Talacko v Bennett & Ors

[2017] HCATrans 47

[2017] HCATrans 047

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M154 of 2016

B e t w e e n -

JUDITH GAIL TALACKO (AS APPOINTED REPRESENTATIVE OF THE ESTATE OF JAN EMIL TALACKO)

Appellant

and

ALEXANDRA BENNETT

First Respondent

MARTIN TALACKO

Second Respondent

ROWENA TALACKO

Third Respondent

JAN TALACKO (AS EXECUTOR OF THE ESTATE OF HELENA MARIE TALACKO)

Fourth Respondent

KIEFEL CJ
BELL J
GAGELER J
KEANE J
NETTLE J
GORDON J
EDELMAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 7 MARCH 2017, AT 10.16 AM

Copyright in the High Court of Australia

____________________

MR B.W. WALKER, SC:   May it please the Court, I appear with my learned friend, MR J.B. MASTERS, for the appellant.  (instructed by Strongman & Crouch)

MR P.H. SOLOMON, QC:   If your Honours please, I appear with MR O.M. CIOLEK, for the first and third respondents.  (instructed by Brand Partners)

KIEFEL CJ:   Yes, Mr Walker.

MR WALKER: Your Honours, the interaction between the two statutes in question requires attention to, in particular, the word “stay” that appears in section 15(2) of the Foreign Judgments Act. But we start with section 58 of the Bankruptcy Act in which that word does not appear because, as we put it in our proposition 1, properly understood in what might be called a substantive substantial and practical sense, the provisions of paragraph 58(3)(a) amount to a stay.  The wording is well known to your Honours.  It addresses a form of capacity.  It says that:

after a debtor has become a bankrupt, it is not competent for a creditor –

that is, a creditor lacks competence, a form of capacity:

(a)to enforce any remedy against the person or the property of the bankrupt in respect of a provable debt –

and, in our submission, the action of creditor, person or property, remedy and provable debt means that by saying that a creditor is not competent to enforce a remedy, et cetera, exactly the same is accomplished in every respect as saying that a court may not issue a remedy or grant a remedy for the enforcement, et cetera.

The changes can be rung upon those possibilities in every single one of them.  The same effect as a stay, either by force of statute imposed by statute in absolute or conditional terms, or a stay ordered by a court in absolute or conditional, permanent or temporary terms is achieved.

KIEFEL CJ:   Mr Walker, does the fact that section 60(1) of the Bankruptcy Act provides for a stay of proceedings by order of the court bear upon the construction of section 58?

MR WALKER:   Unquestionably. The whole of section 60 – what it does and what it does not do – must be looked at for a contextual understanding of section 58. Is it convenient if I go directly to section 60? Although, in our list of propositions we have touched on it in answer, as it were, to a reply.

KIEFEL CJ:   I see.  Yes, you did proposition 5 – whatever suits your argument.

MR WALKER:   Perhaps I should deal with section 60 now. May I take your Honours to it? The first thing which is well recognised is that, unlike section 58 which operates upon a person becoming bankrupt, the powers available to the court under section 60 become available at any time after the “presentation of a petition”. Notoriously, not all petitions are upheld, so we are talking about a period and a state of affairs which may never result in a bankruptcy.

The topic of section 60, however, extends beyond bankruptcy; that is, it is not simply the period between petition and bankruptcy - see subsection (2).  One sees that the subject matter of section 60 extends to the state of affairs, which is a very good example of a statutory stay ‑ that is, a stay imposed by statute – upon and by reason of the sequestration order.  One sees that it is conditional, that is, upon the familiar trustee’s election.  Subsection (3) continues to deal with exactly the same subject matter as subsection (2), and then subsection (4) deals with the carve‑out from what is otherwise the dealing in a bankruptcy with claims against or by the bankrupt.  Subsection (5) is definitional. 

So subsection (1) is a general power.  It is of a different kind of provision from subsections (2), (3) and (4), which deal with what might be called substantive effects by reason of bankruptcy.  Subsection (1) is what might be considered to be in the nature of interlocutory power. 

There is a question that arises as to whether the power which the words of paragraph 60(1)(b)would otherwise convey, namely, staying, say, an application for execution upon a judgment, whether that is a power that is actually available after section 58 has operated.

It may be six of one, half a dozen of the other, if I may explain it in this way.  Under paragraph 58(3)(a), it ceases to be possible for the person who may seek a remedy by way of enforcement to do so.  That is the first thing.  Under section 60, therefore, the question would arise if, after bankruptcy, which is also of course a time after the presentation of a petition, somebody were to seek an injunction against a creditor seeking to enforce a remedy against the person or property of the bankrupt in respect of a provable debt.  The question would arise as to whether that is an order properly to be made under section 60, bearing in mind that Parliament has already achieved that in absolute terms in paragraph 58(3)(a).

KEANE J:   But one would not read the two provisions together as stultifying the grant of jurisdiction to a court.

MR WALKER:   No, exactly so.

KEANE J:    So that must tell you something about the scope of 58(3), must it not?

MR WALKER:   Yes, 58(3)(a) has been called an absolute bar, absolute by contrast with 58(3)(b).  As an absolute bar it does not depend upon the discretion which the Court has under section 60(1):

The Court may . . . upon such terms and conditions as it thinks fit -

There is no stultification of court jurisdiction by recognising that 58(3)(a) works in effect regardless of there being any application to a court and the role of a court under 58(3)(a) is the court that made the sequestration order.

Our argument does not detract from, let alone stultify any grant of judicial power by section 60.  We simply draw to attention the possibility that by reason of 58(3)(a), section 60 becomes a dead letter with respect to the staying of proceedings by way of enforcing a remedy against the person or property of a bankrupt with respect to a provable debt.

It probably does not matter whether the power is unavailable or simply the case would never arise and there is an alternative view altogether that says it may well be beneficial for a court to have an order specifically according to the circumstances of a particular case to deal with what might be conduct that is threatened to be undertaken in breach of the prohibition created by 58(3)(a).

GAGELER J:   You might have a writ of execution that has already issued in the hands of the sheriff.

MR WALKER:   Yes.

GAGELER J:   The judgment debtor then becomes bankrupt and maybe you need the stay in some circumstances to stop the sheriff from executing it.

MR WALKER: That is exactly what I meant by there may be circumstances which would be entirely beneficial for a court to have, albeit in a discretionary way, the power under section 60 in aid of the evident intent and purpose of section 58(3). That is the way in which one can analyse the concurrent operation of section 58 and section 60 in cases such as the present.

What section 60 does not do - to return in general terms to what the Chief Justice asked me – what section 60 does not do is detract from the ordinary and perceived meaning of section 58(3)(a) which, as I say, can be thought of as an absolute bar. The word “bar”, as your Honours have seen in Fraser, is a word which naturally is available as an explanatory paraphrase of the effect of paragraph 58(3)(a).

Your Honours, if that is the case, then notwithstanding that the word “stay” appears in both its senses, that is judicially ordered and statutorily imposed in section 60, there is, as a matter of substance, that is, function and effect, precisely the same character to be seen in the notion of the denial of competence for a creditor who is the necessary moving party, of course, to enforce any remedy.  Of course, a creditor enforces remedy, not by self‑help but by making application to a court or by asking a court to put in train the official machinery which ultimately concludes with the sheriff. 

It is for those reasons, in our submission, that as we have put it in our proposition 1, that equivalence, exact equivalence of function and effect shows the bar in section 58 to be a stay within the meaning of the Foreign Judgments Act.  So we then go to the Foreign Judgments Act provision.

KEANE J: Mr Walker, just before you go to that, can I ask you this? Section 58(3) is concerned with the enforcement of remedies in respect of a provable debt and it obviously, by reason of its collocation with 58(1) in aid of maintaining the integrity of the vesting effected by 58(1)(a), is it really to tell the whole story about this equitable compensation obligation described as a provable debt? I am looking at page 43 of the appeal book and one sees in clause 6 of the compromise deed that this payment or provision for payment of equitable compensation is a payment:

for breach of fiduciary duty in respect of each of the Properties and interests -

Now, those interests are the interests of your opponent’s clients.

MR WALKER:   Yes.

KEANE J:   Is there not a difficulty in the notion that there are not equities at play here, that, yes, the order they have is a money order and therefore it is registrable for the purposes of the Foreign Judgments Act ‑ ‑ ‑

MR WALKER:   And enforcement is by way of execution, so the definition tells us.

KEANE J:   Well, perhaps.  But my concern is really rather whether what the other side are entitled to say, although it does not seem they have said it, is that they are enforcing the equity that attaches to these properties which your client’s successor in title held as fiduciary.

MR WALKER:   Yes.  I think the answer to all of your Honour’s question is yes, and I need to explain and, in particular, it is not telling the whole story simply to look at the equitable compensation as a provable debt.  There is all of the explanation for why there is equitable compensation that is contained, among other places, in the terms originally settled in February 2001.

If your Honours go back to page 41 where the matter is fully recited, the agreement – let us call it agreement – the agreement was that my clients, deceased, would transfer title to certain property, and one sees that the agreement included everything necessary to effectuate that – see paragraph 2, but in default by reason of some overarching legal situation in paragraph 3 there would be a liquidation and distribution of proceeds. 

So that the agreement contemplated that there would be in specie transfer or, if by reason of applicable law or some other clause that cannot be given effect to, so it is not an election of Mr Talacko, there would not be a right to have the actual land but rather a right to take the proceeds of sale.

Then in paragraph 6 a further default provision which, as it were, between the lines shows in a way that is quite awkward that if there was a breach – it actually says of “any term, condition or warranty”.  It does not say only a breach of the obligation to transfer, interestingly.  In any event, that was the breach and the words in paragraph 6 are apt to encompass that breach.  In the event of the breach, there would not be an entitlement to judgment for an order to transfer, an in personam order to transfer, but instead, as it were, perhaps echoing the acceptance of money in paragraph 3 in case of impossibility, there would be the acceptance of money in case of defiance.

EDELMAN J:   So you read paragraph 6 then as, effectively, giving up the right to sue for specific performance of paragraph 1 or for the proceeds?

MR WALKER:   I do, your Honour.  It is not necessary for any part of my argument, but one cannot help observe that these are not the most watertight terms.  And it does not lie well in our mouth, in any event, to make such criticisms.  But yes, we certainly read paragraph 6 as stipulating that the outcome upon breach by Mr Talacko of what is called “any term” et cetera is that there is an entitlement.  Now, it might be that in the intestacies there is an election rather than a mandated outcome.  I do not know; that has never been tested.  And “entitled to enter judgment” and, of course, if it was an election they did elect, they got that from Justice Osborn and there was an order that the defendant pay equitable compensation.  That appears to have been – well, it clearly has been – quantified so as to produce the judgment in question, the judgment in respect to which the certificates were issued, which is as a matter of equitable compensation the financial reflex of the land which was not transferred in breach of the agreement.

EDELMAN J:   An election between remedies usually does not take effect until some period after quantification.

MR WALKER:   Your Honour, there is no doubt about that and, on my understanding, which I am sure is incomplete and may be imperfect, of what is happening outside these proceedings in other places, including the Czech Republic, it may well be that there is in the future the possibility of that kind of thing being explored.  I am not aware of that having been advanced as a position – that is, that there is yet to be exercised a relevant election.

If I may digress slightly, your Honours are aware that there are – query were – two forms of proceeding in the Czech Republic, to use some of the labels that have been usefully or otherwise applied to them in the record, the “enforcement” or “execution proceeding” and the “donation proceeding”.

The donation proceeding, in particular, raises questions to which answers are not found in the record, at least on my reading of it, as to what in fact it reflects or seeks to advance in terms of what Justice Edelman has asked me about, because on one reading – and I think it is at page 99 of the book in the first instance reasons, paragraph 11, you find a description by the lawyer, adopted by her Honour, describing that donation proceeding:

as a petition to contest the effectiveness of ‘donation agreements’ –

which are then explained.  It is described as being a gift of:

his interest in certain properties . . . that were in issue in the equitable compensation proceedings then pending -

Of course, the “equitable compensation proceedings then pending” followed the order for equitable compensation.  Then there is a recitation of the not entirely clear statement by the Czech lawyer that:

if successful, would enable the -

respondents:

to claim ‘their enforceable rights’ ‑

I am sorry, on my search of the record I cannot find anything better or more precisely to explain what that really means –against the sons:

being ‘the persons to whom Jan Talacko transferred a property by way of a gift with the intention to curtail -

that is prejudice, no doubt:

the creditor’s (Clients) claim and that ‘[i]n this way, it is possible to contest [his] legal acts made during the last three years.’

Now both passages, I am sorry, do not get further explained in the record but they obviously give rise to the possibility that something they, in the nature of what I am going to call in specie claim, might be in somebody’s mind in the Czech Republic.  It does not seem on the record in this Court with respect to Australian courts, not only the courts below for this appeal but also the other proceedings about which your Honours have read, it does not seem that there has been anything since the equitable compensation order by Justice Osborn that reflects anything in specie.  So there has been no, as it were, invocation of a Penn v Lord Baltimore personal jurisdiction to force – and that may well have to do with people not being present in the jurisdiction.

I am sorry for that long‑winded digression but the fact is it is not really possible from the record to know for certain anything concerning what I am going to call the money judgment other than the fact that it exists.  Whether there is going to be some inconsistent treatment of it by our opponents in the Czech Republic, we do not know.  By “inconsistent” I mean you can scarcely get the money for not getting the property and also get the property, that is, at least under our system, equity would require to be done to avoid double counting or over‑compensation. 

I am not suggesting that is afoot; I have just drawn to attention material that means I cannot be definitive one way or other about it.  But for present purposes, in relation to that step in the Czech Republic, which we think is relevant to the so‑called enforcement or execution proceeding rather than the donation proceeding, we have the impugned issue of the certificate by the Victorian Supreme Court.

KIEFEL CJ: Just before you leave section 58(3), it goes without saying that in its language it operates – is intended to operate on the creditor rather than being directed to the action. It does not say, for instance, “no remedy shall be enforced” or “no action shall be brought” ‑ ‑ ‑

MR WALKER:   Unquestionably, your Honour.

KIEFEL CJ:   ‑ ‑ ‑ in universal terms.  So one question it gives rise to, I suppose, is whether or not the enforcement of that limitation upon the actions of a creditor are intended or comprehended to be actions taken by the trustee, say, by way of injunction rather than it operating as a stay that some personal action is brought against the creditor.

MR WALKER:   May I respond in this fashion?  First of all, the denial of competence for a creditor to enforce any – I stress the word “any” – remedy against the person or property of a bankrupt in respect of a provable debt is deliberately, I suggest, and purposively, so wide as to comprehend legitimate self‑help as well as the enlistment of the civil authorities, mostly, obviously, that would be courts.  It might not be only courts.  It might also be administrative tribunals.

So, it is the enforcement of any remedy. And that has, within the context of section 58 and the scheme of bankruptcy in our system as a whole and, obviously, salutary effect. That is the first thing. The second thing is it is a creditor’s remedy in respect of a provable debt. So, it is – and is only – claims against a bankrupt. That is, claims that were available against the person before bankruptcy.

One sees that that is continued in paragraph (b) – the conditional bar – though except with leave and if so, on terms, there is a bar on the creditor commencing any legal proceeding.  So, there is a subset of the means by which there could be the enforcement of any remedy.

In our submission, it means that there can be no action of a legal kind except that which is approved by the Court and in accordance with terms imposed the Court.  And, your Honours are familiar with – and there are examples of it in this case in the terms you have seen – for example, imposed by Justice North.  There are familiar forms of words which are used to ensure that such steps as are permitted to be taken by leave of the Court remain, as it were, within the control of the Court and assiduously stop short of that which it is not competent for a creditor to enforce under 58(3)(a), so taking steps short of or apart from execution.

One thing is clear, that the trustee is not affected directly by 58(3).  The trustee obviously has a function which steps in as a result of the bankruptcy.  It includes the possibility of making elections, as one sees in section 60, and otherwise has the duty to get in the property and the means to facilitate that being done within a duty including the means to determine, or have determined, disputes about the rateable proportions to which creditors with provable debts are entitled.   As I say, 58(3) says nothing to the position of the trustee but it is plainly part of the architecture that ensures that the trustee will have available to him or her everything that should be made available for the purposes of the cardinal requirement of rateable distribution.

As I think is common ground, it is clear of course that the rateable distribution is of property, including foreign property, by dent of the section 5 definition of “property” to include property in Australia or elsewhere.

It is for those reasons, in our submission, that when one comes to the critical provisions of section 15 and in particular the words of subsection (2), which at least give content either completely or importantly to the notion of an application duly made that you see at the beginning of subsection (1) and the content it gives is that there may not be an application made, which means that proceeding in breach of that would be not duly made, until the expiration of any stay of enforcement of the judgment in question.

Bearing in mind the more particular purposes to be understood in relation to the Foreign Judgments Act, in our submission, a ready reconciliation and concurrent operation with section 58 emerges, as we have advanced in proposition 3 and 4, the reason that we advance in proposition 4.

The argument we put in proposition 3 does depend and will be vulnerable accordingly on the proposition that the expression “any stay of enforcement of the judgment” picks up the expression in paragraph 58(3):

not competent . . . 

(a)       to enforce any remedy . . . in respect of a provable debt ‑

et cetera.  The equivalence in a case such as the present of the provable debt and what the judgment adjudicates is complete.  The next question is whether enforcement of the judgment fits within the wording and the concept of enforcing any remedy against, et cetera.  It plainly does. 

It may be that there is a greater breadth to the enforcement of any remedy which may not be limited to curial remedies but it certainly includes curial remedies and subsection (2) is obviously talking about enforcement either by or subject to the supervision of a court because it is enforcement of a judgment. The next question is whether the denial of competence by the absolute bar in section 58(3)(a) fits within the concept of stay.

For the reasons we have put in our written submissions, focusing particularly on the reasons clearly set out by Justices Ashley and Priest, there is no weight in the considerations, we respectfully submit, that their Honours assembled in particular for regarding stay in 15(2) as referring only to a stay ordered by a court, presumably pursuant to a discretionary power.

In our submission, the strength and purposive breadth of the expression “any stay”, and I stress the word “any”, is such that it is natural to include within it stays which, as it happens, section 60 of the Bankruptcy Act displays might either be imposed by statute or ordered by a court.

KIEFEL CJ:   Do the words, though, “the expiration of” suggest that one is looking at a court order which would contain the time within which it operates?

MR WALKER:   No.  Under section 60 the statutory stay expires upon bankruptcy being dissolved.  So, no, expiration of any stay means it ceases to operate.

EDELMAN J:   One may understand the expression “expiration of any stay” in the context of where the subsection came from, which is the ACT ordinance and the English legislation which did seem at least primarily to be concerned with stays pending appeals, although the subsection has obvious deliberately been widened.

MR WALKER:   Quite.  You can have a stay pending appeal.  I know it is unfashionable, but you could have that imposed by statute and it would be remarkable and utterly anti‑purposive for 15(2) not to apply to it and that of course is a possibility that would depend upon law reform by an individual jurisdiction, and this is a Commonwealth Act that will pick up obviously the outcomes and circumstances of any of the jurisdictions in Australia. 

If one of the Australian jurisdictions decided that it would not be necessary to make application for a discretionary stay pending appeal but rather there will be stays pending appeal unless ordered otherwise - that is perfectly possible - then the wording of 15(2) will not need to accommodate that and it would be odd, in our submission, bearing in mind its evident purpose, to which I am about to come, were the expression “any stay” to be read down as it would need to be. 

What we have to persuade your Honours of in particular in this regard is that the word “stay” is an apt description for the effect of 58(3)(a).  We have written our argument as to why that is so.  To reflect in a slightly different context what Justice Priest said does not bear a lot of elaboration.  It is a stay, in our submission, because it prevents that which would otherwise in the ordinary course be available from happening.  It halts a progress that would otherwise occur, and that is precisely what 58(3) does.  It is denying ‑ ‑ ‑

GORDON J:   In 15(2), the word “enforcement” is defined.

MR WALKER:   Yes.

GORDON J:   Which includes reference in cases of non‑monetary amounts.

MR WALKER:   Attachment, sequestration, et cetera.

GORDON J:   Does that assist you?

MR WALKER:   I am not sure it adds any particular impetus to our argument rather than our friend’s argument.

GORDON J:   It is dealing with monetary – it has clearly turned its mind to sequestration.

MR WALKER:   Yes.

GORDON J:   In relation to money sums it is talking about “enforcement by execution”.

MR WALKER:   Execution, yes.  Attachment, committal, fine or sequestration, which are notoriously all, as it were, punitive, they are encouraging of compliance by visiting pain, and execution, of course, is the taking by force.

GORDON J:   Because what 58(3) then is doing is, in a sense, providing – on the way you put it ‑ ‑ ‑

MR WALKER:   That there cannot be the enforcement of any of those courses.  You cannot do any of those things, which means you cannot, in the case of those things, all of those can only be done – thank goodness – under the rule of law by authority of a court.  So the breadth of 58(3)(a), as I say, comprehends everything which is available to a creditor who is competent to do so – that is, with standing, et cetera – to seek from the civil authorities, whether it is seeking, classically, the issue of a writ of execution or otherwise.  The denial of competence during the bankruptcy of that is, in our submission, in every respect, functionally and as a matter of effect, a stay.

NETTLE J: Mr Walker, do you get any assistance of the kind that Justice Santamaria envisaged in section 6(6) of the Foreign Judgments Act?

MR WALKER:   Yes, although, with respect, the special subject matter of section 15 is rather, perhaps, more removed from the subject matter of section 6 than his Honour thought.

NETTLE J:   I meant in terms of his reciprocity.

MR WALKER:   Yes, that is so.  This is a reciprocal concept that his Honour is advancing.  The concept conveyed by the words “could not be enforced in the country of the original court” is evocative.  “Could not be enforced” is broader than “enforcement is stayed” but it certainly includes “enforcement is stayed” in the ordinary understanding of that expression, whether it is a statutory stay or a judicial ad hoc stay.  “Could not be enforced” might also include the immunity of certain persons, for example, with respect to enforcement.

NETTLE J:   Is it wrong to reason, as his Honour did, that given that 6 refers to something which could not be enforced in the country of - the original court, and given that what is intended by the Act is reciprocity, the meaning of “stay” rather takes its meaning from something which cannot be enforced in Australia?

MR WALKER: Yes, is the short answer. In particular, his Honour suggests and, with great respect, we adopt this as an observation that the purpose of reciprocity is advanced in the fashion that Justice Nettle has raised with me. One has to be careful with such arguments, particularly when different words are used. The wording of section 6(6) is different from the wording of section 15(2).

One has to be careful that you do not assume your conclusion – that is, that there needs to be an equivalence in order for there to be reciprocity and therefore there is equivalence because the first question is what is meant by “reciprocity” and that can be practised at a level of what I might call international relations, without there being either textually or indeed, as a matter of operation, exact equivalence in converse cases between countries.  Reciprocity is a broader concept than what I might call exact equivalence in opposite directions.

All that having been said, nonetheless, with great respect, what his Honour there advances, that is, paragraph 200, pages 255 and 256 of the appeal book, is, with respect, some support for the argument we put.  It also chimes with the purposive argument that we wish to put and which moves me to proposition 4.  It would be, in our submission, quite contrary to the understanding which 15(2) displays that there can be judgments – which are perfectly valid judgments – which cannot be enforced because of what is called a “stay” as a result of Australian law, which is various, it depends on jurisdictions.

It would be quite odd and totally anti‑purposive for that understanding to sit alongside a complacence in the face of, what we call the location of property overseas, becoming a reason – surely arbitrary – or some owners of provable debts who manage to register the judgment, their judgment, in a foreign country where that property is to receive more than a rateable proportion.

It is, obviously – 15(2) obviously evinces a concern that persons who wish to enforce – and they are the only people who can seek a certificate in a foreign country – not be armed with a certificate which as I shall come to has certain particulars in it which will be very significant to a foreign court.  But, they should not be armed with a certificate if there is, by dent of Australian law, a stay of enforcement.

In our submission, if that be correct as an understanding of the purpose of 15(2), that there not be a certificate sent out of the direct control by territorial jurisdiction of our Court, that there not be sent a certificate to a foreign court who, invited by the terms of the certificate to proceed to enforcement where there has been a stay of enforcement in Australia, then that purpose is greatly advanced by the purposive and functional understanding of what a stay is so as to comprehend 58(3) because, in our submission, the effect of bankruptcy on enforcement is a very well – historically a very well established and understood aspect of Australian law and nothing appears in either legislative history and, more particularly, in enacted text of either statute but, particularly, the Foreign Judgments Act.

We suggest a complacence about the enforcement, contrary to bankruptcy law, against property in a foreign country while ensuring there cannot be enforcement in a foreign country if there has been, for example, a judicially ordered stay pending appeal.  It is possible to understand how that would be an intended operation of the statutes.

Your Honours, we then come to proposition 5, which I have really dealt with in answering the Chief Justice’s question earlier this morning.  The first proposition ‑that is, unavailable to safeguard the position of property being rateably available to all admitted creditors ‑is the possibility that need not be decided and is not essential to our argument, the possibility that the relation between 58(3) and 60 truncates the power after sequestration.

As Justice Gageler points out and Justice Keane raised with me, that may be contrary to the obviously salutary concern that there be available judicial power to meet certain circumstances.  The alternative, as we have put it, is that there is no detraction, of course, by the existence of section 60 from the automatic effect, as it has sometimes been called, of the absolute bar, as it has sometimes been called, of 58(3).

Your Honours, that completes what I want to say about what I will call our main argument.  It depends, as I say, upon whether the word “stay” in 15(2) picks up the concept of non‑competence in 58(3).  I then come in proposition 6 to what is very much a separate argument, and it has problems.  Let me try and put the argument before volunteering the problems.  I will not be long, I hope.

Your Honours will have seen the way in which the forensic conduct in the Czech Republic has been described.  If I go in the appeal book trial reasons to pages 98 and 99, you find in paragraph 10 on page 98 and up to the top of page 99 a description of the so‑called execution petition that was filed “in order to enforce the obligation to pay the Clients” et cetera.  Obviously enough, that signifies in the most concrete way possible, I suppose, that that is a moving party who wishes to enforce.  That is the first thing.

The next thing I need to take you to is the somewhat different description from the same source noted by her Honour at pages 103 and 104 in paragraph 21, where further explanation is advanced that the execution petition proceedings are in order:

to prove the finality and enforceability of the judgments.

The Czech court asked for:

evidence proving that the Australian judgment might be recognized –

which seems to be similar to the registrable quality in our statute.  The appellate court in Prague, paragraph 22 on page 104, approved, it said:

the decision approving the enforcement entered into legal force.

English, no doubt, is not equal to the subtlety of the foreign law but it appears that it is something in the nature of a judicial fiat for what might be called enforcement, which presumably means execution against certain property.

Then in the Court of Appeal, if your Honours go - in Justice Santamaria’s reasons your Honours will recall the majority call in aid his Honour’s, with great respect, very thorough exposition of the facts and circumstances, at page 237 in paragraph 141, the paraphrase is ventured by his Honour that:

In the first of the proceeding – 

which I have been calling the execution petition –

the Applicants seek to enforce the orders of Kyrou J -

Those are the orders that quantified the equitable compensation ordered by Justice Osborn following demonstrated breach of the terms of settlement. It seems clear from the way our learned friends put it in this Court and we have drawn to attention – I do not need to take you to it – paragraph 32 of their written submissions here, it seems clear that it is accepted that section 58 prohibits them from doing that.

What we refer to in our proposition 6 is that it is the Federal Court of Australia that superintends bankruptcies.  The bankruptcies extend to foreign property.  These are properties that the trustee has a duty to get in and deal with according to the scheme in the Bankruptcy Act.

We advance the possibility that a proper reading of the expression “who wishes to enforce” is a wish which it is lawful to accomplish and that that cannot be true of an enforcement which is prohibited.  In a sense, we call in aid, as your Honours have seen in our written submission, the familiar proposition that certain expressions or many expressions, in a legal context, are premised on the lawfulness of the conduct or position in question, contrary it may be said to psychological and social fact.

Obviously people may wish to do something unlawful.  Question:  has Parliament posited that as a qualification to make an application to a court?  There are problems with the argument.  First, I draw to attention the really quite different way the trial judge attended to this matter in appeal book 146, paragraph 113.  It is quite a different point, which is factual for these parties, that her Honour was raising.

It is not clear whether her Honour was deciding this point.  I draw to attention the word “if” that appears on line 19 of page 146 and the absence of any reference, we think, to this matter in paragraph 114, which is her Honour’s summary of the conclusion on this point.  Your Honours will have noticed that in paragraph 113 the point is observed by her Honour that the respondents themselves, as it were, insisted for purposes that seemed convenient to them, that they did:

not seek to execute upon or enforce the judgments, but merely to recognise them ‑

the so‑called precursor step that the majority noted.  Well, that is not really the point we are taking.  We are taking a point that is available, if it is available at all, on the face of the text of the statute that if 58(3) operates, as we understand it is accepted by our friends it does, then you cannot wish to enforce because the wish to enforce ought to be a wish to do something lawful not unlawful.

Against me, I have to acknowledge is that section 15(2) itself may well be read as being premised upon the propriety of a wish to enforce notwithstanding and during the currency of a legal bar to it being accomplished.

KIEFEL CJ: But if you are right about section 58(3) this is redundant, is it not?

MR WALKER:   Exactly.  It is separate and unnecessary.  That is all I wanted to say about it. 

KIEFEL CJ:   But if you are not right about 58(3), you say it is a stand‑alone argument.

MR WALKER:   Yes, it is, yes. 

KIEFEL CJ:   Yes.

MR WALKER:   It depends, if I may so, on just how wrong I am about 58(3) because certain ways of disposing with our 58(3) argument will also dispose of the lawfulness argument concerning 15(2).  May it please the Court.

KIEFEL CJ:   Yes, Mr Solomon.

MR SOLOMON:   If your Honours please.  Do your Honours have the first to third respondents’ outline of oral submissions?

KIEFEL CJ:   Yes.  You might give us a moment then, Mr Solomon.

MR SOLOMON:   Thank you, your Honour.

KIEFEL CJ:   Yes, Mr Solomon.

MR SOLOMON:   If your Honours please.  Your Honours, we wish to make submissions under the six headings enumerated in the oral submissions.  The first four should be quick.  Before turning to those might I for a few minutes seek to respond on the factual background to the question framed by Justice Keane around page 43 of the appeal book?  I will be a few minutes only.  I want to contextualise the document set out at page 43 and around it. 

Litigation was commenced in the Supreme Court in Victoria in the middle of 1998 by two arms of the family against a third arm – obviously enough.  There were three siblings.  Two joined together and sued and they sued Jan Emil Talacko who died in November 2014.  That claim was an in personam claim only, and it was an in personam claim only because of the nuances of the Moçambique principle in respect of foreign land. 

The matter was to be heard at trial commencing 26 February, and on 23 February 2001 the parties entered into terms of settlement.  The terms of settlement are in the appeal book.  There was by the defendant two essential promises.  One was to transfer some rural land and the other was to pay a sum of money.  Pausing for a moment, the essence of the litigation was in respect of the repatriation of overseas property which included six very valuable properties in the centre of Prague, and so the promises proffered in the deed of settlement by Jan Emil Talacko did not involve that property.  It involved separate less valuable rural property and a promise to pay a sum of money.

There was in addition in the terms what might accurately enough be called a default clause, which is clause 6 on page 43 of the appeal book.  Justice Edelman commented on election.  What in fact occurred was as follows.  The property the subject of the primary promise was not transferred.  The plaintiffs in the litigation reinstated the proceeding and in the reinstated proceeding sought judgment. 

There was an initial trial before Justice Osborn out of which his Honour concluded that there had been a breach of the settlement agreement.  Then there was a trial before Justice Kyrou in relation to clause 6 of the terms of settlement and at the end of which, your Honours have seen, Justice Kyrou ordered severally to the two arms of the family a money judgment in an amount of approximately €5 million each. 

That judgment was delivered in 2009.  It was the subject of an appeal to the Court of Appeal of the Supreme Court of Victoria, essentially but not only on the question of whether clause 6 comprised a penalty, and the Court of Appeal delivered judgment in early 2011 and dismissed the appeal.             There was an application by Jan Emil Talacko to this Court and the question in the special leave application was only the question of whether clause 6 did or did not comprise a penalty.  The High Court, this Court, on 4 November 2011 dismissed the application for special leave, and on 7 November 2011 the sequestration order was made. 

So, I thought it might be of assistance, the record being as incomplete as it is, for the purposes of this appeal to seek to contextualise the document in that way contained in the appeal book.

Let me then turn to the six topics on which we seek to address.  We wish to begin with two or three introductory propositions that will not be controversial but we think are contextual.  First of all, obviously enough, a stay of enforcement operates to prevent a claimant, a plaintiff, putting into operation the machinery of the law.  We cite in our outline Re A Company, a 1915 case.  Master of the Rolls there said – and I am just reading it; it is a few lines:

Now “execution on the judgment” is a technical term.  It is a legal process by which the judgment creditor, in that character and for his sole benefit, by a proceeding in the same action seeks to satisfy his judgment wholly or partially.

Justice Merkel in Re Hughes, also in our outline at paragraph 24, described it this way:

The legal processes available by way of enforcement, but stayed under the order –

are in Victoria:

set out in O66 to 76 inclusive.

Then we rely upon this proposition:

In my view, a distinction is to be drawn between a stay of execution of a judgment and a stay on the operation of the judgment.

I will come back to that. One of the things that my learned friend has done this morning is to invite your Honours to place focus and attention on the term “stay”. We wish, contrastingly, to invite your Honours to review section 15(2) as the collocation of words contained therein: “stay of enforcement of a judgment”. That is to be contrasted to the stay on the operation of a judgment. The stay of enforcement or, in older language, the stay of execution, simply does this. It precludes resort by a judgment creditor to remedies entailing execution.

So in, for example, Pollack, each of Justice Pincus, at 51 in the Federal Court Reports – I do not invite your honours to get it out; I will just read the passage – and Justice Gummow at 56, draw the distinction between the underlying debt on the one part and the stay of execution on the other.  Justice Gummow said as follows - in the relevant provision - and to the extent that your Honours have been provided with the Federal Court Reports, I am reading from page 56, near the foot of the page:

distinctions are drawn between giving judgment in an action, enforcement of the judgment, stays of enforcement of the judgment, and the character of the judgment debt both as an obligation payable forthwith and as an obligation payable by instalments.  Enforcement is concerned with the means of compulsion . . . The debt may be payable by the debtor although the means of enforcement are denied to the creditor.

We collected six or eight cases in our outlines and we have set out in our proposition documents that the stay of enforcement does not touch the underlying debt, leaves untouched the legal effect of the judgment, maintains the prospect of a set‑off, enables various steps under the Bankruptcy Act to be taken, and the like.  That is the first of six topics we wanted to address.

The second topic is this. My learned friend jumped immediately to section 58(3) of the Bankruptcy Act.  We propose for your Honours to commence and to stay for a little while in subsection (2) of section 15.  We are not in this appeal speaking of, in any meaningful sense, a clash or a conflict or a question of reading provisions together harmoniously.  I will seek to make that good a little later.  In approaching the interpretation of subsection (2) of section 15, we contend that, on a very long line of authority, if your Honours are persuaded that the collocation of words comprise what the authorities call “technical words” then they must have their legal effect.  It may not matter much whether your Honours reach that conclusion or not but we submit to your Honours that stay of enforcement of a judgment is a collocation comprising technical words within the authority of cases that probably begin with Brett v Barr Smith.  That is the second topic.

The third topic is to seek to make good that the phrase “stay of enforcement of the judgment” and, as it may happen, other phrases of a like type – “stay of execution” of a judgment and the like – has a technical legal meaning.  The technical legal meaning which we submit those words have is that the stay of enforcement or the stay of execution operates directly on the order the subject of the stay.  And for that proposition, advanced below but, as we will show in a moment, not the subject of consideration in the dissenting judgment against us, we notice in particular in the case of Whan in this Court about 30 years ago, which had remarkable facts but for another time, at 638 said this:

A stay of execution, as its name implies, operates directly on the judgment or order the subject of the stay.  Bail, in the absence of the exercise of any associated or supplementary powers that may be available, merely authorizes the accused person to be at liberty notwithstanding the operation of the sentence.

So to the extent your Honours are evaluating in isolation the concept of a stay, we submit that, if it is useful to look to a proxy, a stay takes away the inherent ability to go forward of an action in which a judgment has been given and, as a corollary, that it only derivatively speaks to a party.  That is the third topic.

Can I say some things next about the phrase in subsection (1) “wishes to enforce”?  It is put against us that there cannot be a wish to enforce by us, the judgment creditor, during the pendency of the bankruptcy.  It is probably put against us that wishes to enforce is, as understood, a jurisdictional fact and that it not being in existence we were not able to apply and the Prothonotary was not able to grant the certificate.  Were that all to be so, an order should be made of the type sought. 

Can I say a few things in respect of that argument under the heading of dysfunctionality – four or five things.  First of all, the case against us, obviously, looks to the applicant, the creditor.  It is narrower than that, though.  The case against us must be that the certificate cannot be applied for when, by reason of the bankruptcy, the judgment comprises a provable debt.  When our learned friends, at proposition 3, say that the combined effect is to prevent a certificate being issued after a sequestration order, we would understand them to mean further in respect of a provable debt, or framing that the other way, we do not understand that proposition to be put against us other than in respect of provable debts. 

If “wishes to enforce” is a jurisdictional fact, that would require both the applicant and the Prothonotary to determine whether the certificate is in respect of a judgment that comprises a provable debt.  Even this morning on this case, that issue was raised.  In this Court, the Court has split on that question in the last 10 years in Foots and in Coventry, and insofar as the question of properties concerned in Cummings.

And, section 82(2) of the Bankruptcy Act which is the section identifying which property may comprise a provable debt, is ripe for complexity in claims, for example, of a restitutionary type in unjust enrichment or where the claim might have a feature that touches upon real property ‑ not this claim, as identified, but a similar claim ‑ or any other proceeding of which there might reasonably be a controversy as to whether or not the judgment was in respect of a provable debt.

On the case against us, if “wishes to enforce” is inhibitory, that judgment needs to be made both by the applicant and the Prothonotary, and if it is inaccurately made, that would, on the case against us, cause the certificate down the track to be vitiated on the determination of the Court on the question.

I have a few more dysfunctionality propositions but that of itself obviously would suggest that “wishes to enforce”, whatever it does connote, is not a jurisdictional fact.

There would be further things necessary imposed on the applicant and the Prothonotary if “wishes to enforce” relevantly is to operate jurisdictionally in that way.  For example, both applicant and Prothonotary would need to know and have regard to any federal legislation which may be said to operate as a stay. 

The case against us here is that in terms of function and effect section 58(3)(a) has that character. Justice Santamaria, in one of his footnotes, collects five other federal pieces of legislation that he contends have that effect and the consequence of each may in a particular matter need to be focused upon by an applicant as a precondition to applying for a certificate.

Further again on the “wishes to enforce” point, it may be necessary for a view to be formed on whether a foreign court’s order or a foreign jurisdictions’ laws comprise a stay of enforcement if the phrase “may encompass either foreign orders or foreign law” – lastly, it might be that the bankruptcy petition is issued by a debtor.

So as we would understand proposition 3 put against us, that would render invalid the certificate applied for by the applicant and issued by the court without there being any reasonable prospect of the creditor or the court, in the short period after the debtor’s petition is presented, having occasion to know of it.

All of those matters would, we respectfully submit, strongly point against “wish to enforce” being a jurisdictional fact and, if it is not put against us as a jurisdictional fact, it is inevitably the case that the appeal will be determined by evaluating the proper construction of section 15(2) and characterising whether, in the relevant sense, section 58(3)(a) comprises a stay of enforcement of a judgment. So let me turn to that.

In evaluating whether section 58(3)(a) comprehends in a relevant sense a stay of enforcement of a judgment, can we start with an evaluation of four or five points involving section 60, not merely textual points, although we rely on those as well. Would your Honours turn to section 60(2). Subsection (2), as my learned friend identified this morning, stays in action automatically, can we notice four things about it? They are these. The first is that, as Justice Gummow and Whitlam noticed in the case of Fuller, which is in our oral proposition document, it has accurate antecedents in New South Wales back to 1841.

Second, as Justice Kenny concluded in Garrett, which we have also set out in our proposition document, it covers all actions commenced by a bankrupt whether or not there is a connection to the estate.  It is protective of those being pursued who might obtain an unenforceable order.  It is unconnected with the concept of provable debts.

Thirdly, and again Justice Kenny in Garrett at paragraph 26 makes this point, quoting Justice Gray in Lofthouse, it is a broad provision.  Illustratively ‑ and in passing Justice Edelman had occasion to notice this in Duckworth ‑ it has effect, that is, it attaches even if the debtor is one of several plaintiffs.

So, as your Honours evaluate section 58(3)(a) and what it comprehends, section 60(2) is a provision in that legislation with all of those features. Paragraph 60(1)(b), as my learned friend identified this morning, speaks to legal process commenced before the bankruptcy and its empowering of a court, and as lots of authority evidences, it among other things is protective of the debtor. So, that is section 60.

The relevant mirror or match might be said to be 58(3(b). It speaks to the time after bankruptcy is commenced. Section 58(3)(b) provides that except with leave of the Court after that time it is not confident to a creditor to commence a proceeding in respect of a provable debt or to take a fresh step in such a proceeding, and because it is, among other things, limited to provable debts, it is in that respect narrower than the provisions we have just been looking at.

KIEFEL CJ:   How does the different operation of these provisions aid your argument?

MR SOLOMON:   In due course, your Honours will form a view on whether section 58(3)(a) in the way my learned friend puts it, in its function, comprises a stay of enforcement of a judgment. We submit to your Honours that for the purpose of fully evaluating section 58(3)(a), it will be relevant to that task to identify it in the context of a scheme that has included 60(2), 60(1)(b), 58(3)(b) and, among other things, the role that provable debts play in the provisions of 58(3).

Although it was not submitted this way, there is a suggestion in our learned friend’s written outline that because 58(3)(a) is more encompassing than 15(2) by reason of that circumstance a court should be persuaded that it is comprehended by 15(2). One of the purposes of this exercise is to notice the feature of provable debts in section 58(3) and obviously enough it is non‑featuring in section 15(2). I will come back to that in a moment.

Let me turn then to 58(3)(a).  The decisional question - there is only one, it transpires, on the appeal and it is relatively narrow - is whether the 15(2) phrase comprehends the denial of competence to a creditor provided for in 58(3)(a).  We have taken your Honours to other provisions in the Bankruptcy Act which we submit will assist your Honour when working out whether the thing, the beast, the matter in 58(3)(a) does or does not fall within 15(2), by which I mean does the phrase comprehend it.

Can I quickly show your Honours why the two judges thus far against us on that question found against us.  I will be brief.  Insofar as the trial judge was concerned, would your Honours turn to page 123.  The issue framed contending for invalidities at 64 and it is again at 75.  It is not very relevant but the language in the first ground of appeal is precisely the same as the last sentence in 75. 

Her Honour’s evaluative approach commences at 79. Her Honour observes that her Honour’s starting point is to ascertain the scope and operation of section 58(3), and reasonably that is not so. The starting point is to take and look at and evaluate 15(2), text, context, purpose.

In any event, having started in section 58(3), her Honour’s decisional reasoning on this issue is at paragraphs 83 to 89 and the decisional reasoning at 83 to 89 looks at a line of bankruptcy authority construing section 41(3) of the Bankruptcy Act, asserting again at 87 the argument of our opponents and then concluding in 89 that:

the bankruptcy operated as an effective stay of enforcement of the judgment ‑

It may be in due course against us, your Honours conclude, it is a stay of enforcement, but the adding of “effective” is unhelpful, with respect, because it does not assist in construing 15(2) and her Honour had essayed a construction earlier on of 15(2) which rendered relevant the concept of effective.  That is the trial judge on construction.

KIEFEL CJ:   But the use of the word “effective” there is merely to say that it does not actually say that it has this effect.

MR SOLOMON:   We submit to your Honours that “stay of enforcement of a judgment” has a technical legal meaning.

KIEFEL CJ:   Yes, I appreciate that.

NETTLE J:   “Stay of execution” has a technical legal meaning.  Does “stay of enforcement of a judgment” have a technical legal meaning?

MR SOLOMON:   “Stay of enforcement” has a technical legal meaning if your Honour is not persuaded that the whole collocation does.

GAGELER J: You said that section 15(2) had to be interpreted by reference to its text, context and purpose.

MR SOLOMON:   Yes.

GAGELER J:   I do not think we have heard anything from you about purpose.

MR SOLOMON:   Yes.  Let me come to Justice Santamaria and then I will turn immediately, Justice Gageler, to your Honour’s question.  Is that convenient?

GAGELER J:   Of course.

MR SOLOMON: Mr Ciolek is going to stand up and pull at me if, after dealing with Justice Santamaria, I do not do that. Justice Santamaria, in paragraph 178, accurately identified that on appeal the relevant question was the proper construction of subsection (2) of section 15. His Honour then approached that and had concluded against us by paragraph 201. The conclusion against us included – I am not meaning to do a disservice – it included all of that but part of that was this. First of all, his Honour relies on section 6(6) of the Foreign Judgments Act. Justice Nettle noticed that and raised a question in respect of it earlier today. It might be thought that, if one is looking for equivalence of assistance in the first part of the Act, section 8(1) of the Foreign Judgments Act, which speaks of a stay of enforcement of a registered judgment, would contextually better assist in construing section 15. In any event, section 6(6) involves considerations where countries overseas are registered, relevantly, by which I mean included in the regulations, which the Czech Republic is not.

His Honour’s evaluation of the constructional question really begins at 189.  His Honour does two things; first of all, reasons why a stay of enforcement may include a stay affected by statute.  We put below, and continue to put, that it speaks to a judicially ordered stay, but that distinction may not matter much because it is not a proposition of construction either, it is just a part of our argument that his Honour rejected.  In looking to see why his Honour determined that 58(3)(a) comprised a stay of enforcement, the relevant evaluation, as I said, to paragraphs 194 to 199, his Honour does at least these things.  He says the term “any” is relevantly encompassing but I have tried – I am not sure what word would neatly be deployed other than “any” ‑ ‑ ‑

NETTLE J:   “An” I suppose.

MR SOLOMON:   I suppose so.  I tried that.  “Any” works better, I think, with respect.  Let me withdraw what I think.  “Any”, we submit, does not amplify or expand another choice of language.  The real point against us is the point in 198 and 199:

courts have referred to the operation of s 58(3) of the Bankruptcy Act . . . as imposing a stay.

The dissenting judge, Justice Santamaria, refers to Foots and, reasonably evaluated, neither paragraph 15 nor paragraph 67 in Foots characterised 58(3)(a) as a stay.  At 201, his Honour concludes against a feature of our argument below, that it is:

all stays howsoever imposed by law –

We respectfully submit that that is just the middle of the inquiry.  His Honour nowhere further elaborates upon why it is reasoned that 58(3)(a) falls within 15(2).  Can I hold you, Justice Gageler, just for one moment, I want to do another point and then I will come to purpose. 

Assume that a plaintiff sues three defendants, each jointly liable for a debt, or under a guarantee or if it were not a tort in a conspiracy.  The judgment of the court will be entered against the three defendants.  Judgment for the plaintiff – defendants ordered to pay $400,000 and there might be contribution between them.  One judgment debtor files a bankruptcy petition.  The statutory provision looks to a judgment.  It is a defined term. 

One needs to do a degree of violence to identify my scenario as three judgments.    Assuming it comprises a judgment, there could be no certificate for any – in respect of any judgment debtor, the one in bankruptcy or the other two.  It is in a way the equivalent point to – withdraw that.  That proposition – withdraw that, too.  So that on the case against us, upon the bankruptcy of one judgment debtor, the certificate cannot be issued against a solvent judgment debtor with overseas property.

NETTLE J:   But it would not be in respect of a provable debt that you would proceed against the two solvent debtors, would it? 

MR SOLOMON:   The statutory provision in 15(1) speaks of a certificate in respect of the judgment, and so ‑ ‑ ‑

NETTLE J:   The judgment that you would, assuming you wanted a solvent – I beg your pardon – that you are pursuing the two solvent debtors.

MR SOLOMON:   Yes.

NETTLE J:   The judgment that you would seek to have registered would be the judgment and it would be unaffected as against either of those debtors by 58(3).

MR SOLOMON:   Well, that is the answer to the point; it would require for it to be accurate that the Prothonotary would be expected in respect of the same judgment to provide a certificate which if, for example, all three debtors asked for it, was proffered to two of them in respect of the same judgment.  It might be that there is nothing in the point and that your Honour can construe judgment so that in a relevant sense it delineates between the different judgment debtors.  But the definition of “judgment” in the Foreign Judgments Act does not neatly permit that.

I, as twice promised, turn to purpose. The purpose of section 15(2) is to permit or to create a formal attestation by the court directed to foreign bodies and foreign officials who, as appears to be the case in these circumstances, seek that authenticity and authority from the court of the place where the judgment was obtained.

GORDON J:   Is that any more or any different to what Justice Santamaria said at paragraph 199?

MR SOLOMON:   As I framed it, it might be seen as slightly narrower.  One of the consequences of the point put against us is that a certificate intended to be deployed generally, as this one is, loses its – I withdraw that – is amenable to being declared always invalid after it is used and after the event, the more that stay of enforcement of the judgment comprehends circumstances spoken of in other legislation, federal or State, or otherwise comprehends effective stays or functional stays or other circumstances like a stay.  It loses the capacity usefully and accurately formally to attest to a judgment for another place, the more it is amenable to a challenge of this type.  That is the fifth topic.

Lastly, can I briefly say some things in response to point 7 in our learned friend’s proposition document, just two or three things.  Firstly, the certification obviously does not and cannot and here will not enable a judgment creditor to do something absolutely prohibited.  So that it is not really that the point put against us was a tension point, at least in oral argument, although there is a feature of that in paragraph 57 in the written outline against us.  But we submit that there is not reasonably a tension.  We are absolutely barred by paragraph (a) and it is not contended against us in this Court that we have done or are doing or are intending to do anything inconsistent with that absolute bar.  Your Honours have the order of Justice North in the Federal Court in the relevant transcript as well.

Second, it may be apprehended generally and it may further be apprehended in this matter why a judgment creditor in a circumstance where the judgments become a provable debt might want a judgment recognised in a foreign place.  I could stand here and posit hypothetical examples but it looks like there is a real one. 

In 2009, in advance of the bankruptcy, there was entered into a donation agreement between the bankrupt on the one part and two of his sons on the other.  It does no violence whatsoever to the bankruptcy provisions if it transpires that the recognition of the judgment is relevant in respect of that proceeding insofar as the proceeding may have the consequence of plumping up, making larger, the bankrupt’s estate.  The gifted properties may be remitted to it. 

In any event, it is not this case that usefully tests recognition, it is any case and for a certificate to be deployed overseas only for the purposes of recognition can be countenanced as useful or potentially useful and in no way subverts any of the aims of bankruptcy captured, for example, in the various judgments set out in Fraser.

KIEFEL CJ:   At paragraph 32 of your written submissions, it is said that if it was apprehended that a judgment creditor intended to enforce a judgment debt against the foreign property of a bankrupt an injunction could issue.

MR SOLOMON:   Yes, under section 30 we said.

KIEFEL CJ:   Presumably at the suit of the trustee in bankruptcy.

MR SOLOMON:   At least at the suit of the trustee in bankruptcy. 

KIEFEL CJ:   Yes.

MR SOLOMON:   But, in any event, the certificate and the obtaining of it does not end run 58(3)(a).  It does not operate behind it.  The absolute bar is maintained.  If the certificate can be deployed usefully for recognition or otherwise, that is consonant with bankruptcy law and in the event in this case it can be used for the repatriation of properties to the bankrupt estate it positively assists in relation to the regime established under bankruptcy law.

NETTLE J:   But given that it is a money judgment and must always be so, how would registration or recognition of it in a foreign land assist in that way?

MR SOLOMON:   I realise this is a non‑answer, but the answer to your Honour’s question is that in the trial judgment, at various places, it is submitted that recognising the judgment is relevant for the donation proceeding.  Why that is is a matter of Czech law.  The record does not further assist, as my learned friend observed this morning on that.

GAGELER J:   Does the Cross‑Border Insolvency Act have anything to say about that scenario?

MR SOLOMON:   I do not know the answer to that question, but the legislation is referred to in Justice Santamaria’s footnote as being another example of legislation that might be said functionally to comprise a stay but I am afraid I cannot assist your Honour further on that question.  Subject to any further questions, those are the submissions of the first to third respondents.

KIEFEL CJ:   Yes, Mr Walker, anything in reply?

MR WALKER:   Briefly, your Honours.  In relation to paragraph 3 of our friends’ outline and the address with respect to it, of course the word “enforcement” is different from “operation” and thus a stay of one or the other is in a sense different, however relevantly the operation of a judgment at the stage that has been reached in these proceedings is that it may be enforced.  There is no relevant difference at all, with respect.

KEANE J:   What about a case of set‑off?

MR WALKER:   Well, that is another way in which a judgment may operate.

KEANE J:   But it is not being enforced, is it?

MR WALKER:   No, no, quite so.  In this case, however, there is no such possibility.

KEANE J:   But that is this case.

MR WALKER:   That is this case.

KEANE J:   But in terms of the utility of the distinction ‑ ‑ ‑

MR WALKER:   No.  They are plainly different.  One is comprehended within another.  There is no question about that.  They are operating at a different level of generality.  Operation will include, but is certainly not confined to, enforcement, as your Honour points out.  Indeed, one of the operation – that might be in order to signify what it does signify as a judgment upon recognition.  That is another way in which it may operate.

In relation to paragraph 6 of the outline in the address concerning it, in our submission it has not been identified what technical legal meaning the collocation in question has, or to put it another way, where it is used in the statute is technically legal. The question is what does it mean and how does it relate, in particular, to the effect of section 58(3).

Now, there are two parts to subsection (3) of section 58, paragraphs (a) and (b), but they are both expressed by denying competence to a creditor to do something and neither uses the word “stay”. Thus, although with respect my friend is correct concerning the use by way of explanatory paraphrase of the word “stay” in Foots, that those references are in context directed to paragraph (b), not to paragraph (a), there is for the reasons I have just put no difference to be observed.

Each of them concerns the prohibition, prevention or unavailability of a course of action created by the statutory wording that a creditor is not competent to do something.  As to paragraph (b) on that model, it was thought appropriate – I stress it is only an explanatory paraphrase and it certainly was not directed to the section 15 point - but it was thought appropriate in this Court to use the expression “stay”.

NETTLE J:   Does that mean that the criticism that is made of Justice Santamaria’s observation about Foots at paragraph ‑ ‑ ‑

MR WALKER:   Falls away.

NETTLE J:   ‑ ‑ ‑ 99 is wrong?

MR WALKER:   It falls away, yes, because it is true that in context it was not directed at paragraph (a) in Foots.  The reference, for the record, in Foots is 234 CLR 59 at paragraphs 15 and 67. It is quoted by Justice Santamaria, as my friend pointed out, in paragraph 198 of his Honour’s reasons, appeal book 255.

In our submission, there simply is no point to be made against his Honour’s reference to that. There is a limit to how useful it can be. I stress it is not at all a conclusion by this Court by those references that the position in section 58(3) answers the description of “stay”, et cetera in subsection 15(2). It is, however, a useful corrective to what my learned

friend urges by way of a canon of interpretation concerning technical legal language in, with great respect, a forum of technical legal language, namely the High Court.  By way of explanatory paraphrase, the word “stay” was selected, we submit, naturally, to describe what has also been called a bar in 58(3).

In paragraph 7, my learned friends turned to that which is elaborated in their written submissions distinguishing between the direct operation of a stay on an order, the suggestion being that there is something indirect about the operation of a denial of competence to a person.  In our submission, there is no difference of directness or closeness of connection between the nature of the command or prohibition on the one hand and the object of it, either grammatically or in terms of its operation, on the other hand. 

It is really only the difference between these two propositions.  In one form it is expressed as “someone cannot do something”; in another form it is expressed as “something cannot be done by someone”.  In our submission, there is no diminution of directness to be observed in either of those possibilities.  May it please the Court.

KIEFEL CJ:   Thank you, Mr Walker.  The Court reserves its decision in this matter and adjourns until 9.30 am tomorrow for pronouncement of orders and otherwise until 10.15 am.

AT 12.08 PM THE MATTER WAS ADJOURNED