JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : RE PATRICK JOHN WALKER, COMMISSIONER FOR FAIR TRADING; EX PARTE FREMANTLE ISLAMIC ASSOCIATION INCORPORATED [2003] WASC 252

MATTER : Section 35 of the Associations Incorporation Act 1987

An application for a Writ of Prohibition against PATRICK JOHN WALKER, COMMISSIONER FOR FAIR TRADING

Administrative law - Prerogative writs or orders - Application for writ of certiorari to quash decision of respondent cancelling the incorporation of the applicant - Whether donee of power may act via an agent - Whether agent must act in the name of the donee - Doctrine of administrative necessity

Associations Incorporation Act 1987, s 35, s 36

Respondent : Department of Consumer & Employment Protection

David Cheney Pty Ltd v City of Adelaide [1998] SAERDC 476

Director of Public Prosecutions v His Honour Judge Fricke [1993] VicRp 27; [1993] 1 VR 369

Dooney v Henry (2000) 174 ALR 41

FH Faulding & Co Ltd v Federal Commissioner of Taxation [1994] FCA 1492; (1994) 54 FCR 75

1 PULLIN J: This is the return of an order nisi for a writ of certiorari.

2 The decision the applicant seeks to quash is the decision cancelling the incorporation of the applicant. In short, the applicant says that steps taken to cancel the incorporation were taken by agents of the respondent, when s 35 of the Associations Incorporations Act 1987 ("Act") provided that it was the Commissioner himself who should make the decision.

3 Section 35 of the Act provides that, where the Commissioner "has reasonable cause to believe" that an incorporated association has been inoperative for the preceding 12 months, then the Commissioner may send, by certified post, a notice stating the ground or grounds on which it is proposed to cancel the incorporation of the association, and stating that if a reply showing cause to the contrary is not received within two months thereafter, the incorporation of the association would be cancelled.

4 Section 35(2) provides that unless the Commissioner is satisfied of certain specified matters within two months after the sending of the notice, or the Supreme Court on the application of an aggrieved person otherwise orders, the Commissioner may cancel the incorporation of the association.

5 Section 35(3) provides that where the Commissioner cancels the incorporation of an incorporated association, the Commissioner shall publish in the Government Gazette a notice of the cancellation.

6 Section 35(4) empowers the Commissioner to reinstate the incorporation of an association if the Commissioner is satisfied that the incorporation was cancelled as a result of an error on the part of the Commissioner.

7 Section 36 provides that where the incorporation of an incorporated association is cancelled under s 35, the property of the association vests in the Commissioner and the Commissioner may give directions concerning the distribution of the property.

8 The steps which must be taken by the Commissioner before he may cancel the incorporation of an association are therefore:

(a) to form a belief, on reasonable cause, about the matters listed in s 35(1);

(b) to send by certified post the notice required under s 35(1);

(c) to decide within the stated time whether he is satisfied about the matters listed in s 35(2), and if he is not so satisfied then;

(e) to publish in the Government Gazette, a notice of the cancellation as required by s 35(3).

9 The "Commissioner" is defined in s 3(1) of the Act to have the same meaning as in the Consumer Affairs Act 1971. The Consumer Affairs Act 1971 defines the Commissioner to mean the Commissioner for Fair Trading referred to in s 15 of the latter Act. Section 15 states that there shall be a Commissioner for Fair Trading appointed under the Public Sector Management Act 1994.

11 By letter dated 15 August 2002, Jeannine Purdy, a "Senior Liaison Officer Associations" and an agent of the respondent, wrote to the President of the applicant, stating that the Department had received a complaint about the conduct of the applicant. The letter stated that it had been alleged that the inaugural annual general meeting of the applicant was convened on 10 July 1999 and that no annual general meeting had been convened since July 1999, despite the fact that the rules of the applicant required annual general meetings. The applicant was asked to respond. The letter also referred to the powers of the Commissioner to cancel the applicant's incorporation if it had been inoperative for 12 months. This letter was not part of the statutory process leading to cancellation of incorporation. As a result, it does not matter who signed or sent this letter.

12 There is no evidence before me about whether the Commissioner formed the belief on reasonable grounds about the matters in s 35(1), but, as the document to which I next refer was sent to the applicant, it can be presumed (if the notice is valid) that the belief was formed by the Commissioner (or his agent, if that is permitted). This is because where a power is conferred, upon terms requiring the prior formation of a particular opinion by the donee of the power, it will be presumed from the exercise of that power, in the absence of evidence to the contrary, that the donee had the required opinion. See McLean Bros & Rigg Ltd v Grice [1906] HCA 1; (1906) 4 CLR 835 at 859-860 and Re City of Joondalup; Ex parte Mullaloo Progress Association Inc [2003] WASCA 293 at [77].

13 On 31 October 2002, a notice was sent to the applicant. It read:

"ASSOCIATIONS INCORPORATION ACT 1987

Section 35

NOTICE OF PROPOSED CANCELLATION

FREMANTLE ISLAMIC ASSOCIATION INCORPORATED

Notice is hereby given that it is the intention of the Commissioner for Fair Trading to cancel the incorporation of the above-named association under section 35(1)(a) of the Associations Incorporation Act 1987 as it

has been inoperative for the preceding 12 months.

If no reply showing cause to the contrary is received by the Commissioner within two (2) months from the date of this notice the incorporation of the association will be cancelled.

Dated the Thirty-first day of October, 2002

(Signature)

Denis Blakeway

Executive Officer, Associations and Charitable Collections

for Commissioner for Fair Trading"

14 This notice was the notice which was required under s 35(1).

15 By letter dated 13 January 2003, Ms Purdy, once again describing herself as "Senior Liaison Officer Associations", wrote to the former President of the applicant. The letter read:

"... I am writing to confirm that the [applicant] was cancelled on 2 January 2003. A copy of the notice of cancellation as published in the Government Gazette on 7 January 2002 ... is enclosed for your information."

16 This letter of 13 January 2003 is not a letter required by s 35. Section 35(2) authorises the Commissioner to cancel the incorporation. The letter of 13 January 2003 states that the cancellation occurred on 2 January 2003, but does not say who made the decision. Once again, it may be presumed by reason of the following document that the Commissioner was not satisfied of the matters listed in s 35(2), and that as a result the Commissioner, or his authorised agent, made the decision to cancel the applicant's incorporation. See again McLean Bros & Rigg Ltd v Grice (supra).

A notice was then published in the Government Gazette on 7 January 2003. It read:

"ASSOCIATIONS INCORPORATION ACT 1987

CANCELLED ASSOCIATION

(Section 35)

The Fremantle Islamic Association Incorporated

Notice is hereby given that the incorporation of the above-named association has been cancelled as from the date of this notice.

Dated the 2nd day of January, 2003

PATRICK WALKER, Commissioner for Fair Trading."

17 This publication in the Government Gazette was the step required by s 35(3) of the Act.

18 The above recital of the facts reveals that, at least in relation to the sending of the notice, it was Denis Blakeway who signed the notice "for the Commissioner for Fair Trading". There was no dispute that he was an agent for the Commissioner.

19 Subsequently letters were sent by the former President to the respondent making various points which go to the merits of whether or not the cancellation should have occurred. The merits of the Commissioner's decision is not in issue in this case, so I need not set out the points made by the former President.

" ...

B. Section 35 of the Act was not complied with in that it was not the [respondent] who held the belief required by section 35 to be held by the [respondent] and it was not the [respondent] who issued the notice required by the section to [be] given prior to the purported cancellation of the incorporation of the Applicant ... but an employee or employees of the Department of Consumer and Employment Protection; and thus

C. The purported notice of proposed cancellation issued to the [applicant] dated the 31st October 2002 signed by Denis Blakeway and the purported cancellation of the incorporation of the [applicant] were of no effect."

21 The applicant, in its submissions, emphasises the fact that exercise of the power under s 35 of the Act adversely affects rights both of the association and of its members, who are now deprived of the right to determine where or to whom the assets may go.

22 The applicant points to the fact that there is no power of delegation in the Act, and yet in relation to numerous other statutes which confer functions, duties, powers and responsibilities on the Commissioner, the powers of delegation were conferred. Further, the applicant points to the Consumer Affairs Act 1971 and to the fact that s 23 provides that a reference to the Commissioner in certain sections of that Act "shall be deemed" to include a reference to a person approved by the Minister or Chief Executive Officer of the Department to carry out certain functions under that Act. It is argued that a lack of a similar provision in the Act, and the lack of any power of delegation, should lead the Court to a conclusion that it was intended that the Commissioner should act personally under s 35 of the Act.

23 There is a body of authority recognising the distinction between the delegation of statutory power by an authority to a person ("X") and the exercise of the authority's power by X as an authorised agent of the authority. See O'Reilly v Commissioners of State Bank of Victoria [1983] HCA 47; (1983) 153 CLR 1 at 30.

24 As Brennan J said in Re Reference under s 11 of Ombudsman Act 1976 for an Advisory Opinion; Ex parte Director-General of Social Services (1979) 2 ALD 86 at 94, there is a confusing similarity between the two situations. X may make the decision in each situation and both decisions may be valid exercises of power. However, as Brennan J said in the Ombudsman's case (supra) at 94, the "sources of validity" are different. Where an authority has not delegated his power but has authorised another to act in exercise of his power, the act is to be done in the name of the authority: Ombudsman's case (supra) at 94 and London County Council v Agricultural Food Products Ltd [1955] 2 QB 218, per Romer LJ at 224. Where a delegate is exercising the power delegated to him, he may validly exercise that power in his own name: Owendale Pty Ltd v Anthony [1967] HCA 52; (1967) 117 CLR 539 at 562 at 611.

25 Whether the act required by statute may be done by an agent in the name of the authority, or whether the authority must act personally, depends upon an examination of the provision in question, read in the context of the statute as a whole. The nature of the power and all other circumstances of the case must be considered: O'Reilly's case (supra) page 11. Whether the exercise of the power could adversely affect the right or have serious consequences for a person, is a factor to be considered in coming to a conclusion: O'Reilly's case (supra) page 11. Whether, because of the number of powers and duties to be performed by the authority, Parliament must have intended that by reason of administrative necessity the authority could act via an agent, is also a matter for consideration: Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 at 38, per Mason J.

26 In this case, the respondent points to the fact that the Commissioner has many thousands of decisions to make in the Act and in other Acts in which he is said by Parliament to have powers, duties and functions. If all of these powers, duties, and functions were matters to be attended to personally by the Commissioner rather than via his agents, then it is likely that the work could not be done. The applicant, however, points to the fact that in relation to s 35 of the Act, only a few associations have their incorporation cancelled each year. There were four such cases in the 2000-2001 financial year; 13 in 2001-2002, and 48 in 2002-2003. It is true, as the Chief Justice said in Re Plutonic Operations Ltd; Ex parte Roberts [1999] WASCA 133 at 36, that it is necessary to determine with respect to each of the powers whether it may be exercised personally, but this determination must take place by bearing in mind other responsibilities that the Commissioner has under the Act. As a matter of statutory construction, it is always necessary to read the Act as a whole.

27 In the case of s 35 of the Act, it is true, as the applicant says, that the exercise of power by the Commissioner has serious consequences for a corporation and its members. Many examples can be found where the consequences were serious yet the courts concluded that a power conferred on an authority might be exercised through agents. So, for example, in Commonwealth v Rian Financial Services & Developments Pty Ltd [1992] FCA 239; (1992) 36 FCR 101, an agent was held to be authorised to exercise powers on behalf of an authority to cancel a contract. In Carltona Ltd v Commissioners of Works [1943] 2 All ER 560, it was held that an agent could exercise powers to requisition land. In O'Reilly's case (supra), an agent could decide which documents a taxpayer would be required to produce pursuant to notice.

28 It is also to be noted that s 35, if read as requiring the Commissioner to take all of the steps referred to, would require him to personally attend at the post office to "send" a notice stating the ground or grounds on which it was proposed to cancel the incorporation of an association. Parliament should surely not have intended that result. In addition, the suggestion that the Commissioner should personally take all of the steps leading to cancellation of incorporation as well as attending to his many other duties and exercising the large number of other powers to be performed by him, both under the Act and under other Acts, leads me to the view that Parliament must have intended that he could act through an authorised agent. This is particularly so where Parliament has built safeguards into the Act. The safeguards are that the Supreme Court may be asked to intervene and prevent a cancellation order being made if proceedings are taken by an aggrieved person, and that if some error is made in the process, the Commissioner may reinstate the incorporation of the association.

29 The fact that there is no statutory authority to delegate powers, in my view, strengthens rather than weakens the view that Parliament must have intended that the Commissioner could act via agents.

30 The final matter to consider is whether the steps taken by the respondent's agents have been steps "taken in his name". In my opinion, the steps must be taken in the name of the authority. This means that the steps must be taken, literally, in his name. Thus, in the London County Council case (supra), which was referred to by Brennan J in the Ombudsman case (supra), a notice to quit had to be signed by an assistant as "the valuer to the Council". It was the valuer to the Council who was authorised. Romer LJ at 224 said:

"... If the notices in dispute had been signed by the assistant in his own name they would doubtless had been invalid. This, however, is not what was done; for the assistant signed in the name of the valuer and, as I have already intimated, the signature is to be regarded as the valuer's own, provided that the assistant was authorized to affix it."

31 Turning to the facts in this case, the document which must come under scrutiny is the notice under s 35(1), which I have set out above. The signature of Denis Blakeway appears above his name, but the signature is said to be "for Commissioner for Fair Trading". The notice is therefore in the name of the Commissioner for Fair Trading, and the typing of the name of "Commissioner for Fair Trading" on the notice was similar to the affixing of a facsimile signature stamped on the document by an officer of the Commissioner of Taxation in O'Reilly's case (supra). The signature of Denis Blakeway identifies the agent who is affixing the name of the Commissioner for Fair Trading. The typing of the name of the Commissioner for Fair Trading is a signature by procuration, by proxy. See Denning LJ in the London County Council case (supra) at page 222. Strictly speaking, it was not necessary for Denis Blakeway's name to appear at all. He could, with the authority of the Commissioner, have affixed a facsimile signature of the Commissioner via a stamp, or written his name and nothing more. However, in my opinion, it makes for good administration for the agent authorised to sign a document in the name of a donee of power, to identify himself or herself as the person who has affixed, written, or added the name to the document.

32 The formation of the belief, on reasonable cause, of the matter in s 35(1) by Denis Blakeway (if that occurred) required no notice or document to be signed by him. If he was authorised to form a belief on behalf of the Commissioner (and that is not in dispute), then his belief was the belief of the Commissioner.

33 The only other document which is required under s 35, in the context of this case, is the publication in the Government Gazette, and that is a document in the name of the respondent (although probably by his agent).

34 For the above reasons, I would discharge the order nisi.

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : RE WALKER; EX PARTE FREMANTLE ISLAMIC ASSOCIATION INCORPORATED [2003] WASC 252 (S)

MATTER : Section 35 of the Associations Incorporation Act 1987

An application for a Writ of Prohibition against PATRICK JOHN WALKER, COMMISSIONER FOR FAIR TRADING

Practice and procedure - Application by unsuccessful party for costs out of fund

Respondent : Department of Consumer & Employment Protection

Knight v F P Special Assets Ltd [1992] HCA 28; (1992) 174 CLR 178

W J Green & Co v Cooper & Oxley Constructions Co Pty Ltd (1993) 10 WAR 227

1 PULLIN J: This is an application, nominally by the applicant, that its costs be paid out of the funds held by the respondent. The application is made following the dismissal of the application to obtain an order quashing the respondent's decision to cancel the incorporation of the applicant, which occurred on 2 January 2003. As soon as that part of the history of this matter is stated, it is clear that it is not the applicant which is making the application for costs, because it no longer exists.

2 The person who has been instructing the solicitors for the cancelled association is Mohammed Ayiub Ali, the former president of the cancelled association. The respondent was prompted to take action to cancel the incorporation because it received a complaint about the conduct of the association. The information he was given in 2002 was that no annual general meeting had been convened since July 1999, despite the rules requiring such meetings on an annual basis.

3 Mr Pillay, in an affidavit filed in support of these proceedings and sworn 23 June 2003, said that he had been informed by Mr Ali that funds for a mosque had been collected by the association and that the association "lay dormant" while the president was overseas. In a letter dated 16 March 2003, the president said it was not true that the association had not been active because the executive committee, as he called it, had met regularly every Friday after Friday prayers.

4 It is to be observed that by clause 11 of the constitution, management is vested in the annual general meeting and a committee of management. The committee of management is elected by members. Whether Mr Ali meant to refer to the committee of management when he said that the executive committee met on Fridays, I do not know. I have not been shown the record of any proceedings of the executive committee. At no stage before I gave judgment in this application - that is, on the original application - did Mr Ali attempt to reveal who he claimed the committee members were, or how decisions were made for the association, or whether the proceedings had been authorised by a committee of management of the association.

5 The funds which are now held by the respondent total just over $24,000. They had been transferred to the respondent on 22 January 2003.

6 When I handed down my judgment on 20 January 2004, Mr Pillay foreshadowed an application for payment of costs out of the funds of the former incorporated body. An order was made that the applicant file and serve any affidavits in support of that application within 28 days, and that the respondent file and serve any answering affidavits 14 days thereafter.

7 No affidavits were filed by Mr Ali before 19 March 2004. I am informed by Mr Hawkins, appearing as counsel for the applicant, that affidavits were filed last Friday, or at least faxed somewhere to the Court on Friday. They had not been seen by me before this hearing commenced, and had not been served on the respondent. I was told that one of the affidavits which is not even yet before me, stated that Mr Ali was in north Queensland. I assume that was by way of some explanation about why no affidavits or other information had been put forward in support of the application.

8 The other affidavit, a photocopy of which I have been shown and which is sworn by Naveen Chandra Pillay on 19 March 2004, says that he was instructed by Mr Ali and verily believes that the circumstances set out in the letter dated 16 March 2004, which was exhibited and which was addressed "To Whom It May Concern," were correct. The letter was signed by Mohammed A. Ali, "president", and says that prior to the cancellation of the Fremantle Islamic Association Inc, the office-bearers were as follows, and then he sets out the names of eight people, one being Mr Ali, as president; another being Mr Ismail Ahmed, as vice-president; Mr Guray Erok, as treasurer; Mr Zaheer Ali, as secretary; and four committee members.

9 The letter goes on to say that Mr Ali was authorised by the "said office bearers" to pursue the association's application for an order nisi for a writ of prohibition and declaration. The difficulty with this information is that it still does not say whether or not this collection of people are members of the committee of management, so it is not clear, after reading the affidavit and that letter, whether or not there was a committee of management or when, if there were such a committee, the members were elected and who those members were. So it is still not clear whether any collection of people constituting the former committee of management have authorised Mr Ali to take any of this action.

10 Strictly speaking, a decision of the former committee of management, if it ever existed, did not authorise the commencement of proceedings once the association was cancelled, but if there was a former committee of management and it resolved to bring the proceedings or authorised Mr Ali to do so, then that would be a highly material piece of information in the exercise of any discretion which the Court has.

11 As it turns out, despite plenty of time being provided, it is no clearer today than it has been in the past that Mr Ali is acting with the authority of persons who were formerly properly in control of the incorporated body.

12 The Court does have authority in certain circumstances to make costs orders of the kind sought here, and that authority comes from s 37(1) of the Supreme Court Act, which provides that:

"Subject to the provisions of this Act and to the Rules of Court and to the express provisions of the Local Courts Act 1904, or any other Act, the costs of and incidental to all proceedings in the Supreme Court, including the administration of estates and trusts, shall be in the discretion of the Court or Judge, and the Court or Judge shall have full power to determine by whom or out of what estate, fund, or property, and to what extent such costs are to be paid."

13 There is also a provision in the Rules authorising payment of moneys out of funds, that being O 66 r 9, but I do not believe that provision applies because it relates to parties. Section 37 is the wider provision, and if any provision does apply, in my view it is that section which would assist the applicant in the application which is made today.

14 The "subject to" provision in s 37, of course, compels me to examine the provisions of the Associations Incorporation Act 1987. The relevant provisions are s 33, s 35 and s 36. Section 35 provides for the cancellation of the incorporation of an association. Section 36 provides that where there has been a cancellation, the property of the association vests in the Commissioner. Section 36 also provides that the Commissioner may give directions as he thinks just for or with respect to the payment of debts and liabilities of the association, the distribution of its property and the winding up of its affairs. Section 36(3) provides that s 33 applies to, and in respect of, the vesting, under s 36, of property of an incorporated association remaining after satisfaction of the debts and liabilities of the association and the payment of any amount under s 36(2) in the same way as that section applies to and in respect of the vesting of that property in a winding up of an incorporated association. Section 33 must therefore be examined. Section 33(1) identifies what is meant by the surplus property of an incorporated association. It is the reference to the property of the association remaining after satisfaction of debts and liabilities of the association and the costs, charges and expenses of the winding up of the association. Section 33(2) provides:

"Notwithstanding any Act or law to the contrary, it shall not be lawful for any part of the surplus property of an incorporated association to be distributed on the winding up of the association -

(a) among the members or former members of the association; ..."

15 Now it is clear that the situation we have here is that Mr Ali has instructed solicitors. By doing so, he has incurred a debt to those solicitors. It is also clear that, on the material before me, it has not been established that he had any authority from the association to conduct litigation of this kind, and therefore Mr Ali could not claim that the legal expenses associated with this litigation were costs which would amount to a debt or liability of the association.

16 It was argued that the costs of this litigation might fit within the description of costs, charges and expenses of the winding up of the association. That was a submission made by Mr Hawkins, but I am afraid that I cannot agree with it. In my view, the costs, charges and expenses of the winding up of the association would not include litigation attempting to quash a decision of the respondent to cancel incorporation of the association.

17 What we have then is an attempt by Mr Ali to have some of the surplus property of the formerly incorporated association distributed to him for the purpose of discharging the costs of conducting this litigation. Unfortunately, Mr Ali is a former member of the association, and in my view that stands in the way of the attempt to gain an order of the kind which is sought here.

18 One can have some degree of sympathy with Mr Ali, who was, after all, attempting to save the applicant from the process of cancellation and winding up which is now well under way; but s 37 of the Supreme Court Act is clearly subject to the provisions of s 33 of the Associations Incorporation Act 1987, and that creates the problem which I have mentioned, which is that there is a prohibition on an order of the kind which is sought here, ie a distribution to a former member.

19 If I am wrong about that view of the legal position, then there is a question of whether or not I should exercise my discretion and make an order in favour of payment which would allow Mr Ali to discharge the costs that he has incurred in the conduct of the litigation. It is clear that every opportunity should be given to a former president to challenge a decision of this kind, but steps could, of course, have been taken by Mr Ali before cancellation took place. The battle could have been fought while the association was still in existence, or in existence as an incorporated body.

20 This legislation - that is, the new Associations Incorporation Act 1987 - was introduced with the need for heightened accountability in mind. In the Second Reading Speech by the Attorney General on 11 June 1987 when the Associations Incorporation Bill was introduced, it was noted that there were major deficiencies in the then Act, including inadequate accountability of association executives to their own membership. The purpose or aim of the new Bill, and therefore of the new legislation, was to improve the accountability of associations to their members.

21 What has led to the cancellation in this case was lack of accountability which formed the foundation for this application. Taking into account that policy and the fact that Mr Ali has made no proper attempt to give particulars about who made the decision about the conduct of this litigation, I would exercise my discretion against the making of an order of the kind which is being sought in this case. I dismiss the application.