Commissioner for Motor Transport v Train

[1972] HCA 62

HIGH COURT OF AUSTRALIA

Barwick C.J., Walsh and Stephen JJ.

COMMISSIONER FOR MOTOR TRANSPORT v. TRAIN

(1972) 127 CLR 396

4 December 1972

Bankruptcy

Bankruptcy—Imprisonment of fraudulent debtors—Power of Bankruptcy Court to discharge—Summary conviction for offence of failing to pay civil charges imposed by statute—Imprisonment in default of payment of charges—Whether under law relating to imprisonment of fraudulent debtors—Whether execution or other civil legal process against person of debtor—"Debtor"—Road Maintenance (Contribution) Act, 1958-1969 (N.S.W.), ss. 5, 10, 12—Justices Act, 1902-1968 (N.S.W.), s. 82 (2)—Bankruptcy Act 1966-1970 (Cth), s. 60 (1).*

Decisions

December 4.
The following written judgments were delivered : -
BARWICK C.J. Arthur Train, the respondent in this appeal brought pursuant to leave granted by the Supreme Court of Queensland exercising federal jurisdiction in bankruptcy, was a road transport operator. By reason of his haulage operations on the roads of New South Wales he became liable, by virtue of s. 5 (1) of the Road Maintenance (Contribution) Act, 1958-1969 (N.S.W.) (the Road Act) to pay to the Commissioner for Motor Transport (the Commissioner) "towards compensation for wear and tear caused . . . to public streets in New South Wales a charge at the rate prescribed in the First Schedule" to the Road Act. The charge became due at the time of the use of the vehicle on a public street. Section 5 (3) of the Road Act provides :

"(3) Any charge payable under this Act shall be a civil debt due to the Commissioner by the owner of the vehicle concerned and, without affecting any other method of recovery provided by this Act, may be recovered by the Commissioner in any court of competent jurisdiction." (at p399)

2. Section 10 (1) (e) of the Road Act provides that any person who fails to pay to the Commissioner as required by the Act any charges payable in respect of any vehicle shall be guilty of an offence against the Act. By s. 10 (2) penalties are prescribed for offences, beginning with a maximum of $100 for a first offence and rising to a maximum penalty of $400 in relation to a third or subsequent offence. Section 12 of the Road Act provides :

"12. (1) Where any person is convicted of an offence against this Act the court before which he is so convicted may, in addition to imposing a penalty on such person for the offence, order him to pay to the clerk of the court within a time to be specified in the order any amount which from the evidence given during the proceedings the court is satisfied should have been, but has not been, paid by the person so convicted to the Commissioner by way of charge under this Act. Any amount paid to the clerk of the court under this subsection shall be paid by him to the Commissioner.

(2) Any such order shall be deemed to be a conviction or order whereby a sum of money is adjudged to be paid within the meaning of the Justices Act. 1902, as amended by subsequent Acts." (at p399)

3. The reference in s. 12 (2) to "the Justices Act, 1902" incorporates for the purposes of the Road Act s. 82 (2) of the Justices Act, 1902- 1968 (N.S.W.). That sub-section provides :

"(2) Whenever by any conviction or order it is adjudged that any fine or penalty, or any sum of money, or costs, shall be paid, the Justice or Justices making the conviction or order shall, except where the conviction or order shall, except where the conviction or order is made against a corporate body, therein and thereby adjudge that, in default of payment, in accordance with the terms of the conviction or order, of the amount thereby adjudged to be paid as ascertained thereby, the person against whom the conviction or order is made shall be imprisoned and so kept for a period calculated in accordance with the provisions of this subsection, unless the said amount and, if to such Justice or Justices it seems fit, the costs and charges of conveying him to prison be sooner paid :

Provided that this subsection shall not affect the provisions relating to periodical payments contained in the 'Deserted Wives and Children's Act 1901' and in the 'Lunacy Act of 1898'.

Where the said amount does not exceed two dollars such period shall not exceed twenty-four hours.

Where the said amount exceeds two dollars but does not exceed four dollars such period shall be forty-eight hours.

Where the said amount exceeds four dollars such period shall be one day for each two dollars of such amount or part thereof,

but in no case shall such period exceed twelve months.

Such imprisonment shall be with either hard labour or light labour, as the Justice or Justices in and by the conviction or order adjudge." (at p400)

4. The respondent failed to pay to the Commissioner a number of charges which became payable by him under the Road Act. The Commissioner did not sue him for such charges but the respondent was prosecuted in a court of petty sessions on the complaint of an officer of the Department of Motor Transport for the offences of having failed to pay the charges. The complaint was laid under the provisions of the Justices Act. The respondent was convicted in the Court of Petty Sessions at Redfern, New South Wales, of a total of forty-two offences of having failed to pay charges and fined in respect of such offences. Having convicted him, the court of petty sessions exercised the power given to it by s. 12 of the Road Act and ordered the respondent to pay an amount of money, being charges due by him under s. 5 of the Road Act. (at p400)

5. The respondent did not pay either the fines or the sums ordered by the Court of Petty Sessions to be paid. Subsequently, the respondent, being in the State of Queensland, was proceeded against in the Magistrates' Court, Toowoomba, and warrants of commitment were issued by virtue of the Service and Execution of Process Act 1901-1968 (Cth). Pursuant to such warrants he was committed to prison for a period of imprisonment appropriate to the amount of fines and other amounts of money ordered to be paid. No distinction was made in the warrants of commitment between fines and those other moneys. (at p400)

6. The respondent's estate was sequestrated in bankruptcy on 25th February 1971 by the Supreme Court of Queensland exercising federal jurisdiction in bankruptcy. On 14th April 1971, whilst still held under the warrants of commitment, the respondent applied to the Supreme Court of Queensland in that jurisdiction for an order pursuant to s. 60 of the Bankruptcy Act 1966-1970 (the Act) discharging him out of custody. At the time his continued imprisonment under the warrants issued out of the Magistrates' Court, Toowoomba, was wholly referable to his failure to pay the amount ordered to be paid by the Court of Petty Sessions at Redfern, representing unpaid charges due by him under s. 5 of the Road Act. Section 60 (1) of the Bankruptcy Act is in the following terms :

"60. (1.) The Court may, at any time after the presentation of a petition, upon such conditions as it thinks fit, discharge an order made against the property or person of the debtor under any law relating to the imprisonment of fraudulent debtors and stay any action, execution or other civil legal debtors and stay any action, execution or other civil legal process against the property or person of the debtor and discharge him out of custody." (at p401)

In Re Frankel(1959) 19 ABC 10, at p 11 , the Court of Bankruptcy adopted a statement of Fletcher Moulton L.J. in Victor v. Victor (1912) 1 KB 247, at pp 252-253 that "I have no doubt whatever that the intention of the Bankruptcy Act was to grant the bankrupt a discharge from all pecuniary liabilities arising contractually", and held that s. 63 (1), the predecessor of s. 60 (1), did not warrant the discharge of a person in prison for failure to pay maintenance to a deserted wife. In Re Caddies ; Ex parte Stapleton(1962) 19 ABC 155, at p 158 Gibbs J. sitting as the Federal Court of Bankruptcy, said that s. 63 (1) was :

". . . obviously not intended to enable the court to discharge from custody a debtor who is serving a sentence of imprison ment imposed on conviction for a crime, and I hold that, like the English section, it does not give power to stay legal process of a punitive character, or to discharge a bankrupt from imprisonment imposed as a punishment."

In Re Hollis(1968) 15 FLR 386 , the Court of Bankruptcy held that it had authority to discharge a person in the same situation as the respondent out of custody, taking the view that the process by which the bankrupt was in prison was a civil process. Gibbs J. in this connexion said(1968) 15 FLR, at pp 388-389:

"It is, of course, clear from the provisions of the Road Maintenance (Contribution) Act to which I have referred that every charge payable under the Act is a civil debt. It seems to me further that those provisions show that the Act itself draws a distinction between a fine, which is imposed as a punishment for the offence of failing to pay a charge, and an order for payment of the amount of the charge, which is intended to provide a means of recovering the charge. Section 5 (3) provides that the charges may be recovered in a court of competent jurisdiction but that this shall not affect any other method of recovery provided by the Act, and another method of recovery there referred to must be that provided in s. 12. Section 12 expressly says that the order for payment may be made 'in addition to imposing a penalty'. This reinforces the view that the legislature has made provision for punitive orders, which are made under s. 10, and also for orders, under s. 12, which are intended, not as penalties, but as a means of recovering the debt.

In my view, therefore, the orders which were made by the magistrate in the present case were not of a punitive character but were made to enforce the payment of the debt constituted by the charges under the Act. The warrants issued to enforce the orders amounted to execution against the person of the debtor. It follows that the provisions of s. 60 (1) apply to the present case. Since the applicant is bankrupt and is therefore unable properly to use any money he may have to make any payment to the Commissioner under the Road Maintenance (Contribution) Act, this seems to me clearly to be the sort of case in which the powers conferred by s. 60 (1) should be exercised."

We were informed that the Bankruptcy Court has more recently followed the decision of Re Hollis(1968) 15 FLR 386 in circumstances identical with those which obtain in the instant case. (at p402)

8. Counsel for the appellant contended, in the first place, that s. 60 (1), as a whole, was limited to the consequences of the application of a law relating to the imprisonment of fraudulent debtors and that the Road Act could not be so described in any of its provisions ; and secondly, that, in any case, the order under which the respondent was imprisoned was not a civil legal process. It may be significant in the construction of the section that at the date of its enactment, whether of its original enactment as s. 63 of the Bankruptcy Act 1924 or of its re-enactment in the Act of 1966, so far as I have been able to ascertain with any certainty, no imprisonment for failure to pay a debt contracted inter partes could be effected under a law of any State except in the case of a fraudulent debtor. How widely the description of fraudulent debtors, as used in this section, should be applied need not be resolved. But my own inclination is to confine the word "debtor", in the context of the section, to a person who owes a debt expressly or impliedly contracted as such. However, under some State laws operating at the relevant time, judgment debtors in respect of damages awarded in certain types of tortious causes of action such as defamation and breach of promise of marriage could be imprisoned for failure to pay the amount of damages awarded. But such laws themselves provided that the judgment debtors should be released upon sequestration of their estates in bankruptcy. (at p402)

9. But whatever the correct position in the laws of the several States, in my opinion, the section should be read as one integrated provision and not as two separate provisions, the first not qualifying or limiting the apparent generality of the second. The section speaks of the debtor throughout. That, in my opinion, is a reference to a person who is being proceeded against or is in prison "under any law relating to the imprisonment of fraudulent debtors". The final words of the sub-section "discharge him out of custody", in my opinion, refer to such a person. The various stages of the proceeding to imprison a fraudulent debtor are conceived to be an action, using that term as wide enough to include any proceeding or application of a civil kind, an order for imprisonment, the execution of such an order by the taking into custody or attempting to take into custody, and, lastly, the actual imprisonment. It seems to me that the omnibus expression, "other civil process", has been used with more abundant caution in a statute intended to embrace what might prove divergent procedural forms from time to time in the various States. The civil legal process is a process against the property or person of a debtor. (at p403)

10. It has been decided by the Court of Bankruptcy that the use of the word "debtor" in the section does not exclude the bankrupt and that the operation of the section is not restricted to the period intervening between the presentation of the petition and the making of an order of sequestration. See Re Malins ; Ex parte the Bankrupt ; Robinson(1936) 9 ABC 140 (at p403)

11. Two important but allied questions emerge. The first, whether s. 12 of the Road Act can be described as a law relating to the imprisonment of fraudulent debtors ; and, secondly, whether the warrant of commitment under which the respondent was held was a civil process. (at p403)

12. Even if it were possible to read the section as if it contained two disparate parts and that the latter part related to any legal process against the property or person of the debtor, whether or not the process was under or related to any law relating to the imprisonment of a fraudulent debtor, the appellant should succeed if the process by which the respondent was imprisoned is not a civil legal process against his person. Again, if it were held that the process was not a civil legal process, it would, of course, go far to establish that the provisions of s. 12 could not be regarded as a law with respect to the imprisonment of fraudulent debtors. (at p403)

13. The Road Act, by s. 5, creates a civil debt which may be sued for in any court of competent jurisdiction. Section 10 creates an offence of failing to pay the charges. The purpose of that provision is to enable the person who fails to pay the charge to be punished for having failed to do so. That the threat of punishment may include payment of the charges does not remove the penal nature of the provision. Section 12 provides a means whereby when a person is convicted of an offence of failing to pay a charge due by him to the Commissioner, the court which convicts may order him to pay the charge. It is important to note that at that stage the charge is due and is capable of being recovered by civil action, but the purpose of s. 12 (1) is to add another and different sanction. It provides, in short, that the person failing to pay the charge may be further punished for having failed to obey a court's order to pay it. However widely the description "fraudulent debtor" is applied, the Road Act is not, in my opinion, a law with respect to the imprisonment of fraudulent debtors. (at p404)

14. The Court which is empowered to order the payment of the charge as a concomitant of a conviction for having failed to pay it up to that time, is a court of petty sessions having no jurisdiction in civil matters at all under the Justices Act. The proceeding in which the respondent was fined for not having paid the charges was initiated under the Justices Act and was unquestionably a criminal proceeding. The order to pay the charge consequent on a conviction for having failed to do so was part and parcel of that proceeding, although the authority of the court of petty sessions to make the order was not wholly derived from the Justices Act but in part from the Road Act. But it is clear that the Road Act intended that the power of the court of petty sessions to order payment of the charges to be exercised with a view to punishment in case the order was not obeyed. Section 12 (2) in attracting s. 82 of the Justices Act is indicative of this. (at p404)

15. At the time the Court of Bankruptcy made its order in this case the only order or process which remained not fully executed was the warrant of commitment. All that the Court of Bankruptcy could relevantly do would be to stay that legal process against the person of the debtor and discharge him out of custody. But, plainly, in my opinion, the warrant of commitment was not a civil process. It was, both in form and in substance, a criminal process and the purpose of executing it against the person of the respondent was to punish him for not having obeyed the order of the court of petty sessions to pay the charges. It was not a process executed against him simply because he owed the charges under s. 5 of the Road Act : nor was it merely a method of collecting a debt. (at p404)

16. We were referred in argument to Ex parte Duffy ; Re Automobile Advance Agency Co. Ltd.(1958) SR (NSW) 343 Owen J, with whom Street C.J. agreed, said in that case(1958) SR (NSW), at p 351, :

"It seems to me that the nature of the proceedings is not to be determined by their result. If they can end in punishment, as for example by fine or imprisonment, they are criminal in their nature and they do not change their nature because in a particular case no punishment is in fact imposed."

With respect, I entirely agree with that statement and as applied to the present proceedings it results in the conclusion that the proceedings were not of a civil nature but essentially of a criminal nature. In my opinion, both for the reason that s. 60 of the Act only authorizes an order to be made in relation to proceedings which derive from a law relating to the imprisonment of fraudulent debtors, but also because, in any case, the warrants of commitment in this case cannot be described as civil legal process, but are, on the contrary, both in form and substance, criminal legal processes, the appellant should succeed. It follows that Re Hollis(1968) 15 FLR 386 is overruled (at p405)

17. We were told that in the event that the Court was prepared to allow the appeal it was not intended to seek to recover the respondent and commit him to prison to work out the balance of the period for which he was originally committed. Therefore, the only order that need be made in the present case is that the appeal be allowed and that the order discharging the respondent out of custody be set aside. In my opinion, there should be no order for costs. (at p405)

WALSH J. The circumstances that gave rise to this appeal and the relevant statutory provisions are set out in the reasons for judgment of the Cheif Justice and I need not repeat them. The circumstances are not different from those with which the Court of Bankruptcy was concerned in Re Hollis (1968) 15 FLR 386, a decision which was followed in the present case by the learned judge against whose order the appeal is brought. (at p405)

2. The first submission on behalf of the appellant was that the provisions of s. 60 (1) of the Bankruptcy Act 1966-1970 (Cth) (the Act), as a whole, are applicable solely in cases in which action has been taken or is being taken under some law relating to the imprisonment of fraudulent debtors and that no part of the sub-section had any operation in this case, in which the proceedings were taken in accordance with the Road Maintenance (Contribution) Act, 1958-1969 (N.S.W.) (the Road Act) which is not, it was submitted, a law answering that description. According to the argument, that part of s. 60 (1) which provides that the Court may "stay any action, execution or other civil legal process against the property or person of the debtor and discharge him out of custody" is limited in its operation by the earlier words referring to "any law relating to the imprisonment of fraudulent debtors", so that the provision applies only where a law of that description has been or is being invoked against the property or person of the debtor. It has been assumed, in my opinion correctly, that the word "civil" should be understood as qualifying the words "action" and "execution", as well as the words "legal process". (at p406)

3. In considering whether this submission on behalf of the appellant should be accepted, I shall not attempt a complete survey of the history of s. 60 (1) or of the background of State law to which it may be thought to have been directed. But I think it is desirable to make some references to legislation in force at the times when the Act and when its predecessor, the Bankruptcy Act 1924, which contained in s. 63 a similar provision, were enacted. Before making those references I observe that in the English Bankruptcy Acts 1883 and 1914 provision was made for the staying, after the presentation of a bankruptcy petition, of an action, execution or other process against the property or person of the debtor, but those provisions did not include any reference to discharging an order against the property or person of the debtor under any law relating to the imprisonment of fraudulent debtors. Nor did the bankruptcy legislation of the Australian States contain such a reference. The insertion in the Bankruptcy Act 1924 of a provision for discharging an order made against the property or person of the debtor under "any Act or State Act dealing with the imprisonment of fraudulent debtors" appears to have been an innovation. This was copied, with minor changes, including the substitution of the words "any law" for the words "any Act or State Act", in the 1966 Act. Of course, the expression "fraudulent debtor" was not new. It had been used, for example, in the Debtors Act 1869 (Eng.). There it was used to describe persons who had become bankrupt and had committed acts of a kind similar to those which are made offences by s. 265 of the Bankruptcy Act now in force here. The expression had been used also, but in a different sense, in legislation in Australia, to some of which I shall refer later. But it had not been used, so far as I am aware, in provisions of bankruptcy legislation relating to the making of orders for the release of debtors who were bankrupt or were about to become bankrupt. (at p406)

4. It is necessary to consider who were the "fraudulent debtors" to whom the legislature directed its attention when s. 63 of the 1924 Act was enacted and what were the laws dealing with their imprisonment which it had in its contemplation. In Halsbury's Laws of England, 3rd ed., vol. 2, p. 638, it is stated :

"Except in certain cases and classes of cases and in circumstances applicable to them, all of which are expressly or impliedly defined and regulated by statute law, no person can now be arrested or imprisoned for making default in the payment of money. The power of the court to commit in respect of default in the payment of a judgment debt is, however, preserved subject to safeguards. The intention and effect of the existing law on this subject is that a fraudulent debtor shall be punished, but that an honest debtor shall not."

The last sentence of that statement can be justified only if a very wide meaning is given to the term "fraudulent". That is apparent from some of the instances in which a defaulting debtor was made liable to imprisonment, which are set out in the paragraph which follows the passage quoted. One instance which is there mentioned is : "Default in paying any sum recoverable summarily before a justice or justices of the peace". When the Debtors Act 1869 (Eng.) abolished by s. 4 thereof imprisonment for debt subject to certain exceptions, that was one of the specified exceptions. It is not easy to suppose that a person who makes such a default is necessarily a "fraudulent debtor" in the ordinary sense of that expression, yet it has been held that an order for his imprisonment is a punitive order : see In re Edgcome ; Ex parte Edgcome(1902) 2 KB 403 I do not suggest that the provisions of the English Debtors Act 1869 and other similar legislation or the construction put upon them by the Courts are decisive as to the meaning to be given to the words "fraudulent debtors" in s. 60 (1) of the Act. But, in my opinion, the development in the courts of the view that various classes of defaulting debtors, not all of whom would be described in ordinary language as fraudulent, were liable to punishment by imprisonment, as being guilty of a form of delinquency not much different from fraud, has a bearing upon the construction of s. 60 (1). (at p407)

5. I shall refer now to some Acts of the States dealing with the imprisonment of debtors. The Judgment Creditors' Remedies Act, 1901-1970 (N.S.W.) enacted in s. 19 that, except as thereinafter provided, no person should be arrested on any writ of capias ad satisfaciendum issuing out of the Supreme Court. Certain exceptions were set out in s. 20 ; and s. 21 provided :

"Nothing in this Part hereinbefore contained shall extend to any such writ issued in an action for breach of promise of marriage, libel, slander, seduction, or any malicious injury."

Provisions were inserted in s. 25 relating to the discharge of a person from custody under such a writ, upon the sequestration in bankruptcy of his estate. (at p408)

6. In Victoria, the Imprisonment of Fraudulent Debtors Act 1915 re-enacted, with some changes, an Act of 1890. The 1915 Act was replaced by an Act of 1928, which was in turn replaced by the Imprisonment of Fraudulent Debtors Act 1958. The last-mentioned Act deals separately, as do the earlier Acts, with judgments of the Supreme Court, judgments of the Country Court and orders of the Courts of Petty Sessions. Section 3 provides that no person shall be arrested or imprisoned or detained in prison upon any writ of capias ad satisfaciendum issued out of the Supreme Court. Provisions of a similar kind are made with respect to the other Courts. But the prohibitions against imprisonment of debtors are not absolute. Under certain conditions orders may be made for the committal of a debtor to prison. But the conditions are of such a character, so it has been held, that imprisonment when it is ordered is a means of punishing a debtor who is deserving of punishment, because some fraud or dishonesty has been involved in the contracting of the debt or in divesting himself of property in fraud of his creditors or because he has acted in defiance of the orders of the Court. The view that an order made under the Imprisonment of Fraudulent Debtors Act 1915 is of a punitive character and is not to be regarded as a process of execution is explained fully in the judgments of Madden C.J. and Cussen J. in R. v. Wallace ; Ex parte O'Keefe (1918) VLR 285 The latter judgment contains an elaborate historical survey of legislation relating to the imprisonment of debtors and to the discharge from custody of insolvent debtors. In Newmarch v. Atkinson (1918) 25 CLR 381, the decision in Wallace's Case (1918) VLR 285 was approved by this Court It was held that the effect of the Victorian Act of 1915 was that coercion of the body of a judgment debtor, by way of execution in order to obtain payment of a debt, is entirely and absolutely abolished, but where there is a judgment against a debtor, then for certain cases of dishonest or unjust conduct in relation to that debt, expressed in the statute, punishment by imprisonment is provided. The Court was of opinion that the imprisonment was not intended as a means of execution for debt, but as a deterrent against reprehensible conduct in relation to the debt : (1918) 25 CLR, at pp 385-387 (at p408)

7. In Queensland, the Common Law Process Act, 1867, as amended, provides in s. 52 that no person shall be arrested on any writ of capias ad satisfaciendum issuing out of the Supreme Court. But exceptions are made similar to those contained in s. 20 and s. 21 of the Judgment Creditors' Remedies Act (N.S.W.). (at p409)

8. In South Australia, the Abolition of Imprisonment for Debt Act 1889 included exceptions similar to those contained in s. 4 of the English Act of 1869. It declared, also that it was not intended to repeal or alter Pts IX or XIII of the Local Courts Act 1886. The provisions thus left unaffected included a provision similar to that now contained in s. 154 of the Local and District Criminal Courts Act 1926-1971. The Debtors Act, 1936, s. 3, after declaring that except in certain specified cases, no person shall be arrested or imprisoned for making default in payment of a sum of money, adds as a proviso that nothing in the section shall alter or repeal the powers given to any local court under Pt VIII of the Local Courts Act, 1926, to commit a debtor to gaol, as therin authorized, or alter or repeal Pt XIII of the last-mentioned Act, or s. 35 of the Supreme Court Act, 1935. Part VIII of the Local Courts Act contains s. 154, already mentioned, and ss. 178-180. The latter provisions authorize the committal to gaol of persons in certain circumstances : some of these persons, being those to whom pars. (d) and (e) of s. 178 refer, appear to be "fraudulent" in the ordinary sense of the term. Others are defaulting or delinquent persons in the same categories as those to whom the Victorian legislation discussed above would apply. But s. 154 (3) is a provision which appears to authorize the Court to issue a warrant of commitment in the nature of a writ of capias ad satisfaciendum, if there has been return to a warrant of execution against a debtor's goods and chattels that there are no goods or insufficient goods to satisfy the debt. Section 154 appears, also, to have assumed that in the Supreme Court the writ of capias ad satisfaciendum remained an available form of process. (at p409)

9. There is no need in the present case to resolve difficulties that may arise, as to the scope of the operation of s. 154 and its earlier counterpart, or as to the effect thereon of the enactment of the Debtors Act, 1936 or of the promulgation in 1942 of O. 44 r. 1 of the Supreme Court Rules which includes a provision that no writ of attachment shall be issued against any person for making default in payment of a sum of money except in the cases specified in s. 3 of the Debtors Act, 1936. It is sufficient in s. 3 of the Debtors Act, 1936. It is sufficient for my present purpose to observe that when the Commonwealth Parliament enacted the Bankruptcy Act in 1924, it appeared that in South Australia there could be imprisonment for debt in some cases as a civil process, that in 1966 it was not completely clear whether or not that was still possible, and that both in 1924 and in 1966 there was in force in that State legislation authorizing the committal to prison of fraudulent debtors and of defaulting debtors who could have been classed as delinquent and as "fraudulent", in a broad but recognised sense of that term. (at p410)

10. From the legislation and the judicial pronouncements to which I have referred, certain conclusions may be drawn which are relevant to the construction of s. 60 (1). The first is that it is probable that in that provision and in its 1924 predecessor the reference to a "law" (or in the 1924 Act to "any Act or State Act"), described as "relating to" or as "dealing with" the imprisonment of "fraudulent debtors", was intended as a reference to such laws as the Imprisonment of Fraudulent Debtors Act 1915 (Vict.) and the subsequent re-enactments made in similar terms, and similar enactments elsewhere, that is to say, it was intended as a reference to laws which provide for the committal to prison of certain debtors whose conduct was considered to be reprehensible and deserving of punishment, whether in relation to the contracting of the debt or evading payment of it or in defying orders of the Court designed to help the creditor to recover it. It is not, I think, an objection to that view to say that s. 60 (1) contemplates that under such a law an order might have been made against the property of the debtor as well as against his person. Under the Victorian legislation, the debtor may free himself in whole or in part from the operation of the order for his imprisonment, either by paying the debt, before he is imprisoned, within the time specified in the order or by paying it after he has been imprisoned and thus obtaining his discharge from custody : see the Imprisonment of Fraudulent Debtors Act 1958 (Vict.), ss. 5 and 10 and Newmarch v. Atkinson (1918) 25 CLR, at p 386 I think, therefore, that an order under such legislation could be regarded as being in a sense an order against the debtor's property as well as against his person. But in any event, the central feature of the description of the law to which s. 60 (1) refers is that it is a law relating to imprisonment. That part of the provision is clearly intended, in my opinion, to apply mainly to orders against the person of the debtor. (at p410)

11. If I am correct in thinking that it is to laws of the type of which the Victorian Act is an example that the first part of s. 60 (1) is meant to refer, the fact that it had been accepted both in England and in Australia that such laws are punitive in character and are not laws providing a form of civil process for the enforcement of debts is significant in relation to the question whether the sub-section as a whole relates only to cases in which such laws have been or are being invoked against a debtor. (at p411)

In Wallace's Case(1918) VLR, at p 336, Cussen J. drew attention to the double aspect of such enactments, one aspect being the obtaining by a creditor of his money and the other being the imposing by the Court of punishment upon the debtor for fraudulent conduct or contumacy. But in Newmarch v. Atkinson(1918) 25 CLR 381it was the second of those objectives that was held to constitute the purpose of the enactment and it was declared(1918) 25 CLR, at p 386 that the imprisonment was not a means of execution for debt. (at p411)

13. From what I have so far said, it appears to me to follow that that part of s. 60 (1) which empowers the Court to stay "any action, execution or other civil legal process against the property or person of the debtor" must be interpreted as having an operation independent of the earlier reference to an order made under "any law relating to the imprisonment of fraudulent debtors". An order made under such a law against the person of the debtor would be an order for his punishment. It would not itself be, nor would it be a part of, any civil action, execution or legal process against his person. If proceedings were being taken under such a law or if he had already been imprisoned under such a law, there would be no civil action or civil execution or other civil legal process upon which the power to stay any such action etc. could operate. (at p411)

14. The second conclusion which I draw from my consideration of the background of legislation and judicial decision to which I have referred above is that although the old form of civil process of execution against the person for debt had been greatly diminished in its scope and its importance, it had not been wholly abolished throughout Australia. That appears from the legislation in force in New South Wales and in Queensland to which I have referred, and, also, at least in 1924 if not in 1966, from that in force in South Australia. The consequence of that fact is that it cannot be said that in so far as s. 60 (1) refers to any action, execution or other civil legal process against the person of the debtor, there was nothing upon which it could ever operate. It remained possible that against a debtor not being a "fraudulent debtor". even in the most expanded sense that could be given to that expression, proceedings by way of civil execution for debt might have been taken or might be current and in respect of such proceedings the Court could take action under s. 60 (1). (at p412)

15. For the foregoing reasons I am unable to accept the first submission made on behalf of the appellant. (at p412)

16. It is an essential element in that submission that the Road Act, in so far as it provides for imprisonment in default of payment of the charges, is not a law relating to the imprisonment of "fraudulent" debtors. It may be suggested that it is such a law. (at p412)

17. In the legislation providing for the abolition of imprisonment for debt, both in England and in Australia, one of the exceptions commonly specified was, as has already been noticed, default in paying any sum recoverable summarily before the Justices or before a magistrate. The tendency has been, as the foregoing discussion has shown, to regard as punitive in character a committal to prison in the excepted cases and to treat some defaulting debtors, who are liable to imprisonment, as being, at least in some cases, no different from fraudulent debtors. Notwithstanding those considerations, I do not think that I should hold that the relevant Road Act provisions relate to the imprisonment of fraudulent debtors. But I do not agree with the submission that s. 60 (1) can have no application except to persons imprisoned under such a law. (at p412)

18. The second submission for the appellant was that the order under which the respondent was imprisoned was not a civil execution or other civil process which the Court was empowered by s. 60 (1) to stay, as a preliminary to the exercise of its power to discharge the respondent out of custody. It was submitted that the process was not civil but criminal in its nature. In my opinion the question raised by this submission cannot be resolved by saying that any proceeding which may result in imprisonment cannot be a proceeding of a civil nature. Such a proposition cannot be accepted, in my opinion, because execution against the person was long recognized as a process for the recovery of debts and as being a civil process. Furthermore, it seems plain that s. 60 (1) by its express terms recognizes that civil execution or other civil legal process may be taken against the person of a debtor and that in consequence of it he may be in custody. (at p412)

As Gibbs J. pointed out in Re Hollis(1968) 15 FLR 386, at p 388, it is plain that charges payable under the Road Act are civil debts, as is expressly provided by s. 5 (3) of that Act. It is true also that in s. 12 of the Road Act the making of an order for the payment of an amount due for such charges is expressed to be a power that the Court may exercise "in addition to imposing a penalty" on such person for the offence. Thus a distinction is made between the liability to pay a fine as a penalty for committing an offence and the liability to pay the charges. But, in my opinion, it does not follow from those provisions of the Road Act that the order for the payment of the charges and the order that in default of payment the person against whom the order is made shall be imprisoned are to be described as orders of a civil nature or as orders made in the course of a civil proceeding or process. Nor does it follow that the subsequent warrant for the committal of the respondent to prison was a civil execution or a civil process. (at p413)

20. In determining the nature of the proceedings and of the orders made in them, the fact that the initial liability to pay the charges was a civil debt is important but is not, in my opinion, decisive. It is necessary to consider the form and the character of the action taken and the nature of the jurisdiction which is exercised by the court in which that action is taken. There can be no doubt, of course, that if an action for debt had been brought against the respondent in a court exercising civil jurisdiction that would have been a civil proceeding. But there was nothing in the Road Act or in the Justices Act, 1902 (N.S.W.), as amended, to enable the appellant to take some alternative form of action, in which the recovery of the amount of the charges could be regarded as the sole or as the principal purpose of the proceedings. We need not decide in this case the question whether if the Act had enabled the appellant to make a claim, which was simply a claim to recover payment of the charges, before some particular court therein specified and had empowered that court to enforce by imprisonment any judgement or order for payment given or made by it, such a proceeding and the orders made in it would have been of a civil nature. It may be that they could be properly so described. But what is, in my opinion, of great importance in this case is that, apart from an ordinary civil action in a court of civil jurisdiction, the only way by which any order could be obtained for the payment of the charges was to bring a prosecution for an offence against the Road Act and to obtain a conviction for that offence. Such a prosecution was without doubt a criminal proceeding. It was the only proceeding that came before the court. The Road Act empowered the court before which the offender was convicted to make an order for payment of the charges and such an order when made was deemed to be "a conviction or order whereby a sum of money is adjudged to be paid" and it was, therefore, an order to which s. 82 (2) of the Justices Act applied. But it was an order made in a criminal proceeding. There was not and there could not have been a proceeding before the magistrate, exercising jurisdiction in accordance with the Justices Act, consisting simply of a claim for recovery of the charges as a debt. (at p414)

21. Under s. 52 of the Justices Act an information may be laid where a person has committed or is suspected to have committed an offence or act for which he is liable upon summary conviction to be punished by fine, imprisonment, or otherwise. Under s. 53 a complaint may be made to a justice in any case where a justice or justices has or have authority by law to make an order for the payment of money, or otherwise. If the Road Act had simply given authority to the justices to make an order for the payment of the charges, without any requirement that the commission of an offence should be alleged or proved, the proceeding could have been instituted by a complaint under s. 53 ; and although s. 82 (2) of the Justices Act would have applied to an order made upon such a complaint, there might be much to be said for the view that that would have been a civil proceeding to recover the charges : cf. Commissioner for Motor Transport v. Terry (1968) 41 ALJR 360 ; (1968) ALR 193 In the present case, the parties have not placed before the Court any document by which the original proceedings against the respondent in New South Wales were initiated. But it is shown that he was convicted and fined for the offence of failing to pay charges. The Road Act by s. 10 creates that offence and renders the offender liable to a penalty and by s. 11 (1) provides that any penalty incurred for breach of any provision of that Act may be recovered in a summary manner before a stipendiary magistrate or any two justices in petty sessions. The mode of initiating such a proceeding provided by the Justices Act is, as I have stated, by an information under s. 52 and not by a complaint under s. 53. It is difficult, to regard proceedings so instituted or an adjudication made in them as being of a civil character. (at p414)

22. I am of opinion, as I have stated, that it is too broad a proposition to assert that every proceeding in a Court which may lead to imprisonment is a criminal proceeding. But in cases in England and in this country, the view has been accepted that when a proceeding is brought before Justices or before a magistrate exercising a summary jurisdiction and it is one which may end in imprisonment, it should be regarded as a proceeding which is criminal in its nature. In Ex parte Duffy ; Re Automobile Advance Agency Co. Ltd. (1958) SR (NSW) 343, at p 350 , Owen J., dealing with provisions which empowered a magistrate to impose in certain circumstances a term of imprisonment which was not, in his Honour's opinion, "a mere imprisonment as a judgment debtor", held that the proceedings were criminal in their nature. His Honour referred to a decision to the like effect in Ex parte Walsh (1912) 12 SR (NSW) 306 and pointed out that in the latter case the Court had accepted and applied the statement in Seaman v. Burley (1896) 2 QB 344, at p 347 , that the test was whether the proceedings might end in imprisonment and not whether they must do so. I think it is useful to quote a passage from the judgment of Lord Esher M.R. in Seaman v. Burley (1896) 2 QB, at pp 346, 347 , which states in clear terms the distinction which, in my opinion, ought to be made also in the present case between the nature of the procedure which is adopted and the nature of the matter which is, in his Lordship's phrase, "the origin of the proceeding". His Lordship said (1896) 2 QB, at pp 346, 347:

"It seems to me that the question is really one of procedure. The question is whether the proceeding which was going on was a criminal cause or matter. That it is a question of procedure may be easily seen by taking the case of an assault. An assault may be made the subject of civil procedure by action, in which case there may be an appeal to this Court ; or it may be made the subject of criminal procedure as by indictment, in which case there cannot be such an appeal. This seems to me to be contrary to the argument employed by the counsel for the appellant to the effect that the question depends upon whether the origin of the proceeding, i.e. the matter complained of, is in its nature criminal or not. In each case the thing complained of is the same, namely, the assault ; but there is or is not an appeal to this Court according as the procedure to which recourse is had is civil or criminal."

My conclusion is that the proceedings in which it was ordered that in default of the payment of the charges the respondent should be imprisoned were criminal proceedings. They could not be regarded, in my opinion, as divisible into two separate parts, one of a criminal nature and the other of a civil nature. They were not proceedings in which a claim for payment of the charges could be maintained as a separate claim not dependent upon the result of the prosecution for the offence against the Road Act. In my opinion they were criminal proceedings, because the respondent was prosecuted for an offence against the Road Act before a Court which has as its main function the exercise of summary jurisdiction in criminal matters. The making of an order for imprisonment in default of payment did not constitute, in my opinion, a form of civil execution against the person of the respondent or any "other civil legal process" against him. From what I have stated, it must follow, I think, that the warrant of commitment made by the Magistrates' Court at Toowoomba was not itself a civil execution or a civil process. (at p416)

23. In my opinion the appeal should be allowed. I agree with the orders which are proposed in the reasons for judgment of the Chief Justice. (at p416)

STEPHEN J. The circumstances of this appeal appear from the reasons for judgment of the other members of the Court and I shall not repeat them. (at p416)

2. In my opinion this appeal should be allowed. The respondent was not in custody because of an order against his person made "under any law relating to the imprisonment of fraudulent debtors" nor was he in custody as a result of any civil proceeding, execution or "other civil legal process" against his person. Accordingly the jurisdiction conferred by s. 60 (1) of the Bankruptcy Act was inapplicable to his imprisonment and did not empower the Court of Bankruptcy to order his discharge from custody. (at p416)

3. It follows that I find it unnecessary to determine on this appeal whether s. 60 (1) applies only to relieving against the consequences to a debtor of any order made "under any law relating to the imprisonment of fraudulent debtors" or whether it extends also to relief against the consequences of other civil legal process. Even if the latter, wider, view be taken the section will still not extend to the granting of relief against the consequences of legal process which is not civil in character and which is not under legislation relating to the imprisonment of fraudulent debtors ; on the view I take of the proceedings leading to the respondent's imprisonment, they were purely criminal in character and were, in addition, not brought under legislation capable of falling within the description of a law relating to the imprisonment of fraudulent debtors. (at p416)

4. Section 60 (1) and its predecessor, s. 63 of the Bankruptcy Act 1924, when they refer to such a law, refer, I think, to those laws of the Australian States concerned primarily with the abolition of imprisonment for debt but which nevertheless preserved imprisonment in cases either of a dishonest incurring of debt in the first place or of any subsequent wilful refusal to pay, or morally blameworthy evasion of payment or disposal of assets. The successive Victorian Imprisonment of Fraudulent Debtors Acts are examples of such laws. (at p417)

5. In some of the provisions of this type of enactment the concept of fraud appears to have been given a rather wider meaning than it normally possesses but there is no warrant for including in the category of such laws provisions such as those of s. 12 of the Road Maintenance (Contribution) Act, 1958-1969 and of s. 82 of the Justices Acts, 1902-1957, under the combined operation of which the present respondent was imprisoned. Doubts may perhaps exist whether the legislation to be found in some States, preserving imprisonment for debt in cases where damages in actions for defamation and the like remain unpaid, answers to the above description ; but there appears to me to be no reason at all for including this provision of the Justices Acts in that description. (at p417)

6. If, then, the respondent was not in custody under an order made under a law relating to the imprisonment of fraudulent debtors, can he be said to have been in custody as a result of any civil proceeding, execution or "other civil legal process" ? I pose the question in this way because, as I read s. 60 (1), this is the sole criterion of jurisdiction under it. In Re Hollis (1968) 15 FLR 386 , Gibbs J. held, on facts similar to the present, that s. 60 (1) conferred jurisdiction upon him to order a debtor's discharge from custody, because, as he interpreted the relevant legislation, the orders made which had resulted in the imprisonment of Hollis were not of a punitive character but were made to enforce the payment of the debt constituted by road charges. It is no doubt true, as had been said by His Honour in the earlier bankruptcy case of Re Caddies ; Ex parte Stapleton (1962) 19 ABC 155 , that s. 63 (1) of the Bankruptcy Act 1924-1960 did not give power to stay legal process of a punitive character or to discharge a bankrupt from imprisonment imposed as a punishment, and this is equally applicable to s. 60 (1) of the present Act. I leave aside instances of imprisonment under fraudulent debtors legislation and, as stated earlier, assume for present purposes that the sub-section is not restricted to such instances. On this footing it appears to me that the scope of s. 60 (1) must, by its express terms, be ascertained not by reference to the purpose, punitive or otherwise, of the imprisonment but rather by a characterization of the action, execution or other legal process against the person of the debtor which has resulted in his being in custody. If characterized as civil, power is conferred to discharge him out of custody ; if as non-civil, no such power exists. The sub-section, omitting those parts dealing with fraudulent debtors legislation, reads as follows :

"60. (1) The Court may, at any time after the presentation of a petition, upon such conditions as it thinks fit, . . . stay any action, execution or other civil legal process against the property or person of the debtor and discharge him out of custody."

It appears to me to express only one relevant precondition to the exercise of power, namely that that which is to be stayed, with consequential discharge from custody, should answer the description specified. That description is added to by sub-s. (5) which defines "action" to mean "any civil proceeding, whether at law or in equity" ; "execution" too must, I think, in the context, refer only to civil execution. It is for this reason that, to my mind, the critical question is the characterization, whether as civil or non-civil, of the legal process against the person of the respondent in the present case. (at p418)

7. It would have been open to the Commissioner to have sued the respondent to recover the civil debt which, by virtue of s. 5 (3) of the Road Maintenance (Contribution) Act, 1958-1969 arises when a road charge is unpaid ; instead he was prosecuted on four separate occasions before a court having summary jurisdiction in criminal matters and, on each occasion, was convicted of offences, created by s. 10 (1) (e) of that Act, of failing to pay road charges. So far nothing in the nature of any civil action, execution or other civil legal process is disclosed. (at p418)

8. On conviction the court exercised its discretion under s. 12 and, in addition to imposing penalties under s. 10 (2), also ordered the respondent to pay those amounts which it was satisfied should have been paid by him to the Commissioner by way of road charges. By s. 12 (2) those orders were deemed to be such convictions or orders as are referred to in s. 82 (2) of the Justices Act, 1902, as amended by subsequent Acts. Accordingly, as to both the penalties imposed and the amounts ordered to be paid under s. 12 (1), the court was obliged to, and did, order that in default of payment the respondent should be imprisoned for terms calculated in accordance with the formula set out in s. 82 (2). Again I discern nothing by way of civil legal process. It is true that s. 5 (3) of the Road Maintenance (Contribution) Acts, 1958- 1969, when providing that road charges may be recovered as civil debts, is expressed to operate "without affecting any other method of recovery provided by this Act" and that this no doubt refers to the terms of s. 12 of that Act, which confers the power to order payment of road charges "in addition to imposing a penalty on such person for the offence". But whatever light these provisions may cast upon the intent of orders made under s. 12, whether intended as punitive or merely as a means of recovering the debts due to the Commissioner, they appear to me to be quite equivocal so far as concerns the relevant question, whether or not the legal process against the person of the respondent which has led to his being in custody was civil. Only if the making of the order under s. 12 can be regarded as a legal process distinct from the unquestionably criminal process which proceeded it can s. 60 (1) apply. (at p419)

9. It was held in Seaman v. Burley (1896) 2 QB 344, that a proceeding for the recovery of a poor-rate consisting of an application to justices for the issue of a warrant of distress for the amount of the rate, which would involve imprisonment if there not be found a sufficient distress, was a proceeding properly described as a criminal cause or matter because criminal procedure was employed, although no question of the imposition of any penalty arose. The principle enunciated was that if the proceedings were criminal in nature, being instituted before justices, and might end in imprisonment that was sufficient to characterize it as a criminal cause or matter, even though, unlike the present case, the conduct complained of was not itself criminal, being merely the non-payment of a poor-rate, and the criminal procedure was adopted solely in order to enforce payment of the rate. (at p419)

10. That decision of the Court of Appeal, and earlier authorities upon which it was founded, were concerned with rights of appeal, which did not lie in any criminal cause or matter. However the decision has been applied in other fields - Ex parte Walsh (1912) 12 SR (NSW) 306, per Street J., Ferguson and Rich JJ. concurring, which, like the present case, involved s. 82 (2) of the Justices Act, 1902 and in which as Street J. pointed out, what had been described by A. L. Smith L.J. in Seaman v. Burley (1896) 2 QB, at p 352 as "overwhelming authority" was applied to quite different legislation ; Michel v. Medical Board of Queensland per Philp J. (1942) QSR 1, at p 36; Ex parte Duffy ; Re Automobile Advance Agency Co. Ltd. (1958) SR (NSW) 343, again involving s. 82 of the Justices Acts, especially at (1958) SR (NSW), at pp 350-351, per Owen J., with whom Roper C.J. in Eq. concurred. (at p419)

11. In view of these authorities and in the absence of either authority or principle supporting such a course it is not, I think, permissible to fragment the proceedings to which the respondent was subject and categorize the order for payment of road charges, in default imprisonment, and all that ensured from it as a distinct civil legal process to which s. 60 (1) can apply. (at p420)

12. It follows that in my view persons serving terms of imprisonment for default in payment of road charges, and who may have already served terms of imprisonment for default in payment of pecuniary penalties imposed as a punishment for non-payment of those very charges, can nevertheless not be released from imprisonment under s. 60 (1), despite the fact that bankruptcy has deprived them of the ability to pay and that it is that inability which may have led to their default in payment and, hence, to their imprisonment. (at p420)

13. This appeal must therefore be allowed. (at p420)

Orders

Appeal allowed. Order of the Supreme Court of Queensland discharging the respondent out of custody set aside.