Duncan v Commissioner of Fair Trading, New South Wales Office of Fair Trading [2000] FCA 1615 | Case summary

REASONS FOR DECISION Introduction 1 James Alexander Duncan has held a real estate agent's licence and business agent's licence under the Property Stock and Business Agents Act 2002, and its predecessor, for many years. For some years he was the licensee-in-charge and a director of Diosta Pty Ltd ("Diosta"), which traded as Raine & Horne Special Projects NSW and held a corporate licence under that Act. This expired on 2 December 2006. 2 It is not disputed that Diosta ceased trading in June 2006. On 26 July 2006 an extraordinary general meeting of Diosta was held at which a number of special resolutions was passed resolving that the company was "unable to pay its debts as and when they fall due," that "the company be wound up voluntarily." The company appointed a Liquidator for the purpose of that winding up. Notice of the appointment of Mitchell Ball as liquidator of Diosta was filed with ASIC the next day. 3 On 21 February 2007 Mr Duncan applied for a renewal of his licences, which were due to expire on 27 February 2007. In his renewal application Mr Duncan answered "Yes" to the following questions: "Are you a director or person concerned in the management of any corporation that is the subject of a winding up order or the appointment of a controller or administrator?" "In the preceding 3 years were you a director or person concerned in the management of any corporation which was the subject of a winding up order or the appointment of a controller or administrator?" 4 These answers gave rise to a consideration of whether Mr Duncan was a disqualified person within the meaning of section 16 of the Property Stock and Business Agents Act 2002, and therefore ineligible to hold a licence under that section 14(1)(d) of the Act. At the time Mr Duncan lodged his application section 16 relevantly provided: "(1) A person is a disqualified person for the purposes of this Act if the person: … (e) at any time in the 3 years preceding the application for the licence or certificate of registration, was concerned in the management of a corporation when the corporation was the subject of a winding up order or when a controller or administrator was appointed, unless the Director-General is satisfied that the person took all reasonable steps to avoid the liquidation or administration, or …" 5 A week later, on 1 March 2007, the Property, Stock and Business Agents Amendment Act 2006 was proclaimed and commenced operation. Among other things it amended section 16 of the Property Stock and Business Agents Act 2002 by repealing sub-section (1)(e) and introducing new provisions as to disqualified persons. Relevantly section 16 now provides: "(1A) A person is also a disqualified person for the purposes of this Act (except for the purposes of eligibility to hold a certificate of registration) if the person: … (c) is, or was at any time in the last 3 years, concerned in the management of, or a director of, an externally-administered body corporate (within the meaning of the Corporations Act) except in a case of the voluntary winding up of the body corporate, or … (2) The Director-General may determine that an offence committed by a person should be ignored for the purposes of this section because of the time that has passed since the offence was committed or because of the triviality of the acts or omissions giving rise to the offence. (2A) The Director-General may, in any case that the Director-General thinks it appropriate to do so, determine that a suspension or disqualification from holding a licence, permit or other authority under legislation administered by the Minister (as referred to in sub-section (1)(h)) is to be ignored for the purposes of this section. (2B) The Director-General may exempt a person from the operation of sub-section (1A)(a), (b) or (c) by: (a) certifying, in the case of exemption from sub-section (1A)(a), that the Director-General is satisfied that the person took all reasonable steps to avoid the bankruptcy concerned, or (b) certifying, in the case of exemption from sub-section (1A)(b), that the Director-General is satisfied that the person took all reasonable steps to avoid the bankruptcy or other financial difficulties concerned, or (c) certifying, in the case of exemption from sub-section (1A)(c), that the Director-General is satisfied that the person took all reasonable steps (while concerned in the management of, or a director of, the body corporate) to avoid the body corporate becoming an externally-administered body corporate. (2C) Sub-section (1A)(d) does not operate to make a person a disqualified person unless the Director-General has served a notice on the person giving the person the opportunity to make oral or written submissions to the Director-General within a period (not being less than 14 days) specified in the notice with respect to the grounds on which the person believes he or she took all reasonable steps to avoid the body corporate becoming an externally-administered body corporate and the Director-General is satisfied that the person failed to take all such steps. (2D) In determining for the purposes of sub-section (2B) or (2C) what reasonable steps could have been taken by a person to avoid a particular outcome, the Director-General is to have regard to the steps that could have been taken by the person from the time that the financial difficulties that gave rise to the outcome first arose. …" 6 The Commissioner sought details relating to the circumstances leading to the company resolving to appoint a liquidator, as it could not pay its debts. Mr Duncan provided some information in response. 7 On 18 June 2007 the Commissioner determined to refuse Mr Duncan's application for renewal of his licences on the grounds that he is a disqualified person and not eligible to hold a licence under the Act. In so doing, the delegate applied the provisions of the Act as amended. He found that Mr Duncan was a director of Diosta, a company which had an externally appointed administrator appointed on 27 July 2006 and was therefore a disqualified person. The delegate was not satisfied under section 16(2C) that Mr Duncan had taken "all reasonable steps to avoid the external administration of Diosta." 8 Mr Duncan sought an internal review of that decision. On 18 October 2007 an Internal Review Officer confirmed the original decision on the same grounds. 9 On 14 November 2007 Mr Duncan sought a review of that decision in this Tribunal. That review was listed for hearing before me on 12 March 2008. 10 Section 63 of the Administrative Decision Tribunal Act 1997 (the ADTA) says that in determining an application for review the Tribunal is to make the correct and preferable decision having regard to the material before it, and any applicable written or unwritten law. It is well established that in considering an application for review the Tribunal is not constrained to have regard only to the material that was before the Commissioner, but may have regard to any relevant material before it at the time of the review: Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409. Issues 11 At the hearing it rapidly became apparent that there were a number of legal issues which required determination before the review could be finally determined. 12 The first concerned what law should be applied. Should Mr Duncan's application be considered under the provisions section 16(1)(e) of the Property Stock and Business Agents Act 2002, as it was at the time he filed his application for renewal of his licences, or should the provisions of section 16(1A), which was introduced by the Property, Stock and Business Agents Amendment Act 2006 on 1 March 2007, after Mr Duncan made his application, apply? 13 The second was whether, if section 16(1A) was the relevant law, it had any application to Mr Duncan because Diosta had been the subject of a 'voluntary winding up" and therefore fitted within the exception to that sub-section. This, in turn, required a consideration of whether Diosta had been voluntarily wound up within the meaning of the Act. 14 At the hearing I heard some evidence from Mr Duncan and heard submissions on the legal issues. This led to the identification of further evidence that would be required to determine matter, if I held that section 16(1A) was the relevant law and it was found to apply to Mr Duncan's circumstances. 15 I reserved my decision on the legal issues. 16 It was agreed that, if I determined that the law to be applied was that found in section 16(1)(A) and that it had no application because Diosta had been voluntarily wound up, then I should set aside the decision of the Commissioner and remit it for reconsideration. If I reached a different conclusion, I would publish my reasons and list the matter for further hearing. What Law Should be Applied? 17 Mr Duncan submitted that the relevant law to be applied was that in operation when he made his renewal application, section 16(1)(e), not the law made subsequently. The Commissioner, citing Esber v Commonwealth (1992) 174 CLR 430, 106 ALR 577, argued that section 16(1A), representing the law as it was that the time the delegate and Internal Review Officer made their decisions, applied, as Mr Duncan had no vested or accrued right under the old provision. 18 The retrospective operation of amending legislation is a complex and difficult area of statutory interpretation. In this case, however, the amendments made by the introduction of section 16(1A) do not truly have a retrospective operation. They do not impact on existing licences, but govern the decision making process in granting licences following the commencement of the sub-section. In Coleman v Shell Co. of Australia Ltd (1943) 45 SR (NSW) 27 at 31, Jordan CJ explained that: "… as regards any matter or transaction, if events have occurred prior to the passing of an Act, which have brought into existence particular rights or liabilities in respect of that matter or transaction, it would be giving a retrospective operation to the Act to treat it as intended to alter those rights or liabilities, but it would not be giving it a retrospective operation to treat it as governing the future operation of the matter or transaction as regards the creation of further particular rights or liabilities." 19 The effect of the amendment is to prescribe new circumstances, albeit ones that may have occurred in the past, which govern the granting of licences under the Act after the commencement of the amendments. This does not offend the principle against retrospectivity embodied in section 30 of the Interpretation Act 1987: see Robertson v City if Nunawading [1973] VR 819 at 824. Two examples cited by Pearce and Geddes, in Statutory Interpretation in Australia, 6th Ed, Butterworth's (2006) at page 309-310 illustrate this point. In Re a Solicitors Clerk [1957] 1 WLR 1219 a clerk was convicted of larceny in 1953. At that time this would not have prevented his admission as a solicitor. Subsequent amendments, made before he applied for admission, did. When he sought admission the clerk unsuccessfully argued that the amendment had a retrospective operation. This argument failed because the amendment operated in the future. A similar result occurred in La Maccha v Minister for Primary Industries (1986) 72 ALR 23 where, following an amendment to the Act, a fisherman's licence was cancelled on the basis of his conviction for an earlier offence. At the time of the offence, it had not been a ground for cancellation. The cancellation was held to be valid, as the amendment only operated in the future. 20 Applying that principle I conclude that section 16(1A) of the Act does not have a retrospective operation. 21 The only other basis on which that Mr Duncan could argue that the earlier provision should apply is that he has a accrued right to have the application determined in accordance with the law as it stood when he filed his application. Section 30 of the Interpretation Act 1987 provides: (1) The amendment or repeal of an Act or statutory rule does not: (a) … (b) affect the previous operation of the Act or statutory rule or anything duly suffered, done or commenced under the Act or statutory rule, or (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under the Act or statutory rule, or … and any such penalty may be imposed and enforced, and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, as if the Act or statutory rule had not been amended or repealed. 22 The Property, Stock and Business Agents Amendment Act 2006 which introduced section 16(1A) to the Act contained no transitional provisions which assist in determining the interaction between it and the repealed section 16(1)(e). As a consequence the principles set out in section 30 of Interpretation Act 1987 apply. 23 Under section 30 it is necessary to determine whether Mr Duncan has an accrued right to have his renewal application considered under the repealed section 16(1)(e). In her written submission, Ms Mauro for the Commissioner submitted that, "the application was decided under legislation applicable at the time of the decision." She cited section 63 of the Administrative Decision Tribunal Act 1997 and Esber v Commonwealth (1992) 174 CLR 430 at paragraph 8. In a footnote to that case citation her submissions said: "The case deals with accrued rights or mere expectation, that is, whether Mr Duncan had an accrued right to have his application dealt with under the repealed provision or whether his application should be dealt with under the new provisions as he merely had a hope or expectation that his licence would be renewed." 24 Esber v Commonwealth concerned an appeal to the Commonwealth AAT against a refusal by the Commissioner for Employees' Compensation to redeem weekly payments under section 49 of the Compensation (Commonwealth Government Employees) Act 1971 (Cth). After Mr Esber had made that application, but before the AAT heard it, the 1971 Act was repealed by the Commonwealth Employees' Rehabilitation and Compensation Act 1988 (Cth). The AAT found that the provisions of the 1971 Act applied, and ultimately ordered a significant redemption in Mr Esber's favour. The Commonwealth appealed to a Full Bench of the Federal Court, which held that the 1998 Act applied. On appeal to the High Court the majority (Mason CJ, Brennan, Deane, Toohey and Gaudron JJ) reversed that decision and held that the 1971 Act applied. The Court relied on specific transitional provisions in the legislation, but also considered the application of section 8(c) of Acts Interpretation Act 1901 (Cth) which is in similar terms to section 30(1)(c) of the Interpretation Act 1987. 25 The majority (at ALR 582) said that the first step was to determine what, if any, right had been acquired or accrued. Two such rights were identified by Mr Esber: first a right to redemption, and secondly, a right to have the Tribunal determine his application for review. With respect to the latter, the majority said (at ALR 582): "Once the appellant lodged an application to the tribunal to review the delegate's decision, he had a right to have the decision of the delegate reconsidered and determined by the tribunal. It was not merely "a power to take advantage of an enactment" Mathieson v Burton (1971) 24 CLR 1, per Gibbs J at 23; and see Robertson v City of Nunawading [1973] VR 81. Nor was it a mere matter of procedure (See Newell v R (1936) 55 CLR 707, at 711-12); it was a substantive right (see, by way of analogy, Australian Coal and Shale Employees Federation v Aberfield Coal Mining Co Ltd (1942) 66 CLR 161, at 175, 178, 185, 194; Colonial Sugar Refinery Co v Irving [1905] AC 369, at 372-3) Section 8 of the Acts Interpretation Act protects anything that may truly be described as a right, "although that right might fairly be called inchoate or contingent" Free Lanka Insurance Co Ltd v Ranasinghe [1964] AC 541, at 552; see also Continental Liqueurs Pty Ltd v G F Heublein and Bro Inc (1960) 103 CLR 422, at 426-7; Director of Public Works v Ho Po Sang [1961] AC 901. This was such a right. It was a right in existence at the time the 1971 Act was repealed. That being so, and in the absence of a contrary intention, the right was protected by section 8 of the Acts Interpretation Act and was not affected by the repeal of the 1971 Act." 26 In Azevedo v Secretary, Department of Primary Industries and Energy (1992) 106 ALR 683 the Applicant had applied for a boat licence under the Fisheries Act 1952 (Cth) and the northern prawn fisheries plan of management. The Act gave the Secretary discretion as to whether or not to grant a licence but, French J (at 700) found that when read with the plan, the legislative scheme required that the Applicant be issued a licence upon specified criteria being satisfied. The delegate of the Secretary refused the application for a boat licence, which decision the applicant sought to review in the AAT. Between the time of the original decision and the filing of the AAT appeal, the plan was changed by amending the relevant criteria. The AAT found that in reviewing the decision it should apply the new criteria. French J adopted the principle in New South Wales Aboriginal Land Council v Minister Administering the Crown Lands (Consolidation) Act and the Western Lands Act (1988) 14 NSWLR 685 at 696 (per Hope JA, with whom Samuels and Clarke JJA agreed) that: "… a statutory right will be preserved notwithstanding the repeal or amendment of the statute even though the right can only be implemented by a non-discretionary decision of an official or a court, provided that the statutory machinery for obtaining that decision has been set in train before the repeal or amendment." As a consequence French J determined that the Applicant: "… had the right upon lodging his application to the allocation of the Class A and Class C units if he could satisfy the relevant criteria … of the plan as it then stood. That right was an accrued right for the purposes of section 8 of the Acts Interpretation Act 1901. The question remains whether, having regard to the amendment to the plan, it was preserved." His Honour went on to analyse the amendments to the plan and concluded that they were intended to apply to applications made before the amendments, and, as a result, an intention to displace the accrued right was disclosed. The AAT had therefore applied the correct law, albeit for the wrong reasons. 27 The facts in New South Wales Aboriginal Land Council v Minister Administering the Crown Lands (Consolidation) Act and the Western Lands Act are also illustrative. On 26 April 1984, the New South Wales Aboriginal Land Council made application to the Minister in respect of claimable western crown lands under the Aboriginal Land Rights Act 1983. The claim was refused on 8 November 1984. On 21 December 1984 the Land Council appealed to the Land and Environment Court. On 2 May 1986 the Aboriginal Land Rights Act was amended so that any transfer of lands to which the Western Lands Act 1901 applied would be by way of "a lease in perpetuity under that Act" rather than as "an estate in fee simple." On 3 September 1987 the Minister decided to approve the claim, but proposed to effect the transfer by way of a lease in perpetuity under the Western Lands Act 1901. The Land Council filed an unsuccessful appeal to the Land and Environment Court. From there they appealed to the Court of Appeal. In his judgment Hope JA (at 687) described the scheme of the Act and noted that it required certain conditions to be satisfied before a claim could be granted - whether the lands were claimable Crown lands when the claim was made and whether they were required for an essential purpose. If those conditions were satisfied the Act required that the claim be granted. 28 Hope JA observed with respect to the Minister's function that (at 691): '… He had no discretion in the matter; he was simply required to look at a state of facts existing at the date of the claim. The nature of his inquiry was not affected by the circumstance that the resolution of the question might be difficult or might involve questions of judgment. Thus the nature of the question whether the land is likely to be needed for an essential public purpose as at the date of the claim is a question of fact, even though different persons may arrive at different conclusions. This is in no way different to a decision, which a court may have to make as to, whether a defendant in an action for damages was negligent, or whether an applicant in a Workers' Compensation application has suffered an injury arising out of his employment. If the conditions were in truth satisfied at the time the claim was made the investigation of them by the Minister and his satisfaction in respect of them would be no different in substance from an investigation by a court as to whether facts existed at some prior date giving rise to a right in a party making a claim to that right before it. The Minister might make a wrong decision, but no question of discretion would be involved." In determining an appeal from the Minister the Land and Environment Court was similarly constrained. The fact the Act provided that after hearing the appeal the Court may order the transfer of the lands did not mean that the Court had a discretion (at 692): "At first sight the word "may" in relation to what the court is to do if the Minister fails to discharge the onus upon him may suggest that the court has a discretion. Despite the Interpretation Act 1897, section 23, I do not think that this is so. In my opinion the word "may" merely means that the court, which would not otherwise have the power so to do, is empowered to order the transfer of the land to the claimant. Nothing in the section or in any other part of the Act points to any area of discretion to be exercised by the court or to the matters which would be relevant to the exercise of such a discretion if there were one." 29 In contrast to an accrued right, a mere hope or expectation that a right will be created does not amount to a right which will be protected: Director of Public Works v Ho Po Sang [1961] AC 901. In that case a lessee of Hong Kong premises had applied for a rebuilding certificate. The applicable ordinance provided that, if the Director of Public Works gave the certificate, the lessee could call upon the tenants to quit occupation. The Director gave notice of his intention to issue a certificate, but before he did so the tenants appealed. While the appeal process was pending the ordinance was amended by removing the lessee's right to require the tenants to quit. The Privy Council (Lord Denning, Lord Morris of Borth-y-Gest and the Right Honourable LMD De Silva) held that the lessee had not had a right to certificate under the repealed legislation, because when the appeals were lodged no one knew what the result would be. It was not a matter for the Director. At the time of the amendment, the lessee had only a hope or expectation that he would receive a certificate, but no accrued right. The Privy Council said, at 922, "… there is a manifest distinction between an investigation in respect of a right and an investigation which is to decide whether some right should or should not be given. Upon a repeal the former is preserved by the Interpretation Act. The latter is not." 30 In Robertson v City of Nunawading [1973] VR 816 at Winneke CJ, Gowans and Starke JJ said at 826 that if: "… the mere taking of procedural steps under a statute in the expectation of achieving a benefit from an administrative authority does not create a right to the continuance of the proceedings after the repeal of the statute, then the conclusion seems equally justified that the mere taking of such procedural steps does not create a right to the continuance of the proceedings unaffected by amendment of the statute." There a Local Council, considering a sub-division application, had requested payment of a fee that had not been payable when the application was lodged, but became payable as a result of a subsequent amendment. The Full Court found that the fee was payable. 31 A similar conclusion was reached in by the Full Court of the Federal Court in Hicks v Aboriginal Legal Service of Western Australia (2001) 185 ALR 689 where the issue concerned a refusal to grant legal aid to a native title group, where an amendment to the Native Title Act 1993 (Cth), made after the application, deprived the ALS of its former status as a representative body under that Act. The Court found that, at 701: "… the application made to the ALS was neither the initiation of something in the nature of a cause of action nor an investigation in respect of a right, but instead began an investigation to decide whether some right should or should not be given or involved procedural steps under a statute to decide if a benefit should be granted by an administrative authority, it follows that section 8 of the Acts Interpretation Act did not keep alive after 30 June 2000 the application made to the ALS for the benefit of the group." 32 An analysis of the provisions of the Property Stock and Business Agents Act 2002 leads to the conclusion that Mr Duncan had no accrued right protected by section 30 of the Interpretation Act 1987 to have his application for licences considered under the repealed provisions. Section 14 provides that: (1)A natural person is eligible to hold a licence only if the Director-General is satisfied that the person: (a) is at least 18 years of age, and (b) is a fit and proper person to hold a licence and each person with whom the person is in partnership in connection with the business concerned is a fit and proper person to hold a licence, and (c) has the qualifications required for the issue of the licence, and (d) is not a disqualified person, and (e) has paid such part of any contribution or levy payable under Part 10 (Compensation Fund) as is due and payable on the granting of the licence. (2) …" 33 While some of these matters are questions of fact, which can be simply determined, an assessment of whether an Applicant is fit and proper undoubtedly requires the exercise of discretion. In Hughes and Vale Pty Ltd v New South Wales (No. 2) (1955) 93 CLR 127 the High Court said (at 156-7): "The expression 'fit and proper' is of course familiar enough as traditional words when used with reference to offices and perhaps vocation. But their very purpose is to give the widest scope for judgment and indeed for rejection. 'Fit' (or 'idoneus') with respect to an office is said to involve three things, honesty, knowledge and ability … When the question was whether a man was a fit and proper person to hold a licence for the sale of liquor it was considered that it ought not to be confined to an inquiry into his character and that it would be unwise to attempt any definition of the matters which may legitimately be inquired into; each case must depend upon its own circumstances." The discretion vested in a decision maker in determining whether a person is fit and proper, in any given context, was said by the Full Court of the Federal Court in Commissioner for ACT Revenue v Alphaone Pty Ltd (1994) 49 FCR 589 at 389, per Northrop, Miles and French JJ, to "give wide scope for judgement and allow broad bases for rejection." 34 Mr Duncan as an applicant for the issue of a licence under the Property Stock and Business Agents Act 2002 does not have an accrued right of the kind discussed in Esber v Commonwealth, Azevedo v Secretary, Department of Primary Industries and Energy or New South Wales Aboriginal Land Council v Minister Administering the Crown Lands (Consolidation) Act and the Western Lands Act. This is so, as was the case in Director of Public Works v Ho Po Sang , because, because when he made his application, and until such time as the Commissioner determined it, Mr Duncan had only a hope or expectation that the Commissioner would exercise the discretion favourably. He had no accrued right to have his licence renewed under the legislation as it then was. As a consequence, section30 of the Interpretation Act 1987 does not operate to require that the application be considered under the law, as it was at the time that he made it. 35 As a result I find that I should apply the law as it stood after amendment by the Property, Stock and Business Agents Amendment Act 2006. Was Diosta the subject of a 'voluntary winding up' with the meaning of the exception to section 16(1A)? 36 Section 16(1A) provides: "(1A) A person is also a disqualified person for the purposes of this Act (except for the purposes of eligibility to hold a certificate of registration) if the person: … (c) is, or was at any time in the last 3 years, concerned in the management of, or a director of, an externally-administered body corporate (within the meaning of the Corporations Act) except in a case of the voluntary winding up of the body corporate, 37 A general meeting of Diosta passed a special resolution on 27 July 2006 in which it was resolved that the company was "unable to pay its debts and when they fall due," and that "the company be wound up voluntarily." This is a special resolution required by section 491 of the Corporations Act 2001 (Cth). That section allows a company to pass such a resolution subject to the provisions of section 490, which in turn provides: "Except with the leave of the Court , a company cannot resolve that it be wound up voluntarily if: (a) an application for the company to be wound up in insolvency has been filed; or (b) the Court has ordered that the company be wound up in insolvency, whether or not the order was made on such an application." 38 These sections are found in Chapter 5 (External Administration), Part 5.5 (Voluntary Winding Up) of the Corporations Act 2001 (Cth). Division 1 of that part, is headed "Resolution for winding up" and is concerned with the making of a resolution for voluntary winding up and its effect. Section 494(1) provides that: "(1) Where it is proposed to wind up a company voluntarily, a majority of the directors may, before the date on which the notices of the meeting at which the resolution for the winding up of the company is to be proposed are sent out, make a written declaration to the effect that they have made an inquiry into the affairs of the company and that, at a meeting of directors , they have formed the opinion that the company will be able to pay its debts in full within a period not exceeding 12 months after the commencement of the winding up." Division 2 is headed "Members' voluntary winding up" and makes provision to the appointment, transfer of powers to, and remuneration of liquidators (section 495) and for the liquidators duties when the company turns out to be insolvent (section 496). Division 3 is headed "Creditors' voluntary winding up" and makes provision for a meeting of creditors following a resolution for voluntary winding up being passed, and for the procedures to be followed in respect to that meeting (section 497). The creditors meeting may be adjourned (section 498). At such a meeting the creditors may resolve to make further inquires as to the company's finances, and to accept the appointment of the liquidator or appoint another person as liquidator. Civil proceedings against a company that has passed a resolution for voluntary winding up are stayed without leave of the Court, and execution against the property of the company is void (section 500). Division 4 is headed "Voluntary winding up generally". It contains, among others, provisions dealing with how a company's property is to be applied on its winding up (section 501), the Court appointment or removal of liquidators (section 502 and 503), liquidators remuneration (section 504), the powers and validity of a liquidators actions (section 505 to 506A) and the reporting obligations of the liquidator (section 508). 39 At issue in the present case is whether a creditors' voluntary winding up under the Corporations Act 2001 (Cth) is a voluntary winding up within the meaning of the exception in 16(1A)(c) of the Property Stock and Business Agents Act 2002. Mr Duncan says it is, in which case 16(1A) will have no application. The Commissioner, however, maintained that what is meant and intended by those words is a members' voluntary winding up, not a creditors' voluntary winding up. The Commissioner sought to rely on the provisions of section 33 and 34 of the Interpretation Act 1987. Section 33 provides: "In the interpretation of a provision of an Act or statutory rule, a construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose or object is expressly stated in the Act or statutory rule or, in the case of a statutory rule, in the Act under which the rule was made) shall be preferred to a construction that would not promote that purpose or object." 40 Section 34 of the Interpretation Act 1987 then provides: "(1) In the interpretation of a provision of an Act or statutory rule, if any material not forming part of the Act or statutory rule is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material: (a) to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act or statutory rule and the purpose or object underlying the Act or statutory rule and, in the case of a statutory rule, the purpose or object underlying the Act under which the rule was made), or (b) to determine the meaning of the provision: (i) if the provision is ambiguous or obscure, or (ii) if the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act or statutory rule and the purpose or object underlying the Act or statutory rule and, in the case of a statutory rule, the purpose or object underlying the Act under which the rule was made) leads to a result that is manifestly absurd or is unreasonable." 41 In Osborne v Commissioner of Police, NSW Police Service [2000] NSWADTAP 10 the Appeal Panel discussed the circumstances in which resort can be had to extrinsic material in ascertaining the meaning of a statutory provision. The Appeal Panel said at [35-36]: "As we interpret sections 33 and 34, the method to be adopted has two steps with the second step, the s 34 step, subordinate to the first step, the section 33 step. First an attempt should be made to ascertain the meaning of the text. That step can be informed by having regard to the objects and purpose of the legislation and the content of the legislation as a whole. The second step, the section 34 step, is ancillary. Section 34 provides a variety of options. Under sub-section (1), the ancillary step may involve considering the extrinsic material to confirm' that the meaning attributed as the ordinary meaning of the provision is consistent with the extrinsic materials; or to determine' the meaning of the provision if it is ambiguous or obscure; or to resolve the meaning if the ordinary meaning conveyed by the text ... leads to a result that is manifestly absurd or is unreasonable.' By virtue of sub-section (2) the second reading speech, or other extrinsic material, may be considered' in the interpretation of the provision of an Act. But in our view it is not appropriate to proceed to a consideration of the second reading speech, or other extrinsic document, without first seeking to interpret the provision in issue. It is necessary first to examine and analyse the provisions of the Act for the purpose of determining whether or not there are good reasons to resort to the second reading speech, or other extrinsic document: see esp. Saraswati v R (1991) 172 CLR 1 at 23 per McHugh J; Cooper Brookes (Wollongong) Pty Ltd v Fed Cmr Taxation (1981) 147 CLR 297 per Gibbs CJ at 304 and 305; and for a useful discussion see also Oxley & Anor v Imperial Charter Pty Ltd (1996) NSW Conv R paragraphs 55-783 at pages 56,008-9 (NSW Commercial Tribunal)." 42 Adopting that approach it is first necessary to ascertain the meaning of the words "voluntary winding up" from the context is which they appear. In doing so it is proper to have regard to the "the objects and purpose of the legislation and the content of the legislation as a whole." In written submissions the Commissioner argued: "It is our contention that the Act does not exempt companies voluntarily wound up by creditors when companies are insolvent and that the words "except in the case of the voluntary winding up of the body corporate" has precise meaning within the context of the legislation. The words should either be read down because the phrase has particular characteristics evident from the context of the legislation (Cooper Brookes (Wollongong) Ply Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297), that is, the phrase should be given the specific meaning of a members' voluntary winding up or the word "members' should be implied in the provision. We submit that to interpret this phrase otherwise would defeat the purpose of the legislation that aims to regulate the real estate industry to ensure that only persons who have skill, competency and honesty obtain licences and to give consumers confidence that licensees have, among other things, financial skills to safeguard money entrusted to them. Our view with respect to interpretation is also supported by the inclusion of sub-sections 16(2B), (C) and (D) which requires an examination of the steps taken by an individual or company to avoid bankruptcy or insolvency. The extension of the exemption under section 16(1A)(c) of the Act to include a creditor's winding up means that a director or a person involved in the management of an insolvent company is never put to the test of explaining what steps were taken to avoid the external administration. The person is therefore not assessed as to whether he/she is financially capable of holding a licence under the Act. This is an incongruous result and justifies further inquiry and analysis of the phrase beyond its literal and grammatical meaning." 43 An examination of the Property, Stock and Business Agents Amendment Act 2006 show that its object was to "amend the Property, Stock and Business Agents Act 2002 and to make further provision with respect to licence disqualification, advertising, auction sales, trust accounts and penalties; and for other purposes." There is no statement of purposes in the legislation. However an examination of the amendments to section 16 confirms the Commissioner's assertion that the amendments were designed to assist in ensuring that "licensees have, among other things, financial skills to safeguard money entrusted to them." In accordance with section 33 I am entitled to take that objective into account when construing section 16(1A). 44 When one examines the text of section 16(1A) two things become readily apparent. First the language it uses, "externally-administered body corporate" and "voluntary winding up" are technical legal words. In Attorney General (NSW) v Brewery Employees' Union of NSW (1908) 6 CLR 496 O'Connor J said, at 531: "Where words have been used which have acquired a legal meaning it will be taken, prima facie, that the legislature has intended to use them with that meaning unless a contrary intention clearly appears from the context. To use the words of Denman J in R v Stator ((1881) 8 QBD 267 at 272): 'but it always requires the strong compulsion of other words in an Act to induce the Court to alter the ordinary meaning of a well known legal term.'" See also Pearce and Geddes, Statutory Interpretation in Australia , 6th Ed, Butterworth's (2006) at 4.13, where the authors refer to a chain of similar authority. Secondly the section sets the context from which the meaning of those technical legal words is to be derived; that is "within the meaning of the Corporations Act 2001." The legislature thereby expressly specifies the context in which to ascertain their intended meaning. This is a very clear statement of legislative intention: that the words have a meaning to be derived from the Corporations Act 2001. 45 When one turn to that Act it soon becomes apparent that the task of ascertaining the meaning of these terms will not be resolved by recourse to the definition sections. The Dictionary to the Act (section 9) contains no definition of "externally administered body corporate" or "voluntary winding up." There is however an inclusory definition of body corporate which does not assist. There is no dispute that Diosta is a body corporate. There are definitions of members' voluntary winding up and creditors' voluntary winding up, which provide: '"creditors' voluntary winding up" means a winding up under Part 5.5, other than a members ' voluntary winding up.' '"members' voluntary winding up" means a winding up under Part 5.5 where a declaration has been made and lodged pursuant to section 494.' 46 As noted earlier Chapter 5 is headed "EXTERNAL ADMINISTRATION". It contains nine parts which are respectively headed, "ARRANGEMENTS AND RECONSTRUCTIONS," "RECEIVERS, AND OTHER CONTROLLERS, OF PROPERTY OF CORPORATIONS," "ADMINISTRATION OF A COMPANY'S AFFAIRS WITH A VIEW TO EXECUTING A DEED OF COMPANY ARRANGEMENT," "WINDING UP IN INSOLVENCY," WINDING UP BY THE COURT ON OTHER GROUNDS," "VOLUNTARY WINDING UP," "WINDING UP GENERALLY," "WINDING UP BODIES OTHER THAN COMPANIES," " RECOVERING PROPERTY OR COMPENSATION FOR THE BENEFIT OF CREDITORS OF INSOLVENT COMPANY" and "MISCELLANEOUS." These Parts make provisions concerning various forms of company administration including creditor's voluntary winding up and member's voluntary winding up, which are both deal with in Part 5.5, "VOLUNTARY WINDING UP." In addition the Act contains three sections, which refer to externally administered companies: sections 250PAA, 250PAB and 254N, the first two in their heading only. They make provision with respect to ASIC exempting companies being wound up (whatever the mechanism), companies under administration and companies under a deed of company arrangement, form certain requirements of the Act. Section 254N allows a limited to company to provide, by special resolution, that its unpaid share capital may be called up "only if the company becomes an externally-administered body corporate." 47 The Acts Interpretation Act 1901 (Cth), which applies when interpreting the Corporations Act 2001, makes specific provision as to the treatment of headings. Section 13 provides: "(1) The headings of the Parts Divisions and Subdivisions into which any Act is divided shall be deemed to be part of the Act. (2) Every schedule to an Act shall be deemed to form part thereof. (3) No marginal note, footnote or endnote to an Act, and no heading to a section of an Act, shall be taken to be part of the Act." 48 In interpreting the Corporations Act 2001 therefore the headings, apart from section headings, play an important role in providing structure to Act: they form part of the Act and may be taken into account in determining the meaning of a provision where there is ambiguity: Silk Bros Pty Ltd v SEC (Vic) 67 CLR 1 at 16. per Latham CJ . In Todd v Jones (2003) 74 ALD 321, Allsop J outlined how headings can be used in the interpretation of statutes, at [137-138]: "… the heading to Pt IIA is part of the RD Act: section 13(1) of the Acts Interpretation Act 1901 (Cth) and as such can give assistance to understanding the context and so the scope of a provision, a heading will generally not control words of provisions that are clear and unambiguous: Silk Bros Pty Ltd v State Electricity Commission (Vic) (1943) 67 CLR 1 at 16; Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 225-6, 234 ; 18 ALR 639 at 645, 651; Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 202; 42 ALR 1 at 9 and Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 at 601-2 ; 92 ALR 193 at 195-6. In this context, the function of the heading as a brief guide to the provisions within the part should be borne in mind: Oyston v Blaker [1996] 1 WLR 1326 at 1333; [1996] 2 All ER 106 at 114 and F A R Bennion, Statutory Interpretation , 3rd ed, Butterworth's, London, page 574, section 255. Here, "racial hatred" was a phrase recognised in the Convention as one form of racial discrimination. It had come, over time, to be a convenient short-hand, along with such phrases as "racial vilification", to encapsulate the subject matter of provisions the subject of public debate in Australia in the 1970s, 1980s and 1990s: see [114]-[132] above and McNamara, above, pp 32-49. Further, it was not an entirely inapt, though brief, guide to the subject matter of the provisions. It should not, however, be seen as a control upon otherwise clear words that were deliberately chosen, as a departure from previous models, to deal with the subject matter of the Convention, including, but not limited to, Art 4. The above is not to say that the heading cannot give context to the provisions for their interpretation: CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408; 141 ALR 618; Concrete Constructions, above and Inglis v Robertson [1898] AC 616 at 630, in the manner, for instance, exemplified by the approach of Drummond J in Hagan v Trustees of the Toowoomba Sports Ground Trust [2000] FCA 1615; BC200006905 at [33]-[36]. There, his Honour used the heading as part of the context, assisted also by the explanatory memorandum and second reading speeches, to conclude that the scope of the words did not reach to circumstances where the only connection of the act with race was the exhibiting of care to avoid giving offence to a racial group that might be offended." 49 In my view, it is appropriate to have regard to the headings of the Corporations Act 2001 (Cth) in determining what an "externally-administered body corporate" and a "voluntary winding up," within the meaning of that Act, are. This is so because neither of those terms is defined in the Act. When one considers the structure of Chapter 5 of the Act it rapidly becomes apparent that each of the Parts of that chapter are concerned with the regulation of the various forms of company administration provided for in that part, whether it be winding up (whatever the mechanism), administration, or a deed or arrangement. Where a company is being administered under Chapter 5 it is being externally administered. As a consequence a company which is being voluntarily wound up, whether that is a creditors' voluntary winding up or a members' voluntary winding up, is an externally-administered body corporate within the meaning of the Corporations Act 2001 . 50 The Act provides somewhat more assistance as to the meaning of voluntary winding up. In the dictionary it defines both a creditors' voluntary winding up and a members' voluntary winding up by reference to Part 5.5, which in turn is headed "voluntary winding up." The provisions of Part 5.5 have already been discussed in some detail. It contains specific separate provisions and divisions which apply to a creditors' winding up and a members' winding up, but also general provision which apply to both, under division heading applying to" voluntary winding up". I conclude that a "voluntary winding up" within the meaning of the Corporations Act 2001 refers to both species of voluntary winding up. 51 This then is also the meaning of those terms in section 16(1A) of the Property Stock and Business Agents Act 2002. Such a conclusion accords with the legislative intention expressed in section 16(1A)(c) as to how that meaning is to be ascertained. While reaching that conclusion was a somewhat laborious task, the meaning is clear and unambiguous. 52 The Commissioner submits that such a meaning is contrary to the apparent intention of the Act. I disagree. The meaning has been ascertained in accordance with a clear statement of legislative intention as to how that task should be undertaken. The Commissioner says that the intent of the Act was to ensure that "licensees have, among other things, financial skills to safeguard money entrusted to them," and that this interpretation allows person who have been concerned in the management of companies which have been the subject of a creditors winding up to be licensee's, thereby defeating that intention. The reality is that this interpretation catches persons who have been concerned in the management of companies which have been subject to external administration under the Corporation Act 2001 in all its forms, except for those subject to a voluntary winding up (creditors' or members'.) It does so in accordance with the direction as to the meaning of those terms contained in section 16(1A)(c). The result is not manifestly absurd or unreasonable. 53 Having reached that conclusion the next step is to ask whether it is necessary to consider the extrinsic material sought to be relied on by the Commissioner. This consists of extracts from the second reading speech. The Appeal Panel in Osborne made it clear that before taking that step I should be satisfied that there are good reasons for doing so. Here there is no ambiguity, the provision is not obscure, and the interpretation I have reached (given the wording of the provision) is not manifestly absurd or unreasonable. There is therefore no good reason to resort to the second reading speech under section 34(1)(b) of the Interpretation Act 1987. 54 This leaves only section 34(1)(a). This allows me to consider extrinsic material to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision. That, however, is not the purpose the Commissioner seeks to achieve by asking me resort to that material. Rather, the Commissioner seeks to create uncertainty as to what is otherwise certain, and to point to a contrary legislative intention to that apparent on an examination of the legislation in question. While a purposive interpretation is mandated by the Interpretation Act 1987 (section 33), the intent of the legislature is first to be elicited form an examination of the legislation. Extrinsic material under section 34(1)(a) may only be used to confirm that meaning, not to "create doubt where none exists:" per Lee J in The Ombudsman v Commissioner of Police (1987) 1 NSWLR 386 at 396. As was explained by the High Court (Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ) in Re Federation of Construction Contractors; Ex parte Billing) (1986) 68 ALR 416 at 420, with respect to the equivalent provision in section 15AB in the Acts Interpretation Act 1901 (Cth): "Section 15AB of the Acts Interpretation Act 1901 (Cth), as amended, does not permit recourse to that speech for the purpose of departing from the ordinary meaning of the text unless either the meaning of the provision to be construed is ambiguous or obscure or in its ordinary meaning leads to a result that is manifestly absurd or is unreasonable. 55 In the light of those authorities I think that there is no good reason to resort to the second reading speech. 56 As a result I am satisfied that Diosta was voluntarily wound up within the meaning of section 16(1A)(c) of the Property Stock and Business Agents Act 2002. The voluntary winding up of Diosta falls within the exception to section 16(1A)(c). Consequently Mr Duncan is not a disqualified person within the meaning of that provision. The Commissioner's delegate was in error in finding that he was. 57 I conclude that the correct and preferable decision is to set aside the decision of the Commissioner to refuse Mr Duncan's application for a real estate agent's licence and business agent's licence under the Property Stock and Business Agents Act 2002. In accordance with the agreement reached between the parties I will not proceed to re-determine the application, but will remit for reconsideration by the Commissioner in accordance with these reasons. Orders 1. The decision of the Commissioner to refuse Mr Duncan's application for a real estate agent's licence and business agent's licence under the Property Stock and Business Agents Act 2002 is set aside 2. The application is remitted to the Commissioner for reconsideration in accordance with these reasons.

Duncan v Commissioner of Fair Trading, New South Wales Office of Fair Trading

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