Re Dennis Maher Re Dennis Maher and Official Trustee In Bankruptcy Re Official Trustee In Bankruptcy [1993] FCA 529; (1993) 118 ALR 519 (3 November 1993)

FEDERAL COURT OF AUSTRALIA

Re: DENNIS MAHER
IN THE MATTER OF DENNIS MAHER AND OFFICIAL TRUSTEE IN BANKRUPTCY
IN THE MATTER OF THE OFFICIAL TRUSTEE IN BANKRUPTCY
No. VB1969 of 1991
FED No. 800
Number of pages - 8
Bankruptcy
[1993] FCA 529; (1993) 118 ALR 519

COURT

IN THE FEDERAL COURT OF AUSTRALIA
BANKRUPTCY DISTRICT OF THE STATE BANK OF VICTORIA
GENERAL DIVISION
OLNEY J

CATCHWORDS

Bankruptcy - bankrupt summoned to attend for examination before Registrar pursuant to s 81 - failure to attend - whether Court has power to punish for contempt of court

Bankruptcy Act, ss 5(1), 14, 16, 27(1), 30(5), 31A, 81, 264A, 264C, 264D, 264E

HEARING

MELBOURNE, 10-12 and 15 February 1992
3:11:1993

Mr C. Francis QC and Mr P. Carthorn (instructed by Alwyn Samuel) appeared for the bankrupt.

Mr J. Lenczner (instructed by the Australian Government Solicitor) appeared for the Official Trustee in Bankruptcy.

ORDER

The court orders that:
1. The application of the Official Trustee in Bankruptcy filed

on 21 August 1992 seeking an order to punish the bankrupt
for contempt of court (the contempt applicant) be dismissed.
2. There be no order as to the costs of the contempt application.
3. The Official Trustee in Bankruptcy's costs of the bankrupt's
applications filed on 30 July 1992, 12 August 1992 and 1
October 1992 referred to in paragraphs 1, 2 and 3
respectively of the Order made on 24 February 1993 be taxed
and a sum equal to 85% thereof be paid by the bankrupt.

Note: Settlement and entry of orders is dealt with in rule 124 of the Bankruptcy Rules.

DECISION

OLNEY J On 24 February 1993 I delivered judgment in respect of a number of applications relating to the debtor's bankruptcy which had been heard concurrently over a period of four hearing days earlier in the month.

2. One matter which was not resolved on 24 February 1993 was an application by the Official Trustee in Bankruptcy that the Court punish the bankrupt for contempt. That application had been filed on 21 August 1992 and was heard with the other matters mentioned above. My reasons delivered on 24 February 1993 contain the following comments relating to the contempt application:

The Official Trustee's application filed on 21 August 1992 seeks
the following orders, namely:
1. THAT the Court adjudge that the bankrupt Respondent ('the
bankrupt') is guilty of contempt of the Court in that:
A. Without proper excuse the bankrupt failed and/or
refused to attend before the Registrar of the Court to
be examined pursuant to s 81 of the Bankruptcy Act
1966 on -
(i) 24th July, 1992 at 10.15am and thereafter;
(ii) 31st July, 1992 at 10.15am and thereafter;
(iii) 13th August, 1992 at 10.15am and thereafter;
(iv) 20th August, 1992 at 10.15am and thereafter.
B. The bankrupt has wilfully and/or contumaciously
refused to attend before the Registrar of the Court to
be examined pursuant to s 81 of the Bankruptcy Act 1966 on:
(i) 24th July, 1992 at 10.15am;
(ii) 31st July, 1992 at 10.15am;
(iii) 13th August, 1992 at 10.15am;
(iv) 20th August, 1992 at 10.15am.
C. On -
(i) 13th August, 1992;
(ii) 20th August, 1992;
the bankrupt through his Counsel represented to the
Registrar of the Court that the bankrupt was unable
to attend to be examined pursuant to s 81 of the
Bankruptcy Act 1966 because he was so ill as to be
unable to attend the examination when in fact he was
able to attend at Court.
2. THAT the Court make such Orders as it deems fit in order to
punish the bankrupt for each of the contempts referred to in
paragraph 1A to C hereof and/or to ensure that the bankrupt
attend such examinations pursuant to s 81 of the Bankruptcy
Act 1966.
3. SUCH further and other Orders as may be just.
By reason of events subsequent to the application, a summary of
which appears earlier in these reasons, the Official Trustee does
not now seek an order that the bankrupt attend for
examination pursuant to s 81 of the Act.
In the course of argument I invited counsel for the Official
Trustee to identify the basis of the Court's jurisdiction to
punish for contempt in a case like this and I was referred to s 31
of the Federal Court Act and ss 264A(2) of the Bankruptcy Act.
I do not propose to canvass those provisions in detail except to
observe that the effect of s 31 of the Federal Court Act is that
the Court has the same power to punish contempts of its power and
authority as was possessed by the Supreme Court of Judicature in
England at the commencement of the Judicature Act 1903.
It cannot be doubted that the power to punish contempts extends to
circumstances in which a judgment or order of the Court has not
been obeyed, nor that it is a contempt to wilfully fail to respond
to a subpoena ad testificandum or subpoena duces tecum, but I
remain to be convinced that a summons issued pursuant to s 81 of
the Bankruptcy Act can properly be so described. Nor am I
convinced that ss 264A(2) elevates a summons to attend to the
status of a subpoena.
These issues have not been adequately addressed during the
proceedings and as they go to the very basis of the Court's
authority in the matter I prefer not to express any opinion
without first affording counsel the opportunity to make submissions.
Accordingly, my decision in respect of the contempt application
will remain reserved. I invite the Official Trustee to furnish to
the Court and the bankrupt's legal advisers any submissions he may
wish to make in writing within 14 days from this date. In the
event that the Official Trustee furnishes any such submissions,
the bankrupt will be entitled to make written submissions in reply
within 14 days of receiving same. In the event that the Official
Trustee does not make any submissions within the 14 day period,
the bankrupt will be entitled to furnish to the Court in writing
any submissions he may desire to make within the following 14 days.

3. The orders made on 24 February 1993 included an order that the contempt application remain reserved until further order. At the same time directions were given in accordance with the final paragraph quoted above.

4. The file in these proceedings has since been required in relation to other pending matters and it was not until 20 October 1993 that my attention was drawn to the fact that on 10 March 1993 the Official Trustee had filed a further submission as to the Court's jurisdiction to adjudge the bankrupt guilty of contempt and that on 24 March 1993 the bankrupt had filed submissions in reply.

5. I propose now to deal with the outstanding application which was reserved on 24 February 1993.

6. The Official Trustee now relies upon s 31 of the Federal Court Act as the sole jurisdictional basis to adjudge a bankrupt guilty of contempt of court for the conduct complained of in the application.

7. To the extent that it is relevant in the present proceedings, s 81 of the Bankruptcy Act provides that the Court or the Registrar may, on the application, inter alia, of the trustee of the estate summon a bankrupt (who is referred to as a relevant person) and any other person who is an examinable person in relation to the bankruptcy, for examination in relation to the bankruptcy (s 81(1)). The summons must require attendance at a specified time and place before the Court or the Registrar or a magistrate to be examined on oath about the bankrupt's examinable affairs (s 81(2)). An examination under the section must be held in public (s 81(2)). The Court, Registrar or magistrate may put, or allow to be put, such questions about the bankrupt or his examinable affairs as the Court, Registrar or magistrate thinks appropriate (s 81(10)) and the person being examined is required to answer all such questions (s 81(11)).

8. The Court, Registrar or magistrate may at any time adjourn the examination either to a fixed date or generally or conclude the examination (s 81(3)). Notes of the examination signed by the person examined and a transcript of the evidence given at the examination may be used in evidence in any proceedings under the Bankruptcy Act in which the examined person is a party and shall be open to inspection by the examined person, the bankrupt, the trustee or a creditor without fee and by any other person on payment of a prescribed fee (s 81(17)).

9. In the present case, the bankrupt was summoned by the Registrar to attend before the Registrar for examination pursuant to s 81. The primary issue for determination is whether failure to attend in response to such a summons is a punishable contempt of Court.

10. Section 264A of the Bankruptcy Act, inter alia, makes it an offence for a relevant person within the meaning of s 81 who has been served with a summons to attend for examination under that section, without reasonable excuse, to fail to attend as required by the summons (s 264A(1)(c), (1A)(a)). But s 264A applies to a variety of other circumstances and it is best that it be quoted in full:

264A(1) This section applies to a person who:
(a) is served, whether before or after the commencement of this
subsection, with a summons under this Act to attend for
examination under a provision of this Act (other than
section 81), or to appear as a witness before the Court, and
is tendered a reasonable sum for expenses; or
(b) is not a relevant person within the meaning of section 81
but is served, whether before or after the commencement of
this section, with a summons to attend for examination under
that section and is tendered a reasonable sum for expenses; or
(c) is a relevant person within the meaning of section 81 and is
served, on or after the commencement of this section, with a
summons to attend for examination under that section.
(1A) A person to whom this section applies must not, after the
commencement of this section, without reasonable excuse:
(a) fail to attend as required by the summons served on the
person; or
(b) fail to appear and report from day to day, unless excused or
released from further attendance by the Court, the Registrar
or the magistrate, as the case may be.
Penalty: Imprisonment for 6 months.
(2) Nothing in this section limits the power of the Court to
punish persons for contempt of court, but a person shall not be
punished under this section and for contempt of court in respect
of the same act or omission.

11. The Official Trustee does not rely upon this section as the basis of the claimed jurisdiction to punish for contempt for failure to appear in answer to a summons issued pursuant to s 81 but appears to draw some comfort from ss (2) as confirmation that such a failure does in fact amount to a contempt of court. However, at its highest ss (2) only preserves any existing power to punish for contempt and any argument based on its provisions could never lead to a resolution of the question of whether a failure to attend before a Registrar in answer to a summons issued by a Registrar pursuant to s 81 amounts to a contempt of court.

12. Apart from s 264A, the conduct encompassed by s 264A(1)(a) namely the failure to attend without reasonable excuse in answer to a summons under the Act to appear as a witness before the Court, and the failure to appear and report from day to day unless excused or released from further attendance by the Court, would most likely be regarded as conduct capable of amounting to a contempt of the Court and be punishable accordingly. Subsection (2) of s 264A preserves any such power of punishment that the Court may have, notwithstanding that the same conduct may amount to a statutory offence, provided that an offender is not liable to punishment twice for the same conduct. And it may well be that failure to attend before the Court in answer to a summons under s 81 also amounts to a contempt of court although different considerations may apply in such a case in which the function of the Court would appear to not have the usual incidents of the exercise of judicial power. It is however unnecessary to explore that issue further in the present context. Sufficient to say that ss (2) has relevance in the context of s 264A without it in any way amounting to a recognition that a failure to attend before the Registrar in answer to a summons under s 81 amounts to a contempt of court.

13. The Bankruptcy Act does specifically address the issue of contempt of Court, albeit in a very limited way. For example the following conduct is by virtue of the respective subsections shown in parenthesis, punishable as contempt of court:

* the failure by a bankrupt to file a statement of affairs (s
54(3)).
* the taking of action to attach a debt due to a debtor after
receiving notice of the presentation of a petition against
the debtor (s 118(8)).
* the failure to pay or deliver to a trustee any money or
security pursuant to s 129(4) or (4A) s 129(5)).
* the obtaining by a trustee of an extra benefit contrary to s
165(1) (s 165(2)).

14. The fact that Parliament has thought it necessary to specifically identify the foregoing conduct as amounting to contempt of court suggests that in the absence of such provisions the conduct described would not otherwise be regarded as a contempt. And, it would seem, that apart from leaving unaffected existing powers to punish for contempt of court, that is the limit of the legislative intrusion into the field.

15. Sections 264C and 264D create other statutory offences in relation to a person appearing before the Court, the Registrar or a magistrate for the purpose of being examined under the Act. In the one case (s 264C), the offences are the refusal or failure to be sworn (or make an affirmation), to answer a question the person is required to answer and to produce any books the person is required to produce. In the other case (s 264D), it is an offence if the person being examined is guilty of prevarication or evasion. In each case the power of the Court to punish for contempt of court is preserved in terms similar to s 246A(2).

16. Section 264E also creates offences in relation to conduct affecting the examination of a person pursuant to s 81. The section provides:

264E A person shall not -
(a) insult or disturb a Registrar or magistrate before whom an
examination under this Act is being held;
(b) interrupt an examination under this Act before a Registrar
or magistrate;
(c) create a disturbance, or take part in creating or continuing
a disturbance, in or near a place where an examination under
this Act is being held before a Registrar or magistrate;
(d) use insulting or threatening language towards a Registrar or
magistrate before whom an examination under this Act is
being held; or
(e) by writing or speech use words calculated -
(i) to influence improperly a Registrar or magistrate
before whom an examination under this Act is being
held; or
(ii) to bring a Registrar or magistrate before whom an
examination under this Act is being held into disrepute.
Penalty: $1,000 or imprisonment for 6 months, or both.

17. Three points can be made concerning s 264E. First, it deals with conduct committed in relation to the exercise of functions under the Act by the Registrar or a magistrate but not the Court; second, the conduct proscribed is conduct which if engaged in before or in relation to proceedings before the Court, would amount to contempt of court; third, it contains no provision similar to ss (2) of s 264A, 264C and 264D. In these circumstances, it would be open as a matter of ordinary statutory construction to conclude that Parliament did not regard the Registrar or a magistrate exercising the function of conducting an examination under the Act as having the power to punish for contempt of court.

18. It is appropriate to turn now to examine the role and status of the Registrar.

19. There is a clear distinction in the Act between the Court and the Registrar.

20. The term "the Court" is defined in s 5(1) to mean a court having jurisdiction in bankruptcy under the Bankruptcy Act, such courts being the Federal Court of Australia and the six State Supreme Courts and the Supreme Court of the Northern Territory (s 27(1)). Each of these courts is a creature of relevant Federal, State or Territory legislation and owes nothing to the Bankruptcy Act for its existence. The Registrar in Bankruptcy is not by virtue of any of the Acts creating the several courts, an officer of those courts.

21. In the Bankruptcy Act, the term "Registrar" means a Registrar in Bankruptcy (and includes a person acting as a Registrar). (s 5(1)). Section 14 provides that there shall be for each Bankruptcy District a Registrar in Bankruptcy and such number of Deputy Registrars in Bankruptcy as the Minister determines. Each Registrar and Deputy Registrar has such powers and functions as are conferred or imposed on a Registrar by the Act (s 14(1)). A Registrar or Deputy Registrar may exercise such of the powers and functions of an administrative nature exercisable by the Court as the Court directs or authorises (s 14(3)) and may take evidence in proceedings under the Act either orally or otherwise and administer such oaths as may be necessary in such proceedings (s 14(4)). An order or direction made or given, or an act done by a Registrar or Deputy Registrar under the Act is subject to review on summary applicable to the Court. Each Registrar and Deputy Registrar shall be appointed by the Secretary of the Department (s 16). Clearly the Registrar does not have judicial status. His functions are essentially administrative in nature.

22. There are however occasions when the Registrar may exercise certain powers of the Court delegated pursuant to s 31A but the present matter is not concerned with the exercise of power pursuant to s 31A. The function to examine a person in relation to a bankruptcy is specifically conferred upon the Registrar by s 81.

23. The conducting of an examination pursuant to s 81 does not involve the exercise of court-like powers. No decision is called for nor are the rights of any persons capable of being affected. Section 81 does empower the Registrar to order a person to pay money to the trustee (s 81(12)) and to order a person to deliver up property to the trustee (s 81(13)) but in each case the power arises only when the person concerned admits that he is indebted to the bankrupt or is in possession of property of the bankrupt. Enforcement of any such order made by the Registrar would be by way of application to the Court pursuant to s 30(5) and in those circumstances although the Court has power to commit the person in default to prison, the failure to comply with the Registrar's order is not said to be a contempt of court. Section 30(5), so far as relevant, applies in the case of the failure to comply with an order or direction of the Registrar. A summons issued pursuant to s 81 does not in my opinion fit within the concept of either an order or direction, and the Official Trustee does not rely upon s 30(5) as the basis of jurisdiction in this matter. In my opinion the following passage extracted from the current edition of Australian Bankruptcy Law and Practice (McDonald Henry and Meek) (para 362) is an accurate statement of the legal status of law in relation to an examination by the Registrar pursuant to s 81:

The scheme of the Act is to constitute the registrar as a tribunal
quite apart from the Court and he is not, qua Registrar in
Bankruptcy, an officer of the Court. There can be no doubt that
an examination under this section is an administrative function
properly exercisable by a registrar who cannot be invested with
judicial power. Section 5 defines a magistrate as a magistrate
of a State, being a person in respect of whom an arrangement under
s 17B(1) applies, a person holding office as a magistrate of the
Northern Territory or a person holding office as a magistrate of a
Commonwealth Territory (other than the Northern Territory).
Section 17B allows the Governor-General to make arrangements with
the State Governors or with the Northern Territory Administrator
for the performance by a magistrate of functions under this Act.
The Australian Parliament cannot invest a State court with power
other than judicial power (Queen Victoria Memorial Hospital v
Thornton [1953] HCA 11; (1953 87 CLR 144) but here it would seem that the
magistrate is given the power as a "persona designata" "who with
his own consent and that of the State may be detached from the
Court to which he belongs and used for particular purposes": ibid
at 152. Although the examination of a relevant or examinable
person is a function which traditionally under English, State and
previous Australian legislation has been given to the Court, it is
not so now, nor it is submitted, is it necessarily incidental in
the scheme of this Act to the powers of the Court. If this is
so, there could be some reason to doubt the constitutional
propriety of provisions in this section for the holding of
examinations or the adjournment of them to be held before the
Court.

24. As a matter of statutory interpretation there are compelling reasons to conclude that Parliament did not intend that the failure of a person summoned under s 81 to attend before a Registrar to be examined should be punishable as contempt of court. I have not been referred to any authority which compels a contrary view. No purpose would be served by canvassing the judicial decisions which are said to be analogous as in each case the analogy breaks when the specific provisions of the Bankruptcy Act are taken into account.

25. In my opinion the application presently before the Court cannot succeed on the ground that the Court lacks jurisdiction to grant the relief sought. The application will be dismissed.