BI7 Bankruptcy - application for registration as a trustee under Part VIII Division 1 of Bankruptcy Act - academic and prcfessional requirements prescribed in s.155(3A)(a)i1). (121i) and (111) - applicant not qualified in terms of sub-para.(1i) - whether requirements in sub-paras.(1) and (ii) alternative or cumulative Bankruptcy Act 1966 Part VIII Division 1 Bankruptcy Rules r.61A RE: JOHN FRANCIS WALKER EX PARTE: JOHN FRANCIS WALKER - Applicant No. ART3 of 1986 TOOHEY J. PERTH 5 SEPTEMBER 1986 RECEIVED = 8 SEP 1986 FEDERAL COURT AUSTRALIA OF PRINCIPAL REGISTAY Ti THE FOORPAR Toner QE AUETRALIA GENERAL OLVISIOON BANKRUPTCY DISTETCT WF THE STATE oF WESTEFN ASVSTRALIA FE: JOHN ERANCTS WALKEP EX PARTE: JOHN FRANCIS WALKER Applicant GORAM: TOOHEY J. 5 September 1386 REASONS FOR JUDGMENT 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 implications of those amendments. 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 now oP aD made; they are 2xpressed in the followina terms: "(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 of the Court, are equivalent to the qualifications mentioned in sub-paragraph (i) or (ii): (b) the applicant is not an insolvent under administration: (c) the applicant resides in Australia; and (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 than two years duration. 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 sub-paraaraph. 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 tw 39° fos 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 alternatives. 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 registered as a trustee. 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 Dr eub-s.155 (34) ana aun the srescribed manner with such urckles as 1s of are approved by the Reagiscrar. 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. Associate Dated:5 September 1986