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FEDERAL COURT OF AUSTRALIA - GENERAL DIVISION

DEPUTY COMMISSIONER OF TAXATION (VIC) v BOXSHALL

LOCKHART, BURCHETT and Gummow JJ

4, 12 October 1988 - Sydney

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Lockhart, Burchett and Gummow JJ    This appeal from the judgment of a single judge of this court (Jenkinson J) raises the question whether a petition for the sequestration of a debtor's estate presented by a natural person must be signed by him or may be signed in his name by someone on his behalf. A question also arises as to the proper form of attestation of the signature of the signatory to the petition.

   On 4 October 1988 this court made the orders set out below and said that its reasons for judgment would be given later. The orders were that:

   (1) The appeal from the judgment of Jenkinson J given on 11 February 1988 be allowed.

   (2) The order of Jenkinson J made on 11 February 1988 that the petition be dismissed be set aside.

   (3) The Deputy Commissioner of Taxation pay the costs of this appeal and of any motion or application in this matter after 11 February 1988.

   (4) The petition be restored to the list instanter for further hearing before Lockhart J to hear any motion by the Deputy Commissioner of Taxation to extend the life of the petition and then be remitted to Jenkinson J or other single judge of this court sitting in Melbourne for further hearing.

   The order for costs was made in those terms because the Deputy Commissioner undertook to the court, on seeking expedition of this appeal, to pay the costs of and incidental to the appeal in any event.

   The petition in this case describes the petitioning creditor as Deputy Commissioner of Taxation of the Commonwealth of Australia and the debtor as Maxwell Robert Boxshall, the respondent.

   The petition proceeds in accordance with the form prescribed under r 12 of the Bankruptcy Rules made under the Bankruptcy Act 1966 (Cth) (the Bankruptcy Act) (Form 5) until it concludes as follows:

   

"Signed by the petitioner in my presence

 

(There follows the signature of 'C McElwain'. an officer of the Australian Government Solicitor's Office Melbourne)

 

350 Collins Street, Melbourne

 

R Conwell

 

(signature) Deputy Commissioner of Taxation for the State of Victoria"

   The petition was signed, not by Mr Conwell, who is a Deputy Commissioner of Taxation for the State of Victoria (the petitioner), but in his name by one of his officers, Kaye Gardner, who was duly authorised by the petitioner by instrument in writing dated 17 September 1987 to sign any documents on his behalf in any legal proceedings suit or matter relating to the recovery of amounts due and payable under the Income Tax Assessment Act 1936 (the Assessment Act).

   The signing of the petition was witnessed by Carmen McElwain, who is, as noted above, an officer of the Australian Government Solicitor, the solicitor for the petitioner.

   The power of a Deputy Commissioner of Taxation to present a petition for sequestration of a taxpayer's estate to recover unpaid income tax derives from s 209(1) of the Assessment Act: James v DCT (1957) 97 CLR 23 at 34-5. Section 208(1) of that Act provides that income tax, when it becomes due and payable, shall be a debt due to the Commonwealth and payable to the Commissioner of Taxation. Any tax unpaid may be sued for and recovered in any court of competent jurisdiction by the Commissioner or a Deputy Commissioner suing in his official name: s 209(1).

   The petition was heard by Jenkinson J who held that the relevant provisions of the Bankruptcy Act and of the Bankruptcy Rules, being s 47(1) and r 12 respectively, and the form prescribed in the First Schedule to the Bankruptcy Rules ( Form 5), requires that, in the case of a petitioner who is a natural person: (a) whatever acts causing markings on the petition may satisfy the requirement of signing must be acts done by the person who is the petitioner, and (b) they must be done in the presence of another person who thereafter signs as witness to the commission of those acts by the petitioner. His Honour held that the petition in this case did not comply with these statutory provisions and should be dismissed. The Deputy Commissioner appealed from his Honour's judgment.

   Section 47(1) of the Bankruptcy Act provides:

   

"47(1) A creditor's petition- (a)

 

shall be in accordance with the prescribed form; (b)

 

shall be verified by the affidavit of a person who has knowledge of the facts; and

 (c)  shall be served as prescribed."

   Section 315(1) empowers the Governor-General to make rules or regulations, and to prescribe matters in relation to the forms to be used under the Bankruptcy Act.

   Rule 12(2) of the Bankruptcy Rules provides, inter alia, that a petition shall be in accordance with Form 5. Form 5 concludes with these words:

   

"Dated this day of , 19 .

 

Signed by the petitioner in my presence: (a)

 

(Signature, address and occupation of witness)

 

This petition is filed by whose address for service is on behalf of (blank)

 

(a) If the petitioner is a corporation, the petition may be under the seal of the corporation and the sealing need not be in the presence of a person other than a person required to witness the sealing of a document by the corporation."

   Reference should be made for completeness to r 6 which provides that strict compliance with the forms in the First Schedule is not necessary and that substantial compliance, or such compliance as the special circumstances of the particular case allow, is sufficient.

   The petitioner was represented by counsel before us. There was no appearance by or on behalf of the debtor. Counsel for the petitioner argued first, that the petition complied with the requirements of the Bankruptcy Act, the Bankruptcy Rules and Form 5; and alternatively that, if the petition did not so comply, the proceedings were not thereby invalidated and leave should be granted to amend the petition, or the petitioner should otherwise be relieved from the consequences of non-compliance, as any non-compliance was a formal defect or an irregularity within the meaning of s 306(1) of the Bankruptcy Act.

   At common law, where a person authorises another to sign for him, the signature of the person so signing is the signature of the person authorising it: R v Justices of Kent (1873) LR 8 QB 305 per Blackburn J at 307. There are cases in which a statute may require personal signature. Whether a particular case is in that category is a question of construction of the terms of the particular statute. In some cases concerning some statutes the courts have concluded that personal signature was required. In other cases on other statutes the courts have held that signature by an authorised agent was sufficient: see R v Justices of Kent, supra; Re Whitley Partners Ltd (1886) 32 Ch D 337; O'Reilly v Commissioners of State Bank (Vic) (1983) 153 CLR 1.

   There is some division of opinion as to the form which a signature of a person signing for another, but with his authority, should take. In some cases, for example R v Justices of Kent, supra, the mere writing of the authorising person's name has been held to be sufficient: see also Ex parte Hirst (1874) LR 18 Eq 704; France v Dutton [1891] 2 QB 208. On the other hand, in London County Council v Agricultural Food Products Ltd [1955] 2 QB 218, Denning LJ said (at 222) that: "… where a man is allowed to sign by the hand of another who writes his name for him … the one who does the writing should add the letters 'pp' to show that it is done by proxy, followed by his initials to indicate who he is."

   That decision was cited by this court in Sharp v DCT (NSW) (1988) 19 ATR 1045 at 1051; 88 ATC 4259 at 4264-5. Yet in McRae v Coulton (1986) 7 NSWLR 644 the Court of Appeal of New South Wales held that a form of application for the grant of authorities for joint water supply schemes under the Water Act 1912 (NSW) signed above the printed words "Signatures of all applicants" with a stamped name "Walker, Fiddes & Associates" under which were written the words "Solicitors for and on behalf of all applicants per" followed by a signature was sufficiently signed by the applicants: see especially per Hope JA at 663-4.

   The common law principle has been applied to the signing of a creditor's petition in bankruptcy by the creditor's duly authorised agent: Ex parte Wallace; Re Wallace (1884) 14 QBD 22; Re Anderson [1909] VLR 465; Re Williams; Ex parte Trustees of Assigned Estate of Vass (1911) 28 WN(NSW) 119.

   The common law principle finds expression, though in a wider form, in s 308(d) of the Bankruptcy Act which provides:

   

" 308 Subject to this Act, for the purposes of this Act-

 

…

 

(d) any person may act by his agent duly authorised in that behalf."

   The precursor of s 308(d) was s 42 of the Bankruptcy Act 1924. In Pepper v McNiece (1941) 64 CLR 642, Rich ACJ (at 647) and Williams J (at 654) held that s 42 authorised a petitioner to act by a duly authorised agent appointed under a power of attorney in presenting and signing a petition.

   In our opinion s 308(d) is the statutory source of authority for a petition to sequestrate a debtor's estate to be signed by a Deputy Commissioner of Taxation either himself or by an agent duly authorised by him for that purpose. We discern no contrary intention to be found in the Bankruptcy Act. Nor do we discern any contrary intention in the concluding words of Form No 5 providing for the signature and attestation of the petition.

   It is permissible for a petition to be signed in the name of a Deputy Commissioner by his duly authorised agent who signs the Deputy Commissioner's name in the manner which occurred in the present case. Alternatively, a petition may be signed by a duly authorised agent of the Deputy Commissioner in the Deputy Commissioner's name, but in terms which make it clear that the signature is by a person acting as agent. The latter is the form of signature which commended itself to Denning LJ in London County Council v Agricultural Food Products Ltd, supra.

   In these circumstances there is no necessity for us to consider the argument of counsel for the Deputy Commissioner based upon reg 62 of the Income Tax Regulations which provides that judicial notice shall be taken of the names and signatures of the persons who are Deputy Commissioners of Taxation (sub-reg (1)) and that a certificate, notice or other document bearing the written, printed or stamped name including a facsimile of the signature of a person who is or was at any time a Deputy Commissioner in lieu of that person's signature shall, unless it is proved that the document was issued without authority, be deemed to have been duly signed by that person (sub- reg (2)).

   Before leaving this aspect of the case we shall refer to the judgment of the English Court of Appeal in Re Prince Blucher; Ex parte Debtor [1931] 2 Ch 70, to which we were referred by counsel, where the Court of Appeal considered s 16(1) of the Bankruptcy Act 1914 (UK) which provided that, where a debtor intended to make a proposal for a scheme of composition in satisfaction of his debts, he should within a specified time lodge with the official receiver "a proposal in writing signed by him" embodying the terms of the composition or scheme which he desired to submit for the consideration of his creditors. In that case, a proposal for a scheme of composition was submitted to a meeting of creditors on behalf of the debtor. The proposal was not signed by the debtor himself, but by his solicitor. The court held that no proposal for a composition had been lodged by the debtor within s 16(1) as the words "signed by him" were explicit, signature by the solicitor on behalf of the debtor being impermissible. Re Prince Blucher is distinguishable from the present case. Slesser LJ said (at 76) that certain statutes specifically empower a person to sign documents in the name of another. He cited as examples the Statutes of Frauds which contain specific provisions that an agent may sign on behalf of a sick person and the Bills of Exchange Act 1882 which by s 91(1) specifically provided that where that Act required any instrument or writing to be signed by any person it was not necessary that he should sign it with his own hand, but was sufficient if his signature was written by some other person by or under his authority. His Lordship made these observations to distinguish the Bankruptcy Act 1914 from those statutes, as the Bankruptcy Act 1914 did not contain any equivalent section. By contrast, the Bankruptcy Act 1966 (Cth) contains s 308(d) which specifically permits that which was held to be impermissible in Re Prince Blucher. An additional ground of distinction is that no relevant section of the Bankruptcy Act and no relevant rule in the Bankruptcy Rules is cast in language comparable to the terms of s 16(1) of the Bankruptcy Act 1914 (UK), which required that a proposal in writing must be signed by the debtor. Nor is Form 5 cast in comparable language.

   The further question arises in this case, however, whether the signature of the signatory to the petition was properly attested. Although the petition was properly signed it was not, in our opinion, properly attested.

   Where a person signs in the name of a Deputy Commissioner of Taxation as agent for the Deputy Commissioner it is inaccurate for the attestation clause to say that the petition was "signed by the Petitioner in my presence". It is true, on the facts of this case, that the duly authorised agent of the Deputy Commissioner signed the Deputy Commissioner's name in the presence of the attesting witness; but it is misleading to say that the petition was signed by the petitioner in the presence of that witness. The Deputy Commissioner is the petitioner and he did not sign the petition. It was signed by his duly authorised agent. If the petition had been signed by the Deputy Commissioner's agent "per pro" then the attestation clause could have stated that the named duly authorised agent signed the petition in the presence of the attesting witness. As the petition was in fact signed in the name of the Deputy Commissioner, the attestation clause should have made that fact plain by saying, for example, "Signed by Kaye Gardner, the duly authorised agent of the petitioner in my presence" or words to that effect. Had the petition been so attested it would have substantially complied with Form 5. Since r 6(1) of the Bankruptcy Rules provides that substantial compliance with Form 5 or such compliance as the special circumstances of the particular case allow is sufficient, it would then not have been defective. However, the form of attestation on the present petition renders the petition defective.

   The question arises whether the defect in the attestation of the petition is a formal defect or an irregularity within the meaning of s 306(1) of the Bankruptcy Act or is a fundamental defect beyond the curative powers of that subsection. Section 306(1) provides:

   

" 306 (1) Proceedings under this Act are not invalidated by a formal defect or an irregularity, unless the court before which the objection on that ground is made is of opinion that substantial injustice has been caused by the defect or irregularity and that the injustice cannot be remedied by an order of that court."

   A formal defect or an irregularity, in the context of a defect of form, is one that could not reasonably mislead the debtor: Phillai v Comptroller of Income Tax [1970] AC 1124, per Lord Diplock (delivering the judgment of the Judicial Committee of the Privy Council) at 1135; Re Wimborne; Ex parte Debtor (1979) 24 ALR 494 at 489-9; Re McCormac; Ex parte Taylor (1985) 63 ALR 251 at 255-6.

   In our opinion the incorrect attestation clause constitutes a formal defect or an irregularity. Analogous defects or irregularities have been held to constitute formal defects or irregularities: see Re Marsden; Ex parte E H Sellers & Sons Ltd [1921] Hansell's Report of Cases in Bankruptcy 188, where the court held that the form of signature was not defective, but if it were so the defect would have been merely formal: Russell v Australia & New Zealand Banking Group Ltd (1987) 14 FCR 72 and Re Manias; Ex parte Edsill Pty Ltd (1986) 154 FCR 1.

   There is no evidence that any prejudice or injustice has been caused by the defect or irregularity in this case. There is, therefore, no necessity for us to give leave for any amendment to be made to the petition because s 306 operates automatically unless the court is of the opinion that a substantial injustice has been caused by the defect or irregularity and that the injustice cannot be remedied by an order of the court: Kleinwort Benson Australia Ltd v Crowl (1988) 79 ALR 161, per Mason CJ, Wilson, Brennan and Gaudron JJ, at 166.

   It is for these reasons that on 4 October 1988 we made the orders previously mentioned.