FEDERAL COURT OF AUSTRALIA Mastronardo v Commonwealth Bank of Australia Limited [2019] FCAFC 127 Appeal from: Via Sanantonio Pty Ltd v Commonwealth Bank of Australia [2019] FCA 58 File numbers: NSD 248 of 2019 NSD 249 of 2019 Judges: FLICK, GLEESON AND JACKSON JJ Date of judgment: 8 August 2019 Catchwords: BANKRUPTCY – applications to set aside bankruptcy notices – whether judgments were attached to bankruptcy notices PRACTICE AND PROCEDURE – whether one Full Court bound by decision of previous Full Court – no basis for concluding that ealier decision was clearly erroneous – appeals dismissed Legislation: Acts Interpretation Act 1901 (Cth) s 25C Bankruptcy Act 1966 (Cth) s 41 Bankruptcy Regulations 1996 (Cth) regs 4.01, 4.02, Sch 1 Cases cited: Adams v Lambert [2006] HCA 10, (2006) 228 CLR 409 AEK15 v Minister for Immigration and Border Protection [2016] FCAFC 131, (2016) 244 FCR 328 Curtis v Singtel Optus Pty Ltd [2014] FCAFC 144, (2014) 225 FCR 458 Taulahi v Minister for Immigration and Border Protection [2016] FCAFC 177, (2016) 246 FCR 146 Transurban City Link v Allan [1999] FCA 1723, (1999) 95 FCR 553 Date of hearing: 6 August 2019 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: General and Personal Insolvency Category: Catchwords Number of paragraphs: 28 Counsel for the Appellants: Mr M Cashion SC with Mr JT Johnson Solicitor for the Appellants: Tomaras Lawyers Counsel for the Respondent: Mr M Dempsey SC with Mr ML Rose Solicitor for the Respondent: Norton Rose Fulbright ORDERS NSD 248 of 2019 BETWEEN: CLAUDIA ALEJANDRA MASTRONARDO Appellant AND: COMMONWEALTH BANK OF AUSTRALIA LIMITED (ACN 123 123 124) TRADING AS BANKWEST Respondent JUDGES: FLICK, GLEESON AND JACKSON JJ DATE OF ORDER: 8 AUGUST 2019 THE COURT ORDERS THAT: 1. The appeal is dismissed. 2. The Appellant is to pay the costs of the Respondent. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. ORDERS NSD 249 of 2019 BETWEEN: ANTONIO MASTRONARDO Appellant AND: COMMONWEALTH BANK OF AUSTRALIA LIMITED (ACN 123 123 124) TRADING AS BANKWEST Respondent JUDGES: FLICK, GLEESON AND JACKSON JJ DATE OF ORDER: 8 AUGUST 2019 THE COURT ORDERS THAT: 1. The appeal is dismissed. 2. The Appellant is to pay the costs of the Respondent. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT THE COURT: 1 There are presently before the Court two appeals: in one proceeding the Appellant is Ms Claudia Alejandra Mastronardo; in the other the Appellant is Mr Antonio Mastronardo. Both Appellants appeal from a decision of Griffiths J in which his Honour dismissed applications seeking to set aside Bankruptcy Notices that had been served: Via Sanantonio Pty Ltd v Commonwealth Bank of Australia [2019] FCA 58. The Respondent in each of the current proceedings is the Commonwealth Bank of Australia trading as Bankwest. 2 The primary argument relied upon before Griffiths J was that the Bankruptcy Notices were a nullity because a copy of the judgments upon which reliance was being placed had not been "attached" to the Bankruptcy Notices when they were issued by the Official Receiver. His Honour rejected the argument. In doing so, his Honour followed the earlier decision of the Full Court in Curtis v Singtel Optus Pty Ltd [2014] FCAFC 144, (2014) 225 FCR 458 ("Curtis"). 3 The Appellants, in the present proceedings, contend that the decision in Curtis was wrongly decided and should not be followed. 4 Leave to file an Amended Notice of Appeal in each proceeding was sought at the outset of the hearing. The grant of leave was not opposed and leave was accordingly granted. 5 It is concluded that each of the two appeals should be dismissed with costs. The need for an earlier Full Court decision to be clearly erroneous 6 This Court as presently constituted is not "technically" bound to follow the earlier decision of the differently constituted Full Court in Curtis. 7 But, in accordance with established principle, this Court would generally follow an earlier decision of a previous Full Court unless that decision is considered to be "clearly erroneous": Transurban City Link v Allan [1999] FCA 1723 at [26] to [31], (1999) 95 FCR 553 at 560 to 561 per Black CJ, Hill, Sundberg, Marshall and Kenny JJ ("Transurban"). Their Honours there observed in part: [27] It is not in doubt that a Full Court of this Court has power to decline to follow the previous decision of a differently constituted Full Court. The Court is not bound to perpetuate error if error there be. Nor is it in doubt that while the Court has that power, it is a power which should be exercised with great care. The doctrine of precedent, which is fundamental to the common law, brings with it the consequence that decisions of an intermediate court of appeal will be binding on single judges within the same court hierarchy. They will be relied upon by the broader community and the profession. Decisions of a Full Court of this Court are entitled to due respect and will not be lightly departed from. … [29] A differently constituted Full Court would, of course, decline to follow the decision of another Full Court if it concluded that the previous decision was clearly erroneous. It would be wrong to do this merely because the matter was one on which minds might differ: cf Magman International Pty Ltd v Westpac Banking Corporation (1991) 32 FCR 1 at 20 per Hill J. See also: AEK15 v Minister for Immigration and Border Protection [2016] FCAFC 131 at [27], (2016) 244 FCR 328 at 334 per McKerracher, Griffiths and Perry JJ; Taulahi v Minister for Immigration and Border Protection [2016] FCAFC 177 at [173], (2016) 246 FCR 146 at 189 per Kenny, Flick and Griffiths JJ. The need for a judgment to be "attached' to a bankruptcy notice 8 At its most simple, one purpose of a Bankruptcy Notice is to "convey to the debtor how the debt that is alleged to be owing is said to have arisen": Curtis at [33]. And where the Bankruptcy Notice is founded upon a judgment debt, the purpose of attaching a copy of that judgment is to unequivocally bring to the attention of the bankrupt the judgment upon which reliance is being placed by the petitioning creditor. 9 The statutory provisions of immediate relevance to both the decision in Curtis and to the fate of the present appeals are to be found in of s 41 of the Bankruptcy Act 1966 (Cth) (the "Bankruptcy Act") and regulations 4.01 and 4.02 of the Bankruptcy Regulations 1996 (Cth) (the "Bankruptcy Regulations"). 10 Section 41 of the Bankruptcy Act provides for the "issue" of a bankruptcy notice and provides, in part, as follows: Bankruptcy notices (1) An Official Receiver may issue a bankruptcy notice on the application of a creditor who has obtained against a debtor: (a) a final judgment or final order that: (i) is of the kind described in paragraph 40(1)(g); and (ii) is for an amount of at least $5,000; or (b) … (2) The notice must be in accordance with the form prescribed by the regulations. 11 Further to s 41(2), reg 4.01 of the Bankruptcy Regulations provides, in part, as follows: Application for bankruptcy notice (1) Subject to subregulation (2), to apply for the issue of a bankruptcy notice, a person must lodge with the Official Receiver: (a) an application in the approved form; and (b) 1 of the following documents in relation to the final judgment or final order specified by the person on the approved form: (i) a copy of the sealed or certified judgment or order; (ii) a certificate of the judgment or order sealed by the court or signed by an officer of the court; (iii) a copy of the entry of the judgment or order certified as a true copy of that entry and sealed by the court or signed by an officer of the court. And reg 4.02 provides as follows: Form of bankruptcy notices (1) For the purposes of subsection 41(2) of the Act, the form of bankruptcy notice set out in Form 1 is prescribed. (2) A bankruptcy notice must follow Form 1 in respect of its format (for example, bold or italic typeface, underlining and notes). (3) Subregulation (2) is not to be taken as expressing an intention contrary to section 25C of the Acts Interpretation Act 1901. 12 Form 1, as referred to in reg 4.02(1), provides, in part, as follows: 13 From this twisted tale of provisions it emerges that s 41(2) of the Bankruptcy Act requires a Bankruptcy Notice to "be in accordance with the form prescribed by the regulations" and reg 4.02 of the Bankruptcy Regulations provides that the prescribed form is Form 1 as set forth in Sch 1 of those Regulations. It is within that Form that there emerges the requirement for the "claim" to be identified by reference to (inter alia) the "amount as per the attached final judgment…" 14 To these statutory and regulatory provisions, reference may also be made to s 25C of the Acts Interpretation Act 1901 (Cth) which provides as follows: Compliance with forms Where an Act prescribes a form, then strict compliance with the form is not required and substantial compliance is sufficient. 15 The overall purpose sought to be achieved by providing a copy of the Bankruptcy Notice, and a copy of the judgment upon which the Bankruptcy Notice is founded, is to clearly bring to the attention of the judgment debtor the very basis upon which the judgment creditor is proposing to proceed under the Bankruptcy Act. The Bankruptcy Notice, amongst other things, serves to inform the judgment debtor of the steps that he or she may take, including payment of the amount claimed to be owing and the manner in which that payment may be made. The Full Court's decision in Curtis – clearly erroneous? 16 The principal argument advanced by Senior Counsel on behalf of the Appellants was that the judgments relied upon in the present appeals were not "attached" to the Bankruptcy Notices when they were issued. The requirement imposed by Form 1, it was submitted, was not compatible with the issue of the Bankruptcy Notices by electronic communications such as occurred in the present case. 17 The reasoning of the Full Court in Curtis, which was the subject of particular attention, included the following conclusions: [51] The question is whether the pdf of the copy judgment could be treated as "attached" to the pdf of the bankruptcy notice, both being attached (together with the letter) to the email. Now clearly they were both attached to the email. The question is whether they were attached to each other. In our view, they were so attached. They were attached to the same email and electronically proximate to each other. Both were sent together rather than separately. Moreover, the one electronic communication (the email and attachments) was not divisible electronically at the time of issue or immediate receipt. Later, of course, one could choose to separately open each pdf and print hard copies separately. But at the time of electronic issue, the bankruptcy notice and the copy judgment or order were together and not separated. In one sense they were electronically "glued" together. They were electronically "fastened" to each other. Short of the two documents being constituted in the one pdf, they were as close electronically as they could be. Further, if they had been constituted in the one pdf, then it might have been argued that they were one and the same document, rather than being a notice with an attachment. Moreover, the fact that each pdf was itself attached to the email does not entail that each pdf could not also be attached to each other. 18 On the facts of the present appeals, the email sent on behalf of the Official Receiver had a number of attachments: one being a covering letter; one being a copy of the Bankruptcy Notice; and one being a copy of the judgment relied upon. Contrary to the decision in Curtis, on the approach of Senior Counsel for the Appellants, the email may have contained a copy of the Bankruptcy Notice and a copy of the judgment but it did not contain a copy of the Bankruptcy Notice which "attached" the judgment. Alternatively, Senior Counsel for the Appellants argued that the Full Court in Curtis was also wrong in concluding that there had been "substantial compliance" with the requirement to "attach" a copy of the judgment to the Bankruptcy Notice. 19 The decision in Curtis obviously stood very much in the way of these submissions prevailing. 20 It is concluded that Curtis was rightly decided and for the reasons given. It serves no useful purpose to presently attempt to simply restate the reasons so compendiously given by their Honours. 21 The legislative objectives sought to be fostered by s 41(2) of the Bankruptcy Act and reg 4.01 and 4.02 of the Bankruptcy Regulations are in no way diminished or frustrated by giving to the word "attached" a meaning such as that endorsed by the Full Court in Curtis at [51]. Indeed, to construe the word "attached" as necessarily requiring some physical attachment would be to elevate form over substance and that "should not be done": Adams v Lambert [2006] HCA 10 at [34], (2006) 228 CLR 409 at 421 to 422 per Gleeson CJ, Gummow, Kirby, Hayne, Callinan, Heydon and Crennan JJ. 22 Somewhat bravely advanced on behalf of the Appellants was the submission that the electronic communication of a Bankruptcy Notice together with the judgment as forming one and the same document would still fall short of compliance because one was not "attached" to the other. However it would seem in that case, each was sent together and were "electronically proximate" or "electronically 'fastened'" one to the other: Curtis at [51]. In light of this conclusion reached, it is not necessary to determine that question. 23 Reliance upon dictionary definitions of the term "attach", with respect, merely provide assistance but not answers. That is principally because the use of language in the context of electronic communications has, perhaps, outstripped the commonly understood meaning of words employed in a non-computer era. But such assistance as may be gleaned from the dictionary definitions in (for example) the Macquarie Dictionary support giving to the term "attach" a broader meaning than simply "to fasten; affix; join" and as also embracing (inter alia) "to connect as an adjunct". CONCLUSIONS 24 The statutory provisions of relevance to the present appeal have been set forth. 25 These are the provisions which were construed and applied by the Full Court in Curtis. Such submissions as were advanced on behalf of the Appellants in the present proceedings fail to provide any basis for concluding that Curtis was "clearly erroneous": Transurban at [29]. The decision in Curtis, far from being arguably wrong, is – with respect – unquestionably correct. 26 No necessity arises to consider the further submissions advanced with respect to "substantial compliance" within the meaning of s 25C of the Acts Interpretation Act 1901 (Cth). 27 The appeals should be dismissed. 28 There is no reason why costs should not follow the event. IN MATTER NUMBER NSD 248 of 2019 THE ORDERS OF THE COURT ARE: 1. The appeal is dismissed. 2. The Appellant is to pay the costs of the Respondent. IN MATTER NUMBER NSD 249 of 2019 THE ORDERS OF THE COURT ARE: 1. The appeal is dismissed. 2. The Appellant is to pay the costs of the Respondent. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Flick, Gleeson and Jackson. Associate: Dated: 8 August 2019