FEDERAL COURT OF AUSTRALIA Bendigo Bank Ltd v Williams [2000] FCA 482 BANKRUPTCY – bankruptcy notice failed to state 'the provision under which interest is being claimed' – whether such a notice was 'in accordance with the form prescribed the regulations' – whether such a failure was merely 'a formal defect or an irregularity' STATUTORY INTERPRETATION – legislative scheme governing bankruptcy notices – use of Bankruptcy Regulations in interpreting Bankruptcy Act 1966 (Cth) PRACTICE AND PROCEDURE – precedent – circumstances in which a Full Court may decline to follow a decision of another Full Court Bankruptcy Act 1966 (Cth) ss 40, 41, 306 Bankrupty Regulations reg 4.02 Acts Interpretation Act 1901 (Cth) s 25C Kirk v Ashdown [1999] FCA 1664 not followed Transurban City Link Ltd v Allan [1999] FCA 1723 applied Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 applied Deputy Commissioner of Taxation v Woodhams [2000] HCA 10 considered Kleinwort Benson Australia Ltd v Crowl (1988) 165 CLR 71 considered Hunter Resources Ltd v Melville (1988) 164 CLR 234 referred to Thorn EMI Pty Ltd v Commissioner of Taxation (1987) 13 FCR 491 considered Hanlon v The Law Society [1981] AC 124 considered Elazac Pty Ltd v Commissioner of Patents (1994) 53 FCR 86 referred to Government of Canada v Aronson [1990] 1 AC 579 referred to British Amusement Catering Trades Association v Westminster City Council [1989] 1 AC 147 referred to James v Federal Commissioner of Taxation (1955) 93 CLR 631 considered Pillai v Comptroller of Income Tax [1970] AC 1124 considered Re St Leon; Ex parte National Australia Bank Ltd (1994) 54 FCR 371 considered Hilti (Australia) Pty Ltd v Millard (1997) referred to Re Ma; Ex parte Farrow Mortgage Services Pty Ltd (in liq) (1995) 58 FCR 444 referred to Commonwealth Bank of Australia v Horvath [1999] FCA 143 referred to Re Scerri (1998) 82 FCR 146 referred to Thompson v Metham [1999] FCA 935 referred to American Express International Inc v Held [1999] FCA 321 referred to Parianos v Lymlind Pty Ltd [1999] FCA 684 referred to Yu v Farrow Mortgage Services Pty Ltd (in liq) (1995) 60 FCR 300 referred to Bank of Melbourne v Hannan (1997) 78 FCR 249 referred to Ashdown v Kirk [1999] FCA 1263 not followed Bendigo Bank Ltd v Scerri [1999] FCA 1215 discussed Foote v Mid-West Finance Pty Ltd (1997) 78 FCR 306 discussed Re O'Keefe; Ex parte Australian Factors Limited (1963) 19 ABC 101 cited Shanahan v Scott (1957) 96 CLR 245 cited Morton v Union Steamship Co Of New Zealand (1951) 83 CLR 402 cited BENDIGO BANK LIMITED (ACN 068 049 178) v GARY JOHN WILLIAMS V 703 OF 1999 BENDIGO BANK LIMITED (ACN 068 049 178) v SABINA HUSSEIN-BARBOUR V 704 OF 1999 BENDIGO BANK LIMITED (ACN 068 049 178) v KAREN FLORENCE YOUNG V 705 OF 1999 MOORE, KIEFEL AND LEHANE JJ 18 APRIL 2000 SYDNEY (HEARD IN MELBOURNE) IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA V 703 OF 1999 BETWEEN: BENDIGO BANK LIMITED ACN 068 049 178 APPELLANT AND: GARY JOHN WILLIAMS RESPONDENT V 704 OF 1999 BETWEEN: BENDIGO BANK LIMITED ACN 068 049 178 APPELLANT AND: SABINA HUSSEIN-BARBOUR RESPONDENT V 705 OF 1999 BETWEEN: BENDIGO BANK LIMITED ACN 068 049 178 APPELLANT AND: KAREN FLORENCE YOUNG RESPONDENT JUDGES: MOORE, KIEFEL AND LEHANE JJ DATE: 18 APRIL 2000 PLACE: SYDNEY (HEARD IN MELBOURNE) THE COURT ORDERS THAT: 1. The appeals be dismissed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA V 703 OF 1999 BETWEEN: BENDIGO BANK LIMITED ACN 068 049 178 APPELLANT AND: GARY JOHN WILLIAMS RESPONDENT V 704 OF 1999 BETWEEN: BENDIGO BANK LIMITED ACN 068 049 178 APPELLANT AND: SABINA HUSSEIN-BARBOUR RESPONDENT V 705 OF 1999 BETWEEN: BENDIGO BANK LIMITED ACN 068 049 178 APPELLANT AND: KAREN FLORENCE YOUNG RESPONDENT JUDGES: MOORE, KIEFEL AND LEHANE JJ DATE: 18 APRIL 2000 PLACE: SYDNEY (HEARD IN MELBOURNE) REASONS FOR JUDGMENT MOORE AND LEHANE JJ: Introduction 1 These are three appeals against orders made under s 52 of the Bankruptcy Act 1966 (Cth) ("the Act") dismissing three creditor's petitions of the appellant, Bendigo Bank Ltd ("the Bank"). Each petition was based on the failure of the debtor to comply with a demand in a notice purportedly in conformity with the provision of the Act and the Bankruptcy Regulations ("the Regulations"). Each appeal raises the same issue and matter V 703 of 1999 illustrates sufficiently the facts necessary to consider that issue. The Factual Background (V 703 of 1999) 2 On 11 February 1999 the Bank obtained judgment against Mr Gary Williams, the respondent in V 703 of 1999, in the sum of $4,927.88 in the Melbourne Magistrates' Court. A notice dated 9 April 1999 was served on Mr Williams demanding either payment of an amount of $5,474.20 within 21 days of service or to make arrangements to the satisfaction of the Bank for settlement of the debt. The notice was generally in the form prescribed by the Act and Regulations for a bankruptcy notice. The notice claimed Mr Williams owed the debt of $5,474.23 "as shown in the Schedule". The Schedule provided: "Schedule 1. Amount of judgement or order $4927.88 2. Legal costs if ordered to be paid and a specific amount was not included in the judgment or order (see Note 1, below) 3. If claimed in this Bankruptcy Notice, interest $546.35 accrued since the date of Judgment or order (see Note 3, below) $ 4. Subtotal $5474.23 5. Payments made since date of judgment order $0.00 6. TOTAL DEBT OWING $5474.23 (NB: Amounts, where applicable, are to be inserted in column 2) For the Information of the Creditor Notes to the Schedule Note 1: Legal costs (item 2 of the Schedule) If legal costs are being claimed in this Bankruptcy Notice, a certificate of taxed or assessed costs in support of the amount claimed must be attached to this Bankruptcy Notice. Note 2: Interest accrued (item 3 of the Schedule) If interest is being claimed, in this Bankruptcy Notice, details of the calculation of the amount of interest claimed are to be set out in the document attached to this Bankruptcy Notice. The document must state: (a) the provision under which the interest is being claimed AND (b) the principal sum on which, the period for which, and the interest rate or rates at which, the interest is being claimed. ANNEXURE 'INTEREST' BENDIGO BANK LIMITED REFERENCE GARYJOHN WILLIAMS START END NO. OF INTEREST $ DEBT $ INTEREST $ AMOUNT DATE DATE DAYS RATE % AMOUNT AMOUNT PER DAY 13/05/98 06/04/99 329 12.3000 4927.88 546.35 1.66 TOTALS 329 546.35" The learned primary judge said of the schedule: "It can be seen immediately that the details of the calculation of the amount of interest claimed, and the principal sum on which, the period for which and the interest rate at which, the interest is being claimed are set out in the document attached to the bankruptcy notice. But that document does not set out or state 'the provision under which the interest is being claimed' as is contemplated by sub‑paragraph (a) of Note 2 in the Schedule." The issues and the legislative framework 3 The ultimate issue in these proceedings is whether the notice served on each judgment debtor was a bankruptcy notice which, if not complied with, resulted in an act of bankruptcy of the type referred to in s 40(1)(g)of the Act. In each of these three appeals, the resolution of that issue turns on one question only. It is whether a notice, which otherwise complies with s 41(2) of the Act, reg 4.02 of the Regulations and Form 1 of Sch 1 to the Regulations, is not a such bankruptcy notice because (and only because) it does not have attached to it a document which states the provision under which the claim for interest is made. 4 If effect is given to the decision of the Full Court in Kirk v Ashdown [1999] FCA 1664 the issue will be resolved in favour of the appellant in each case. For that reason Mr G T Bigmore QC, who appeared with Mr M J Galvin to assist the Court (the respondents being unrepresented) submitted we should decline to follow Kirk v Ashdown, on the basis that a number of relevant authorities apparently had not been cited to the Court in that matter and that, in the light of those authorities, the decision should be regarded as wrong and this Full Court could decline to follow it. To do so would be consistent with the principles most recently stated by the Full Court in Transurban City Link Ltd v Allan [1999] FCA 1723; (1999) 168 ALR 687. 5 A bankruptcy notice is issued by an Official Receiver on application of a judgment creditor: see s 41(1). The contents of the notice are addressed in the remainder of s 41 which relevantly provides: "41. (2) The notice must be in accordance with the form prescribed by the regulations. … (5) A bankruptcy notice is not invalidated by reason only that the sum specified in the notice as the amount due to the creditor exceeds the amount in fact due, unless the debtor, within the time allowed for payment, gives notice to the creditor that he or she disputes the validity of the notice on the ground of the misstatement. (6) Where the amount specified in a bankruptcy notice exceeds the amount in fact due and the debtor does not give notice to the creditor in accordance with subsection (5), he or she shall be deemed to have complied with the notice if, within the time allowed for payment, he or she takes such action as would have constituted compliance with the notice if the amount due had been correctly specified in it." 6 The Regulations prescribe the form referred to in s 41(2). Regulation 4.02 provides: "4.02 (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." 7 Form 1 in the Sch 1 to the Regulations is lengthy. It is set out in full later in these reasons. It takes the form of a pro forma document which includes a series of numbered paragraphs. It contains sections that need to be filled out before it is lodged in a draft form for signing by the Official Receiver: see reg 4.01(1)(a). Indeed Form 1 contains what can be described as directions (express or implied) as to how the form should be filled out. It also contains directions requiring that, in certain circumstances, documents must be attached to the notice. One such direction is of central importance in the present proceedings. The first numbered paragraph, when filled out, declares that the judgment creditor claims the addressee (the judgment debtor) owes the judgment creditor a specified amount "as shown in the Schedule". The pro forma schedule in Form 1, in a case such as the present, is in the same terms (not including the amounts specified) as the schedule to the notice sent to Mr Williams in these proceedings which is set out earlier in these reasons. Paragraph (a) of note 2 to the schedule requires that a document accompany the notice which states the provision under which interest is claimed. It is to be recalledthat the notice actually sent did not have attached a document complying with paragraph (a). 8 It is also convenient to set out the terms of s 306: "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. (2) A defect or irregularity in the appointment of any person exercising, or purporting to exercise, a power or function under this Act or under a deed entered into under this Act does not invalidate an act done by him in good faith." We now turn to the issue raised in the appeal. Consideration of the issue in the appeal 9 A failure to comply with a bankruptcy notice can constitute an act of bankruptcy: s 40(1)(g). Ascertaining what, for that purpose, is a bankruptcy notice (or a valid bankruptcy notice as it has conventionally been described) is a matter of construction of the Act: see Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 388-390 and Deputy Commissioner of Taxation v Woodhams [2000] HCA 10; (2000) 169 ALR 503. 10 The characterisation of elements in a bankruptcy notice as elements evidencing a "requirement made essential by the Act" in Kleinwort Benson Australia Ltd v Crowl (1988) 165 CLR 71 ("Kleinwort Benson") was in a statutory context in which s 41 identified matters that had to be dealt with in a specified way in the form prescribed by the Regulations. Significantly those matters included the requirement to make payment, doing so within a specified time and in accordance with the judgment debt or order and the consequences of non-compliance with the notice. Section 41 qualified the power conferred by s 315(1)(a) to prescribe a form by directing that the prescribed form address those matters. Having regard to the function a bankruptcy notice serves it can be readily understood why these matters were both identified by the legislature in s 41 as matters a notice must address and characterised as essential (with certain consequences) by the High Court in Kleinwort Benson. 11 Section 41 now contains no explicit directions concerning the contents of a notice but deals with the contents of the notice in two more limited ways. The section contemplates the prescription of a form and directs that the notice be in accordance with that form: s 41(1). Evident in s 41 are two assumptions about the contents of any notice conforming with the prescribed form. The first is that the notice will specify an amount due to the creditor: s 41(5) and (6), and the second is that it will, if served in Australia, specify a time within which the payment will be made: s 41(6A) (and also in s 40(1)(g)). However it is scarcely likely that the legislature was, in framing s 41 in the way it did in the 1996 amendments, intending to abandon the notion that a notice must have certain characteristics for it to be a bankruptcy notice for the purposes of s 40(1)(g). The question that then arises is by what means has the legislature identified those characteristics and what are they. 12 The starting point in this inquiry is that a notice must conform with the prescribed form as directed by s 41(1). What must be done to satisfy the direction in s 41(1) is to be found in the Regulations. The regulation prescribing the form, reg 4.02, together with the form completes the legislative scheme arising from the amendments made to s 41 in 1996. The amendments to s 41 commenced on 16 December 1996 which was the time the Regulations were made which included reg 4.02. Generally it is not permissible to interpret a statute by reference to regulations made under it: see e.g. Hunter Resources Ltd v Melville (1988) 164 CLR 234 at 244. Nonetheless the role of reg 4.02 in ascertaining the legislative scheme embodied in the Act, and s 41 in particular, is relevant and is similar to the role of the sales tax regulations discussed by Beaumont J in Thorn EMI Pty Ltd v Commissioner of Taxation (1987) 13 FCR 491 at 498: "It may be accepted, as a general proposition, that 'the intention of Parliament in enacting an Act is not to be ascertained by reference to the terms in which a delegated power to legislate has been exercised' (per Brennan J in Webster v McIntosh (1980) 49 FLR 317 at 321.) On the other hand, as Mason J observed in the course of argument in Brayson Motors Pty Ltd (In Liq) v Federal Commissioner of Taxation (1985) 156 CLR 651 at 652: 'One looks at regulations, not to construe an overall scheme or to throw light on ambiguity in a statutory provision, but to ascertain what the scheme is.' In the present context, it has been settled since the decision in Deputy Federal Commissioner of Taxation (SA) v Ellis & Clark Ltd (1934) 52 CLR 85, that the Sales Tax Regulations are an essential part of the legislative scheme (see, especially, per Dixon J at 89). This approach was affirmed recently in Brayson Motors (supra, at 657) and it is unnecessary to pursue the questions which could arise in other contexts (cf Neill v Glacier Metal Co Ltd [1965] 1 QB 16 at 27; Jackson v Hall [1980] AC 854 at 884, 889; Bennion, op cit, at p 146). In my opinion, reference to the Sales Tax Regulations, including reg 14A(2), is not merely permissible; it is essential to an understanding of the legislative plan." 13 This use of reg 4.02 and the form as a means of ascertaining the legislative scheme accords with the fourth of the six propositions developed by Lord Lowry in Hanlon v The Law Society [1981] AC 124 at 193-194 concerning the use that may be made of regulations in construing an Act. They are: "(1) Subordinate legislation may be used in order to construe the parent Act, but only where power is given to amend the Act by regulations or where the meaning of the Act is ambiguous. (2) Regulations made under the Act provide a Parliamentary or administrative contemporanea expositio of the Act but do not decide or control its meaning: to allow this would be to substitute the rule-making authority for the judges as interpreter and would disregard the possibility that the regulation relied on was misconceived or ultra vires. (3) Regulations which are consistent with a certain interpretation of the Act tend to confirm that interpretation. (4) Where the Act provides a framework built on by contemporaneously prepared regulations, the latter may be a reliable guide to the meaning of the former. (5) The regulations are a clear guide, and may be decisive, when they are made in pursuance of a power to modify the Act, particularly if they come into operation on the same day as the Act which they modify. (6) Clear guidance may also be obtained from regulations which are to have effect as if enacted in the parent Act." 14 The fourth proposition has been cited with approval by an Australian Court: see Elazac Pty Ltd v Commissioner of Patents (1994) 53 FCR 86 at 90; 125 ALR 663 at 667 per Heerey J and contemporaneous regulations have been called in aid in construing an Act in two comparatively recent decision of the House of Lords: see Government of Canada v Aronson [1990] 1 AC 579 at 590 and 610 (per Lord Bridge of Harwich and Lord Lowry respectively, two of the majority of their Lordships) and British Amusement Catering Trades Association v Westminster City Council [1989] 1 AC 147 at 158. 15 The meaning and effect of s 41 can be ascertained by reviewing the scheme rendered complete by the regulations. In our view, the scheme appears to be this. The characteristics of a valid bankruptcy notice (subject to s 41(5) and (6)) are those identified in Form 1. Those characteristics include information that the form expressly or impliedly directs be included. The form must be followed to create a valid bankruptcy notice (the notice must be "in accordance with" the form). This is subject to two qualifications. The first is that a notice which fails in some respect to comply with Form 1 may nonetheless be valid because of the operation of s 306. The second is that s 25C of the Acts Interpretation Act 1901 (Cth) may operate to avoid invalidity though its operation is limited by reg 4.02. 16 Section 25C provides: "Where an Act prescribes a form, then, unless the contrary intention appears, strict compliance with the form is not required and substantial compliance is sufficient." Section 41 does not prescribe a form. That is done by reg 4.02. Thus for the purposes of s 25C, the regulation itself is to be treated as "the Act prescrib(ing) the form ...". That arises because by operation of s 46(1)(a) of the Acts Interpretation Act 1901 (Cth) a regulation is to be treated for this purpose as if it were an Act. It is clear that reg 4.02 was drafted to ensure that the provisions of s 25C have full effect in relation to the format of a notice if it is in the form prescribed by reg 4.02(1). That is, substantial compliance with Form 1 is sufficient in relation to the format of the notice. What elements in Form 1 or aspects of it are comprehended by the word "format" is not entirely clear but the concluding words in parentheses suggest it is probably a reference to the visual representation of the text constituting Form 1 as well as the notes in it. However it appears that reg 4.02 was also drafted to ensure that strict compliance is necessary with Form 1 other than as to format. Reg 4.02(3) refers only to reg 4.02(2) and not reg 4.02(1). It is comparatively clear, in our opinion, that the regulation was drafted this way so as to signify that whileit was intended s 25C would operate in relation to the format of the notice, it would not operate in relation to any other aspect of a notice and, relevantly, not operate in relation to its contents. That is, a notice that did not contain what Form 1 required was not, by operation of s 25C, a valid notice even if, as to contents, it substantially complied with Form 1. 17 However, it can be assumed that both s 41(1) and reg 4.02 were drafted with s 306 in mind. Thus, the omission from a notice of some text or information required by Form 1 which constituted a formal defect or irregularity would not invalidate the notice if no substantial injustice was caused by the defect or irregularity. 18 In reaching a final view about the proper construction of the Act and Regulations and the scope of the operation of s 306 attention must be given to authorities concerning the contents of a bankruptcy notice. It will be necessary to discuss the three leading authorities, James v Federal Commissioner of Taxation (1955) 93 CLR 631 ("James"), Pillai v Comptroller of Income Tax [1970] AC 1124 ("Pillai") and, particularly, Kleinwort Benson. However, it is instructive first to consider the course of authority, following Kleinwort Benson, at first instance in this Court. 19 We do not know of any case, and counsel were unable to refer us to any, in which it has been held that a complete failure to incorporate any information of a kind required by either the Act or the Regulations (including the form), or their predecessors, has been held not to amount, in the terminology of Kleinwort Benson, to a failure to meet a requirement made essential by the Act. That, perhaps, is not surprising. Firstly, though we would not exclude the possibility of exceptional cases it might perhaps be thought strange, where the legislature and the executive have required a notice to take a particular form and to include a number of specified items of information, for the Court to take the view in the absence of a clear legislative licence to do so, that some of those items are essential but others are not. Secondly, counsel for the appellant conceded, rightly in our view, that he could not suggest that, in circumstances where an item was wholly omitted, there was substantial compliance with the form within the meaning of s 25C of the Acts Interpretation Act 1901 (Cth) (on the assumption, contrary to our view, that the section has an operation in relation to the contents of the form as opposed to its format) or r 6 of the earlierBankruptcy Rules. 20 Re St Leon; Ex parte National Australia Bank Ltd (1994) 54 FCR 371 ("St Leon") contains what is, with respect, a clear statement of the difficulties to which we have referred and of the distinction, in principle, between a complete failure to provide a category of information required by the form and the provision of information which is inaccurate or incomplete. Lindgren J said at 378: "In relation to the submission that the statement of address is not a matter made essential by the Act, there are, in my view, several difficulties. First, s 41(1)(a) provides that a bankruptcy notice 'shall be in accordance with the prescribed form' and it is difficult, in the face of such plain and mandatory terms, to assume that anything which is in fact in the prescribed form though not required to be in it by s 41(2), is not made 'essential' by the Act. For example, it is difficult to accept that the note at the foot of the prescribed form could be omitted without rendering the notice invalid. A second difficulty, although it may be but another aspect of the first, is that if the submission is correct there would appear to be no sanction for non‑compliance with s 41(1)(a), except perhaps in so far as the prescribed form satisfied s 41(2). I do not think that Parliament intended the mandatory terms of s 41(1)(a) to have that restricted operation. Thirdly, I do not think that their Honours in the joint judgment in Kleinwort Benson were contemplating by their reference to 'a requirement made essential by the Act' a dissection of the prescribed form of bankruptcy notice into parts specifically referred to in the Act and other parts. To construe their Honours' words in that way is to approach them as if they were the language of a statute. I think that it is consistent with the terms of the joint judgment that the statutory requirement that a bankruptcy notice be in accordance with the prescribed form is itself a requirement made essential by the Act. The passage quoted from the joint judgment contemplated that a bankruptcy notice might be in accordance with the prescribed form yet still be liable to mislead. That this is so is indicated by their Honours' reference at 80 of the judgment to the possibility that an understatement of the amount due might be capable, in a particular case, of misleading the judgment debtor as to whether, if an act of bankruptcy was to be avoided, payment was required of the amount in fact due or of the amount specified in the notice." 21 There is, perhaps, scope for debate about whether the majority in Kleinwort Benson can be taken to have intended that the requirement in s 41(1)(a) (that the notice be in accordance with the prescribed form) was one of the matters to be treated as a matter made essential by the Act. It may be that their Honours' observations were directed only to s 41(2), the provision under which the requirement then under consideration arose. However that is not to gainsay Lindgren J's observations about the inappropriateness of dissecting a notice in the way discussed. A similar approach was taken by Burchett J in Hilti (Australia) Pty Ltd v Millard (1997) 78 FCR 453 (though that was a case of the provision of incorrect information rather than an omission to provide any information). St Leon is a case in which an entire failure to state a matter required to be included in a bankruptcy notice (the creditor's address) was held to invalidate the notice; Whitlam J decided similarly, again in relation to the omission of the creditor's address, in Re Ma;Ex parte Farrow Mortgage Services Pty Ltd (in liq) (1995) 58 FCR 444; Finkelstein J held that failure to attach to the form a copy of the judgment giving rise to the debt relied on invalidated a bankruptcy notice (Commonwealth Bank of Australia v Horvath [1999] FCA 143; (1999) 161 ALR 441); so did Beaumont J in Re Scerri (1998) 82 FCR 146, Katz J in Thompson v Metham [1999] FCA 935 and Kenny J in American Express International Inc v Held [1999] FCA 321; (1999) 168 ALR 185; and in Parianos v Lymlind Pty Ltd [1999] FCA 684; (1999) 164 ALR 229(see especially at par 16) Sackville J took the same view about the requirements of reg 4.03 (that was a case where information was provided, but not the information which the regulation required). 22 There are cases in which it has been held that it is unnecessary to state the address of the creditor precisely where, in the notice, the prescribed form requires it to be stated (Yu v Farrow Mortgage Services Pty Ltd (in liq) (1995) 60 FCR 300 ("Yu"), a case in which the principles stated by Lindgren J in St Leon were adopted and applied) and that the current form of notice is not invalidated if the creditor's address is not stated as such, but an address is stated at which the debtor may pay the judgment debt (Bank of Melbourne v Hannan (1997) 78 FCR 249 – we leave open the question whether the creditor's address might be necessary in order to identify where the debtor is able to make arrangements to the creditor's satisfaction for the settlement of the debt). That the creditor's address might not be necessary is readily explained by reference to the nature and purpose of the particular information required to be provided. The creditor's address is required for two reasons. The first is part of the description of the creditor, to assist identification. The second is to inform the debtor of where payment may be made or arrangements made to compound the sum or otherwise settle the debt to the creditor's satisfaction. If the latter requirement is met and there is no difficulty about identification, then there is no question of failure to provide the informationrequired to be given. The same point may be illustrated by reference to the decision in Yu. In that case the prescribed form required, as part of the description of the creditor, that the creditor's occupation be stated. The creditor was a corporation and no occupation was stated. That was held not to amount to a failure to comply with an essential requirement because the requirement to state the creditor's occupation was part of the more general requirement to identify the creditor. Stating the creditor's occupation could have no other purpose. 23 That course of authority supports the proposition that, subject perhaps to exceptional cases, the entire failure to address or deal with, in a bankruptcy notice, a matter which the legislative scheme requires be addressed or dealt with is not a formal defect or irregularity cured by s 306. However, it is necessary to consider whether such a general proposition is justified by reference to the decisions of the High Court and the Privy Council in James, Pillai and Kleinwort Benson. 24 The legislation considered in James was the Bankruptcy Act 1924‑1954 (Cth) ("the 1924 Act") and the Bankruptcy Rules made under that Act. The provisions, including the prescribed form, are set out in the joint judgment of the Court at 637‑639. The prescribed form was a great deal less elaborate than the form now prescribed. In particular, there was no requirement to attach a copy of the judgment or order relied on, a certificate of taxed or assessed costs (if legal costs were claimed) or (if interest was claimed) a document of the kind required by Note 2 to the present form. Section 53 of the 1924 Act provided that a notice was to "require the debtor to pay the judgment debt … in accordance with the terms of the judgment …" and the prescribed form directed the debtor "to pay the debt to [the creditor] of [an address]". The notice in question purported to require (as the judgment on which it was based did not) that the debtor pay the creditor at a particular place. There was a second defect in the notice. The prescribed form, following the terms of s 53, required the debtor either to pay the amount due or to "secure or compound for the said sum to [the creditor's] satisfaction or the satisfaction of the Court." The notice served on the debtor instructed him that either he must pay "or you must secure or compound for the said sum to the satisfaction of the said Deputy Crown Solicitor, the agent for the abovenamed creditors, or the satisfaction of the Bankruptcy Court" (that is, it did not make it clear that the debtor could compound to the satisfaction of the creditors themselves). The court held that those two defects in the notice resulted in its invalidity. That was so, their Honours said at 643-644: "… because it wrongly seeks to restrict the debtor to paying the debt to the creditors at one particular place and because it does not notify him that he may in the alternative secure or compound the debt to [the creditors'] satisfaction. In the first respect it is not in accordance with the terms of the order and in the second it is capable of misleading the debtor as to the manner in which he may secure or compound for the debt. The court cannot inquire whether the debtor has in fact been misled or not. In this case it is probable that he was not misled. It is sufficient that he could be misled. But strict compliance with the requisites of a bankruptcy notice is essential to its validity and in these two respects the bankruptcy notice does not comply with these requisites. The defects cannot be regarded as formal defects or irregularities. They are breaches of important provisions of s. 53 … ." 25 The legislation with which Pillai was concerned required a bankruptcy notice to be in a prescribed form. The prescribed form required the notice to bear the title of the court by which it was issued and was expressed to be issued "by the Court". The notice served on the debtor took the prescribed form and was signed by a registrar of the court by which it was issued and sealed with the seal of that court. Section 7 of the Courts of Judicature Act 1964 (Malaysia) provided, however, as follows: "7. (1) All summonses, warrants, orders, rules, notices and mandatory processes whatsoever, whether civil or criminal, shall be issued and shall be expressed to be issued by the Chief Justice of the High Court issuing the same in the name of Yang di‑Pertuan Agong and shall be signed by a registrar of such Court; and every such summons, warrant, order, rule, notice and mandatory process shall be sealed with the seal of the court issuing or making the same. (2) All summonses, warrants, orders, rules, notices and other processes whatsoever, whether civil or criminal, issued or made by or with the authority of any court respecting any cause or matter within its jurisdiction shall have full force and effect and may be served or executed anywhere within Malaysia." 26 The Privy Council held that a bankruptcy notice was a "notice" within that section. The notice served on the debtor was not issued in the manner required by s 7(1). Their Lordships held, however, that the omission was a "formal defect or irregularity" within the meaning of a provision corresponding to s 306 of the Bankruptcy Act 1966 (Cth). Their Lordships said, at 1135: "What, then, is a 'formal defect or irregularity' within the meaning of the section? This was discussed in relation to a bankruptcy notice In re A Debtor (No. 21 of 1950), Ex parte the Debtor v. Bowmaker Ltd. [1951] Ch. 313, in which the earlier authorities were considered. The test there laid down was whether the defect in the notice was of such a kind as could reasonably mislead a debtor upon whom it was served. If it was, the notice was not validated by the section notwithstanding that the particular debtor upon whom it was served was not in fact misled. If, on the other hand, it could not reasonably mislead the debtor it was a formal defect and validated by the section. Their Lordships are here only concerned with the application of the section to a bankruptcy notice. They are not concerned with whether the same test is appropriate to determine the validity of subsequent steps in bankruptcy proceedings. In their view any failure to comply with the statutory provisions as to the form of a bankruptcy notice of a kind which could not reasonably mislead a debtor upon whom it is served is a 'formal defect' and validated by the section." 27 There is no suggestion in Pillai that there is a separate category of requirements, in relation to a bankruptcy notice, made essential by the legislation. What their Lordships appear to say (the authorities which they cited were, of course, subsequently considered in some detail in Kleinwort Benson) is that in every case where a bankruptcy notice fails to comply with the prescribed form the deficiency will be a formal defect or irregularity if, and only if, it is one which is not capable of misleading the debtor. What, precisely, was intended by the phrase "mislead a debtor" was not explored. Given the form of the bankruptcy notice in question, exploration was hardly necessary. 28 Nor is there in James a clear anticipation of the distinction later made in the majority judgment in Kleinwort Benson. Certainly it was said that the requirement that the debtor make payment at a particular place was "not in accordance with the terms of the order" whereas the failure to indicate that the debtor might compound to the satisfaction of the creditors themselves was merely "capable of misleading the debtor". But in discussing the former deficiency the court observed at 639 that: "The objection is not a trifling one particularly in a large geographical area like Australia. It is one of substance. If a judgment creditor can direct payment at one place exclusively it means that, although he and the debtor reside or carry on business in the same vicinity, the creditor can require the debtor to seek him or his agent out in some remote part of the realm." No doubt it did not occur to their Honours that it might be appropriate to discuss that deficiency in terms of its potential to "mislead" a debtor. The creditors were simply purporting to direct payment in a way which exceeded the authority which the legislation gave them. Nevertheless, their Honours' observations were plainly directed, among other things, to the question whether the deficiency might be cured by s 7 of the 1924 Act (the equivalent of s 306 of the presentAct): see at 637‑639. That may indicate a view (perhaps hardly a surprising view) that a feature of a notice which is capable of misleading a debtor does not exhaust the categories of defects cured by s 306. 29 The deficiency in the notice considered in Kleinwort Benson was that it understated the amount of interest due to the creditor. The majority of the Court held that that deficiency was a formal defect or irregularity which caused no substantial injustice to the debtor and was, therefore, cured by s 306. The case arose under the Bankruptcy Act 1966 (Cth) but, as earlier discussed, s 41(2) then provided not only that a bankruptcy notice must be in accordance with the prescribed form but also that it must include certain specified matters. The prescribed form was, once again, considerably less complex than the present form and it did not include the requirement in issue in these appeals. The majority judgment stated the questions arising, at 77, as follows: "Three questions arise as to the validity of the bankruptcy notices in this case: are they defective or irregular; if so, is the defect or irregularity substantive or formal; and if it is formal only, has it occasioned substantial and irremediable injustice?" Their Honours, after discussing a number of authorities, continued, at 79-80: "The authorities show that a bankruptcy notice is a nullity if it fails to meet a requirement made essential by the Act, or if could reasonably mislead a debtor as to what is necessary to comply with the notice: James v. Federal Commissioner of Taxation …; Pillai …. . In such cases the notice is a nullity whether or not the debtor in fact is misled … ." After considering the terms of the notices in question, their Honours continued, at 80-81: "There could thus be no uncertainty as to what would constitute compliance with the notice. The notice cannot be regarded as capable of misleading and accordingly cannot be said to be a nullity. The understatement thus constituted a formal defect or irregularity which attracts the operation of s. 306(1) of the Act." 30 As Lindgren J pointed out in St Leon, it is unnecessary in order to observe its binding authority to construe the majority judgment in Kleinwort Benson as if it were a statute, and it is a mistake to do so. Several things are apparent from the reasons of the majority. First, their Honours were concerned to affirm and apply the law as it had emerged from James and Pillai. Secondly, their Honours did not regard the understatement of the amount of interest due as a failure "to meet a requirement made essential by the Act". Thirdly, the notice left no uncertainty as to what was required in order to comply with it and thus, fourthly, it could not be regarded as capable of misleading. Accordingly the understatement constituted a formal defect or irregularity. Fifthly, it is improbable their Honours intended to give an exhaustive account of what was encompassed in the word "misleading" or, for that matter, to hold that the category of "not misleading" precisely coincided with the category of "formal defect or irregularity". 31 In our view, none of James, Pillai or Kleinwort Benson justifies a proposition that where the legislative scheme specifically and unambiguously requires particular matters to be included or stated in a bankruptcy notice, and does so without any indication as to whether any is essential or any not, the Court is at liberty to hold of some that they are essential but of others that they are not (again, no doubt one should allow for the possibility of an exceptional case, but there can be no suggestion that we are concerned with an exceptional case here). The course of authority since Kleinwort Benson, to which we have referred, is inconsistent with such a proposition. Still less, in our view, is it possible to justify, on the basis of the authorities, a proposition that any failure to comply with the requirements of the legislation (including the prescribed form) is a formal defect or irregularity which causes no injustice provided that it does not have the potential to mislead the debtor, or leave the debtor in a state of uncertainty, as to what would constitute compliance with the notice. To omit to attach a copy of the judgment on which a notice is based could probably never be more than a formal defect or irregularity on that basis. Nor could the failure to attach a certificate of taxed or assessed costs or a document stating the provision under which interest is claimed, the principal sum on which, the period for which, and the rate or rates at which it is claimed. Nor, for example, would it be more than a formal defect or irregularity to omit par 9 of the present prescribed form, headed "WARNING". 32 Those matters sufficiently illustrate, in our view, that to apply with literal rigidity particular expressions used in the judgments is to give, in relation to new and significantly changed legislation, an effect to what was said in James, Pillai and Kleinwort Benson that neither the High Court nor the Privy Council should be taken to have intended. 33 What is striking about the form of bankruptcy notice prescribed by the Regulations is an aspect of it to which we have already referred. By contrast with its predecessors, it requires the debtor to be given a good deal of information both justifying, in some detail, the claim made by the notice and as to the debtor's rights and obligations under the Act. Despite the length of the current form, we think the point is most conveniently made by placing it in juxtaposition with its predecessor. The form which a bankruptcy notice was required to take until the current form was prescribed was to be found in Sch 1 to the Bankruptcy Rules. 34 It read: " Rule 8 FORM 4 BANKRUPTCY NOTICE (Title) To: (name, address and occupation of judgment debtor) WHEREAS (name, address and occupation of judgment creditor) (hereinafter referred to as "the judgment creditor") has claimed that the sum of $ is due by you to him under a final judgment (or order) obtained by him against you in the Court of on the day of , 19 , being a judgment (or an order) the execution of which has not been stayed: THEREFORE TAKE NOTICE that within days after service of this notice on you, excluding the day on which this notice is served on you, you are required – (a) to pay the sum of $ so claimed by the judgment creditor to (here insert "the judgment creditor" or, if the judgment or order requires payment to be made to a court or a person other than the judgment creditor, the name and address of the court or the other person to whom payment is required to be made); or (b) to secure the payment of the sum referred to in paragraph (a) to the satisfaction of the (name of the Court) or the judgment creditor (or his agent whose name and address are ) or compound the sum so specified to the satisfaction of the judgment creditor (or his agent): AND FURTHER TAKE NOTICE that if, within the period set out above, you fail either to comply with either of the abovementioned requirements of this notice or to satisfy the (here insert the name of the Court) that you have a counter‑claim, set‑off or cross demand that you could not have set up in the action (or proceeding) in which the judgment (or order) was obtained, you will have committed an act of bankruptcy on which bankruptcy proceedings may be taken against you. Dated this day of , 19 . Registrar NOTE: If you have a counter‑claim, set‑off or cross demand equal to or exceeding the sum specified in paragraph (a), being a counter–claim, set‑off or cross demand that you could not have set up in the action (or proceeding) in which the judgment (or order) was obtained, you may, under subsection 41(7) of the Bankruptcy Act 1966, within the period set out above, file an affidavit to that effect giving details of the counter‑claim, set off or cross demand, as the case requires, and the reasons why you were unable to set up the counter‑claim, set off or cross demand, and, if you do so, the time for complying with the requirements of this notice shall be deemed to have been extended until the Court determines whether it is satisfied that you have such a counter‑claim, set‑off or cross demand. This notice was issued on the application of (name of the solicitor for the judgment creditor or the name of the judgment creditor, as the case may be) whose address for service is" That form was slightly more elaborate than the earlier version considered in James but added little of substance to that form. The current form is as follows: " FORM 1 Regulation 4.02 Bankruptcy Act 1966 BANKRUPTCY NOTICE This Bankruptcy Notice is prescribed, under subs. 41(2) of the Bankruptcy Act 1966 ("the Act"), by r. 4.02 of the Bankruptcy Regulations. [NOTE: Words appearing below in italics [for the purposes of this judgment only – not in italics] are for guidance in the completion of this Notice, and are not to be reproduced in the Notice.] To: (name) ____________________________ ("the debtor") of: (address) ____________________________ ____________________________ ____________________________ This Bankruptcy Notice is an important document. You should get legal advice if you are unsure of what to do after you have read it. 1. (name) ____________________________ ("the creditor") of: (address) ____________________________ ____________________________ ____________________________ claims you owe the creditor a debt of $ (amount), as shown in the Schedule. 2. The creditor claims that the debt is due and payable by you. A copy of the judgment or order relied upon by the creditor is attached. At the time of applying for this Notice, execution of the judgment or order had not been stayed. 3. You are required, within (insert number in accordance with the note to this paragraph) days after service on you of this Bankruptcy Notice: (a) to pay to the creditor the amount of the debt; or (b) to make an arrangement to the creditor's satisfaction for settlement of the debt. [NOTE: The number of days to be inserted is 21 or, if an order has been made under subparagraph 40(1)(g)(ii) of the Act, the number of days constituting the time fixed by the order.] 4. Payment of the debt can be made to: (name) ____________________________ of: (address) ____________________________ ____________________________ ____________________________ [NOTE: The address must be within Australia.] 5. Bankruptcy proceedings may be taken against you if, within the time stated in paragraph 3, above: (a) you do not comply with the requirements of either paragraph 3(a) or paragraph 3(b) above; and (b) the Federal Court does not extend, or is not deemed to have extended, the time for compliance with this Bankruptcy Notice (see paragraph 6, below). 6. The Federal Court of Australia may extend the time for compliance with this Bankruptcy Notice if, within the time stated in paragraph 3 above, you apply to that Court on one or both of the following grounds: (a) that you have instituted proceedings to set aside the judgment or order in respect of which this Bankruptcy Notice has been issued; (b) that you have filed with the Federal Court of Australia an application (on one or more grounds, apart from the grounds mentioned in paragraph 7, below) to set aside this Bankruptcy Notice. 7. In addition, within the time specified in paragraph 3 above, you may file an application to the Federal Court of Australia for an order to set aside this Bankruptcy Notice on the specific grounds that: (a) you have a counter‑claim, set‑off or cross demand equal to or exceeding the sum specified in this Bankruptcy Notice as owing to the creditor; and (b) in the action or proceeding in which the judgment or order mentioned in paragraph 2 of this Bankruptcy Notice was obtained, you could not have set up that counter‑claim, set-off or cross demand*. * This means that, because of a legal obstacle, you could not have raised that counter-claim, set-off or cross demand in defence of the creditor's court action against you. It is not enough if, for example, you simply neglected or overlooked the matter. 8. You should note the following points carefully: (a) If you file, at the Federal Court Registry, an application mentioned in paragraph 6 (a) or (b), you must still comply with this Bankruptcy Notice within the time stated in paragraph 3 above unless the Court extends the time for you to comply. (b) If you file, at the Federal Court Registry, an application mentioned in paragraph 7 (a), you need not comply with this Bankruptcy Notice until the Court decides whether you have grounds for a counter‑claim, set‑off or cross demand. Whether you will have to comply at that stage will depend on the Court's decision. WARNING 9. The information in paragraphs 6, 7 and 8 is based on provisions of section 41 of the Act. The information is a summary only, and not a complete statement of the relevant law. It might be unwise to rely solely on this summary. If you need a more detailed explanation, you should seek legal advice. 10. The Federal Court Registry for your State or Territory is located at: (set out the address and telephone number of the relevant Registry) Schedule Column 1 Column 2 1. Amount of judgment or order plus 2. Legal costs if ordered to be paid and a specific amount was not included in the judgment or order (see Note 1, below) plus 3. If claimed in this Bankruptcy Notice, interest accrued since the date of judgment or order (see Note 2, below) 4. Subtotal less 5. Payments made and/or credits allowed since date of judgment or order 6. Total debt owing (NB: Amounts, where applicable, are to be inserted in column 2) ______________________________________________________________ For the Information of the Creditor – Notes to the Schedule Note 1: Legal costs (item 2 of the Schedule) If legal costs are being claimed in this Bankruptcy Notice, a certificate of taxed or assessed costs in support of the amount claimed must be attached to this Bankruptcy Notice. Note 2: Interest accrued (item 3 of the Schedule) If interest is being claimed in this Bankruptcy Notice, details of the calculation of the amount of interest claimed are to be set out in a document attached to this Bankruptcy Notice. The document must state: (a) the provision under which the interest is being claimed; and (b) the principal sum on which, the period for which, and the interest rate or rates at which, the interest is being claimed. (NB: If different rates are claimed for different periods, full details must be shown) Note 3: Foreign currency amount conversion (see Bankruptcy Regulations, reg 4.04.) Total debt owing, expressed in foreign currency (amount) Commonwealth Bank of Australia opening telegraphic transfer rate on ___/___/___ (date) x (rate) ______________ Australian dollar equivalent = $ (amount) ______________ (delete Note 3 if not applicable) For the Information of the Creditor – Note about use of information It may be necessary to disclose some or all of the information provided by you on this Form to Government agencies and departments for any purpose under the Act. Also, the information may be included on a public record or given to other persons, bodies or agencies for proposes authorised by the Act. ______________________________________________________________ The person who applied for this notice to be issued is: ____________________________ (name) who confirms by the following signature that he or she is the creditor/the creditor's authorised agent*: (* delete as appropriate) ____________________________ (signature) and whose address for service is: ____________________________ ____________________________ ____________________________ (address) Telephone and fax numbers (including STD code): ____________________________ DX number (if applicable): ____________________________ FOR OFFICIAL USE ONLY Dated this (date) day of (month) (year) This notice was issued by the Official Receiver (or delegate or an officer authorised by the Official Receiver) for the Bankruptcy District of: address of Official Receiver: (signature or stamp of Official Receiver or delegate or authorised officer)" 35 It is readily apparent that it may not be appropriate to apply mechanically what has been said authoritatively in relation to the earlier form to the current form. Nor, perhaps, is the relationship between s 41, the Regulations and the present form on the one hand and s 306 on the other appropriately to be described in precisely the terms considered apt to the operation of s 306 in relation to earlier forms. Apart from the note to the previous form, which does not seem to have given rise to controversy in any reported case, that form told the debtor what was claimed under a judgment or order of a particular court obtained on a particular day, and proceeded to tell the debtor what he or she was required to do and what might be the consequences of failure to do it. In that context, there is nothing surprising about a proposition that a deficiency is formal, rather than substantive, if it is not apt to mislead the debtor as to the alternative courses of action required or as to a failure to take any of them. But if such an approach were taken in relation to the present form the consequence might be that large parts of what the Act requires (by providing that a bankruptcy notice must be in the prescribed form) might be omitted, the notice being nevertheless valid (so that failure to comply with it would be an act of bankruptcy). Such an approach, in our view, could not be correct. Indeed, what Lindgren J said in St Leon about the earlier form might be said a great deal more emphatically about its successor. No doubt, as mentioned earlier, it should be taken that the legislature, in amending s 41, and the executive, in making the Regulations, should be taken to have been aware of the presence of s 306 and of what had been said about that section, in relation to bankruptcy notices, in the authorities. But equally, in our view, both legislature and the executive should be taken to have had in mind the course of authority, at first instance, in this Court. It was authority which certainly did not encourage a notion that if something explicitly required to be included in a bankruptcy notice was omitted altogether, the notice was nevertheless valid. 36 In our view, the legislative scheme indicates that it is not sufficient merely to give a debtor details of the source of the obligation on which a notice is based and to tell the debtor what he or she must do in order to avoid an act of bankruptcy. A view has been taken that the debtor should be given a good deal of additional information, some of it quite complex and technical, directed in part to informing the debtor of the precise basis on which elements of the amount claimed are said to be due. To say that the entire omission of any of those pieces of information is merely a formal defect or irregularity, because it will not mislead the debtor as to what must be done or what will follow if it is not done, is, in our view, to disregard the choice which the framers of the scheme have deliberately made. If a bankruptcy notice is served in which information is given purportedly in compliance with the requirement of the prescribed form but which is inaccurate or incomplete then, no doubt, a question may arise whether that defect is merely formal. In considering that question, it may be relevant to ask whether the debtor could be misled. But in that context the way in which the debtor might relevantly be misledwould not be as to what must be done to avoid an act of bankruptcy but (materially) as to the information the debtor is intended to derive from the material required to be provided. At all events, where the legislative scheme has required a particular piece of information, such as the source of the debtor's obligation to pay interest, to be given, we do not think authority requires us to hold, and we think it would be wrong to hold, that the entire omission to provide it is merely a formal defect or irregularity. 37 A broadly analogous situation arose in Deputy Commissioner of Taxation v Woodhams (above). In their joint judgment, six members of the High Court considered the effect of notices given under ss 222APE and 220AOE of the Income Tax Assessment Act 1936 (Cth). The latter provision is of particular relevance. A penalty payable under Subdiv B of Div 9 cannot be recovered by the Commissioner until fourteen days after a notice is given. Section 220AOE(a) requires the notice to contain details of the unpaid amount. No form of notice was prescribed. Of this requirement the court said (at par 33): "It is the legislative purpose to be served by the giving of a s 222AOE notice that determines the nature and extent of the information necessary to satisfy the requirement to set out details of the unpaid amount of the company's liability under a remittance provision in respect of deductions. At this stage of the argument, the concern is with absence of information, rather than erroneous or misleading information. Absence of information will involve a failure to provide necessary details if, without such information, the notice will not fulfil the purpose for which it is required to be given." 38 In a case such as the present, it cannot be assumed that a notice that does not satisfy the requirement to include information about the source of the obligation to pay interest, satisfies the purpose for which the notice is required to be given. There is a plain purpose, in providing that information as an element in satisfying the overall purpose for which the notice is given. As Goldberg J said in his principal judgment in these proceedings (at par 16): "The specification of the provision under which the interest is being claimed is important for the debtor, as it enables the debtor to determine whether the claim for interest is a valid claim as a matter of law. The judgment debt speaks for itself in the sense that the debtor is given a copy of the order of the court with the bankruptcy notice as an attachment as required by Form 1. If a copy of the judgment or order relied upon is not attached to the notice, there is a failure to comply with an essential requirement of the Act: American Express International Inc v Held [1999] FCA 321 at [14] and the cases there cited. The only way in which the debtor can satisfy himself or herself as to the validity or lawfulness of the claim for interest is if he or she is told the provision under which the interest is claimed. As Finkelstein J said in Scerri (supra) it "is not an idle piece of information." " 39 The combined effect of s 41(2) and reg 4.02 is that the source of the obligation to pay interest must be included. Ultimately it is not, in our view, a matter for the Court to decide whether it should be included. That decision has already been made by the imposition of the requirement in the statutory scheme that it be included. 40 For those reasons we would, but for Kirk v Ashdown, hold that the decision of the primary judge was right and that the appeals should be dismissed. 41 Dowsett J gave judgment at first instance in Ashdown v Kirk on 13 September 1999: see [1999] FCA 1263. The bankruptcy notice considered by his Honour was based on a judgment of the Supreme Court of Queensland in the sum of $250,000 plus interest to date of judgment at twelve per cent plus costs. The schedule to the notice identified not only the amount due under the judgment but also an amount of $34,567.06 being interest accrued since the date of judgment. The entitlement to interest on the judgment debt derived from s 48 of the Supreme Court Act 1995 (Qld) though this was not specified in the notice nor in any attachment to it. The notes to the schedule appearing in Form 1 were not included in the notice. His Honour addressed the legal consequences of the failure to specify the source of the obligation to pay interest and after referring to passages from Kleinwort Benson said (at pars 25-26): "The failure to refer to s 48 of the Supreme Court Act as the relevant 'provision' justifying the claim for interest certainly constitutes non-compliance with the Act. It would be difficult to treat the notice as substantially complying with the relevant requirement so as to invoke the protection of s 25C of the Acts Interpretation Act as there was no attempt to comply with that requirement. Thus it is necessary to consider the approach adopted by the High Court in Kleinwort. Having accepted that there is a defect or irregularity, I must determine whether the requirement in question is essential pursuant to the Act. That is a matter of construction. Although the relevant provisions are in language which might be thought to be prescriptive, the reference in reg 4.02(3) to s 25C of the Acts Interpretation Act suggests something less than an expectation that there will be strict compliance with its provisions. Similarly, as I have already observed, the express, and relatively liberal treatment in s 41 of an overstatement of the debt suggests that less serious defects should not be fatal to the validity of a bankruptcy notice. If the claim for interest were unjustified or excessive, the matter would have fallen for resolution pursuant to subs 41(5). It seems most unlikely that the Act places the debtor in a better position where the amount claimed is correct, but not justified in detail. I conclude that the defect is not as to an essential requirement of the Act." 42 Two months later, on 12 November 1999, Goldberg J gave judgment in the matters to which these appeals relate. 43 The judgment of Dowsett J was the subject of an appeal which was heard on 26 November 1999 and determined on 30 November 1999. It appears that the Full Court was not referred to the judgment of Goldberg J. The Full Court first referred to Kleinwort Benson and then set out the passage from the reasons of Dowsett J quoted in par 41 above. The Full Court said (at par 18): "We agree that, as a matter of construction, the requirement of Note 1 to Schedule 1 to the Regulations is not mandatory in the sense that failure to comply with it will render a bankruptcy notice a nullity. It therefore remains for us to consider whether the omission of the reference to the prescription of a rate of interest pursuant to a regulation contemplated by s 48(1) of the Supreme Court Act 1995 (Qld) was objectively capable of misleading the debtors as to the amount which had to be paid in order to comply with the notices." 44 Their Honours concluded it was not. The Full Court referred to the judgment of Foster J in Foote v Mid-West Finance Pty Ltd (1997) 78 FCR 306 and the judgments of Northrop J in Distribution Group Ltd v Lyndan (1997) 78 FCR 421 and Bank of Melbourne Ltd v Hannan (above). Their Honours then set out a passage from the judgment of Finkelstein J in Bendigo Bank Ltd v Scerri [1999] FCA 1215 and said (at par 23): "It does not appear that his Honour had occasion to consider Bank of Melbourne v Hannan or the other cases in which Judges of this Court had held that the omission of a matter required by Reg 4.01 does not nullify a bankruptcy notice but is curable by resort to s 306. We consider that the omission to specify the source of the obligation to pay interest should also be regarded as a formal defect or irregularity, and that no substantial injustice has been caused by that omission." The Full Court dismissed the appeal. Should Kirk v Ashdown be followed? 45 In Transurban City Link Ltd v Allan (above) a Full Court of this Court (Black CJ and Hill, Sundberg, Marshall and Kenny JJ) declined to follow the decision of a differently constituted Full Court in Allan v Development Allowance Authority (1998) 152 ALR 439. In doing so, the Court, in a joint judgment, stated the principles, and the effect of earlier authorities, as follows: 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. 28. In Nguyen v Nguyen (1990) 169 CLR 245, at 268‑269, Dawson, Toohey and McHugh JJ, observed that the extent to which the appellate court of the Supreme Court of a State regards itself as free to depart from its own previous decisions must be a matter of practice for the court to determine for itself, citing the judgment of Bowen CJ and Forster J in Chamberlain v The Queen (1983) 72 FLR 1 at 8‑9, and noted also that the Full Court of the Federal Court will depart from a previous decision if convinced that it is wrong. Their Honours then said: 'Where a court of appeal holds itself free to depart from an earlier decision it should do so cautiously and only when compelled to the conclusion that the earlier decision is wrong. The occasions upon which the departure from previous authority is warranted are infrequent and exceptional and pose no real threat to the doctrine of precedent and the predictability of the law ... '. See also Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485 at 492. 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 v Westpac (1991) 32 FCR 1 at 20 per Hill J. 30. What their Honours said in Nguyen must be read in the context of their previous remarks. The statement of principle in Chamberlain v The Queen, cited with evident approval by their Honours, was qualified by the word "normally". The use of expressions of this nature leaves the way open for an approach that is appropriate to the circumstances of a particular case: see La Macchia v Minister for Primary Industries and Energy (1992) 110 ALR 201 at 204. Towards the conclusion of their joint judgment in Nguyen, Dawson, Toohey and McHugh JJ, noting that appeals to the High Court were now by special leave only, and that the appeal courts of the Supreme Courts of the States and of the Federal Court were, in many instances, courts of last resort for all practical purposes, observed (at 269‑270): 'In these circumstances, it would seem inappropriate that the appeal courts of the Supreme Courts and of the Federal Court should regard themselves as strictly bound by their own previous decisions. In cases where an appeal is not available or is not taken to this Court, rigid adherence to precedent is likely on occasion to perpetuate error without, as experience has shown, significantly increasing the corresponding advantage of certainty.' 31. Beyond this principle, we do not think it possible, or even desirable, to formulate exhaustive criteria upon which this Court should act when asked to reconsider an earlier decision, for so much will depend upon the nature of the controversy, the strength of the arguments and the particular circumstances attendant upon the case." 46 The particular circumstances attendant upon the present case include the following. The Full Court decision in question is very recent. It is highly unlikely that many people have ordered their affairs in reliance on it. Indeed, it is unlikely that prudent creditors would do so. The only way in which they might so act (unless disposed to attribute to the decision a wide operation in relation to matters required to be included in a bankruptcy notice) is by consciously omitting something which the prescribed form requires, that is a statement of the source of the obligation to pay interest. If Kirk v Ashdown remained good law the result would be, simply, that a particular form of careless omission will not have detrimental consequences for a creditor. Additionally, the Full Court in Kirk v Ashdown dealt with the present question very briefly, in substance simply by adopting the reasons given by Dowsett J. Moreover apparently a number of relevant authorities were not brought to the attention either of Dowsett J or of the Full Court. By contrast, we have had the benefit of comprehensive argument concerning both the legislation and the authorities. We are conscious that Kiefel J has reached a different conclusion having regard to the same material. Her Honour's ultimate conclusion accords with that of the Full Court in Kirk v Ashdown. We accept that fact might well inhibit us, as two members only of this Full Court, in not following Kirk v Ashdown. However while her Honour has reached the same ultimate conclusion as the Full Court in Kirk v Ashdown, it is, as we apprehend it, a conclusion reached by a significantly different route. Accordingly we consider that the difference of views, between Kiefel J and ourselves, should not operate as a constraint on us giving effect to what we consider is the correct legal conclusion. 47 In those circumstances we are, with respect, convinced that the reasons we have given lead to the conclusion that the decisions of the primary judge were correct. In the circumstances to which we have referred, we think that is a view to which this Court is entitled to give effect, and in our view we should do so. Accordingly, in our view, the appeals should be dismissed. As the respondents were not represented before us and as there is no evidence that any of them have incurred costs in relation to the appeals, there should be no order as to costs. I certify that the preceding forty seven (47) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Moore and Lehane. Associate: Dated: 18 April 2000 IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA V 703 OF 1999 BETWEEN: BENDIGO BANK LIMITED ACN 068 049 178 APPELLANT AND: GARY JOHN WILLIAMS RESPONDENT V 704 OF 1999 BETWEEN: BENDIGO BANK LIMITED ACN 068 049 178 APPELLANT AND: SABINA HUSSEIN-BARBOUR RESPONDENT V 705 OF 1999 BETWEEN: BENDIGO BANK LIMITED ACN 068 049 178 APPELLANT AND: KAREN FLORENCE YOUNG RESPONDENT JUDGES: MOORE, KIEFEL AND LEHANE JJ DATE: 18 APRIL 2000 PLACE: SYDNEY (HEARD IN MELBOURNE) REASONS FOR JUDGMENT KIEFEL J: 48 Each of these appeals concern the obligation of Bendigo Bank Limited to identify, in the bankruptcy notices served on the debtors, the provision which entitled it to claim interest which had accrued since the date of the judgment upon which the notice was based. Note 2 of the Schedule to the form of bankruptcy notice prescribed by the regulations to the Bankruptcy Act 1966 (Cth) ("the Act") (Form 1) requires that information, in addition to setting out a detailed calculation of the claim for interest. It was not disputed that, apart from the omission of the relevant statutory provisions under which interest was claimed, there was compliance with all other requirements of the form. His Honour, the primary Judge, held that the omission resulted in a failure to meet a substantive and mandatory requirement of the Act. This resulted from a combination of s 41(2), reg 4.02(1) and Form 1. His Honour dismissed the petitions in each case, and the bank now appeals from those decisions. 49 Section 41(2) was substituted in December 1996 (Act No 44 of 1996). At the same time, regulations and new forms came into effect. The previous provisions, and in particular the former s 41, is referred to later in these reasons. 50 Subsections 1 and 2 of s 41 provide: "41(1) [Issue of bankruptcy notices] An Official Receiver may issue a bankruptcy notice on the application of a creditor who has obtained against a debtor a final judgment or final order that: (a)is described in paragraph 40(1)(g); and (b)is for an amount of at least $2,000. 41(2) [Notice must accord with form prescribed] The notice must be in accordance with the form prescribed by the regulations". 51 Regulation 4.02 then provides: "4.02(1) For the purposes of subsection 41(2) of the Act, the form of bankruptcy notice set out in Form 1 is prescribed. 4.02(2) A bankruptcy notice must follow Form 1 in respect of its format (for example, bold or italic typeface, underlining and notes). 4.02(3) Subregulation (2) is not to be taken as expressing an intention contrary to section 25C of the Acts Interpretation Act 1901". 52 I shall not set out the considerably expanded form of bankruptcy notice in Form 1. It identifies the amount claimed "as shown in the Schedule"; requires a copy of the judgment or order to be attached; explains what the debtor is required to do and the consequences if those steps are not undertaken. It provides some additional explanation and information. The schedule in question lists the amount owing under the judgment or order; legal costs if ordered to be paid; and interest accrued since the date of judgment or order where such is claimed in the bankruptcy notice. Provision for a sub-total is then made from which payments or credits allowed since the date of judgment or order are to be deducted. The total owing is then inserted. There are notes to each of the items of legal costs and interest. Relevantly, note 2 to the Schedule provides that: "Note 2: Interest accrued (item 3 of the Schedule) If interest is being claimed in this Bankruptcy Notice, details of the calculation of the amount of interest claimed are to be set out in a document attached to this Bankruptcy Notice. The document must state: (a) the provision under which the interest is being claimed; and (b) the principal sum on which, the period for which, and the interest rate or rates at which, the interest is being claimed. (NB: If different rates are claimed for different periods, full details must be shown)". 53 It also is necessary to refer to ss 40(1)(g) and 306(1) which are relevant to a consideration of the above provisions. Subsection 40(1)(g) provides that a debtor commits an act of bankruptcy in circumstances where: "…a creditor who has obtained against the debtor a final judgment or final order, being a judgment or order the execution of which has not been stayed, has served on the debtor in Australia or, by leave of the Court, elsewhere, a bankruptcy notice under this Act and the debtor does not: (i) where the notice was served in Australia - within the time specified in the notice; or (ii) where the notice was served elsewhere - within the time fixed for the purpose by the order giving leave to effect the service, comply with the requirements of the notice or satisfy the Court that he or she has a counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt or sum payable under the final order, as the case may be, being a counter-claim, set-off or cross demand that he or she could not have set up in the action or proceeding in which the judgment or order was obtained". 54 Provision is made in ss 306(1) to preserve the validity of proceedings affected by formal defects: "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". 55 There has been a difference of view expressed in cases since 1996 concerning non-compliance with Form 1 constituted by an omission of the reference to the basis for claiming interest. Finkelstein J, in Bendigo Bank Limited v Scerri [1999] FCA 1215, by way of obiter, held that strict compliance with regulation 4.02 and Form 1 was required when regard was had to the language of the subsection, the regulation and the form, which was expressed in mandatory or emphatic terms. His Honour, the primary Judge, concurred with that view. A similar approach was taken by Sackville J in Parianos v Lymlind Pty Ltd (1999) 164 ALR 229. Dowsett J in Ashdown v Kirk [1999] FCA 1263 departs from that view, holding that the insertion of the provision under which interest is claimed could not be said to be essential pursuant to the Act, which is the basis for invalidity for non-compliance. I will later refer to aspects of his Honour's reasoning on the question of construction. The consequences of non-compliance with the form then fell to be determined according to whether it could mislead, and his Honour held that no confusion could arise in the debtor's mind on account of the missing provision. The Full Court (Kirk v Ashdown [1999] FCA 1664) approved his Honour's reasoning and held that, as a matter of construction, the requirement of note 2 is not mandatory, in the sense that failure to comply with it would render a bankruptcy notice a nullity. With respect to the construction of bankruptcy notices, their Honours (Spender, Ryan and Weinberg JJ) referred to Foote v Mid-West Finance Ltd (1997) 78 FCR 306, in which it had been pointed out that the rationale underlying cases concerned with notices was that the notice must make clear to the debtor what the debtor must do to comply with its requirements and thus avoid the consequences of committing an act of bankruptcy. 56 I should add here that his Honour, the primary judge, also considered the question whether the defect in the form could be regarded as capable of misleading the debtor. His Honour held that the debtor could be misled by the defect. It is, with respect, difficult to see how that conclusion could be reached. There seems little prospect of confusion from such an omission, and this was the view taken in Ashdown v Kirk (and on appeal). In any event, it was not sought in the appeals to support the orders made by his Honour on this ground. The only question which arises is as to the legal effect of the omission. 57 It is accepted that the much quoted statement in Kleinwort Benson Australia Ltd v Crowl (1988) 165 CLR 71, 79-80 applies to the current statutory provisions: "The authorities show that a bankruptcy notice is a nullity if it fails to meet a requirement made essential by the Act, or if it could reasonably mislead a debtor as to what is necessary to comply with the notice… In such cases the notice is a nullity whether or not the debtor in fact is misled …". 58 Section 41(1) at that time provided that a bankruptcy notice "shall be" in accordance with the prescribed form. Subsection (2) then provided: "The prescribed form of bankruptcy notice shall be such that the notice: (a) requires the debtor named in it, within a specified time (being the time referred to in subparagraph 40(1)(g)(i) or (ii), whichever is appropriate) to: (i) pay the judgment debt or sum ordered to be paid in accordance with the judgment or order ; or (ii) secure the payment of the debt or sum to the satisfaction of the Court or the creditor or his agent, if any, specified in the notice or compound the debt or sum to the satisfaction of the creditor or his agent, if any, specified in the notice; and (b) states the consequence of non-compliance with the requirements of the notice." Section 40(1)(g) was in the same terms as set out above. 59 Subsection (2) has now been removed from s 41. It is now provided simply that a bankruptcy notice must be in accordance with the form prescribed, in terms similar to the provisions of s 41(1). Prior to the 1996 amendments, the form was prescribed by the Bankruptcy Rules (r 8), which provided that, for the purposes of s 41(1)(a), a bankruptcy notice shall be in accordance with Form 4. That form required the nomination of the sum due "under a final judgment (or order)". Provision was not made for interest which had accrued since the date of judgment, but it was regularly included in notices, as was observed in Kleinwort (78). If it was, the amount of interest had to be specified and it was not to be left to the debtor to attempt the calculation: Re O'Keefe, Ex parte Australian Factors Limited (1963) 19 ABC 101, 103; Kleinwort at 78. The present form, Form 1, allows for a claim for such interest and a calculation. 60 The principal question in Kleinwort was what was meant by a requirement of payment "in accordance with the judgment", since the notice there had understated the correct figure (see 79). The requirement of s 41(2)(a)(i) could not then be said to have been met. The majority of their Honours went on: "If the amount specified in a bankruptcy notice is in fact due and payment is claimed in accordance with the judgment, the essential requirements of section 41(2)(a)(i) - the only requirements presently relevant - are met. Understatement of the amount due, whether it be an understatement of the judgment debt or of interest payable thereon, will thus constitute a defect which is substantive rather than formal only if the understatement is objectively capable of misleading the debtor as to what is necessary for compliance with the notice" (80). 61 It has been held that it is consistent with the approach taken in Kleinwort to regard the statutory requirement, that a bankruptcy notice be in accordance with the prescribed form, as itself a requirement made essential by the Act: Re Leon; Ex parte National Australia Bank Limited (1994) 54 FCR 371, followed Yu v Farrow Mortgage Services Pty Ltd (in liquidation) (1995) 60 FCR 300. I am, respectfully, unable to agree. In Kleinwort, the majority did refer to the "essential requirements of a bankruptcy notice" as those "found in s 41 of the Act" (76). Their Honours went on, however, to identify s 41(2) as relevant : "Section 41(2) provides the prescribed form of the notice, which must be such that it…" (The subsection is then set out). 62 That is to say, s 41(2) itself made clear what the notice had to contain. That may be contrasted with the present position where s 41 itself says nothing about what is to be included in the notice. The former s 41(2) provided for the debtor to be informed as what needed to be done to avoid the consequences of s 40(1)(g), the commission of an act of bankruptcy, by reason of non-compliance with the notice. It furnished the "requirements" of the notice to which s 40(1)(g) refers, those that were essential to it given its purpose and effect. 63 Clearly a bankruptcy notice now must also inform a debtor what is required of him or her. It is left to those drafting the regulations and forms to determine how that is to be effected, in a way which obviates doubt on the part of the debtor as to what has to be done. In so doing, the form will give effect to the purpose of a notice apparent from the Act, and in particular s 40(1)(g). A grant of power to make regulations is, after all, only for objects or purposes which may be discerned from the Act. It is not intended that regulations themselves add to those purposes and provide means of carrying them out which may not be gleaned from the legislative plan: Shanahan v Scott (1957) 96 CLR 245, 250; Morton v Union Steamship Co of NZ (1951) 83 CLR 402. 64 It follows, in my view, that insofar as regulation 4.02 and Form 1 require the provision of information as to what is necessary for compliance, and in particular the identification of the sum to be paid and advices as to paying or securing it, those requirements could be said to be essential to a bankruptcy notice. They reflect its purpose. It may readily then be inferred that a notice which did not contain that information is to be regarded as invalid. What is not apparent, from a consideration of provisions such as s 40(1)(g), is that it was considered necessary that a debtor be provided with other, additional, information before the notice could be said to comply. In particular, there is nothing which suggests that it was considered a pre-requisite to the issue of a notice or its validity that a debtor be advised of the legal basis for a claim for interest. His Honour, the primary Judge, considered that the importance of the requirement of note 2(a) was that it was the only way in which debtors could satisfy themselves as to the validity or lawfulness of the claim for interest. Such a purpose and the requirement to effect it is not however apparent from the Act. 65 His Honour was, as mentioned above, influenced to his view as to the requirement of the regulations and form by the nature of their language. Words of command and phrases requiring that there be accordance with a form are not usually taken as concluding questions as to the consequences which will attend non-compliance. The language used is but one indicator as to whether invalidity was intended to follow. That purpose is ascertained not only by reference to the language of the statute, but the subject matter in question, the purpose of the statute and the consequences for the parties of holding void any act in breach of the requirements: Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355, 388-9. The traditional mandatory/directory dichotomy is no longer useful (389-390). 66 The question in these cases concerned what a bankruptcy notice needed to contain and could not, in my respectful view, be answered by having regard to the language and requirements of the regulation and Form 1 alone. The requirements of the notice were to be gleaned principally from the scheme of the Act and s 40(1)(g). 67 It has been said that bankruptcy notices are viewed strictly so far as compliance is concerned. Certainly the Courts are conscious of the consequences which follow for a debtor who has not complied; which explains the clarity required of a notice. The consequences for a debtor who is not told about the legal basis for an interest claim are not of that kind. A person with legal representatives would not need it; an unrepresented person, at best, would only be put on a train of inquiry by a reference to the statute, which would not usually disclose the ultimate source of the relevant rate of interest. A claim for interest in the notice by reference to a statute might, however, be taken by a debtor as authoritative and therefore likely to be accurate. 68 Dowsett J in Ashdown v Kirk observed that s 41(5) permitted that an error of magnitude will not automatically lead to invalidity. Indeed, the subsection recognises that an overstatement may be viewed as a defect beyond that to which s 306 might apply: Kleinwort, 78. His Honour then doubted that it was intended that less serious defects should be fatal to the validity of a bankruptcy notice. Further, his Honour considered that a strict view of all that the Form required to be inserted would mean that a creditor making an excessive claim would be, by reason of s 41(5), in a better position than one claiming the correct amount, but omitting a matter of detail. I would respectfully agree. 69 In my view, there is no reason to doubt the decision of the Full Court in Kirk v Ashdown. The identification of the provision under which interest has accrued since judgment is not an essential requirement of bankruptcy notices under the Act. The appeals should be allowed, the orders therefore set aside, and the matter remitted to his Honour for determination of the petitions. The respondents should pay the costs of the appeal and the proceedings below. I certify that the preceding twenty-two (22) paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kiefel. Associate: Dated: 18 April 2000 Counsel for the Appellant: Mr J A Nolan Solicitor for the Appellant: John Dunne & Associates Counsel appearing as amici curiae: Mr G T Bigmore QC with Mr M J Galvin Solicitor for the Respondent: Deacons Graham & James Date of Hearing: 17 February 2000 Date of Judgment: 18 April 2000