In the Matter of an Application by Prichard, Michael Anthony for an inquiry into an Election in the South Australian Branch of the Federated Clerks Union of Australia

[1985] FCA 155

CATCHWORDS

Bankruptcy - whether election inqulry a "clvll proceeding" -

whether election inquiry continues after bankruptcy of appllcant - whether bankrupt has right to take proceedings for contempt of court.

Contempt of Court - whether motion for contempt	a separate
proceedlnq.

Concillation and Arbitration Act 1904, S. 159, S. 160(l)(a), S.

165(1), S. 164, S. 140, S. 141, S. 170.

Bankruptcy Act 1966, S. 5(1), S. CO(21, S. 6 0 ( 5 ) .

Federal Court of Australia A c t 1976, 5 . llBA(4A), 5 . 31.

State of Victoria v. Australian Buildins Constructlon Emplovees'

and Builders Labourers' Federation (1982) 152 C.L.R. 25.

IN THE MATTER OF AN APPLICATION BY MICHAEL ANTHONY PRICHARD FOR

AN INQUIRY INTO AN ELECTION IN THE SOUTH AUSTRALIAN BRANCH OF THE

FEDERATED CLERKS' UNION OF AUSTRALIA.

GRAY J.

26TH FEBRUARY 1985

ADELAIDE.

..

IN THE FEDERAL COURT O F AUSTRALIA	) 1
SOUTH AUSTRALIA DISTRICT REGISTRY	) S.A. No. 22 of 1984
1

DIVIS ON INDUSTRIAL )

IN THE MATTER of an

Application by MICHAEL

ANTHONY FRICHARD t o r an

Inquiry into an electlon

in the South Australian

branch of the FEDERATED

CLERKS' UNION OF

AUSTRALIA

JUDGE: GRAY J.

m: 26TH FEBRUARY 1985

EX-TEMFORE REASONS FOR JUDGMENT

On 30th August 1984, Michael Anthony Prichard ("the

Appllcant"), lodged with the Industrial Registrar, pursuant to S.

159 of the Conciliation and Arbltration Act 1904 ("the Act"), an

application for an inquiry concerning an election In the South

Australian branch of the Federated Clerks Union of Australia. On

25th October 1984, the Industrial Registrar referred the matter

to the Court, pursuant to S. 160(l)(a) of the Act.

On 6th NovemhPr 1 9 A 4 , this Court, exerclsing

jurisdiction in its General Division under the Bankruptcy Act

1966, madc d sjcrlucsLrdLiurl urclcr In renpecL d lht. c o L ~ L c of the

Appllcant. The Appllcant thereby became a bankrupt, within the

- 2 -

meanlng of the B!&kruptry Art 1966; see the definition of

"bankrupt" in S. 5( 1).

On 73th November 1 c)P,4, thF lnqul ry f 1 rst ramp h e f r,ve t+)-

Court, and direcLiutls wCLC qivetl. lhc CLULL wcr:; rlvL .rL L h L L l m L

informed of the bankruptcy. O n 30th January 1985, the Applicant

flled In the Sout,h AuTtralia District, Reqlstry a notlce of matlon

calllng upon twr, per snns , nnt p5t-tlPS rlr rloemprl p + - t l z = , t n the

inquiry, to show C ~ I I S F vhy thpy should not be dealt wlth for

contempt of Court. The notice of motion is entltled in matter

S.A. No. 22 of 1984, which is the number qlven to the inqulry,

and hears a hearlivg	appropriate fnr a document filed in	the
inquiry itself.

On 14th February 1985. the motion for contempt came

before the Court for directions. Mr. Kevin Mlchael Flpkln, the

AppllcanL' S trusLec i r i bankruptcy, appeared and drew the

attention of the Court to S. 60(2) of the Bankruptcv Act 1966.

The matter was adjourned until today for the purpose of hearinu

argument, as tr, thP effPct, jf any, of that provision upon the

conLirludLLur1 QI Li l t lrlquiry drd u lw t l ? h + : h - , ~ r L I I ' ~ o f L h c r t l u ? l s r l

for contempt. Mr. Pipkin decllned to attend and argue the

matter, on the rxpresscd gruurld that no funds exist In the estate

to enahle hlm to do so. As a consequence, the Appllcant appeared

in person to urge that the matters should proceed, and Mr. Ward of coutlscl for LLe Lwu twrsons alleged to have acted in contempt

of court argued that the motion for contempt should not proceed.

Section 60(2) of the Bankruptcy Act 1966 provides as

- 3 -

follows :

" ( 2 ) An a c t Ion commenced by person a who

subsequently becomes a bankrupt is, upon his becomins a

bankrupt, stayed until the trustee makes election, in

writing, to proserr~t~ or dlsrnnt.inue the actinn."

Section 60(5) contains a	definition of the word "action" in the
following terms:

" ( 5 ) In this sectlon, "action" means any civil

proceeding, whether at law or in equlty."

The first questlon which arises is whether the inquiry falls withln this broad deflnitlon. An inquiry under Part IX of

the Act is an unusual proceeding, possibly having no parallel.

It is commenced, not by filing any document in Court, but by

appllcation to the Industrial Registrar. In a case such as this, where the subject election was not conducted under S . 170, the

Industrial Registrar is required to make an admlnlstratlve

decision, satisfying himself that there are reasonable grounds

for the inquiry: see S . 160(l)(a) of the Act. Only when such a

positive decision is made IS the matter referred to the Court.

Once it is so referred, the Court has a statutory obligation

under S . 165(1) of the Act to inquire lnto and determine the

question whether any lrregularlty has occurred in or in

connection with the subject election, and certain other

questions. This ohligation could be discharged without the

presence of the orlginal appllcant, except insofar as he or she

may apply to the Court for leave to appear, and be justly

entitled to be heard: see S . 164 of the Act. In the normal

case, the original appllcant appears, and is thereby deemed to be

- 4 -

a party by virtue of S . 164(2). He or she has, however, no right

to thp carriage of the inquiry. The inquiry may examine issues

not raised by the original applicant, and must do so if issues

arise which fall within the obligation imposed by S . 165(1) of

the Act. An inquiry under Part IX of the Act has an element of

public interest, at least so far as the members of the

organization in which the subject election has taken place are

concerned. This is, no doubt, the reason for the inquisitorial

nature of the proceeding.

Section 60(2) of the Bankruptcy Act 1966 is directed to

ensuring that a bankrupt's estate is not reduced by the

continuance of litigation the result of which 1 s unlikely to

benefit the estate, and by possible liabilities for costs of

other parties to proceedings in which the bankrupt is unlikely to

succeed. The trustee in bankruptcy is given control of any

pending proceedings, so that he or she may act for the benfit	of
the bankrupt's creditors. The provision, therefore, also has	an
element of public interest.

Against this background, it is necessary to construe the

definition of "action" in S . 60(5) of the Bankruutcy Act 1966.

There can be no doubt that the conduct by the court f an inqulrp

concerning an election is a "civil proceeding" in a broad sense.

It does not in any sense involve reliance on any cause of action

given by common law or equity. Nor is there any cause of acticn

given to an applicant by the statute: as I have said, the conduct

of the inquiry is in the hands of the Court, and the appllcant

for such an inquiry is given no statutory rlght to proceed for

- 5 -

any relief or remedy. The provisions of Fart IX of the Act are

in marked contrast to those of other sectlons of the Act which do

give such L~ riyhL d r r e c l l y to a mcntbcr u i an O K ~ ~ ~ ~ I I ~ - ~ ~ I - ~ , - . I ~ , 1 2 . 1 1 .

s s . 140 and 141. ~ ' O L Lh:,:c LCLLLUII . . , 1 f d - 1 r ~ ~ . ~ l . K ~ ~ , L L L ~ all 111~qu~r~d

under Fart IX of the Act a 5 a "rlv~l proceedlng, whether at lax

or In equity" wlthln the meanlng of S. 6 0 ( 5 ) of the Bankruptcv

Act 1966. Such an inqulry 1 s not, therefore, stayed by operatlon of S. 6 0 ( 2 ) of the last-mentloned Act.

Even if I am wrnnq i n ronstrulng t h e d p f l n i t l n n rlf

"actlnn" in this way, the same result follows In thls case for

other reasons. Section 6 . 0 ( 2 ) of the EankrUFtCV Act 1966 is of

general appllcation to clvll proceedings. Fart IX of tne Act is a spccicic E.II~I( Llllent, deal1rlq wll h cule klnrl nf rivll proceedlng.

So far as Part IX of the Act relates to electlons not conducted

under S. 170 of the Act, Its provlsions have been in the Act

since before the passage of the Eankruptcy Act 1966. Even though

S. 6 0 ( 2 ) oL Lhr. € l L L r l P . t w > L ~ : { ilcl lLltt> nay h . , r : I ~ c c r l L rc-cr1~cLm~111

of an earlier provlsxon. thls seems to be a proper case for the

appllcatlon of the prlnclple that a speclfic enactment is not

intend4 to be repealed or affected by a later general enactment:

see the authorities referred Fearce, In to Statutory

Interpreldliurl irl A U S L K ~ ~ ~ ~ L , 2nd Edltiun a t pdfjc 1 2 L .

The inquiry will therefore proceed. As the orlalnal

appl~rant., the Appllcant h a s already obtained leave to appear

under S. 164(1) of the Act. No ground appears for a revocation

of that. ]pave. Tn t h e extent to whirh the Applirant'~ -+tate might be depleted by any llablllty for costs whlch mlaht arise

- 6 -

under S . 168(5) of the Act, the public interest in the conduct of

the inquiry must override the interests of the Appllcant's

creditors.

I have reached this conclusion wlthout reference to

Order 6 Rule lO(1) of the Federal Court Rules, on which the

Applirant relipd. T t is suffiripnt tn <ay that that Frcvi=inn

does not irl Lerrus , and could not, overrlde the effect of S . 60(2)

of the Bankruptcv Act 1966 in any case.

I turn now to the motion for contempt of Court. It 1 s

well established that such a motion constitutes a separate

proceeding from that in relation to which an alleged contempt

arises: State ee of Victorla v. Australian Bulldlno

CorlsLruction Emplovees' and Builders Labourers' Federation ( 1 9 8 2 )

1 5 2 C.L.R. 25, at pages 41-2, 82, 83, 116, 140 and 170-174,

Australian Bulldinq Construction Employees' and Bullders

Labourers' Federation v. Minister of State for Industrial

Relations ( 1 9 8 2 ) 43 A.L.R. 1 8 9 at page 200. and Viner v .

Australian Uuildrrw Cor~sLrucLiorl Emplovees' and Builders

Labourers' Federation (1981) 56 F.L.R. 5, at pages 27-32. The

power of the Court to deal with a contempt whlch occurs in

relation to a proceedlnq under Part IX of the Act derives from S .

31 of the Federal Court of Australia Act 1976. It is exerclsable

by the Court in Its Industrial Division by virtue	of S .	llBA(4A)
of the Act.

The separate proceeding for contempt was instituted

after the bankruptcy of the Appllcant, so is untouched by S .

- 7 -

60(2) of the Bankruptcy Act 1966. In addition, so far as It may raise allegations of crlminal contempt of Court, It would not be stayed by that provlslon, even if commenced before "the bankruptcy.

Mr. Ward argued that S. 116(1) of the Bankruptcv Act

1966 operates to deprive the Appllcant of the riuht to take

contempt proceedings. That provlslon is as follows:

"116.(1) Subject to thls Act-

(a) all property that belonged to, or was vested in, a

bankrupt at the commencement of the bankruptcy, or

has been acqulred or is acqulred by him, or has

devolved OL d w u l v ~ s U I I hla, after Lhe commencement

of the bankruptcy and before his discharge;and

(b) the capacity to exercise, and to take proceedings

for exercisinq all such powers in, over or In

respect of property as mlght have been exercised by

the bankrupt for his own benefit at the

commencement of the bankruptcy or at any tlme after

the commencempnt of	t,he hankrllptcy and before	his
discharge,

is property divisible amongst the credltors of the

bankrupt. "

The definltion of	"property" In S . 5(1) of	the Bankruptcv Act
1966 is as follows:

"property" means real or personal property of every

description, whether sltuate in Australia or elsewhere,

and includes any estate, interest or profit, whether

present or future, vested or contlngent, arising out of

or incident to any such real or personal property;"

This definition would undoubtedly include any right of action

which could be of value to a bankrupt's estate. A right to

proceed in respect of an alleged contempt of court, however, is

not such a valuable right of action; it results in no gain to

\r

r,

- 8 -

the estate of the bankrupt, even if an order for costs in favour

of the bankrupt is made. Its object is to secure the proper

administration of justice. It would be inappropriate to

construe S. 116(1) of the Bankruptcy Act 1966 as covering a right

to make such an application.

Accordingly, the motion for contempt must also proceed.

Any detriment L v Lht. dllc(jcd cvntemnors by bemg faced wlth such

a motion brought by an applicant wlth no abillty to satisfy an

order f o r costs is capable of being dealt with In other ways,

e.g. by an order for security for costs.

l	i
l
l- l
\
\, -

, .