Melbourne Coach Terminal Pty Ltd v Wyss [2003] VSC 122

[2003] VSC 122

CORPORATIONS - Statutory demand - Application to set aside - Identity of debtor - Debt disputed as to existence and amount - Creditor's property under control of a trustee under Part X of Bankruptcy Act 1966 (Cth) - Proper claimant for debt - Whether demand defective in including references to controlling trustee and requiring payment to controlling trustee - Whether compliance with demand involved contravention of Estate Agents Act 1980 (Vic) s 48 & s 50.

2. The plaintiff in this proceeding is Melbourne Coach Terminal Pty Ltd ("the company"). By an originating process filed on 20 November 2002 the company seeks an order that a statutory demand served on it, dated 30 October 2002, be set aside. The Senior Master heard the application on 27 February 2003. He refused the application. He ordered that the demand be varied by reducing the sum demanded to $148,978, and declared that the demand had effect, as so varied, from the time it was served on the company. The calculation used by the Senior Master to vary the amount of the demand is set out in the Other Matters section of his order. The Senior Master also ordered that there be no order as to costs.

5. The defendant to the proceeding is Peter Wyss. The statutory demand seeks payment of $298,233 in commissions owed to him as an estate agent pursuant to a written authority dated 15 April 2002. Details of the commissions were provided in a schedule attached to the demand.

8. The appeal, which is brought by a notice filed on 28 February 2003, first came before me on 6 March 2003. I ordered that the time for compliance with the statutory demand be extended until the hearing and determination of the appeal, and adjourned the hearing of the appeal to 21 March 2003.

11. Counsel for the company submitted that for a variety of reasons the statutory demand should be set aside. In summary, counsel submitted that there is a genuine dispute as to the existence, and amount, of the debt, that there is a defect in the demand which would result in substantial injustice if the demand is not set aside, and that there are other reasons for setting aside the demand. I was reminded that the inquiry to be undertaken is as to whether there is a dispute that is a genuine dispute.[1] Before dealing with the particular contentions on which these general grounds are based it is convenient to refer to the facts.

14. The company is the registered proprietor of a property at 58 Franklin Street, Melbourne. Part of the premises comprised a commercial carpark subdivided into approximately 460 carparking spaces.

17. The defendant, Wyss, is a licensed real estate agent, and has been for approximately 27 years.

20. By an Exclusive Sale Authority dated 15 April 2002 Peter Wyss trading as Ray White Project Marketing (Vic) was appointed by the vendor named therein as agent for a period of 90 days to market and sell 280 of the carparking lots at 58 Franklin Street, Melbourne, and which lots were identified in an attached schedule. The vendor was stated to be:

Melbourne Coach Terminal Pty Ltd (A.C.N. 006 274 068)

Level 1/58 - 64 Franklin Street Melbourne Vic 3000."

The Authority was signed "by or for the Vendor" by Barros. The Authority specified the commission to which the agent was entitled. For each lot sold for $45,000 the commission was $4,545.56 plus GST. Where the price was less than $45,000, a commission of 10 percent of the sale price was payable, and where the price was less than $38,000, the commission was to be negotiated. Although the Authority provided for a 90 day agency there was provision for the payment of a commission in the event of a subsequent sale in specified circumstances.

27. By a letter to Wyss dated 21 August 2002 Barros, as director of the company, terminated the Authority with immediate effect. This followed a period of some differences between them.

30. When the Authority was signed Barros was not a director of the company. At that time, according to a historical company extract, dated 16 December 2002, provided by the Australian Securities and Investments Commission, there were five directors, each of whom held one share, Messrs H C Meltzer, S K Jerrard, J Shaker, F Kaye and A Stuk. They ceased to be directors on 17 May 2002, when Barros became the sole director and secretary. On 8 October 2002 Barros ceased to hold those offices and was replaced as sole director and secretary by Ekber Ozbey who, in turn, was replaced by Mark Harrison as sole director and secretary on 11 December 2002. Ozbey was the only one of those persons to make an affidavit in support of the application to set aside the statutory demand. In his affidavit Ozbey said that he made the affidavit from his own knowledge and belief after making due and proper inquiries most particularly of Barros.

33. On 6 September 2002 Wyss, by written instrument signed that day, authorised an experienced insolvency practitioner, Stirling Lindley Horne, to call a meeting of his creditors for the purpose of Part X of the Bankruptcy Act 1966 (Cth) ("the Act") to take control of his property in accordance with that Part. The Authority was in the form of the Controlling Trustee Authority for the purpose of s 188 of the Act and was signed by Horne by way of consent to the exercise of such powers. Horne thus became the controlling trustee of Wyss' property and, as such, had control of his property in accordance with s 189 of the Act, and with the duties and powers referred to in s 190.

36. Section 194(a) of the Act required that the meeting of creditors to be called under the Authority be held not more than 35 days after Wyss signed the Authority. On 9 October 2002 the Federal Magistrates Court ordered that that time be extended until 16 December 2002. At the meeting which was duly held on that day the creditors resolved that the meeting be adjourned for 90 days or earlier if appropriate.

39. Section 189(1A)(d) provides that the controlling trustee retains control until four months after the Authority under s 188 takes effect. That period expired on 6 February 2003. On 25 February 2003 the Federal Magistrates' Court ordered that the period of control under s 189 be extended for a further four months. The extension was effected by "varying" the provisions of s 189 and substituting the words "4 months" in para (d) with "8 months".

42. The statutory demand sought to meet the position of a controlling trustee in the following way. It claimed the debt as owed to Wyss trading as Ray White Project Marketing (Victoria) by the company for commissions due under the Authority dated 15 April 2002. Para 2 of the demand stated that:

"The affairs of the creditor are being administered under Part X of the Bankruptcy Act 1966 (C'th). Stirling Lindley Horne ("controlling trustee") Level 7, 114 William Street, in the State of Victoria, registered trustee, was appointed the controlling trustee to the affairs of Peter Wyss on 6 September 2002. The creditor authorises the controlling trustee to pursue this demand on his behalf."

Then, para 3 referred to the attached affidavit of Wyss, dated 30 October 2002, verifying the amount due and payable by the company. The balance of the demand was in the prescribed form save for the following. In the paragraph equivalent to para 3 in the prescribed form the words "and the controlling trustee" were added after the words "The creditor". The company was required to pay the controlling trustee, or to secure a compound for the total of the amounts of the debts to his reasonable satisfaction. After the words "the creditor" in the paragraphs equivalent to paras 4 and 6 in the prescribed form the words "and the controlling trustee" were added. The attached schedule was dated 30 October 2002 and signed by Wyss as "the creditor" and by Horne as "the controlling trustee".

47. In his supporting affidavit Wyss stated that he was the creditor in the statutory demand for debts totalling $298,233 owed by the company to him relating to estate agency services rendered by him to it, being agents fees due in respect of such services by way of commissions. He said that the amounts which made up the total debt were due and payable, and that he believed there was no genuine dispute as to the existence or amount of the debt. He also stated that on 6 September 2002 Horne had been appointed to take control of his property in accordance with Part X of the Act.

50. It is to be noted that the jurat clause in Wyss' affidavit stated "Sworn at Melbourne on October 2002", but the actual date of swearing was not inserted. The company's solicitor referred to this omission in an affidavit and stated that the omission was a defect which rendered the statutory demand defective. Both Wyss and his solicitor said in affidavits that Wyss' affidavit had been sworn on 30 October 2002. That is also the date of the demand. In their submissions before me counsel for the company did not rely on the omission as a ground on which the statutory demand could, or should, be set aside.

53. Then, moving to another aspect, in his affidavit Ozbey stated that from about March 2002 Wyss carried on business pursuant to a joint venture with Barros and himself as a real estate agent under the registered name Ray White Project Marketing (Victoria). He referred in this respect to an affidavit which Horne had sworn in another proceeding (No 6110 of 2002) commenced by the company on 21 June 2002 against Scott Oliver Talbot for the removal of a caveat over a number of the carparking lots referred to in Wyss' Authority. In that litigation, an interim order was made on 27 June 2002 which required the company to pay into a stipulated account any amount received by it from any purchaser of any of the lots. On 19 August 2002 the company obtained an order ex parte restraining Wyss until 21 August 2002 both in his own right and trading as Ray White Project Marketing (Victoria) from withdrawing or dealing with the proceeds of sales of any of the carparking lots and from withdrawing monies in certain of his accounts. At a further hearing on 21 August 2002, Wyss was represented and the injunctions were continued until 28 August 2002. For the purpose of the hearing on 28 August 2002 Wyss swore an affidavit on 27 August 2002. This affidavit, and a range of other materials, were exhibited to Ozbey's affidavit in support of the application to set aside the statutory demand.

56. In his affidavit sworn on 27 August 2002, Wyss stated that on or about March 2002 he made an agreement with Ray White (Victoria) Pty Ltd by which he was authorised to act under the name Ray White Project Marketing (Victoria), and he began to do so. He said that Barros acted as guarantor of his obligations under the agreement with Ray White (Victoria) Pty Ltd. He also referred, but in general terms, to earlier discussions as to Barros having an interest in the ownership of the business of a real estate agency to be commenced. He referred to "many discussions" with Barros concerning the possible basis on which the ownership of the business might be shared and the possible structure that might be adopted. He said that the business operated from its inception without any formal arrangements between Barros and himself concerning the respective entitlements to it. At no material time was Barros a licensed real estate agent.

59. Wyss further stated in his affidavit that Barros had told him that the carparking subdivision had been commenced by a group of investors, including members of the legal firm Jerrard and Stuk, who had been the owners of the company before him. Barros also informed him that the settlement of the sale of various lots was threatened because amounts owing to those investors, to Jerrard and Stuk, and to Braxton Lawyers, were overdue. Barros asked him to agree to apply a portion of the deposits held by him in respect of sales of the lots towards those parties. In that respect he referred to the Deposit Disbursement Deed executed by Wyss, among others, on 17 May 2002. I return to this Deed later.

62. Wyss went on, at length, to explain relevant matters. Notwithstanding his explanation, on 28 August 2002 orders were made requiring Wyss to pay monies into the account previously established under the prior order, to provide details of certain accounts by affidavit. Wyss was otherwise restrained from dealing with the proceeds of sale of any of the lots until the hearing and determination of the case.

65. The materials before me do not include an affidavit sworn by Barros in answer to the matters stated by Wyss in his affidavit.

68. On 6 September 2002 the company filed a summons in proceeding 6110 of 2002 seeking payment to it of the monies held in the account established under the Court's orders except the amount owed by the company to the defendant, Talbot, and secured by a mortgage. Horne opposed the application and swore an affidavit to establish the grounds of opposition. It is to that affidavit that Ozbey made substantial reference in his affidavit filed in support of the present application.

71. The first reference, in para 20 of Ozbey's affidavit, was to para 10 in which Horne stated his belief, in light of investigations, that Wyss held his interest in the business on trust for and on behalf of a partnership of Barros as to 50 per cent, Ozbey as to 30 per cent, and Wyss as to 20 per cent. Wyss had referred to Barros and Ozbey as partners in the real estate business in his statement of affairs dated 20 September 2002, although he did not otherwise refer to the nature and extent of their respective interests.

74. Somewhat curiously perhaps, after referring to this evidence of Horne, Ozbey did not give evidence of the facts as to the nature of the relationship between himself, Barros and Wyss, or as to their proportionate interests. Nor did Barros swear an affidavit in the present application addressing these matters. The course which Ozbey took was to say of Horne's evidence that

"If this is so, it means that the defendant may at best be entitled to no more than 20% of any monies owing under the Exclusive Sale Authority ... to the agent and as deposed herein, that is 20% of no debt as I verily believe that the defendant is indebted to the plaintiff".

A little later in his affidavit Ozbey took a similar course in relation to the statement of Wyss in his affidavit sworn on 27 August 2002 in proceeding 6110 of 2002, that the business operated in the absence of any formal arrangements with Barros concerning their respective entitlements to it. Ozbey commented that this stood, apparently, in direct conflict to the matters deposed to by Horne. Not only was that not necessarily so, but it was comment and not evidence. It was for the deponent (Ozbey) to swear as to the facts and give an account of the relevant matters in accordance with the rules of evidence and from which the Court could draw an appropriate conclusion. The course he took was to skirt around the issue without condescending to give evidence of the facts as he knew them. Furthermore, insofar as Ozbey relied on Horne's belief as to the arrangements, Horne's evidence was simply a statement of his belief. Whether that belief was correct was a matter for evidence to be given in a proper form to enable the Court to draw a conclusion.

79. Further in his affidavit sworn in proceeding 6110 of 2002, Horne stated that pursuant to the orders made on 28 August 2002 Wyss had paid $159,967.53 from his accounts to the required account. They were part of the monies in relation to which Horne claimed an interest as Wyss' controlling trustee. In all, Horne claimed $507,915.

82. By a summons filed on 21 October 2002 in proceeding 6110 of 2002 Horne sought an order that the sum of $159,967.53 be paid from the funds in the Court ordered account, together with interest, to himself as trustee for the estate of Wyss. The application was referred to the trial judge. Orders were made by consent at the trial of the proceeding on 13 December 2002. That, of course, was a few weeks after the filing of the application to set aside the statutory demand on 20 November 2002. The orders of 13 December 2002 dealt with a number of matters. They provided for payment of a sum of money out of the Court ordered account to the defendant in return for a discharge of the mortgage and withdrawal of the caveat. The Court also ordered that the company's solicitor hold the sum of $159,967.53 as trustee for the estate of Wyss and the plaintiff until further order, or by their consent. I was informed by counsel that on or about 22 December 2002 the company's solicitor paid these trust monies to Horne.

85. I now turn to the submissions of counsel for the company and deal with the several grounds relied on to set aside the demand.

88. The first ground concerns the identity of the debtor. Counsel first addressed the Exclusive Sale Authority. It was signed by Barros when he was not a director. Counsel submitted that on its terms the vendor was both Barros and the company, yet the statutory demand alleged only that the company was liable. These circumstances were relied on as establishing a genuine dispute as to whether the company was liable for commission under the Authority.

91. In my view the submission is without substance. Even if it be accepted, as it was by counsel for Wyss, that both Barros and the company were named as vendor, as distinct from the possibility that Barros was referred to in the capacity of an officer of the company, it was open to Wyss to proceed by statutory demand against one, as opposed to both, of them. Further, the statutory demand merely alleged that the company was liable for commission. It did not state that the company was solely liable. Moreover, it was not submitted that for any reason of principle the statutory demand could not be effective, or was defective, because it did not allege that Barros also was liable. Finally, as to Barros not being a director when he signed, counsel merely observed that fact but did not develop a submission as to the consequence of it in terms of whether the company was bound by the Authority. Counsel could hardly have done so having regard to the evidence of Ozbey that by the Authority the company appointed Ray White Project Marketing (Victoria) as its agent. Ozbey swore that affidavit as the then sole director of the company and after having made inquiries, including inquiries of Barros. I have already drawn attention to the absence of an affidavit by Barros in support of the company's application. Counsel for the company acknowledged Ozbey's concession but said that it "may have been perhaps erroneously made". Counsel did not refer to any evidence to support that statement, and there is none in my view. Ozbey had sworn his affidavit on 20 November 2002, and never sought to change the evidence. The evidence accords with the plain meaning and understanding of the Authority.

94. Counsel for the company sought to develop the submission as to whether the company was liable for commission by reference to the Deposit Disbursement Deed referred to earlier. This document was dated 17 May 2002. Counsel submitted that the Deed raised an estoppel against Wyss asserting that the company had appointed him as its agent.

97. There were numerous parties to the Deed, namely:

(a) the company in its own capacity and in its capacity as bare trustee for the "Owners",

(b) Atlantica Developments Pty Ltd

(c) Barros,

(d) Felix Kaye,

(e) Jack Shaker and Howard Charles Meltzer,

(f) Steven Kelvin Jerrard and Jack Stuk in their own capacities and as agents for Jerrard and Stuk Lawyers,

(g) Wyss trading as Ray White Project Marketing (Victoria), and

(i) Chin Tan trading as Braxton Lawyers.

104. The Deed contained a series of recitals. Recital A stated that Atlantica and Barros have engaged Wyss to sell a number of carpark bays at 58 Franklin Street, Melbourne. Recital B stated that Wyss as stakeholder, in accordance with s 25 of the Sale of Land Act, holds approximately $201,000 in trust, and Jerrard and Stuk Lawyers as a stakeholder, in accordance with s 25, holds approximately $111,000 in trust, being deposits received from the sale of some of the carpark bays. In Recital C Atlantica and Barros acknowledged that under an Exclusive Development Agreement Supplemental Deed ("Supplemental Deed") they had failed to pay the satisfaction amount due under the Exclusive Development Agreement ("Agreement") executed on 21 December 2001. Recital D stated that Wyss, Atlantica and Barros have requested the company, and Kaye, Shaker, Meltzer, Jerrard and Stuk (being investors in the company), to sign the Supplemental Deed which varied strict performance of the Agreement. Recital E stated that Wyss had agreed that if the company and the investors signed the Supplemental Deed, Wyss would provide the covenants set out in the Deed.

107. In the Deed, Wyss agreed that upon settlement of the sale of a carpark through his agency he would cause no less than 60 percent of the deposit held by the agency to be paid to Jerrard and Stuk on behalf of the named investors in the company, such monies then to be applied in reduction of the balance of the satisfaction amount and the guaranteed money from time to time. Once the satisfaction amount and all guaranteed monies had been paid in full to the company's investors, all of Wyss' obligations would end.

110. Counsel for the company submitted that Recital A constituted an estoppel against Wyss asserting that the company had appointed him as agent under the Exclusive Sale Authority. It is to be noted that the carpark bays covered by the Deed included those covered by the Authority. Counsel pointed out that the company was a party to the Deed, and that Recital A did not refer to the company as having engaged Wyss. Neither in Recital A nor elsewhere in the Deed was there a reference to the company having appointed Wyss to sell the carpark bays or to the company being the principal in the appointment. In these circumstances, Recital A constituted a statement or acknowledgement by Wyss that Atlantica and Barros, but not the company, had appointed him as agent for the sale.

113. In my view the submission is not well founded. In the first instance, there is the evidence of Wyss as to Barros requesting his assistance for commercial reasons. Wyss was not an investor in the company. He was an external party to the transactions of and between the investors and Barros. It is reasonably clear that Wyss' purpose in entering into the agreement was to aid Barros and Atlantica in achieving relief from their financial circumstances. It was not the apparent purpose of the Deed to settle an issue as to exactly which party had appointed Wyss. To observe that is not to ignore Recital A. The purpose of Recital A would seem to have been to indicate how Wyss was involved, and how he could be in a position to give his covenants. However, apart from these considerations, and also noting the absence of evidence otherwise explaining the Deed and the context in which it was entered into, there are other reasons why the submission must fail.

116. It is not necessarily inconsistent with Recital A that the company (as Ozbey concedes) did appoint Wyss as its agent. In other words, Recital A does not expressly state that Atlantica and Barros were the only entities to engage Wyss as the company's agent. It is to be noted that the recital does not refer to the Exclusive Sale Authority. The recital does not refer to the circumstances of the appointment. It merely asserts that Atlantica and Barros "have engaged Wyss". To state that is not necessarily to deny the Authority. In these circumstances, the company must rely on it being an inference reasonably drawn from the recital that Atlantica and Barros only were the appointers under the Authority. It is well established that inference, as distinct from precise and unambiguous statement, is not sufficient to found an estoppel.

119. It is also important to note that it is evident from cl 7 that Wyss did not have independent legal advice in relation to the Deed. His preparedness to enter into the agreement without such advice is consistent with him having been prepared, at Barros' request, to aid Barros and his commercial interest in meeting circumstances of financial stress. The purpose and object of the Deed, or its essential subject matter, was not the legality or enforceability of the Authority.

122. Moreover, and more fundamentally, there cannot be an estoppel by deed where the action is not founded on the deed but is collateral to it,[2] as is the situation in the present proceeding. Wyss' claim is not founded on the Deed. It is founded on the Authority. The company cannot set up the Deed to found an estoppel contradictory to the Authority. The fact is that the company, by Ozbey, concedes that it appointed Wyss. In my view, Ozbey's concession was properly made. Independently of that concession, it is clear in my view that the company did appoint Wyss by the Authority dated 15 April 2002.

125. Counsel then submitted that there was a genuine issue as to whether Wyss was entitled to retain any commission at all. Section 50(1)(d) of the Estate Agents Act 1980 (Vic) provides that an estate agent shall not be entitled to sue for or recover or retain any commission unless the agent has complied with s 49A(1) with respect to the engagement or appointment. Section 49A(1) provides that an estate agent must not obtain or seek to obtain any payment from any person in respect of work done by the agent unless the agent holds a written engagement signed by the person or the person's representative. The Authority had been signed by Barros who was not then a director of the company. Counsel said that at the time he signed, Barros was not the agent for, or an employee of, the company. This raised an issue as to whether the Authority is enforceable against the company, and whether Wyss is entitled to retain any commission received by him at all.

128. It is true that the historical extract states that Barros was not a director when he signed the Authority. Accepting that as a true statement of fact, it does not follow, as counsel asserted, that Barros did not sign the Authority in the capacity of an agent of the company. Counsel's statement in that regard was an assertion not founded on facts deposed to by Ozbey in his affidavit, or otherwise identified by counsel in his submission. It seemed to be an assertion based on Barros not having been a director at the relevant time. Indeed, in my view, the submission departs from Ozbey's evidence that the company appointed Ray White Project Marketing (Victoria) by the Authority. That is a clear statement by the company, of which Ozbey was then the director, and which statement was not put in question by Barros, that the company appointed Wyss by the Authority signed on 15 April 2002. Implicit in that concession is that Barros signed the Authority as agent for, and with the authority of, the company to do so. An alternative position is that the company adopted the Authority as binding on it subsequent to its execution by Barros. There is no evidence to suggest that the latter alternative was the case. It does not matter because either way the company is bound, as Ozbey concedes, by the Authority.

131. It was not suggested by the company's counsel that I should disbelieve Ozbey's evidence on this point, and I do not do so. It accords with the appearance of the appointment of the company on the face of the Authority. That is, Ozbey's evidence accords with what one would presume to be the regularity of the situation as to the signing of the Authority.

134. Counsel then addressed a submission as to the right of Wyss to recover commission if it is payable. Wyss had acknowledged that he was not acting as agent solely for himself and that he held whatever rights he had on trust for a "partnership" between himself, Barros and Ozbey. The next step in the submission was that s 190 of the Act operated to vest Wyss' property in the controlling trustee. Relevantly, Wyss' property was his interest in the net assets of the partnership, or trust, and not the right to the gross commission. Further, if the controlling trustee wished to recover any property owing to the partnership he could only do so with the approval of the Court obtained pursuant to s 61 of the Act. Horne had not obtained any such approval.

137. In my view these submissions must fail. Whatever might be the true nature of the relationship between Wyss, Barros and Ozbey, Wyss alone was, by the Authority, duly appointed as an estate agent to sell the carparking lots and entitled to receive a commission for the sale. It is further to be noted that Wyss was the sole registered owner of the business name Ray White Project Marketing (Victoria), and that Barros and Ozbey were not licensed estate agents. Hence, it was understandable that the Authority appointed Wyss trading as Ray White Project Marketing (Victoria) without any reference to Barros and Ozbey. In these circumstances Wyss possesses the legal right to claim and receive amounts due as commissions under the Authority. It is a separate matter as to the manner in which he should deal with monies so received, as between himself, Barros and Ozbey. If there needs to be an inquiry to ascertain the nature and terms of the relationship including the respective entitlements of Wyss, Barros and Ozbey to the assets and property of a partnership or trust, that can be had and the property dealt with accordingly. But in the first instance, Wyss is entitled, legally, to claim and receive the commissions due under the Authority. For these reasons, s 61 of the Act is not applicable.

140. Further, the submission was in error in stating that s 190 of the Act vested the debtor's property in the controlling trustee. It does not do that. Rather, the controlling trustee has "control" of the property and affairs of the debtor (s 190(2)(a)) and is empowered to deal with the property in any way that will, in the opinion of the trustee, be in the interests of the creditors (s 190(2)(d)). For these purposes, the trustee may act in the name of the debtor as if he or she had been duly appointed by the debtor to be his lawful attorney to exercise those powers (s 190(4)).

143. A proper understanding of these provisions explains the set out and structure of the statutory demand. The outstanding commissions were, and remain, a debt due to Wyss. Hence the demand is made by Wyss as a debt due to him, but with the trustee, who has control of Wyss' property, joining in to indicate his consent to the action and to require payment to, or satisfaction of, the trustee. The trustee does not claim that the debt is owed to him. The recovery is sought pursuant to Wyss' legal right, while Wyss and the controlling trustee join in directing to whom payment is to be made. There is nothing in the Corporations Act that would preclude a statutory demand to that effect.

146. The next submission was based on s 48 of the Estate Agents Act, which prohibits an estate agent from paying to any person the whole or any part of any commission to which he is entitled in his capacity as estate agent in respect of any transaction. It was submitted that the requirement in the statutory demand that the debt be paid to the controlling trustee would, if acted on, infringe the prohibition in s 48. The submission misapprehends the position. Section 48 is concerned to prohibit an estate agent from paying to an unlicensed person any part of his commission on a sale. The section operates on or in relation to the commission itself, not on that which might be produced or exist as a consequence of its receipt. The prohibition is to be understood in the context of the requirement that estate agents be licensed (s 12), and the provision prohibiting an unlicensed person from recovering a commission (s 50).

149. These provisions do not, however, prohibit an estate agent from conducting business as such in a normal commercial manner. Thus, for the agent to make payments to a bank in repayment of a loan would not involve paying the whole or part of a commission to an unlicensed person in contravention of s 48 even though the payment came from the revenues of the business, which revenues were sourced from the payment of commissions. It would not matter for this purpose if the estate agent had granted security for repayment over the assets and undertaking of the business.

152. Moreover, the prohibition in s 48 is upon the estate agent, not the person liable to pay the commission. Payment by the company pursuant to the statutory demand is not a payment by Wyss and thus could not, in itself, offend s 48. It is no answer to the statutory demand for the company to point to the prohibition in s 48. The company's liability to pay its debt is unaffected.

155. Then, payment to the controlling trustee is payment of a debt due to Wyss. The right of property remains in Wyss subject to the control of the trustee. It is not a payment "to" the trustee in the sense of being a payment of the whole or part of a commission within the meaning of s 48. Section 48 prohibits an agent from giving or sharing his commission with another person. The statutory demand requires or involves no such thing. It does not require a payment of money otherwise due to Wyss for the benefit of the trustee.

158. For these reasons, in summary, compliance with the statutory demand would not result in a breach of s 48, as submitted by the company.

161. Counsel then submitted that there are defects in the statutory demand. A series of points were made, the first being that the demand is not in the prescribed form. The prescribed form makes no provision for reference to a controlling trustee. According to counsel, the demand is ambiguous as it refers to Wyss as the creditor, and yet requires payment to the controlling trustee. This places the creditor in the position of having to ascertain whether the affairs of the creditor are under the control of a trustee, and the effect of that control on the obligation to pay the debt where the demand and affidavit assert that the creditor is Wyss. According to counsel, this means that the demand does not clearly and completely identify who the creditor is and require payment to that person.

164. In my view it was both open and appropriate that the statutory demand be varied from the prescribed form to include the references to the controlling trustee. Those additions accorded with the legal position as to the debt being owed to Wyss and properly required payment to the trustee. That requirement was properly to be understood as a direction by the creditor, joined in by the controlling trustee, to the debtor as the person to whom the debt was to be paid. The debtor was truly, accurately and properly informed. The debtor knew exactly what was required, and why. I reject the company's submission. Even if I considered that there was substance in the submission I would not set the demand aside, as in my view no substantial injustice would be caused as a result.

167. The next submission concerned the capacity of Horne to continue acting as the controlling trustee. This submission attacked the validity of the order of the Federal Magistrates' Court made on 25 February 2003 to extend the period during which the property of Wyss was under the control of Horne. But for that order the control would have ceased on 6 February 2003. Counsel submitted that there had been no power in the Bankruptcy Act to make the extension order. The relevant section was said to be s 33(1)(c). Counsel submitted that no act or thing being required to be done under s 189, the power in s 33(1)(c) was not applicable, as to which see Nilant v Macchia.[3] Thus, it was submitted, the order was void.

170. The difficulty confronting the submission is that the relevant order has not been set aside on appeal to the Federal Court. Thus, the order continues to stand and the criticism of it seems to be no more than that the Federal Magistrates Court erred in construing and applying the power in s 33(1)(c). In other words, the order was made within the jurisdiction of the Court and has not been set aside. Such an order is not a nullity; see Residual Assco Group Ltd v Spalvins.[4] It follows that it is not open to the company to resist the statutory demand, let alone have it set aside, on the basis that the order is void. It is not void, only liable to be set aside on appeal, and that has not happened.

173. Finally, counsel for the company addressed the amount of the debt. If the company is liable for any amount, which was denied, the amount for which the demand is effective should be reduced to nil. These submissions were based on Ozbey's affidavit. In para 24 of his affidavit Ozbey said that, at most, the total balance which may be due to Wyss is $151,425, but after appropriate adjustments and deductions have been made Wyss owes the company a balance of $8,542.53. In para 25 Ozbey set out the steps in his calculations, as follows:

177. It is to be noted that Ozbey subtracted the amount of $159,967.53 from Wyss' entitlement. That was wrong as it was money that Wyss had received and to which he was entitled. Further, Wyss (or Horne) had already made allowance for it, as referred to at [25]. Ozbey's inclusion of it involved a double deduction against Wyss.

180. The Senior Master reached a conclusion with which I completely agree, on the basis of the evidence, and in the sense of reaching an appropriate resolution of the application. That conclusion represents the position on the amounts which is the most favourable to the company. The calculation is as follows:

Total commissions payable, as per Ozbey (and being less than the $727,230 stated by Horne)

Less total commissions received, being the higher sum stated by Horne

184. In my view the Senior Master was correct in varying the statutory demand to the amount of $148,978. The effect of the variation was to allow the company the amount of $116,000, as to which there is a genuine dispute. That is to say, it is claimed as a deduction by the company, and that claim is disputed by Wyss. I hold that there is no genuine dispute as to the existence or amount of the debt in that amount.

187. I further hold that there is no defect in the statutory demand and no other reason why the demand should be set aside. As I mentioned earlier in relation to the form of the statutory demand, even if it is considered that there is a defect in the demand, in my view it would cause no substantial injustice.

[1] Mibor Investments Pty Ltd v Commonwealth Bank of Australia [1994] VicRp 61; [1994] 2 VR 290 at 295.

[2] See Halsbury's Laws of England, 4th ed reissue vol 16 para 1032; Carpenter v Buller [1841] EngR 552; (1841) 8 M & W 209; 151 ER 1013 at 1014 - 1015 per Parke B; Ex parte Morgan; Re Simpson (1876) 2 Ch D 72 at 89 per Mellish LJ; McCathie v McCathie [1971] NZLR 58 at 61 per North P and 70 per Turner LJ; Offshore Oil NL v Southern Cross Exploration (1985) 3 NSWLR 337 at 343 and 345 per Clarke J.

[3] (1997) 148 ALR 329.

[4] [2000] HCA 33; (2000) 202 CLR 629 at [11].