Lennox v Board of Professional Engineers of Queensland [2011] FMCA 479 (7 June 2011)

Last Updated: 18 July 2011

FEDERAL MAGISTRATES COURT OF AUSTRALIA

LENNOX v BOARD OF PROFESSIONAL ENGINEERS OF QUEENSLAND

[2011] FMCA 479

BANKRUPTCY – Bankruptcy notice – seeking to set aside – declaration that bankruptcy notice has not been served – service of bankruptcy notice at business address – business address last known address – service effected.

Bankruptcy Act 1966 (Cth), ss.41, 41(7) Bankruptcy Regulations 1996 (Cth), reg.16.01 Commercial and Consumer Tribunal Act 2003 (Qld), ss.7, 71, 71(7)(b), 91, 92 Queensland Commercial and Administrative Tribunal Act 2009 (Qld), ss.41, 131, 252 Uniform Civil Procedure Rules 1999 (Cth)

Associated Provincial Picture Houses v Wednesbury Corporation [1947] 1 KB 223 Skalkos v T & S Recoveries Proprietary Limited [2004] FCAFC 321; (2004) 213 ALR 311 Sunrise Auto Limited v Commissioner for Taxation (1995) 61 FCR 446

Applicant:

PETER LENNOX

Respondent:

BOARD OF PROFESSIONAL ENGINEERS OF QUEENSLAND

File Number:

BRG 79 of 2011

Judgment of:

Burnett FM

Hearing date:

7 June 2011

Date of Last Submission:

7 June 2011

Delivered at:

Brisbane

Delivered on:

7 June 2011

REPRESENTATION

Counsel for the Applicant:

Solicitors for the Applicant:

V.J. Butler & Associates

Counsel for the Respondent:

Mr D. Kissane

Solicitors for the Respondent:

Holding Redlich

ORDERS

(1) The application be adjourned to 10.00am on 16 December 2011.
(2) Costs reserved.

FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE

BRG 79 of 2011

PETER LENNOX

Applicant

And

BOARD OF PROFESSIONAL ENGINEERS OF QUEENSLAND

Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

1. In this application, the applicant debtor seeks orders that bankruptcy notice 21 of 5 January 2011 be set aside or alternatively, there be a declaration that the notice has not yet been served. The application has its genesis in a judgment obtained by the creditor against the debtor following proceedings in the Queensland Commercial and Administrative Tribunal (QCAT) and its predecessor, the Commercial and Consumer Tribunal (CCT). The proceedings were brought by the judgment creditor in respect of disciplinary matters, and resulted in the making of two awards by the CCT against the debtor.
2. The first was an award made on 5 September 2008, directing the debtor pay a penalty fixed in the sum of $1,000.00. At the same time, a costs order was also made. On 5 September 2009 an order partially setting aside the award on appeal was made by an order of the District Court. It set aside the original costs order and then imposed another order favourable to the debtor. In due course, a judgment was registered in the Magistrates Court of Queensland on 15 December 2010 in respect of the penalty sum of $1,000.00. That was the only judgment in that matter.
3. The second order made by the CCT was made on 22 December 2008 and it too directed that the debtor pay a penalty fixed in the sum of $2,550.00, together with an order that the debtor pay costs. The costs order was expressed in these terms:
   • “The [debtor] will pay the Board two-thirds of its costs of and incidental to the investigation and the application, to be assessed on a District Court scale on a standard basis, to be assessed by Hickey and Garrett, Legal Costs Assessors, Level 21, 141 Queen Street, Brisbane, Queensland, 4000, such costs to be paid within 14 days of dispatch to him of the assessment.”
4. For the debtor, it was contended that the bankruptcy notice ought to be set aside because the total amounts for which judgment have been entered was only $3,550.00. That is a sum less than $5,000.00 as provided for by the regulations governing the issue of bankruptcy notices under s.41 of the Bankruptcy Act 1966 (Cth) (the Act). The debtor contended that that comes to pass because the District Court order of
   1 November 2010 relating to the CCT order of 22 December 2008 dealing with costs simply attached a copy of the short form assessment by the costs assessor. He contended that of itself was not an “order” of the tribunal.
5. He contended that only an order by the tribunal can be subject to entry of judgment and on that basis, the costs assessment attached to the order ought not be considered. The total of the costs based on the assessments was approximately $50,000.00. Clearly if the costs were included the quantum would bring the matter within the prescribed sum provided for under regulation, pursuant to s.41. On this basis, the debtor contends the notice ought to be set aside.
6. Alternatively, the debtor maintains that there is a set off, cross-claim or cross-demand which could not have been set up in the original action. That was based upon him having his own claim for favourable orders worth something in the order of $117,000.00.
7. Dealing with the first point, the debtor’s contention is that the costs orders are not yet registered. That is to say registered in terms of the quantum and therefore cannot form part of the basis for assessing the sum due under the bankruptcy notice. In other words he contended they do not constitute a final order or judgment. He contended that the letter from Hickey and Garrett which was attached to the Tribunal’s certification and forming the judgment and the evidence of the parties, do not support a conclusion that there has been any assessment of costs in accordance with the orders of the CCT.
8. He submitted that there should be some process of the kind provided for in the Uniform Civil Procedure Rules 1999 (Cth) (UCPR) involving the Tribunal governing the costs assessment. That is an adversarial cost process. While not expressed as such, the objection appeared to contend that there was an apparent relinquishment by the tribunal of any supervisory role by it in the assessment of costs processes. This he contended was in contrast to the courts, where courts maintain an ongoing role by use of assessors who undertake the assessment of costs in the conventional adversarial manner.
9. Ultimately, in my view the question appears to resolve into one of power and whether or not the order was ultra vires. There was no suggestion in this case that the costs order was ultra vires by reference to s.100 of the Commercial and Consumer Tribunal Act 2003 (Qld) (CCT Act).
   Nor was it contended that order constituted a failure to properly exercise jurisdiction. For instance, by reason of the Wednesbury Corporation[1] unreasonableness test. Nor was any other administrative law principle advanced to support the contention that that judgment ought not stand. The fact is that no point has been taken by the parties on appeal to the District Court to support any contention of that kind.
10. The tribunal’s powers in respect of costs and orders generally are now found in the Queensland Commercial and Administrative Tribunal Act 2009 (Qld) (QCAT Act), which applies by application of s.252. It must be remembered that between the time of the making of the original orders and the date of registration of the judgment, the CCT Act was repealed and in its place, the QCAT Act was introduced and passed. The transitional provisions in that Act govern the relevant factors in this instance.
11. In particular, s.252 provides that a decision of the former tribunal in a proceeding made before the commencement – in this instance, that was November 2009 – is taken to be a final decision of QCAT. The QCAT Act governs the manner in which the judgments are registered going forward, but preserves the manner on which judgment was reached when reviewing it. So the question now is whether the final decision included an assessment of costs and whether it was a proper decision under the former Act.
12. Section 91 of the former Act, the CCT Act, dealt with the form of decisions and provided that a decision of the tribunal must be one that finally decides the matter the subject of the proceeding; it must be in writing; it must state the decision; and, it must be published. In that event, s.92 provided that the decision would then take effect when the decision was given or order was made.
13. In this case, the relevant decision, being the decision of the Tribunal made 22 December 2008, satisfied the formal requirements provided for in s.91 of the CCT Act that took effect on 22 December 2008, in accordance with s.92 of that Act.
14. In terms of the tribunal’s powers to make a costs order, that is order 3 in the tribunal’s orders, s.71 of the CCT Act provided that the tribunal may make a costs order that it considered appropriate. In doing so, it particularly provided by ss.7:
    • “The tribunal may direct that costs be assessed –
    • (a) in the way decided by a presiding case manager; or
    • (b) by a person appointed by the tribunal.”
15. In this instance, the tribunal in exercising the powers afforded to it under the CCT Act, s.71(7)(b), appointed Hickey and Garrett, Legal Costs Assessors, to undertake an assessment. The order was expressed in a self-executing form; that is, it stated that after such assessment was undertaken:
    • “Such costs to be paid within 14 days of the despatch to [the debtor] of the assessment.”
16. In this regard, it was unlike the standard form of order provided for under the UCPR, as it did not involve the express supervision by the tribunal of the assessment process being undertaken. However, that is not to say that the order was not open to review. The order here, although self-executing, was ultimately open to review, for instance, upon Wednesbury Corporation (supra) grounds if its execution resulted in an outcome that was so unreasonable it could be contended by the debtor, that the exercise of the power by the tribunal through its effective delegate was so unreasonable as to constitute a failure to properly exercise its jurisdiction, or on other grounds which may have been apparent by reason of error on the face of the record.
17. The fact is that no issue has been taken in respect of the Hickey and Garrett assessment. So it would seem that there has been, at least prima facie, no complaint in an administrative sense about the nature of the order and the exercise of the jurisdiction by the tribunal of the manner in which the order has been performed. In any event, even if issues were to arise now, there would be difficulties with the debtor seeking to exercise its rights under the QCAT Act which now governs its rights in respect of review on an error of law, having regard to the time limitations provided for in that Act.
18. There has in fact been no challenge to the quantum at all. It is only in this instance made to the form. The only point being taken by the debtor being not so much with the account but with respect to the manner in which the tribunal expressed the order. The creditor proceeded then to have the tribunal’s order registered in accordance with s.131 of the QCAT Act in the manner provided by statute and it follows, having been so registered, that the order was enforceable as a judgment and it constitutes a final judgment for the penalty sum and assessed costs.
19. It follows that I reject the debtor’s contention that the costs order did not give rise to a final judgment which, in aggregate, exceeded the threshold provided for in s.41.
20. However, for the debtor it is also contended that he has the benefit of a number of costs orders in his favour against the creditor. Those matters have been addressed in an affidavit filed by the debtor on 6 June 2011. It is apparent from a review of that affidavit and from argument in the course of the application, that there is a long and protracted history of litigation between the creditor and the debtor.
21. There have been wins and losses by each party in respect of the various proceedings that have been launched by each against the other. In the result, however, it seems that there are three cross-orders at the moment which remain outstanding in favour of the debtor as against the creditor. Mr Butler, solicitor for the debtor, estimates that at the moment those costs appear to have a value in excess of $130,000.00. Those costs of course have not been assessed and will need to be assessed in order to ascertain with some precision the quantum of any set-off, counterclaim or cross-demand.
22. However, what is plain is that any counterclaim, set-off or cross-demand for costs which could be maintained by the debtor against the creditor, is not one which could have been set up in the original proceeding in respect of which the creditor seeks to proceed. It follows on that basis that the time to comply ought to be extended, pursuant to s.41(7) of the Act, until those matters are quantified following which the creditor can then consider the course of action it wishes to take.
23. Finally, for the debtor, it was contended by way of claim for final relief that the bankruptcy notice was not properly served and accordingly, the application ought to be dismissed as being fatally flawed on that basis.
24. Regulation 16.01 of the Bankruptcy Regulations 1996 (Cth) (The Regulations) relevantly provides that:
    • “Unless the contrary intention appears, where a document is required or permitted by the Act or these Regulations to be given or sent to, or served on a person, the document may be:
      • (a) Sent by post, or by a courier service, to the person at his or her last-known address.”

Subsection (2):

“A document given or sent to, or served on, a person in accordance with subregulation (1) is taken, in the absence of proof to the contrary, to have been received by, or served on, the person:

• (a) In the case of service in accordance with subparagraph 1(a), then the document would, in the due course of post or business practice, as the case requires, be delivered to the person’s address.”

25. The issue in this case was that the service was purported to be effected on the debtor’s business address, not his residential address. The manner of address has been the subject of examination in a number of authorities on previous occasions. In general terms, the observations of the Full Court in Sunrise Auto Limited v Commissioner for Taxation (1995) 61 FCR 446 at [455] are helpful. There the court said, although considering the meaning of the words “address for service”, which are slightly different to the words which are to be considered by this court under the Bankruptcy Regulations, a literal approach should be adopted.
26. In particular, the court at [455] noted, as is the case here, there was no definition in the Act or Regulations for individual words making up the composite phrase. The court then looked to the dictionary meaning of the word address and in that instance found the Macquarie Dictionary to cite the meaning that the word “address” to mean:
    • “A direction as to the name and residence inscribed on a letter, a place where a person lives or may be reached.”
27. The court proceeded to conclude that in its ordinary meaning, an address for service may be described for present purposes as a place in which a person may be reached for the purpose of making a formal delivery of a notice of assessment.
28. In this case, as I have noted, the words which have to be considered are provided for in the regulations as his “last known address”. In that context, the words were considered in Skalkos v T & S Recoveries Proprietary Limited [2004] FCAFC 321; (2004) 213 ALR 311 where at [321], after examining some English authority dealing with cases addressing the matter of service at residence or last abode, the court continued to note with approval observations that:
    • “Such an expression as residence, which has no technical meaning, may properly be construed having regard to the objects of the Act in which it is found. The only possible object in the case of the statute in question is that the documents in question may be brought to the knowledge of the defaulter. For this purpose I can see no reason why a man’s private house or lodging should be selected as a place of service exclusively of his place of business.”
29. In that case, the court went on to find in a case where there had in fact been service on a person at his last place of business being the last address known to the creditor at that time, that service at a place of business if it was his last known address, was satisfactory. It follows in my view that in this case there has been service effected by the creditor of the bankruptcy notice upon the debtor. It follows this ground is dismissed.
30. In the result, I am of the view that the appropriate order in this instance is to adjourn the application to permit the debtor adequate time to prepare his bills in appropriate form for assessment, and upon the production of those accounts for the parties to consider the ultimate outcome of the application. The application will be adjourned.

I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of Burnett FM

Date: 13 July 2011

---

[1] Associated Provincial Picture Houses v Wednesbury Corporation [1947] 1 KB 223