Rodway v White - [2009] WASC 201

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: RODWAY -v- WHITE [2009] WASC 201

CORAM: EM HEENAN J

HEARD: 24 JUNE 2009

DELIVERED : 20 JULY 2009

FILE NO/S: SJA 1012 of 2009

BETWEEN: WILLIAM SCOTT RODWAY
Appellant
AND
JEREMY WHITE
SHARON RENEE FAULKNER
Respondents

ON APPEAL FROM:
Jurisdiction              :  MAGISTRATES COURT OF WESTERN AUSTRALIA
Coram  :MAGISTRATE R BLACK
File No  :PE 53547 of 2006, PE 64738-64757 of 2008

Catchwords:

Bankruptcy - Convictions for failure to fully disclose to the trustee all of bankrupt's property contrary to s 265(1)(a) of the Bankruptcy Act - Federal jurisdiction - Jurisdiction of State courts of summary jurisdiction to try bankruptcy prosecutions - Jurisdiction to appeal to State Supreme Court - Whether obligation to disclose property to trustee extends to afteracquired property - Afteracquired property obtained by the use of income permitted to the undischarged bankrupt - Restrictions on use of permitted income - Application of s 77(1)(f) regarding disclosure of after acquired property

Legislation:

Bankruptcy Act 1966 (Cth)
Judiciary Act
Acts Interpretation Act 1901 (Cth)
Magistrates Courts Act 2004 (WA)
Criminal Appeals Act 2004 (WA)

Result:

Appeal dismissed

Category: A

Representation:

Counsel:

Appellant: Mr P N Bevilacqua
Respondents : Mr D W L Renton & Mr J K Grinceri

Solicitors:

Appellant: Mossensons
Respondents : Director of Public Prosecutions (Cth)

Case(s) referred to in judgment(s):

Beckwith v The Queen (1976) 135 CLR 569
British American Tobacco Australia Ltd v Western Australia (2003) 217 CLR 30
Calegeros v Attorney-General for the Commonwealth (1953) 88 CLR 41
Cohen v Mitchell (1890) 25 QBD 262
Commissioner of Taxation v Official Receiver (1956) 95 CLR 300
Cordes as trustee for George v Dr Peter Ironside Pty Ltd [2009] QSC 89
Director of Public Prosecutions (WA) v Mansfield [2008] WASCA 5; (2008) 35 WAR 431
Ex parte James (1874) LR 9 Ch App 609
Ex parte McMaster (1991) 33 FCR 70
Falstein v Official Receiver (1962) 108 CLR 523
Geia v Palm Island Aboriginal Council [2001] 1 Qd R 245
Goodwin v Phillips (1908) 7 CLR 1
Krakouer v The Queen (1998) 194 CLR 202
Meriton Apartments Pty Ltd v Industrial Appeal Court of New South Wales (2008) 171 FCR 380
O'Brien v Sheahan [2002] FCA 1292
Owens v Comlaw (No 62) Pty Ltd [2006] VSCA 151
Pearce v Cocchiaro (1977) 137 CLR 600
R v Adams (1935) 53 CLR 563
R v Bull (1974) 131 CLR 203
R v Mitchell (1881) 50 AL (MC) 76; 43 LT 52
R v Owen-Pearse (1996) 128 FLR 82
R v Ward (1978) 140 CLR 584
Re Gilles; Ex parte the Official Trustee in Bankruptcy v Gilles (1993) 42 FCR 571
Re Hannon (1945) 13 ABC 218
Re Hawkins; Ex parte Worrell (1996) 71 FCR 371
Re Sharpe; Ex parte Donnelly (1998) 80 FCR 536
Scott v Cawsey (1907) 5 CLR 132
Sheahan v O'Brien [2002] FMCA 25
Troughton v Gitley (1766) AMB 630; 27 ER 408
Trustee of the Property of O'Reilly v Law Society (NSW) (2001) 110 FCR 574; [2001] FCA 701
White & Faulkner v Rodway (Unreported, WA Magistrates Court, Black M, 27 January 2009)
Wilson v White [2007] WASCA 87

EM HEENAN J: This appeal raises an important and previously undecided question about whether an undischarged bankrupt is obliged to disclose to his trustee after‑acquired property purchased with income which the bankrupt was permitted to retain for his own use by reasons of the operation of Part VI Div 4B of the Bankruptcy Act 1966 (Cth).
On 9 July 1999, William Scott Rodway was declared bankrupt upon his debtors' petition being received by the Official Receiver. He was discharged from bankruptcy on 10 July 2002 - White & Faulkner v Rodway (Unreported, WA Magistrates Court, Black M, 27 January 2009).
Mr Rodway was charged with 21 offences against s 265(1)(a) of the Bankruptcy Act for failing to disclose to his trustee his interests in shares in various listed companies on the Australian Stock Exchange. He purchased all these shares while still bankrupt . After a trial before his Honour Magistrate R Black in the Magistrates Court at Perth from 19 to 21 November 2008, he was convicted on each of those charges on 27 January 2009. His Honour gave details written reasons for his decisions. In the result, the appellant was fined an aggregate of $5,700 and ordered to pay the respondents' costs of $4,000.
By notice of appeal filed 25 February 2009, the appellant sought leave to appeal against each of those convictions. By order made by McKechnie J on 16 April 2009, leave was granted to appeal to a single judge on the one ground raised by the notice of appeal. At the hearing of the appeal, I granted leave for that ground of appeal to be amended by the addition of one further particular. As amended, the ground of appeal is now:
The magistrate should have found that, on a proper construction of the Act, shares purchased with after‑acquired income were not required to be disclosed under s 265(1)(a) of the Bankruptcy Act on the grounds that:
(i)Such shares do not fall within the meaning of 'the property of the bankrupt' in s 265(1)(a) of the Act and
(ii)after‑acquired does not fall within the meaning of 'the property of the bankrupt' in s 265(1)(a) of the Act.
None of the facts now material was in dispute at the trial before the learned magistrate, nor is there any dispute over matters of fact on this appeal. The accepted facts are that after the appellant was declared bankrupt, he derived approximately $155,440 in gross income from his employer, Jiffy Foods, whilst undischarged from his bankruptcy. This money was earned over a period of two years from mid‑1999 to the end of the 2000/2001 income year. During the period from 27 November 2000 to 3 June 2002, the appellant, in a series of transactions, purchased shares in various companies through a firm of stock brokers. None of the purchases was disclosed to his trustee in bankruptcy. All of the shares were purchased with after‑acquired income of the bankrupt.
The appellant's contention, before the learned magistrate and on this appeal, is that because after‑acquired income of a bankrupt does not constitute after‑acquired property to which s 116(1) of the Act applies - Re Gilles; Ex parte the Official Trustee in Bankruptcy v Gilles (1993) 42 FCR 571 - property, such as these shares, acquired by the use of that income does not need to be disclosed by the bankrupt pursuant to s 265 of the Act or at all. As the ground of appeal was developed in argument, either such shares are not 'property of the bankrupt' or, by a rather broader contention, the reporting of after‑acquired property is not required by that section. The learned magistrate held that the obligation of disclosure under s 265(1) did extend to property acquired with the use of a bankrupt's after‑acquired income and convicted him of all those charges. From those convictions, and with the leave which has been granted, the appellant appeals to this court in reliance upon s 7(1) of the Criminal Appeals Act 2004 (WA).

Jurisdiction of State courts for trials of bankruptcy offences and on appeals from decisions in bankruptcy prosecutions

Although both counsel assumed and contended that this court had jurisdiction to entertain and determine these appeals which, inevitably, involved consideration being given to the true meaning and effect of s 265(1) of the Bankruptcy Act on the facts established, I invited submissions from both counsel as to the basis for this court's jurisdiction. In addition to the oral submissions received at the hearing, I have received helpful and comprehensive written submissions after the trial as a result of that request. Counsel for both parties maintain that the court has jurisdiction and have agreed upon a single composite set of submissions in support.
In such circumstances, it may seem surprising that I raised the question of jurisdiction at all. The reason lies in the provisions of s 27 of the Bankruptcy Act as amended. That section now provides:
27.BANKRUPTCY COURTS
(1)The Federal Court and the Federal Magistrates Court have concurrent jurisdiction in bankruptcy, and that jurisdiction is exclusive of the jurisdiction of all courts other than:
(a)The jurisdiction of the High Court under section 75 of the Constitution; or
(b)the jurisdiction of the Family Court under section 35 or 35A of this Act.
In my view, it is inevitable that, in determining the charges brought in a Magistrates Court, and in determining these appeals it is necessary to decide whether or not on the facts established a criminal offence created by s 265(1) of the Bankruptcy Act has occurred. To make such a determination requires a consideration of a matter arising under a law of the Federal Parliament - Constitution s 76 - and, also because the jurisdiction to make such a determination is said to be conferred upon State courts by the Bankruptcy Act that also establishes that the court is exercising federal jurisdiction: British American Tobacco Australia Ltd v Western Australia (2003) 217 CLR 30 and Director of Public Prosecutions (WA) v Mansfield [2008] WASCA 5; (2008) 35 WAR 431, where her Honour McLure JA said at [110]:
The interpretation of a law of the Commonwealth does not without more involve the exercise of federal jurisdiction: Felton v Mulligan (1971) 124 CLR 367, 382 ‑ 383; LNC Industries Ltd v BMW (Australia) Ltd (1983) 151 CLR 575, 581. It is sufficient but not essential for the cause of action or form of relief to owe its existence to a federal law. A matter will also arise under a federal law if a right or duty in question in the matter owes its existence to a federal law or depends upon such a law for its enforcement or is the source of a defence to the application: Felton v Mulligan (408). Federal jurisdiction will be attracted if the court finds it necessary to decide, as a step in a proceeding, whether a right or duty based in federal law exists: Moorgate Tobacco Company Ltd v Philip Morris Ltd (1980) 145 CLR 457, 476.
However, the exclusive jurisdiction referred to by s 27 of the Bankruptcy Act is not all federal jurisdiction, but rather 'jurisdiction in bankruptcy'. Accordingly, the question is whether or not the court determining a prosecution for an offence under the Bankruptcy Act or an appeal from a conviction on such a charge is exercising 'jurisdiction in bankruptcy' and, if it is, whether the power to do so exists, notwithstanding s 27 of the federal Act.
Dealing with a similar issue in Meriton Apartments Pty Ltd v Industrial Appeal Court of New South Wales (2008) 171 FCR 380, Greenwood J said, with respect to s 27, at [80] ‑ [81]:
The Parliament has thus invested exclusive jurisdiction 'in bankruptcy' in the identified courts for the purposes of ss 71, 76(ii) and 77(ii) of the Constitution. The exclusive jurisdiction is a jurisdiction 'in bankruptcy' which means 'in relation to jurisdiction or proceedings, any jurisdiction or proceedings under or by virtue of the [Bankruptcy Act] (s 5)'.
The investing of exclusive jurisdiction in bankruptcy in the nominated s 27 courts effects a repeal of the general investing of federal jurisdiction in State courts within the limits of their several jurisdictions by s 39(2) of the Judiciary Act having regard to ss 71, 76(i) and 77(i) of the Constitution, in matters arising under a law of the Commonwealth, to the extent any jurisdiction or proceeding arises under or by virtue of the Bankruptcy Act. [80] ‑ [81]
then, after a comprehensive examination of the authorities, his Honour concluded that if some provision in the Bankruptcy Act needs to be considered peripherally by a State court, or in regard to whether or not proceedings can properly be commenced or maintained before a State court, such tasks can and should be undertaken by the State court without it becoming engaged in the exercise of bankruptcy jurisdiction (see [117]).
Perram J took a different view and, although dissenting, would have held that s 27 precluded the Industrial Appeal Court of New South Wales dealing with the bankruptcy issue which had arisen. In doing so, his Honour said at [171] ‑ [172]:
However, the general grant contained in s 39(2) cannot be used to outflank the jurisdictional limitations which are expressed in s 27. The exclusivity of this Court's jurisdiction in bankruptcy was brought about by the passage of the Bankruptcy Legislation Amendment Act 1996 (Cth) (No 44 of 1996). That Act effected a partial repeal of s 39(2) so that the several courts of the State were not invested with federal jurisdiction in matters which were 'in bankruptcy': Kartinyeri v Commonwealth [1998] HCA 22; (1998) 195 CLR 337 at 359 (at [9] per Brennan CJ and McHugh J; 369 at [48] per Gaudron J; 375 ‑ 376 at [66] ‑ [70] per Gummow and Hayne JJ, 421 at [175] per Kirby J; see also R v Ward [1978] HCA 27; (1978) 140 CLR 584 at 589 per Gibbs ACJ, Stephen, Mason, Jacobs and Aickin JJ for a general discussion on the interaction between s 39(2) and the vesting of jurisdiction by other statutes.
That this is so follows from the High Court's decision in Stack v Coast Securities (No 9) Pty Ltd [1983] HCA 36; (1983) 154 CLR 261 where it was accepted that a grant of exclusive jurisdiction to this Court under Pt VI of the Trade Practices Act 1974 (Cth) operated to exclude the jurisdiction that the Supreme Court of Queensland would otherwise have had by reason of s 39(2). There is no precise overlap between jurisdiction exercised in respect of matters 'arising under' the Bankruptcy Act 1966 (Cth) and the exercise of jurisdiction 'in bankruptcy', although in practice there may tend to be some degree of coincidence between the two concepts. The distinction is important because to the extent that a matter arises under the Bankruptcy Act 1966 (Cth) but does not involve the exercise of jurisdiction 'in bankruptcy', s 27 will not prevent a State court from exercising the jurisdiction conferred on it by s 39(2) of the Judiciary Act1903 (Cth): cf Stack at 277 per Gibbs CJ. In effect, this is Mr Rose’s contention in this case. One example which illustrates the distinction would be an application to the New South Wales Court of Appeal to restrain the Industrial Relations Court from exercising any jurisdiction reserved from it by s 27 of the Bankruptcy Act1966 (Cth), which involves a matter arising under the Act but not the exercise of jurisdiction 'in bankruptcy'.
The question was also addressed even more recently by Lyons J in the Supreme Court of Queensland in Cordes as trustee for George v Dr Peter Ironside Pty Ltd [2009] QSC 89. In that case, his Honour granted a permanent stay of proceedings in the Supreme Court of Queensland concerning the efficacy of the transfer of certain land and the validity of a mortgage over it in favour of a bank when, at the same time proceedings were pending in the Federal Magistrates Court in which a bankruptcy trustee was seeking declarations as to the beneficial ownership of that same property and whether or not it formed part of a bankrupt estate. His Honour concluded that the jurisdiction of the Federal Magistrates Court was exclusive of the issues sought to be raised in the Supreme Court. In his reasons, Lyons J referred to the decision in Meriton Apartments Pty Ltd v Industrial Appeal Court of New South Wales and said at [26]:
The 2008 decision of the Full Court of the Federal Court, in Meriton Apartments Pty Ltd v Industrial Appeal Court of New South Wales [2008] 171 FCR 380, examined the meaning of the jurisdiction 'in bankruptcy' and the nature and effect of the exclusive jurisdiction of s 27 courts. State courts are clearly not s 27 courts as defined and the decision determined that, courts which are not 's 27' courts do not have jurisdiction 'to the extent any jurisdictional proceeding arises under or by virtue of the Bankruptcy Act'. Importantly, it was held that, there is a distinction between the exercise of a court's jurisdiction in a proceeding, that calls into question a provision of the Bankruptcy Act and the exercise by that court, of a jurisdiction 'under or by virtue' of the Bankruptcy Act. Whilst the Full Court held that, exclusive jurisdiction does not mean that State courts cannot and should not apply the Act in proceedings that properly come before them, or that, State courts cease to have jurisdiction as soon as a matter acquires a bankruptcy aspect to it, it held that, once the s 27 concept of 'jurisdiction in bankruptcy' arose, then there was exclusive jurisdiction.
Similar questions had arisen in R v Ward (1978) 140 CLR 584, which was decided before the jurisdiction referred to in s 27 was made exclusive of all but the nominated courts. In Ward's case, questions had arisen as to whether or not a District Court in Queensland had jurisdiction to try and convict a person on indictment for an offence against s 269 of the Bankruptcy Act and whether an appeal in such a case lay to the Court of Criminal Appeal in Queensland and not to the Federal Court of Australia. The Court of Criminal Appeal, and also the Full Court of the Supreme Court of Queensland in related certiorari proceedings, held that the District Court had no jurisdiction conferred upon it by the Bankruptcy Act to convict or sentence that respondent. Appeals from both decisions to the High Court succeeded on the basis that s 27, as it then read, taken in combination with other provisions conferred jurisdiction on courts of competent jurisdiction to try offenders for Commonwealth offences. At 589, Gibbs ACJ, Stephen, Mason, Jacobs and Aicken JJ said:
Accordingly, when s 27 and s 273 [Bankruptcy Act] are read together, they take their place alongside s 39 and s 68(2) of the Judiciary Act. Section 273(5) proceeds on the footing that a s 27 court, which is not given jurisdiction to try on indictment by the Bankruptcy Act, will commit a defendant for trial on indictment by courts possessing jurisdiction in that respect under the provisions of the Judiciary Act.
And further, at 589:
As Gibbs J said in Reg v Bull (1974) 131 CLR 203 at 257, 's 39(2) invests the several courts of the States with federal jurisdiction and any matter arising under any Commonwealth law'. In our opinion, this grant of jurisdiction will only be displaced in whole or in part by another statute when that statute evinces an intention to exclude or otherwise limit the jurisdiction conferred by s 39.
And then, at 590:
For the reasons which we have already given, a State court which exercises jurisdiction in a trial on indictment in respect of an offence against the Bankruptcy Act is not exercising bankruptcy jurisdiction. Consequently, an appeal lay in this case from the District Court to the Court of Criminal Appeal, not to the Federal Court of Australia. It follows that the ground assigned by the Court of Criminal Appeal to striking out the appeal to it was incorrect.
It is apparent that one of the reasons leading to this conclusion of a general conferral of jurisdiction on State courts to try persons charged with federal offences arose by virtue of s 39 of the Judiciary Act and that this had not been excluded by the terms of the bankruptcy legislation as it then existed.
The present issue, therefore, is whether this is still the case in view of the later amendments to s 27 granting bankruptcy jurisdiction exclusively to the nominated courts in the light of the views taken in Meriton and in Lauren Kay Cordes (supra) that this effected a partial modification of s 39(2) of the Judiciary Act. It might be supposed that if the amendments to s 27 had this effect on s 39, a similar effect may have resulted in relation to s 68.
The joint submissions filed by counsel in relation to the question of jurisdiction commenced with the proposition that s 273 of the Bankruptcy Act has the effect that any offence against the Act, other than one punishable by a fine only, may be tried either on indictment or summarily and that summary proceedings for the trial of any such offence may be brought either in a court of summary jurisdiction or in a court having jurisdiction in bankruptcy. In this respect, reliance is placed on s 26 of the Acts Interpretation Act 1901 (Cth) where it is provided that, unless a contrary intention appears:
(d)'court of summary jurisdiction' shall mean any justice or justices of the peace or other magistrate of the Commonwealth or part of the Commonwealth, or of a State or part of a State, or of an external Territory, sitting as a court (other than the Federal Magistrates Court) for the making of summary orders or the summary punishment of offences under the law of the Commonwealth or part of the Commonwealth or under the law of the State or external Territory or by virtue of his or their commission or commissions or any Imperial Act.

The submission proceeds that a 'court of summary jurisdiction' as defined by s 5(1) of the Bankruptcy Act operates to extend the definition provided by s 26 of the Acts Interpretation Act to include a court of a Territory sitting as a court for the making of summary orders or the summary punishment of offences under the law of a Territory. Accordingly, as the submissions progress, when the definition contained in s 26(d) of the Acts Interpretation Act is read into s 273 of the Act, the reference to a 'court of summary jurisdiction' includes a reference to a State court of summary jurisdiction - Pearce v Cocchiaro (1977) 137 CLR 600 at 603, 607 and Wilson v White [2007] WASCA 87 at [24].
On this basis, therefore, s 273(2) of the Bankruptcy Act constitutes an express conferral of jurisdiction on a court of summary jurisdiction to determine summarily offences arising independently of the Act and that it has this effect, regardless of whether s 39(2) and s 68(2) of the Judiciary Act would have brought about the same result - Pearce v Cocchiaro (supra) at 607; R v Ward (supra) at 588 and Acts Interpretation Act 1901 s 15C. On this approach, the Magistrates Court in Perth at the time of convicting and sentencing the appellant was, and still is, a 'court of summary jurisdiction' - s 11(4) of the Magistrates Court Act 2004 (WA).
Counsel for both parties submit that the jurisdiction to try and determine offences under the Act is separate from the jurisdiction vested in specified courts pursuant to s 27 of the Act; that is, 'jurisdiction in bankruptcy'. According to this submission, this is evident from the fact that s 273(4) specifically states that s 27 courts have jurisdiction to try summarily any offence against the Act - it would be unnecessary to do so if those courts already had general jurisdiction to try offences under the Act - R v Ward at 588. Furthermore, as the submission goes, a State court which exercises jurisdiction in respect of an offence against the Act is not exercising bankruptcy jurisdiction - R v Ward at 520.
With respect to the decision of the Full Federal Court in Meriton, the submissions contend that Greenwood and Perram JJ took the view that s 27 of the Act effected a partial repeal of the general grant of federal jurisdiction contained in s 39(2) of the Judiciary Act only to the extent that such general grant purported to confer jurisdiction in bankruptcy. Counsel submit that their Honours did not hold that s 39(2) of the Judiciary Act had been displaced in relation to the balance of any other federal jurisdiction conferred on State courts. Accordingly, so counsel submit, Meriton is not authority for any proposition that s 27 of the Act displaces s 39(2) of Judiciary Act as a potential basis for the jurisdiction of State courts to try and determine offences arising under the Act - see also R v Bull (1974) 131 CLR 203 per Gibbs J at 257. On that basis, if the Magistrates Court of Western Australia had jurisdiction to try and determine these offences, it must follow that this Court dealing with an appeal from the decision of the magistrate likewise has jurisdiction to deal with the matter - R v Ward at 590. Express rights of appeal from decisions of a court of summary jurisdiction to this court are provided by s 7(1) of the Criminal Appeals Act 2004 (WA).
Counsel further submit that s 68 of the Judiciary Act confers on this court a like jurisdiction to determine any matter arising from a decision of a court of summary jurisdiction exercising federal jurisdiction. Counsel point out that there is no statutory right of appeal to the Federal Court provided to any person from a decision of a magistrate arising from criminal proceedings conducted in the Magistrates Court of Western Australia and that this also suggests that the existing rights of appeal to this court have always been regarded as sufficient to confer a right of appeal in cases of federal offences tried summarily, except to the extent that any particular statute may provide otherwise.
These submissions do not recognise any potential inconsistency between the construction advanced for s 273 and the provisions of s 27 itself as amended conferring exclusive jurisdiction in bankruptcy upon the nominated courts. There appear to me to be two ways of looking at the matter. First, either this court in any such appeal is not exercising jurisdiction in bankruptcy, which is the view which would seem to follow from R v Ward (supra); or, second, even if it is, it is in relation to a particular scope of that jurisdiction, namely, prosecutions for offences, which is expressly conferred on State courts by reason of s 273, as extended by s 5 and s 15C of the Acts Interpretation Act, which must be regarded as qualifications upon the reservation of exclusive bankruptcy jurisdiction to the nominated s 27 courts. This second approach would be consistent with the maxim of statutory interpretation that a general provision should not be regarded as derogating from a special provision - see Goodwin v Phillips (1908) 7 CLR 1 at 14 ‑ and for further authorities see Pearce & Geddes 'Statutory Interpretation in Australia', 6th ed at [7.18] and [17.19].
As there is no issue between the parties challenging the jurisdiction of the court and in view of these authorities, I am satisfied that I should accept that jurisdiction has effectively been conferred both upon the Magistrates Court and upon this Court. It is perhaps unfortunate that there is any scope at all for any doubts upon such a fundamental and basic proposition yet, as the views taken in Meriton Apartments Pty Ltd v Industrial Appeal Court of New South Wales (supra) illustrate, the effect of s 27 of the Bankruptcy Act is not as clear and obvious as its apparently unequivocal language might suggest.

Merits of the appeal

The disclosure obligations of the appellant must be considered in the light of the purpose and effect of the bankruptcy legislation generally. I accept that these are to ensure a fair distribution of the bankrupt's assets among creditors, so that no one creditor receives an undue advantage and the bankrupt debtor is allowed a fresh start, free from existing debts - Ex parte McMaster (1991) 33 FCR 70 at 72 ‑ 73. On becoming bankrupt all the 'property' of the bankrupt, as defined in s 5 and read with s 116 vests in the trustee.
Upon the commencement of bankruptcy the bankrupt is required to make full disclosure of his or her property, income and affairs - s 54(1). The submission of the respondents, accepted by the learned magistrate, is that under s 77(1)(f) of the Act, a bankrupt has a continuing obligation to disclose to the trustee, as soon as practicable, property that is acquired by him or her or devolves on him or her after the bankruptcy but before his or her discharge, being property divisible amongst his or her creditors. According to the respondents, should the bankrupt fail to do so an offence will be committed against s 265(1)(a) if the bankrupt has failed fully and truly to disclose to the trustee all of the property of the bankrupt and its value.
Under s 5(1) the term 'the property of the bankrupt' takes its meaning from two definitions 'property' and 'the property of the bankrupt' and means property of all kinds divisible amongst the bankrupt's creditors. It has been held to be wide enough to include 'income' and personal earnings notwithstanding that s 58 and s 116 may nevertheless not apply to after‑acquired income and earnings because the provisions in Div 4B of Part VI constitute a code for dealing with after‑acquired income of the bankrupt and have been considered to continue the effect of the former s 131 notwithstanding its repeal in 1992: Re Gilles; and Trustee of the Property of O'Reilly v Law Society (NSW) (2001) 110 FCR 574; [2001] FCA 701 - see generally McDonald, Henry & Meek: Australian Bankruptcy Law and Practice (6th ed) at par 5.1.100 and par 5.1.135.
There is no controversy about the fact that the shares purchased by the appellant in the present case constitute 'property' within the meaning of the Act. Rather the issue is whether or not they constitute property divisible amongst the creditors of the bankrupt. In this respect s 116(1)(a) provides:
116.Property divisible among creditors
(1)Subject to this Act:
(a)All property that belonged to, or was vested in, a bankrupt at the commencement of the bankruptcy, or has been acquired or is acquired by him or her, or has devolved or devolves on him or her, after the commencement of the bankruptcy and before his or her discharge; and
…
is property divisible amongst the creditors of the bankrupt.
There are a number of exceptions to this provision contained in s 116(2) of the Act which exclude various forms of property such as tools of trade, means of transport, various household items, personal property of sentimental value etc.
However, it is established, and accepted by the respondents, that income earned by the bankrupt, after the bankruptcy and before discharge, is not 'after‑acquired property' and, subject to certain contributions from such income which the bankrupt may be required to make, does not vest in the trustee. Sections 139P to 139ZP provide for a system of assessment and contribution under which some proportion of the bankrupt's income is to be paid to the trustee. As the learned authors of McDonald, Henry & Meek write, apart from and subject to those provisions, a bankrupt who is in receipt of income is entitled to retain it for his own benefit: Commissioner of Taxation v Official Receiver (1956) 95 CLR 300; Falstein v Official Receiver (1962) 108 CLR 523 and Gilles (supra).
In Gilles (supra) French J (as the learned Chief Justice then was) acknowledged that after‑acquired property as described in s 116 was defined widely enough to encompass income but nonetheless such income earned after the commencement of bankruptcy did not fall within the section and did not vest in the trustee because of the detailed scheme for the treatment of such income established by Div 4B of the Act. By virtue of those sections an assessment is carried out at each anniversary of the commencement of the bankruptcy during the bankruptcy period and the bankrupt is liable to contribute, with certain exceptions, half the excess of assessed income over the assessed income threshold amount as prescribed by the Act. That liability only arises after the process of assessment is conducted by the trustee. French J concluded that the scheme of Div 4B proceeds upon the basis that the income of the bankrupt does not vest in the trustee and that, accordingly, after‑acquired income did not fall within the definition of 'property divisible amongst the bankrupt's creditors' in s 116 and therefore did not vest in the trustee. As that is so then neither does after‑acquired income become 'the property of the bankrupt' within the meaning of s 5 and, consequently, does not need to be disclosed pursuant to s 265(1)(a). It follows from this that the obligation of a bankrupt to make contributions to the trustee from after‑acquired income derives from Div 4B rather than from s 116(1)(a). That then gives rises to the crucial question of whether other property, purchased by an undischarged bankrupt from the after‑acquired income which he or she had been permitted to retain, becomes 'after‑acquired property' divisible among the creditors, so requiring disclosure under s 265(1)(a). This is the novel question upon which no authoritative determination has been made.
The approach taken by French J in Gilles (supra) has been approved in O'Reilly at 576 ‑ 577; Re Hawkins; Ex parte Worrell (1996) 71 FCR 371 at 375; Re Sharpe; Ex parte Donnelly (1998) 80 FCR 536 at 540; Geia v Palm Island Aboriginal Council [2001] 1 Qd R 245 and also in Owens v Comlaw(No 62) Pty Ltd [2006] VSCA 151 at [43].
In Gilles (supra) French J referred to this present issue in a passage which is plainly obiter dicta saying:
I am inclined to the view that assets purchased by a bankrupt with after‑acquired income will, if not within any of the excluded categories in s 116(2) constitute property divisible among the creditors and vest in the Trustee. In my opinion, however, no final decision should be given on this point which is still rather hypothetical.
Reference was made to these dicta by Raphael FM in Sheahan v O'Brien [2002] FMCA 25 where his Honour specifically referred to the passage quoted from the reasons French J saying:
His Honour did not provide any clues as to how he came to this view. It seems most probable that he was of the opinion that s 116 of the Bankruptcy Act was the guiding section on what property was divisible among creditors and that the property which was not specifically exempted under subsec 2 came into the hands of a bankrupt, it could be divisible. The Part VI Division B codification related purely to the income. Providing that income was kept in specie or used for the purposes of purchasing assets which fall within s 116(2), then it is not divisible but otherwise it would be.
The decision of Raphael FM was overturned on appeal but his Honour's observations in relation to this point were not specifically addressed by the Federal Court: O'Brien v Sheahan [2002] FCA 1292.
Counsel for the appellant submits that the obligation of disclosure under s 265(1)(a) arises only in respect of the property of the bankrupt at the time of bankruptcy. Counsel acknowledges that after‑acquired property, within the meaning of s 116, is also property divisible amongst the creditors of the bankrupt and submits that obligations of disclosure in relation to after‑acquired property derive not from s 265(1)(a) but from s 77(1)(f) which provides:
77.Duties of bankrupts as to discovery etc of property
(1)The bankrupt shall, unless excused by the trustee or prevented by illness or other sufficient cause:
…
(f)disclose to the trustee, as soon as practicable, property that is acquired by him or her, or devolved on him or her, before his or her discharge, being property divisible amongst his or her creditors; and
Counsel reinforces that submission by advancing the further point that, until the subsequent acquisition or devolution of such after‑acquired property, by the bankrupt no interest in that property could vest in the trustee. So that, accordingly there would be no breach of s 265(1)(a) until the date of acquisition or devolution.
By contrast the respondents submit that s 77(1)(f) is an additional and continuing obligation by the bankrupt which, if not performed, will also constitute a breach of s 265(1)(a) and an offence which may be charged under the latter section. In this regard counsel for the appellant submits that no after acquired property falls within the meaning of 'the property of the bankrupt' in s 265(1)(a).
Counsel for the appellant submits that s 265(1)(a) is inconsistent with s 77(1)(f) in that the former does not accommodate the effect of the words 'as soon as practicable' in s 77(1)(f). Counsel submits that on the respondents' approach one could commit an offence against s 265(1)(a) by failing to disclose after‑acquired property whilst not having breached the duty contained in s 77(1)(f) as soon as the property was acquired even though a disclosure was later made 'as soon as practicable'. To avoid such an improbable legislative incongruity the appellant submits that s 265(1)(a) should be interpreted so as to exclude its application to after‑acquired property. There may be situations, for example, where a bankrupt has knowledge of the acquisition of after‑acquired property (for example by testamentary devolution upon the death of a relative or friend) but it is not immediately practicable for him to make such a disclosure to the trustee because, perhaps, of illness, hospitalisation or some comparable temporary incapacity. In such cases, counsel for the appellant submits that Parliament should not be taken to have intended that an offence against s 265(1)(a) would be committed before it was practicable for the bankrupt to make disclosure.
Counsel for the appellant also submits that the obligations created by s 77(1)(f) are the subject of a specific remedy in s 78(1)(f) which provides that:
78Arrest of debtor or bankrupt
(1)Where it is made to appear to the Court:
…
(f)that a bankrupt has, without good cause shown, neglected or failed to comply with an order of the Court or with any other obligation under this Act;
the Court may issue a warrant for the arrest of the debtor or bankrupt, as the case may be, and his or her committal to such gaol as the Court appoints until the Court otherwise orders and may, by the same warrant, order that any property and books in the possession of the debtor or bankrupt be seized and delivered into the custody of such person as the Court appoints.
and that the use of the words 'without good cause shown' in s 78(1)(f) accommodates the proviso effected by the words 'as soon as practicable' in s 77(1)(f).
Furthermore, counsel for the appellant submits that there are indications within s 265 itself that the obligation imposed relates only to disclosure at the time of bankruptcy. The submission is that the use of the word 'disclose' rather than 'notify' or 'advise' in s 265(1)(a) and the basis of the defence in s 265(1A) being knowledge and belief are consistent with the application of s 265(1)(a) to circumstances involving a one‑off act of non‑disclosure, whether it be through a document or by an answer to a question by the trustee, rather than to a continuing, and perhaps repetitive series of unexpected occasions, for reporting the acquisition or devolution of after‑acquired property. The second suggestion, to the same effect, relied upon by counsel is the use of the word 'all' in the phrase 'all the property of the bankrupt' in s 265(1) as being consistent with the application of the section to an obligation of disclosure at a particular time, namely at the commencement of the bankruptcy. This approach would not provide any escape from liability to answer questions about the acquisition of after‑acquired property fully and completely because such conduct would be an offence against s 265(1)(ca).
Counsel for the appellant relied further upon a passage occurring in the commentary on the 1914 and 1926 Bankruptcy Acts being the 9th ed (1938) of the work of Chalmers & Hough and dealing with s 154 of the Bankruptcy Act 1926 (Cth) which is broadly analogous to the present s 265(1)(a). The learned commentators in that work observed of that earlier subsection that its provisions were not restricted to property in the possession of a bankrupt at the commencement of his bankruptcy but included property disposed of him before that date: R v Mitchell (1881) 50 AL (MC) 76; 43 LT 52, but submitted that it did not include after‑acquired property.
The question at issue in R v Mitchell's was whether the non‑disclosure by the bankrupt to his duly appointed trustee following his bankruptcy on 1 May 1879 of the acquisition and disposition of goods to the value of £4,000 in the early part of 1878 was a breach of s 11 and s 15 of the Bankruptcy Act 1869 (Imp) requiring disclosure to be made to the trustee of the bankrupt's property divisible among the creditors. The Court of Crown Cases Reserved unanimously upheld the convictions of failing to disclose the earlier property (which had been disposed of before the bankruptcy) and Lord Coleridge CJ observed, at LT573:
The great object of sect 11 of the Bankruptcy Act 1869 was to create several offences, into all of which fraud of creditors enters, and in some of which it is enacted that the fraud must have taken place within the period of four months next before the bankruptcy; and if the whole section is looked at, it will be found to contain a most complete and absolute scheme providing for the discovery of the bankrupt's property. It seems to me perfectly plain that sub‑sect 1 of sect 11 must relate to other property than what the bankrupt has at the time of his bankruptcy. It was said that, if that was its meaning, a bankrupt might come within it if he did not disclose something relating to his dealings with property that he may have had within five years before his bankruptcy. If there was nothing fraudulent in such dealings, it does not fall within the sub‑section; but if the question of fraud arises, there is no reason why it should not be inquired into.

Field, Lopes, Stephen and Watkin‑Williams JJ all agreed.
The decision, therefore, is to the effect that provisions analogous to the present section 265(1)(a) required disclosure of questionable transactions of property before the date of bankruptcy, an extended meaning which is now probably truncated by the express provisions of s 265(b) and s 265(h) of the modern statute. It does tacitly assume that there is one obligation of disclosure relating to all property owned by the bankrupt which extends to any significant pre‑bankruptcy transactions or dispositions. To that extent it supports the proposition that the obligation did not, indeed could not, relate to property yet to be acquired by the bankrupt.
R v Mitchell was considered and followed by the High Court in Calegeros v Attorney-General for the Commonwealth (1953) 88 CLR 41 where s 210(1)(a) of the 1924-50 Bankruptcy Act (Cth), which was in terms to some degree comparable to s 265(1)(a) of the present Act, were held to be of wide application not limited only to property passing on the bankruptcy to the official receiver so that acquisitions and disposals of property before the bankruptcy which were in fraud of creditors should be disclosed. The transactions in question in Calegeros occurred before the bankruptcy so the case is on all fours with Mitchell but it does point to a wide scope for the present s 265(1)(a). The focus of both cases was clearly upon dealings in property before the bankruptcy or before the debtor's statement of affairs.
The written submissions for the appellant emphasise the detailed and prescriptive nature of the provisions dealing with income earned by the bankrupt during the bankruptcy and the contribution assessments to be made under those provisions. These submissions emphasise the finding of French J in Gilles (supra) that Div 4B codifies a bankrupt's obligation with respect to after‑acquired income and proceed to develop the point that the income does not vest in the trustee. Rather, as the submission goes, the trustee makes assessments at various stages during the course of the bankruptcy as to whether or not the bankrupt has earned sufficient post‑bankruptcy income to warrant making a contribution. There is consequently an assessment process which can be reviewed and which is subject to appeal. Furthermore, the bankrupt is entitled to request that the threshold be raised in cases of hardship. Once an assessment is made the contribution assessed is due and payable at the times prescribed by the trustee and, if not paid can be the subject of legal proceedings against the bankrupt pursuant to s 139ZG(3) of the Act. In other words, the liability of the bankrupt to pay the assessed portion of income to the trustee is in the nature of a debt rather than any right of property which vests by reason of the Act in the trustee. According to the appellant this distinguishes income earned after the commencement of the bankruptcy from income earned before the date of bankruptcy or assets purchased before the date of bankruptcy.
It is immediately apparent that there is some incongruity in speaking of after‑acquired income as not vesting in the trustee yet maintaining that after‑acquired property (whether acquired with the use of that income or not) does. The incongruity arises from the difference in character assumed to exist between income and property. Plainly there is a difference in those concepts but income generally means money (or other valuable consideration) itself constituting property, obtained by a person over some period. Such income, take wages or salary for example, once received will probably be in the form of cash or credit in a bank or similar account. The accumulating cash on hand, and the accumulating balance in the bank or other account will each be a form of property of the bankrupt from the moment it is paid or received. There is no suggestion by the respondents, nor does the decision in Gilles (supra) appear to contemplate, that the proceeds of income, whether it be cash or credits in bank accounts, as originally received or accumulated will constitute 'after‑acquired property' within the meaning of s 116. This is probably due to the effect of Div 4B and the idea that after‑acquired property does not include income at least in the form in which it was earned. That concept may need a little extension to cater, for example, with a situation where income is received in cash, and is then converted by the recipient to a credit in a bank or deposit account, and is then transferred to a second, third or subsequent bank or deposit account, each transition constituting, strictly speaking, the acquisition of property in the form of the subsequent account or accounts. The inconsistencies between this analysis of what constitutes property and the notion of 'after‑acquired property' in s 116 can probably be ignored for the present notwithstanding that they reveal some special and fundamental changes to the conventional notion of 'property'.
Subject to the protective provisions of s 116(2), and other provisions including the so‑called rules in Cohen v Mitchell (1890) 25 QBD 262 (see now s 126), the rule in Troughton v Gitley (1766) AMB 630; 27 ER 408 and the rule in Ex parte James (1874) LR 9 Ch App 609, the general proposition can be advanced that most varieties of property acquired by the bankrupt after the date of bankruptcy vest in the trustee from the moment they are acquired by or devolve upon the bankrupt - s 58(1)(b) and s 58(6). So a life interest in certain real property left to a bankrupt by a will will vest in the trustee: Re Hannon (1945) 13 ABC 218.
Still the nature and extent of after‑acquired property which is divisible among the bankrupt's creditors and which therefore vests in the trustee is limited by s 116(2) of the Act. Among the exclusions are personal property of a kind prescribed by the regulations (s 116(2)(ba)(ii)); a bankrupt's property that is for use by the bankrupt in earning income by personal exertion (s 116(2)(c)); certain property used for transport (s 116(2)(ca); and policies of life assurance or endowment insurance of certain kinds. Among the property exempted is that identified by s 116(2)(n) namely:
property to which, by virtue of subsection (3), this paragraph applies;
and s 116(3) provides:
Where, at any time, the whole, or substantially the whole, of the money paid for the purchase, or used in the acquisition, of particular property is protected money, paragraph (2)(n) applies to the property.
Section 116(2D) contains some special definitions for limited purposes but including for the purposes of s 116(3) the following:
protected money, in relation to a particular time, means:
(a)exempt money; or
(b)exempt loan money in relation to that time.
And 'exempt money':
exempt money means money of any of the following kinds:
(a)an amount to which subsection (1) does not extend because of subparagraph (2)(d)(ii) or (iv);
(b)damages or compensation of a kind referred to in paragraph (2)(g);
(c)amounts covered by paragraph (2)(k), (l), (m), (ma) or (mb).
Consequently, property purchased by a bankrupt as a result of the use of the proceeds of a policy of life assurance or endowment insurance in respect of his own life or the life of his spouse or de facto partner, or property purchased with the proceeds of a payment to the bankrupt from a regulated superannuation fund after the date of the bankruptcy, if the payment is not a pension, will be excluded. Similarly, property purchased by the bankrupt with the proceeds of amounts paid under a rural support scheme (as defined or related thereto) will also be excluded.
Accordingly, counsel for the respondents submit that subject to these exceptions other forms of after‑acquired property, including after‑acquired property purchased through the use of post‑bankruptcy income, must be regarded as remaining within the concept of the property which vests in the trustee. It is implicit in the respondents' submissions that all this is consistent with the policy of the Act which provides for a rateable distribution of a bankrupt's property, including after‑acquired property, between creditors subject to a series of closely identified exceptions designed to allow the bankrupt to continue to support himself and his dependants and to retain a reasonable share of income derived from his own efforts after the bankruptcy and including property of special classes such as damages, compensation, the proceeds of certain life assurance policies and the like which, for policy reasons, should enure for the benefit of the bankrupt and not for the creditors.
This submission by the respondents that the scheme of s 116(2) would be violated if property acquired by a bankrupt after the bankruptcy, by the use of post bankruptcy income which he or she was entitled to keep, did not immediately upon acquisition vest in the trustee, raises further difficulties. According to the submission, the only after‑acquired property which would not immediately vest in the trustee on acquisition, would be property which is paid for wholly or substantially through the use of money which is protected money within the meaning of s 116(3). The only moneys within that special definition of 'exempt money' are certain forms of damages or compensation, or the proceeds of a life or endowment insurance policies of specified kinds, or money coming from a regulated superannuation fund as prescribed. Post bankruptcy income which the bankrupt is entitled to retain, which itself has not vested in the trustee, is not 'exempt money' within this definition. Accordingly, if the respondents' submission is to be fully accepted, any property purchased with that post bankruptcy income would immediately vest in the trustee and give rise to the alleged obligation of disclosure under s 77(1)(f), regardless of whether or not it was property which, otherwise, under s 116(2) would not vest in the trustee. Such a conclusion would follow from treating the only species of after‑acquired property not vesting in the trustee as being the kinds of property which are specifically identified by s 116(3).
Accepting such a submission would have a number of extreme results. The use of such after‑acquired income by the bankrupt to purchase tools of trade, or means of transport, which would, if owned at the time of the bankruptcy, be protected by s 116(2), would result in the acquisition of after‑acquired property which would vest in the trustee and give rise to a disclosure obligation. The same could be said of the purchase of food or clothing or other household necessities through the use of such income. Such a conclusion would defeat the entire purpose of permitting the bankrupt to retain income for his own use and for the support of his dependants and must, at least at these extremes, be rejected.
One possible rationalisation would be to treat property purchased by the undischarged bankrupt from income which he or she is entitled to retain, as being protected to the same extent as s 116(2) protects specified categories of property owned by the bankrupt at the time of the bankruptcy. Such a course appears to have been assumed by French J in his dicta in Gilles (supra) where his Honour suggested that assets purchased by a bankrupt with after‑acquired income would, if not with any of the excluded categories in s 116(2), constitute property divisible among the creditors and vest in the trustee. With respect, one can easily recognise the practical necessity for allowing such an accommodation, but the point of significance, at present, is that such an approach inescapably involves a reading down of s 116 and an expansion of the exemptions provided by s 116(3). It would seem that such an interpretation is another necessary consequence of accepting the effects of the provisions of Div 4B of the Act. With respect, I consider that such an interpretation is necessary to avoid consequences which would be inconsistent with the doctrine as developed in Re Gilles and the subsequent authorities which have followed or approved that decision.
In that case, therefore, the use of post bankruptcy income which the bankrupt is entitled to retain, to purchase after‑acquired property may have two consequences. It may result in the purchase of property (which if owned by the bankrupt at the time of bankruptcy would be protected under s 116(2)) which would not, on acquisition, vest in the trustee or require disclosure under s 77(1)(f), or it may result in the acquisition of property which would not have been protected under s 116(2) which immediately upon acquisition would vest in the trustee and would generate an obligation of disclosure under s 77(1)(f). This will, therefore, cast a heavy obligation upon the bankrupt to disclose to the trustee all purchases in the second category and it may even give rise to controversy over whether a particular acquisition falls in one category or the other, leaving scope for some need to resolve those controversies in an acceptable way. As such an area of potential difficulty was not raised in submissions in this case and does not require decision now, it is preferable to decline any further attempt at resolving these difficulties and, instead, to leave them for future examination and determination if and when they might arise.
What this appreciation does reveal, however, is that the degree of symmetry assumed to exist in s 116 by the respondents' submissions is elusive and must be subject to qualification. Accordingly, the submission that the acquisition of after‑acquired property by the bankrupt with the use of after‑acquired income which does not come within the s 116(3) exemption vests in the trustee, should, in my respectful view, be regarded as no more than presenting the underlying difficulties of interpretation in a different way, rather than conducing towards their resolution.
In this setting it is perhaps timely to consider a number of possibilities. The undischarged bankrupt may be lucky enough to win a major prize in a lottery or, as we have seen, to receive a large inheritance. If substantial property devolves upon him in that way, what, if any, are the reasons which would render it unjust to determine that this is part of the property of the bankrupt which should be divisible among his creditors? It seems to me that there is no cogent reason to exclude the creditors from benefiting, rateably, in the distribution of such an acquisition or devolution of property. This reflection gives added weight to the submission that property acquired by an undischarged bankrupt from income earned after the bankruptcy should, again subject to the exemptions in s 116, be treated as property available for division among the creditors.
These factors were the basis of the two submissions advanced by the respondents namely:
(a)Any after‑acquired income which the bankrupt receives and/or accumulates in specie is not property which is divisible amongst the creditors of the bankrupt under subsection 115(1). Therefore, it is not property which must be disclosed under section 265(1)(a) of the Act.
(b)At the point when the specie of after‑acquired income is converted/translated into another form of property, then unless the other form of property comes within subsection 116(2) the bankrupt acquires property that is divisible amongst creditors under subsection 116(1). Therefore it is property which must be disclosed under subsection 265(1)(a) of the Act.
For reasons already canvassed there is a certain degree of awkwardness in identifying the after‑acquired income for these purposes as being income 'which the bankrupt receives and/or accumulates in specie'. It was made plain by the respondents that the mere depositing of that income in a bank account, or the transfer of all or part of it to another bank account, so converting the cash or the chose in action from one form of property to another is not within the meaning of the submission or the reach of the Act. If that difficulty of definition can be put aside then I, too, incline to the view foreshadowed by French J in Gilles (supra) that the conversion of that income (or specie) into a distinctly different form of property, as for example by the purchase of shares in the present case, will result in the acquisition of after‑acquired property divisible among creditors and so vest in the trustee, unless within any of the categories excluded by s 116(2). This means that I agree with the learned magistrate that this was property which, by reason of s 58 vested in the trustee and which should have been disclosed. This is the effect of s 58(1)(b). This is consistent with the view taken in O'Brien v Sheahan [2002] FCA 1292 [38] by Carr J on the appeal.
It follows that the appellant should have disclosed these acquisitions of shares and in breach of the Act failed to do so. The question must be asked, when did he become so obliged to disclose the acquisition of that property, and the answer can only be found in s 77(f), which provides the obligation to disclose the acquisition to the trustee as soon as practicable after the acquisition by, or devolution upon, the bankrupt of the property concerned.
That conclusion then requires a return to the submissions by the appellant that after acquired property does not come within the scope of the meaning of 'the property of the bankrupt' to which s 265(1)(a) of the Act must necessarily be limited.
This is the submission which maintains that if there has been a breach of the obligations imposed by s 77(1)(f) the remedy lies under s 78(1)(f), namely the issue of a warrant for the arrest of a debtor and his or her committal until otherwise ordered by the court. Such a remedy would seem to involve more immediate, abrupt and severe consequences for the bankrupt than the effect of a conviction for an offence contrary to s 265(1)(a) and this is a consideration which merits attention when dealing with the submission. Such consideration should include recognition of the possibility that a trustee can, and in appropriate cases perhaps should, conduct an examination of a bankrupt or require the bankrupt to answer certain questions before discharge which include questions regarding whether or not the bankrupt has received after‑acquired property within the meaning of s 116 since his first examination or asset disclosure or statement or affairs. If the bankrupt truthfully disclosed the acquisition of such property then the trustee would be able to take possession of it and include it in the property available for division between the creditors. If the bankrupt falsely or without cause failed to disclose such property then he would be committing an offence which could be subject to prosecution under s 77 or s 77B or which would subject the bankrupt to an examination by a registrar under s 81.
In R v Owen-Pearse (1996) 128 FLR 82 the Court of Criminal Appeal of South Australia quashed a conviction under s 265(a)(a) for non‑disclosure by a bankrupt of his property on the ground that the prosecution case was wrongly left to the jury on the basis of a failure to fully and truly disclose possession (not ownership) of the property concerned ‑ a collection of rifles. In a judgment with which Matheson and Millhouse JJ agreed, Lander J said, at 87:
All interests in property, legal or equitable, immediately vest in the trustee [by s 58] and all after‑acquired property vests in the trustee as soon as it is acquired by, or devolves on, the bankrupt. Therefore, s 265(1)(a) requires the disclosure of any legal or equitable interest in property existing at the time of bankruptcy and the disclosure of any legal or equitable interest which is subsequently acquired.
No question of failure to disclose after‑acquired property arose in R v Owen‑Pearse and the attention of the Court does not seem to have been drawn to s 77(1)(f) of the Act. Accordingly, these observations of Lander J, while entitled to great respect, are strictly obiter dicta and cannot be treated as being determinative of the present issue of whether the obligation to disclose after‑acquired property arises only from s 77(1)(f) or from s 265(1)(a) or from a combination of both provisions.

It does attach attention when two obligations to disclose property by a bankrupt can be found in, respectively, s 77(1)(f) and s 265(1)(a) of the Act and, if the respondents' submissions are to be accepted, where the Act also provides more than one remedy for a breach of those two obligations.
Moreover, there are the differences in temporal obligation about the scope of the obligations and disclosures under those two provisions, the s 265(1)(a) obligation being in respect to all property of the bankrupt at the time of the bankruptcy and extending to other obligations specifically provided by that section. Obviously it would not be possible at that point, to disclose the existence of after‑acquired property which had not by then been received or devolved upon the bankrupt. That impossibility no doubt is the reason for the existence of s 77(1)(f) because that creates an obligation of an extended kind, one that begins with, and endures as a continuing obligation during, the period of the bankruptcy.
The appellant's submission is but another way of submitting that where penal consequences are attached to the breach of a statutory provision, as they are in the case of s 265(1)(a), any question of interpretation should be resolved by an approach that such consequences should, in the absence of clear indication to the contrary, be confined to the specific provision to which they apply and not be extended or expanded to provide penal consequences for the breach of some other provision of the Act. The more is this so, according to the appellant's submissions, whereas in the present case s 78(1)(f) provides a remedy, including penal consequences, for a breach of s 77(1)(f). So the submission invokes an approach to the interpretation of penal provisions of a traditional kind such as described by Isaacs J in Scott v Cawsey (1907) 5 CLR 132, 154 ‑ 155; and again by the High Court in R v Adams (1935) 53 CLR 563, 567 ‑ 568; and by Gibbs J in Beckwith v The Queen (1976) 135 CLR 569, 576 ‑ see generally Pearce & Geddes, Statutory Interpretation In Australia (6^th ed) at 285 ‑ 288. An example of this approach is that taken by McHugh J in Krakouer v The Queen (1998) 194 CLR 202, 223 where his Honour said:
Still less should a court ignore the clear words of a provision so as to give it a meaning that would or might make it easier to convict an accused if the intention of the legislature is at best a matter of contestable opinion.
In the present case, however, there is no doubt that the legislature specifically intended that after‑acquired property, except of certain kinds, should vest in the trustee (s 116(1)) and that a bankrupt is under an obligation to disclose to the trustee the existence or acquisition of property which is divisible amongst his or her creditors, either held at the date of bankruptcy or after‑acquired ‑ s 265(1)(a) and s 77(1)(f) respectively. Nor can there be any doubt that penal consequences are intended to attach to a failure to make disclosure of such property at the appropriate time.
The only remaining question for interpretation is whether or not a failure to disclose the acquisition or devolution of after‑acquired property divisible among creditors is dealt with by s 78(1)(f) to the exclusion of s 265(1)(a). I accept that there is some uncertainty and lack of specific identification in the Bankruptcy Act in this regard but, even after giving due weight to canons of construction relating to penal provisions, I consider that the proper approach is to treat s 265(1)(a) as creating an offence, punishable by imprisonment or fine, for any breach of the disclosure obligations whether applying to divisible property held by the bankrupt at the time of the bankruptcy or earlier or relevant after‑acquired property but, in the case of after‑acquired property, the time for disclosure is modified by s 77(1)(f) to be 'as soon as practicable' after the acquisition or devolution.
There are two principal factors which lead to this conclusion. The first is that the penal consequences created by s 78(1)(f) do not apply specifically or exclusively to s 77(1)(f) but relate to the failure by a bankrupt to comply with an order of the court any obligation created by the Act. Furthermore, in this respect, the consequences specified are not fines or other finite punishment for a summary offence but rather committal to prison for an indeterminate period as an ultimate form of enforcement of an obligation which the bankrupt has not discharged. So, for example, if the bankrupt had failed to perform the obligation of disclosing the existence of relevant after‑acquired property as soon as practicable but did so after proceedings under s 78(1) had been commenced, it seems unlikely that an order for committal or any other form of sanction would then occur, notwithstanding that there had been perhaps a defiant act of non‑disclosure.
The second factor is that an act of non‑disclosure contrary to s 77(1)(f) is essentially of the same character, and offends the same legislative purposes, as a non‑disclosure of existing divisible property at the date of bankruptcy or ealier contrary to s 265(1)(a). There is essentially no difference in the nature of the breach of the obligation, except as to when it must be performed. That leads to the conclusion that s 77(1)(f) is an enlargement of the same obligation of disclosure as is created by s 265(1)(a) with the accompanying necessary qualification as to the timing when such disclosure obligations occur. Treating s 71(1)(f) as an enlargement of the obligation created by s 265(1)(a) means that it is sensible to treat the legislature as intending that the sanctions proposed under s 265(1)(a) can be applied to either form of non‑disclosure.
This means that, in my opinion, the appellant was rightfully convicted of the offences charged under s 265(1)(a) and that, therefore, this appeal should be dismissed.