 June 1990, in support of his application of that date, and in several subsequent affidavits, the debtor contends that Miss Smedley was not duly authorised to act on behalf of the petitioning creditor in signing the petition.

4. The debtor also contended that Miss Smedley had required a commercial subagent's licence as provided in ss. 4 and 8 of the Commercial Agents and Private Inquiry Agents Act 1963 (N.S.W.), something she agreed in oral evidence she did not have. That statute provides for its own penal sanctions for non-compliance with its requirements; see Hawkins v Hughes (1979) 2 NSWLR 178. If Miss Smedley were (as I find to be the case) duly authorised by the petitioning creditor to act on its behalf for the purposes of the Act, as the relevant federal law, any failure on her part to comply with the State law (even if that be the case) would not render void or ineffective the steps she took on behalf of the petitioning creditor under s. 308 of the Act; cf. Yango Pastoral Company Pty Limited v First Chicago Australia Limited (1978) 139 CLR 410.

5. The application came before me on 25 September 1990. Two adjournments were necessary to enable the petitioning creditor to adduce in proper form the evidence upon which it relies in answer to the application.

6. By her affidavit sworn 18 October 1990, Miss Smedley gave evidence that the relevant source of her authority was not the document dated 13 October 1987 and annexed to her affidavit sworn 20 April 1990. Rather, the source of her authority was a document bearing the date 18 May 1988 and apparently issued under the seal of the petitioning creditor, the seal being affixed in the presence of three signatories. Miss Smedley also states that at the date of swearing her affidavit of 18 October 1990, the authorisation dated 18 May 1988 had not been revoked.

7. This document states that it authorises Miss Smedley:
   

". . . as its Authorised Officer to issue process and prosecute any action on its behalf in the FEDERAL COURT OF AUSTRALIA BANKRUPTCY DIVISION and that previous authority was already given prior to this date to commence such proceedings and to sign all documents necessary for and on behalf of the Credit Union and that all such actions as taken by her to date are hereby further ratified by this Authority which may be deemed to remain in force until such time as a notice revoking it has been deposited with the Registrar of the said Court."

1. In affidavits filed in support of his application, the debtor contended that the initial reliance on the instrument dated 13 October 1987 had an effect of disabling the petitioning creditor and Miss Smedley from explaining the obvious mistake that had occurred, and from establishing her authority for the signing of the petition in the later instrument of 18 May 1988. In my view, there is no substance in that submission. Her authorisation had not been revoked by the petitioning creditor nor revoked by operation of any principle of law.

2. However, a question did arise as to the efficacy of the instrument of 18 May 1988 itself. It was said that it did not amount to a due authorisation by the petitioning creditor. On its face, the document states that the seal was affixed in the presence of three persons whose signatures appear, but the offices (if any) held by them in the petitioning creditor are not shown, although it is stated that the seal was duly affixed under the authority of a resolution of the Board in the presence of those three persons.

3. Sections 24, 25 and 26 of the Credit Union Act provide for the rules of credit unions. The rules of the petitioning creditor provide in sub-rule 17 (2):
   

"The seal of the credit union shall not be affixed to any instrument except by the authority either of a resolution of the board of directors or of a person so authorised in writing by the board and shall be affixed in the presence of two directors, and the secretary or three other persons appointed by the board for the purpose and such directors, secretary or other persons shall sign every instrument to which the seal of the credit union is so affixed in their presence."

It follows that the seal may be affixed by the authority of a resolution of the Board in the presence of two directors and the secretary.

1. Mr M.F. Sinclair has been secretary of the petitioning creditor since 20 August 1986. He was present at a meeting of the Board on 18 May 1988 when he tabled in draft the document which became the authority bearing the date 18 May 1988. Pursuant to a resolution of the Board, the authority was signed by the then Chairman, Mr I.R. McDonald, a director, Mr B.L. Sheldon and by Mr Sinclair himself as secretary. The taking of these steps is made clear beyond any doubt by Mr Sinclair's affidavit sworn in these proceedings on 25 October 1990.

2. It follows, in my opinion, that within the meaning of para. 308 (a) of the Act, the petitioning creditor did act by Miss Smedley as a person duly authorised on its behalf to sign the petition filed 26 April 1990.

3. It follows that the application fails.

4. However, the debtor referred to certain authorities to which I should make brief reference. They are Doe d. Mann v Walters (1830) 8 LJ KB (OS) 297, and Bedford Insurance Co. Ltd v Instituto de Resseguros do Brasil (1984) 3 All ER 766. The latter authority deals with law concerning purported ratification of the illegal acts of an agent; in the light of what I have said, it has no bearing upon this case. The former is concerned with the ineffectiveness of ratification to divest rights which vested before the purported ratification, so that an unauthorised notice to quit can be ratified by the landlord only within the period for giving notice; see "Halsbury's Laws of England", 4th Ed., Vol. 1, p. 456. Again, this has no bearing upon the present case. As I have said, the authority dated 18 May 1988 was in force at all material times. No question of ratification arises.

5. The application is dismissed. The petitioning creditor should have its costs of the application up to and including the day of the first adjournment, 25 September 1990. Otherwise, I make no order as to costs of the application. The petition should be re-listed before a Registrar, as soon as practicable.