Re Rooney, A.J. v Ex Parte Rooney, A.J
[1986] FCA 361
•22 AUGUST 1986
Re: ALLAN JAMES ROONEY
Ex parte: ALLAN JAMES ROONEY
No. QLD P9 of 1979
Bankruptcy
COURT
IN THE FEDERAL COURT OF AUSTRALIA
GENERAL DIVISION
BANKRUPTCY DISTRICT OF THE SOUTHERN DISTRICT OF THE STATE OF QUEENSLAND
Pincus J.
CATCHWORDS
Bankruptcy- application for stay - bankrupt discharged by effluxion of time - warrant for imprisonment - debt incurred before bankruptcy - whether still "debtor" after discharge - whether jurisdiction to make order.
Bankruptcy Act, 1966 s.60
HEARING
BRISBANE
#DATE 22:8:1986
ORDER
The order of the Magistrates Court made at Holland Park, Brisbane, in the State of Queensland, on 2 March 1979 be forever stayed insofar as the same required payment by the applicant of the sum of $3,780.99 restitution.
Warrant no. 1030/1979 issued against the applicant on 21 July 1986 be forever stayed.
The order of this Honourable Court made on 25 July 1986, relating to the applicant's place of residence, be discharged.
NOTE: Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules.
JUDGE1
This is an application under s.60 of the Bankruptcy Act for a permanent stay of an order of the Queensland Magistrates Court made on the 2 March 1979, pursuant to which the applicant has been held in custody.
The events leading to the imprisonment are as follows. On the 2 March 1979, the applicant was convicted of falsely pretending to an employee of the Brisbane Credit Union Limited that he had unencumbered securities to the value of $8,000, in order to obtain a loan of $3,835. The applicant was fined $200 and ordered to pay restitution of $3,780.99, in default 12 months' imprisonment. He paid neither fine nor restitution. On 30 August 1979, the applicant presented a debtor's petition which was accepted and endorsed under s.55(3) of the Bankruptcy Act. A warrant for the arrest of the applicant in respect of his non-payment was issued on 9 April 1981 and on 21 July 1986, the applicant was arrested. The applicant was released from custody on 25 July 1986 upon payment of the $200 fine mentioned in the warrant, pursuant to an interlocutory order of this Court.
Counsel for the applicant drew my attention to a difficulty in the case, namely that on the face of it the relevant section might not seem to apply beyond the period of bankruptcy - i.e. might apply only before discharge; in this case, that occurred, by force of s.149(1), on 30 August 1982. That was after the issue of the warrant mentioned above, but some four years before the making of application to this Court under s.60(1), which reads as follows:
"The Court may, at any time after the presentation of a petition, upon such terms and conditions as it thinks fit -
(a) discharge an order made, whether before or after the commencement of this sub-section, against the person or property of the debtor under any law relating to the imprisonment of fraudulent debtors and, in a case where the debtor is imprisoned or otherwise held in custody under such a law, discharge the debtor out of custody; or
(b) stay any legal process, whether civil or criminal and whether instituted before or after the commencement of this sub-section, against the person or property of the debtor -
(i) in respect of the non-payment of a provable debt or of a pecuniary penalty payable in consequence of the non-payment of a provable debt; or
(ii) in consequence of his refusal or failure to comply with an order of a court, whether made in civil or criminal proceedings, for the payment of a provable debt,
and, in a case where the debtor is imprisoned or otherwise held in custody in consequence of the non-payment of a provable debt or of a pecuniary penalty referred to in sub-paragraph (i) or in consequence of his refusal or failure to comply with an order referred to in sub-paragraph (ii), discharge the debtor out of custody.
Although, by reason of the facts set out above, the applicant could once have been described as a fraudulent debtor, the law under which he was imprisoned is not, in my view, one "relating to the imprisonment of fraudulent debtors" within the meaning of par.(a). The provisions of the Queensland Criminal Code and, in particular, s.685A do not answer that description. That appears to me to follow from the reasoning of the High Court in Commissioner for Motor Transport v. Train (1972) 127 CLR 396, in which a similar conclusion was reached with respect to New South Wales legislation providing for the imprisonment of road transport operators who failed to pay charges ordered to be paid to the Commissioner for Motor Transport.
The question then becomes whether there is jurisdiction to grant a stay under s.60(1)(b). Under s.55(8), the applicant's bankruptcy continued until discharge and, as I read the sub-section, until discharge only.
According to the notes to s.60 in the standard work, McDonald, Henry and Meek, Re Malins; ex parte The Bankrupt (1936) 9 ABC 140 is authority for the view that:
"The operation of this section is not restricted to the period intervening between the presentation of the petition and the bankruptcy, and the Court may, in regard to any order made against the property or person of the debtor before the bankruptcy, exercise the powers conferred by this section at any time from the presentation of the petition onwards throughout the consequent bankruptcy" (emphasis added).
Barwick C.J. in Train's case, at p.403, referred to that case as deciding that the use of the word "debtor" in the section does not exclude a 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.
It will be noted that the account of the case given by Sir Garfield Barwick does not imply that the power given by the section can be exercised only throughout bankruptcy and not later. Reference to the decision itself makes clear that what was in issue was whether the word "debtor" in the corresponding provision of the 1924 Act (s.63) restricted the Court's powers to the period between presentation of the petition and making the sequestration order. The applicant there had not been discharged.
The question, then, is whether the use of the word "debtor" produces the result that the section may be used only where there has been no discharge, and therefore no extinction of the debt in question. It is hardly conceivable that, if the legislature had directed its mind to the problem, it would deliberately have so confined the Court's power.
It should be noted that other bankruptcy statutes have expressly dealt with this point. For example, s.162 of the English Bankruptcy Act 1861 gave the Court a similar power "if a bankrupt, after the order of discharge takes effect, be arrested or detained for a debt, claim, or demand provable under his bankruptcy, where judgment has been obtained before the order of discharge takes effect ..."
In my view, the expression "the debtor" is used because the provision may be availed of "at any time after the presentation of a petition" and a petition may be presented only against (s.44) or by (s.55) a debtor. The section exhaustively prescribes the limits of the times during which the jurisdiction under it may be exercised by the words "at any time after the presentation of the petition" and it is not intended to imply a further limitation by the words "the debtor". Those words are used only as a natural and convenient designation of the person by, or against, whom the petition spoken of earlier in the section is presented.
This is not to say that, once a petition is presented against a debtor, the Court may thereafter stay legal process of the kind described in the section in respect of non-payment of a debt, whenever incurred. The words "provable debt" in par.(b) of sub-s.(1) mean a debt able to be proved in the bankruptcy consequent upon presentation of the petition mentioned. Here, there is no reason to doubt that the loan the subject of the order of restitution was a provable debt.
It should be added that other provisions in the Act may be found which use the word "debtor" without confining their scope of operation to the period of subsistence of debts; see, for example, ss.226(1), 228(2) and 232(1). However, my conclusion is arrived at, not by inference from those provisions, but simply by treating the word "debtor" in s.60 as a reference to the person to whose estate the petition referred to in the opening words relates.
On the facts, this is plainly a proper case in which to exercise the statutory discretion in favour of the applicant.
It will be ordered that the order of the Magistrates Court made at Holland Park, Brisbane, in the State of Queensland, on 2 March 1979 be forever stayed insofar as the same required payment by the applicant of the sum of $3,780.99 restitution; that Warrant no. 1030/1979 issued against the applicant on 21 July 1986 be forever stayed; and that the second order made by me on 25 July 1986, relating to the applicant's place of residence, be discharged.
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