Assuming a preferred interpretation which requires prescription of a scheme by reference to a deed in a schedule, and by no other means, the question is whether, as a matter of construction, the statute was intended to have the effect of avoiding a regulation by which the terms of the scheme were published in some other way. The existence of the intention is to be ascertained by reference to the language of the section, its subject matter and objects and the consequences of holding void a regulation purportedly made otherwise than in strict compliance with the requirement: see Australian Broadcasting Corporation v Redmore Pty Ltd (1987) 11 NSWLR 621 at 634 per McHugh JA. The language of the statute is, as I have shown, by no means crystal clear; it is relevant, I think, to the present inquiry that it is not a necessary construction of para (b) that it imposes an exclusive requirement. The purpose or object generally of subs 57(2) is, of course, to enable a scheme to be prescribed which will offer protection to members of the public dealing with travel agents who fail to account for money paid to them: quite plainly that in turn is a central element of the regulatory scheme which the Act establishes. A subsidiary object of paras (b) and (c) is, no doubt, to enable members of the public to inform themselves of the current terms of scheme. However, if that object may be substantially achieved by means falling short of precise compliance with paragraph (b), the result if such means are adopted is not necessarily invalidity if there is what may be regarded as substantial compliance: Scurr v Brisbane City Council (1973) 133 CLR 242 at 255, 256. The consequence of holding the 1995 Regulation invalid would be that there was in existence no compensation scheme as referred to in the Act: an essential element in the legislative framework would be lacking. Although the invalidity of the 1995
Regulation would not entail the failure of the trust, it would deprive the compensation scheme trustees of the rights and powers which they are intended to have under the Act.
One comment should be added in relation to the subsidiary object of paras (b) and (c), though it is implicit in what I have already said. The paragraphs do not provide a regime which will ensure that members of the public are precisely informed of the current terms of the scheme: substantial amendments to the deed as originally scheduled may be made and will be effective even if further regulations are not made amending the schedule. That, I think, may be treated as an indication of an intention that substantial compliance, by way of making the deed available by other means, may be regarded as sufficient to save the 1995 Regulations from invalidity.
The matters to which I have referred - particularly the lack of certainty in the language used, the fact that the means of publication provided will not, strictly, ensure that the public is informed as to the terms of the deed current at any time and the consequences of invalidity (particularly given the cooperative nature of the legislative scheme) - persuade me that this is not a case where strict compliance with para 57(2)(b) is to be regarded as essential to the validity of a regulation under subs (2), and that cl 20 of the 1995 Regulation (which provides a method of publication which may be regarded as substantial compliance) is valid.
If, on the material before me, I had been inclined to favour a different result, no doubt it would have been appropriate to relist the matter so as to give the State of New South
Wales the opportunity to present argument in support of the 1995 Regulation: State of New South Wales v Macquarie Bank Ltd (1992) 30 NSWLR 307 at 312. Given the conclusion to which I have come, however, that step is not required.
Other issues
The result of my conclusions about the effect of the repeal of the 1987 Regulation and the validity of the 1995 Regulation is that the trustees of the deed of 12 December 1986, as it has been amended, are the compensation scheme trustees under the Act and may sue in the name of the Travel Compensation Fund. In circumstances where subs 40(3) of the Act applies, they have rights of subrogation under that subsection and rights of enforcement under subs (4).
The essential allegations in relation to the first respondent, in the applicant's amended statement of claim, are as follows. It was incorporated in New South Wales, it carried on business as a travel agent and was a participant in the compensation scheme and it was ordered to be wound up, the winding up commencing on 19 August 1994. It is then alleged that claimants paid the first respondent sums of money for the future provision of travel services and that the first respondent failed to provide the services or (as in the circumstances it was obliged) to repay or account for the moneys received. Thus, it is claimed, the first respondent is indebted to the claimants or liable to account to them in respect of the amounts paid. Each claimant is alleged to have claimed against the applicant in respect of the first respondent's failure and the applicant to have made
payments to the claimants; it is said that each of the payments made by the applicant is a payment made to the claimant under the scheme by reason of an act or omission of the first respondent carrying on business of a travel agent and that consequently the applicant has the rights of subrogation arising under subs 40(3). It is then said that by a deed of release each claimant has assigned to the applicant all its relevant rights against the first respondent and its directors (that is a matter which does not affect the third respondent as there is no material before the Court which suggests that any claimant had rights against him, and it need not be pursued). It is claimed that the third respondent was a director of the first respondent and that accordingly the applicant's rights of subrogation under subs 40(4) are enforceable by the applicant jointly and severally against the first and third respondents by virtue of subs 40(4).
Similar allegations are made in relation to the sixth respondent, and the third respondent as a director of the sixth respondent, except that it is not claimed that the sixth respondent was a participant in the scheme: it is said, however, that it carried on business as a travel agent in New South Wales.
The third respondent by his defence denies some of the applicant's allegations: he denies the claimed application to wind up the first respondent and the order winding it up with effect from 19 August 1994 (but the evidence sufficiently establishes, in my view, that the winding up order was made with effect from that date); he denies an allegation that at the time when payments were made to the first respondent for the future provision of travel services there were reasonable grounds to expect that the first respondent would not be
able to account for each prepayment at the proper time (a matter which was not canvassed during the trial and which requires no further consideration); he denies that the alleged payments by the applicant to the claimants were payments made under the scheme by reason of an act or omission of a person carrying on business as a travel agent and therefore the existence of any rights of subrogation and of enforcement under s 40. There are similar denials in relation to the sixth respondent; in addition, the third respondent denies that the sixth respondent carried on business in New South Wales as a travel agent (he also denies that the sixth respondent is a company incorporated in New South Wales on 12 December 1989, and the denial seems to be correct: the evidence indicates that the sixth respondent was incorporated in Victoria, but nothing, I think, turns on that). The remaining factual allegations in the applicant's amended statement of claim are not admitted. As I have mentioned, the third respondent led no evidence.
The evidence on behalf of the applicant comprised affidavits of Alexandra Mary Radkevitch, a claims assessor for the applicant, and Carlo Claudio Brattoni, the applicant's Chief Executive Officer. There are annexed to Ms Radkevitch's affidavit Australian Securities Commission searches in relation to both the first and sixth respondents and a summary of claims made to the applicant in respect of the first and sixth respondents and payments made by the applicant to the claimants. There is also annexed a copy of the applicant's standard form of claim for compensation. To Mr Brattoni's affidavit there are exhibited copies of the compensation scheme trust deed, as in force during the relevant period, copies of minutes of the applicant's management committee recording resolutions relating to claims in respect of the first and sixth
respondent and a list of cheques, and copies of cheque requisitions, relating to payments made to the various claimants. Additionally, the affidavit evidence describes the procedure adopted by the applicant in dealing with claims, and in particular the claims relating to the first and sixth respondent. Ms Radkevitch identifies schedules to the statement of claim originally filed by the applicant as listing the claimants, the dates on which each claimant made relevant payments to the first or sixth respondent and the date and amount of each payment made by the applicant to each claimant. Additionally, there are in evidence the applicant's files on the claims relating to the first and sixth respondents. Four files relating to the first respondent were separately tendered and I was taken to them in detail; I was also taken in detail to one of the files relating to the sixth respondent, which was separately marked for identification.
The applicant argued that, on that evidence, it had made out its claims against the first, third and sixth respondents; the third respondent argued that no claim had been made out against him.
A number of things were, in my view, particularly in the absence of any evidence to the contrary, clearly established by the evidence; they were not seriously disputed. Thus, the evidence enables me to find that the first respondent was incorporated, carried on business in New South Wales as a travel agent, was a participant in the Compensation Scheme and was wound up by order of the Court with effect from 19 August 1994. Equally, I find that the sixth respondent was incorporated (though in Victoria), carried on a business associated with that of the first respondent and was wound up by order of the
Court as from 19 August 1994. I find also that the third respondent was at all relevant times (at least until the winding‑up orders were made) a director of the first respondent and of the sixth respondent. Similarly, I find that the applicant made the payments listed in the first and second schedule and the statement of claim filed on 5 September 1995, totalling $499,641, on claims relating to the first and sixth respondents; and that those claims were in respect of payments made by the claimants to either the first or sixth respondent on the dates listed in those schedules. I find that each amount so paid by a claimant was for travel or arrangements (e.g. hotel accommodation) associated with travel.
Those findings, however, are insufficient, by themselves, to enable the applicant to succeed. Among other things (to which I shall return), they do not attribute particular payments to the first and sixth respondents respectively and they do not, in relation to the sixth respondent, satisfy the requirement of subs 40(3) that it was a "person carrying on business as a travel agent".
The issue about apportionment arises, to a large extent, from the use by the first and sixth respondents, at various times, of similar names. The evidence indicates that the sixth respondent was formerly known as Pan Pacific Airlines Marketing Pty Ltd and, before that, as Pan Pacific Airlines Pty Ltd. One of the files to which I was specifically referred in relation to the first respondent related to travel bookings made by Maria Crimi. Correspondence addressed to Ms Crimi is on notepaper headed "Pan Pacific Airlines" and one of the letters thanks Ms Crimi "for choosing to use the Pan Pacific Airline special
travel offer". However, at the foot of the notepaper one reads "Travel Guide Pty Ltd ... trading as Pan Pacific Airlines". I think I am on safe ground in inferring that "Pan Pacific Airlines", as well as being at one time part of the name of the sixth respondent, was also a trading name of the first respondent; and it appears clearly enough that it is in that sense that it is used in the correspondence with Ms Crimi, that it was through the first respondent (not the sixth) that Ms Crimi made her bookings and that when Ms Crimi in her claim form asserted that her arrangements were with the sixth respondent, rather than the first, she was simply mistaken. I was informed by counsel for the applicant, and Mr Mura did not demur, that all the files which are now in evidence were discovered and produced for inspection many months ago; Mr Mura did not, however, draw my attention to matter in any other file which might be taken to indicate a mistake in attribution, by the applicant, of claims as between the first and sixth respondents. In those circumstances it is open to me to find, and I do, that where the applicant's deponents say that a particular payment was made to the first respondent, rather than the sixth, that was indeed so.
As for the other matter, whether the sixth respondent carried on business as a travel agent, I was taken specifically to a file relating to a booking by a Ms Susan Jane Stevenson. Her claim was said to relate to a payment to the sixth respondent. On that file there is correspondence to Ms Stevenson on paper headed "Travel Guide" (not, incidentally "Travel Guide Pty Ltd"). There is no company name at the foot of that letterhead, merely an address. However, Ms Stevenson received, for a payment she made for "Fiji deal" a receipt signed on behalf of "Air Australia Worldwide Marketing
Pty Ltd [i.e., the sixth respondent], level 2, 56 Berry Street, North Sydney, NSW 2060". Plainly what that indicates is that the sixth respondent received from Ms Stevenson a sum of money for, possibly among other things, return air fares to Fiji ("tickets", no doubt, within the meaning of subs 4(1) of the Act). The inference is clearly available that at that time the sixth respondent carried on, or at least (which is sufficient: see subs 4(1) of the Act) held itself out as carrying on, business as a travel agent. Again, it was not suggested to me that I might find in any other file material suggesting a different conclusion; and in circumstances where the third respondent, a director of the company, has chosen not to give evidence in my view I should, and I do, draw the inference.
Even so, however, the applicant is entitled to the relief which it seeks only if the claimants had rights against the first or sixth respondent and if the payments by the applicant were made "under the compensation scheme by reason of an act or omission" by the first or sixth respondent, as the case may be. It is convenient to deal first with the element of "act or omission".
Except, perhaps, in the case of a payment authorised by sub cl 15.2 of the trust deed as amended on 15 May 1995, a payment under the deed is required or authorised only in circumstances where a person carrying on business as a travel agent fails to account for money or other consideration entrusted to it in the course of carrying on that business; and the failure to account must arise from an act or omission by the person carrying on the business or an employee or agent of that person. Similarly, subs 40(3) of the Act
confers rights of subrogation only in a case where a payment is made under the compensation scheme "by reason of an act or omission by a person carrying on business as a travel agent". The mere failure to account is not, or at least is not necessarily, the relevant "act or omission": the terms of the deed assume that the act or omission is independent of, and precedes, the failure. In Travel Compensation Fund v Dunn supra, Wilcox J held, accordingly, that directors were not necessarily excused from liability because they had ceased to hold office at the time when the failure to account occurred. His Honour held, in the circumstances of that case, that the relevant act or omission, which led to the failure to account, was an omission to pay funds received from clients into a trust account which the travel agent had established (though apparently having no legal obligation to do so). That omission occurred at a time when the directors still held office so that, subject to any defence available under subs (5), rights arising under subs (3) could be enforced against them under subs (4). Mr Mura submitted that in this case, if a failure to account were assumed for the purposes of the argument, no preceding act or omission was established by the evidence, or indeed sufficiently pleaded, so that no statutory right of subrogation arose.
The evidence sufficiently establishes that the payments to the first and sixth respondent, giving rise to the claims paid by the applicant, were received during a relatively short period in 1994. Most of them were received in June and July of that year; relatively a few were received during May and a very small number earlier - the earliest in February. Travel arrangements in respect of which claims were paid by the applicant were not made (some, it seems, were for Travel on dates after the commencement of the winding up)
and the relevant funds were not repaid by the first and sixth respondents to the claimants. A provisional liquidator of each of the corporate respondents was appointed on 22 July 1994 and each was wound up with effect from 19 August 1994. Thus, over a relatively brief period a large number of individual payments was received amounting in total to almost $500,000; a short time later a provisional liquidator of each company was appointed, shortly followed by a winding up order; and neither company in liquidation has seen fit to file a defence in these proceedings or take any part in the trial.
In the circumstances I have no difficulty in holding, on the applicant's evidence, that in the case of each payment for which the applicant paid a claim there was a failure to account. Mr Mura argued, however, that so far as the evidence went such a failure could equally have been due to intervention by the applicant and the appointment of a provisional liquidator (perhaps in circumstances where "trading out" would have been possible) as to any act or omission of either the first or the sixth respondent. He argued that it was necessary, in each case, for the applicant to allege and prove a particular act or omission by the travel agent, or its employee or agent, leading to the failure to account.
Apart from failure to provide the travel services paid for or to repay or account for the money paid, the amended statement of claim makes two relevant allegations in relation to the two corporate respondents. Those relating to the first respondent are as follows (the allegations relating to the sixth respondent are in the same terms):