Walker, Re J.F. Walker, Ex Parte J.F. [1986] FCA 397

GENERAL OLVISIOON BANKRUPTCY DISTETCT WF THE STATE oF WESTEFN ASVSTRALIA

This is an application for reqistration as a trustee under Part VIII Division 1 of the Bankruptcy Act 1966. It is the first application made to this registry of the Court since $5.155(3A) and 155(3B) came into operation. These sections were pact of the substantial amendments made to Part VIII Division 1 by Act No. 21 of 1985 which commenced on 19 Mav 1986. So far as [I am aware, there has been no reported decision of this Court on the

As Part VIII Division 1 stood before the recent amendments. sub-s.155(2) enabled a person to apply to the Court to be reaistered as qualified to act as a trustee and empowered the Court to direct that he be so reqistered upon his entering into a bond as prescribed. No academic or indeed any other

qualifications were demanded by the Act and the matter lay verv

much within the discretion of the Court. Sub-section 155(3A)

lls gue & number of redquicements where an application 15

"(a) the applicant - ois is a member otf a prescribed bodv:

(il) holds a deqree, diploma or certificate froma prescribed university or another prescribed

institution in Australia and has passed examinations in such subrects,. under whatever name, as the appropriate authority of the university or other institution certifies to the Court to represent a course of study in accountancy of not less than 3 vears' duration and in commercial law (includindg company law) of not less than 2 years

duration; or (1ii) has other qualifications that, in the opinion

qualifications mentioned in sub-paragraph (i) or (ii):

(b) the applicant is not an insolvent under administration:

(d) the Court 1s satisfied that the applicant is capable of performing the duties of a trustee and

1s otherwise a fit and proper person to be reqistered as a trustee".

On the hearing of this application a question arose as to the proper construction of para.'(a) andin particular the

relationship between sub-paras.(i),. (11) and (1ii).

_ The applicant, Mr. Walker. 1s a member of a prescribed bodv for he 1s a member of The Institute of Chartered Accountants un Australia, one of the bodies prescribed by r.61A. He does not hold a deaqree, diploma or certificate from a prescribed university or from another prescribed institution in Australia. Pursuant to

r.61A., prescribed universities are most of the universities in

Australia and sther eeeseribed ansticumiens ute. oroaaly speéakina,

iolleves of agvaneta @adu-ablon. Me. Walker obtuinea a divloma in account ina in Lana following a part-bime course lasting sume five years. The ianstitution conducting the course was, 1t appears, the

Ferth Technical College which 15 not one of the orescribed institutions. In any event, it was accepted by counsel that the course did not, in the language of sub-para.(ii), represent a course of study in accountancy of not less than three vears'

duration and in commercial law (including company law) of not less

In my view sub-paras.(i) and (1i) are not cumulative requirements; they are alternatives. It is true that "or" appears only at the end of sub-para.(1i) but this is not an uncommon form of drafting where all components are options. Certainly the repetition of "or" after sub-paras.(i) and (ii) would put the matter beyond doubt. Sub-paragraph (iii) speaks of other qualifications equivalent to those mentioned in sub-para.(i) of vii). The wav is left open for the Court to accept qualifications "equivalent to the qualifications mentioned in sub-paragraph (i) or (i1)". If sub-paras.(i) and (ii) were cumulative, it might of

course be the case that a person had qualifications equivalent to

(i) or (ii) but not' to both. But sub-para.(ii1) constitutes a qualification in its own right, a qualification that need be equivalerit only to those mentioned in sub-para.(1) or (ii). If the intention of the leqislature was that sub-paras.(i) and (ii)

be cumulative. one would expect the optional qualifications in sub-para.(1ii) to be mentioned as part of each of those

sub-paragraphs,. not standing as an alternative to them.

Ie 18 apparenc trom cne exolanatory memorandum accompanying the Bankruptcy Amendment 8111 1935 that the intention wags not, only to aive some a1ndication in the Act as to the criteria to be satisfied for reqistration, but also to bring the Bankruptcy Act into line with the requirements of the companies leaqislation relating to the reqistration of liquidators. See paras.103-105 of the memorandum. Paragraph (a) of sub-s.155(3A) closely resembles para.(a) of sub-s.20(2) of the Companies Act 1981. Interestingly, para.104 of the explanatory memorandum refers to sub-s.20(2) in terms that include "or" after each

sub-paragraph. In fact "or" appears only after the First

However the authors of the CCH Australian Company Law

and Practice vol. 1 p.6,301 suagest that the qualifications in

sub-s.20(2) of the Companies Act are cumulative. They note that the qualifications required of a person applying for the first

time for reqistration as a liquidator are the same as those

required of intending auditors. As to the latter they comment:

",.. an applicant must be a member of the Institute of Chartered Accountants. the Australian Society of Accountants or other prescribed body (reg.20) and must hold a degree or diploma in accountancy (including auditing) and commercial law from an Australian universitv (rea.21) or prescribed institution: req.22.

Equivalent qualifications will be accepted" (emphasis added).

I do not accept this view of sub-s.20(2) but in any event that 1s not the section with which I am_ concerned. In

Re Bird: Bird v. National Companies and Securities Commission

A.S.D.0. 24 Mureav J. considered a seoviston similar ta eub-4.20'629. Althsugh 'he point now at issue was not before nin, tt as apparent that his Honour vreqarded the sub-paraqraphs as

The applicant 1s a member of a prescribed body within

sub-s.155(3A) and. ain my opinion. he therefore meets the requirements of para.(a) of that sub-section. There is evidence that he 1s not an insolvent under administration and that he resides in Australia. I am satisfied. by reason of the applicant's evidence on affidavit and orally of his experience in connection with companies in liquidation and under receivership, his longa experience as a chartered accountant during which he has been concerned with a number of activities relating to insolvent persons and aenerally from the evidence of his professional activities that Mr. Walker 15 capable of performing the duties of a trustee and that he is otherwise a fit and proper person to be

Sub-section 155(3B) requires the Court to refuse an application for reaqistration as trustee where a person has been convicted of an offence involving fraud or dishonesty and makes application within a period of five vears after conviction or release from prison. I am of opinion that a person applying for reqistration as a trustee must expressly negative the

disqualification in sub-s.155(3B). This the applicant has done.

I direct that the applicant be reqistered as a trustee

upon his entry into a bond in the amount prescribed for the

eub-s.155 (34) ana aun the srescribed manner with such

I certify that this and the preceding five pages are a true copy of the reasons for judgment herein of his Honour Mr. Justice Toohey.