Bond v George A Bond & Co Ltd [1930] HCA 24; (1930) 44 CLR 11 (15 August 1930)

Bond Applicant, Appellant; and George A. Bond and Company Limited Respondent, Respondent.

Bond Respondent, Appellant; and George A. Bond and Company Limited and Bond's Industries Limited Petitioners, Respondents.

On appeal from the Court of Bankruptcy, District of New South Wales and the Territory for the Seat of Government.

These are appeals against two orders made by the Supreme Court of New South Wales under the style of "the Court of Bankruptcy, District of the State of New South Wales and the Territory for the Seat of Government." The first of these orders, which was made by Maxwell A.J., dismissed an application by the appellant to set aside a bankruptcy notice which had been issued against him. The second, which was made by Long Innes J. is a sequestration order founded upon the appellant's failure to comply with the bankruptcy notice. The appeals turn upon the question whether the bankruptcy notice was valid, and was effectual to give rise to an act of bankruptcy.

The notice followed the form prescribed by rule 137 of the Bankruptcy Rules 1928 (S.R. 1928, No. 8). It was entitled "In the Court of Bankruptcy, District of the State of New South Wales and the Territory for the Seat of Government." The notice was expressed to be "By the Court," and to have been issued under the authority of "N. C. Lockhart, Registrar." It was dated 9th January 1930. Mr. Lockhart is a State officer who had been appointed before the passing of the Bankruptcy Act 1929 under an arrangement made as in pursuance of sec. 78 of the Commonwealth Public Service Act 1922-1928 to execute the duties of Registrar in Bankruptcy of the District of New South Wales. This means that de facto he was appointed Registrar in Bankruptcy as under the Bankruptcy Act 1924-1928, which in the Bankruptcy Act 1929 is called the Principal Act. Sec. 7 of the Bankruptcy Act 1929 provides "any appointment of a person as Registrar in Bankruptcy made or purporting to have been made under the Principal Act shall be, and be deemed to have been, as valid and effectual as if it had been made under that Act as amended by this Act."

The Bankruptcy Act 1929 was passed in consequence of the decision of this Court in Le Mesurier v. Connor[1]. In that case the majority of the Court considered that secs. 12 (5), 23 and 24 of the Bankruptcy Act 1924-1928 were interdependent provisions, and that they made it plain that the Registrar was to form part of the organization of the Court and was to exercise his powers and functions, whether derived directly from the statute, or from the authority of the Court, as its officer and in the administration of its jurisdiction. Adopting this view of these provisions, the majority of the Court held that they were nugatory in relation to the Courts of the States, and that a person appointed as under them had no authority to issue a bankruptcy notice. The Bankruptcy Act 1929 amended sec. 12 (5) of the Principal Act as from its commencement, so that it now provides that "the Registrars and Deputy Registrars shall be controlled by the Court and shall have such duties as the Attorney-General directs or as are prescribed." The Bankruptcy Act 1929 repealed sec. 23, and substituted the following: "23. The Registrar may exercise such of the powers, duties and functions of an administrative nature exercisable by the Court as the Court directs or authorizes him to exercise." It amended sub-sec. 1 of sec. 24 so that authority in respect of the subjects which it enumerated is conferred upon the Registrar in the following terms: "Subject to rules, a Registrar may exercise in addition to the powers, duties and functions which the Court under the provisions of this Act may direct or authorize him to exercise, the following powers, duties and functions." It amended sub-sec. 2 of sec. 24 so that instead of requiring that the orders and acts of a Registrar should be deemed the orders and acts of the Court, that sub-section now provides that they should be as valid and as effectual to all intents and purposes and may be enforced as if they were orders or acts of the Court. Immediately after these amendments were made, three Judges of the Supreme Court of New South Wales authorized Mr. Lockhart as Registrar in Bankruptcy to issue bankruptcy notices. The question is whether these provisions, or any of them, together with this authority, suffice to enable the issue of the bankruptcy notice against the appellant.

The provisions of secs. 12 (5), 23 and 24 as amended are now attacked as ultra vires upon the ground that they do no more than repeat in other language the substance of the enactment contained in these sections before they were amended, and therefore remain open to the objection which the majority of the Court in Le Mesurier v. Connor[2] thought fatal to them. In the case of sec. 24 there is much to be said, no doubt, for the view that its provisions are ultra vires, because they are an attempt, however disguised, to authorize the Registrar to exercise powers which belong to the Court and to attach to his acts and orders the same efficacy and the same consequences as the law gives to judicial acts and orders. But sec. 12 (5) appears to have been amended for the purpose of changing entirely the Registrar's relation to the Court. It is not easy to get a clear appreciation of the meaning and legal effect of the indefinite expression "controlled by the Court," but it seems to amount to no more than requiring the Registrar to comply with the Court's orders and directions. Instead of forming part of its official system and exercising the authority of an office in the Court, the Registrar is now to be a stranger to the Court and its organization. But the Registrar is, nevertheless, to be amenable to the Court's orders and directions, if it choose to give him any. The purpose of the amendment of sec. 12 (5) and of sec. 23 appears to have been to put the Registrar at the disposal of the Court as a person bound by law to comply with its requirements. Such a scheme has the strange result of making the office of Registrar in Bankruptcy, an office which, in spite of its name, is not attached to a Court at all. Unlikely as otherwise it might seem that the Legislature should mean that there should be Registrars who did not belong to Courts, it must yet be remembered that sec. 12 (2) of the Bankruptcy Act 1924-1928, when it constituted the Registrars in Bankruptcy, did so not in respect of Courts, but in respect of Districts. Moreover, the amendments were evidently drawn to remove the vice found in the provisions to be amended, and it must have been plain that this could not be done if, either in substance or in form, the Registrar were given an official position in a State Court. When it appeared that it was beyond the power of the Parliament to make the Registrar an officer of State Courts exercising the authority and jurisdiction of those Courts, it seems to have been thought that it was possible at least to utilize that official for the purpose of executing such commands and exercising such authority as the Courts might lay upon or commit to him. If this be the true meaning of the amendment made in sec. 12 (5), it appears to follow that its provisions and those of sec. 24 are no longer mutually interdependent, as in their previous form they were held to be. The intention to subject the Registrar to this kind of judicial "control" is not dependent upon the intention disclosed by sec. 24 to give him powers of his own. The former intention can be completely effectuated, although the latter is frustrated. If, therefore, sec. 24 be invalid, the validity of sec. 12 (5) would not be affected. The vague and untechnical language of sec. 23 as it now stands, gives rise to some difficulty. What are the Court's "powers, duties and functions of an administrative nature"? The phrase includes, of course, all strictly ministerial acts. But how much further does it extend?

Much of the judicial power which the Parliament can vest in Courts alone might, in bankruptcy matters, be described as administrative in one sense; and it is not settled that the Parliament can authorize Courts to delegate any part of what is strictly judicial power. But it is apparent that the vague expression "of an administrative nature" has been employed in order to exclude from the power of delegation conferred by sec. 23 those powers, duties and functions which, because of their judicial character, might be considered incapable of such delegation. It is clear, too, that the provision is distributive and means to give a power to delegate every separate duty or function which its language comprehends irrespective of the others.

If, then, as may be the case, such a provision would be invalid if it dealt with anything but strictly ministerial functions, there seems no reason why sec. 23, first should be interpreted as extending beyond such functions, and then should be invalidated in toto for so extending. The issue of the bankruptcy notice for the purpose of secs. 52 (j) and 53 is entirely ministerial, and it is therefore unnecessary, having regard to what has been already said, to consider whether Parliament could enable the Court to authorize a stranger to its organization to perform on its behalf any act of another character. But a law enabling the Court in Bankruptcy to authorize the performance of a ministerial act by a Federal officer, and requiring him to perform it when so authorized, is a law made with respect to bankruptcy. Such a law is, therefore, authorized by sec. 51 (XVII.) of the Constitution, unless sec. 77 has the effect of excluding such a matter from the operation of that placitum. But none of the reasons given in the judgment of the majority in Le Mesurier v. Connor[3] justifies this restriction of the power to deal with bankruptcy which pl. xvii. would otherwise confer. The restriction upon the application to State Courts of the general powers of the Parliament to legislate with respect to the enumerated subjects of legislative power arises from the position of State Courts as judicial organs of another Government, and from the special provisions contained in Chapter III. of the Constitution describing the powers of the Parliament in relation to them. Sec. 77 (III.) considered with sec. 51 (XVII.) confers ample power upon the Parliament to bestow upon State Courts all powers appropriate to bankruptcy jurisdiction and all authority incidental to the exercise of such powers. Such a legislative power must extend to enabling Courts in their bankruptcy jurisdiction to direct and authorize the performance of ministerial acts. It is for Parliament to determine who shall be under a duty to obey such directions and execute such authority, and it is no objection to an enactment made in the exercise of the legislative power that a novel and unusual method of proceeding results from the choice of persons which Parliament has made.

For these reasons so much of secs. 12 (5) and 23 of the Bankruptcy Act 1924-1929 as enables the State Court exercising Federal jurisdiction in bankruptcy to give directions or authority to the Federal Registrars to perform ministerial acts, and places upon the Registrars an obligation to conform to such directions and execute such authority, is valid. Apart, therefore, from a difficulty which arises under the Bankruptcy Rules 1928, the bankruptcy notice issued by Mr. Lockhart pursuant to the authority conferred upon him by the Judges of the Supreme Court would be effectual. But Division 2 of Part III. of the Bankruptcy Rules 1928 appears at first sight to authorize and require the Registrar to issue bankruptcy notices on behalf of the Court in Bankruptcy upon his own responsibility in virtue of his office. These Rules were, of course, drawn upon the footing of the provisions of the Act 1924-1928 before the amendment of 1929. Since the amendments made by the Act of 1929, the more important of which are retrospective, the Rules must be treated as doing no more than prescribing the form of bankruptcy notice and giving efficacy to it when issued by a Registrar, who, pursuant to an authority conferred upon him by the Court under the amended provisions, has issued it on behalf of the Court. An examination of the language in which the Rules are expressed has discovered nothing inconsistent with this interpretation. It is unnecessary for any purpose now material to consider whether rules 139 (4) and 140 can be supported. It follows from what we have said that the bankruptcy notice in this case was effectual to found an act of bankruptcy.

Our brother Gavan Duffy, having read our judgment, desires us to say that he accepts our statement as to the true scope and effect of the majority judgment in Le Mesurier v. Connor[4], and he agrees with us in thinking that, if the present case is not governed by Le Mesurier's Case, the bankruptcy notice validly operates to found an act of bankruptcy, and the appeals should be dismissed.

Unless this case is governed by the decision of this Court in Le Mesurier v. Connor[5], these appeals ought to be dismissed. The Bankruptcy Act 1924-1928 has been amended to meet that decision, and my brothers Rich and Dixon, who were two of the majority of the members of the Court who decided that case, think that the amendment has achieved its purpose. I am content to accept their view. Consequently, in my opinion, and for reasons which I stated in Le Mesurier v. Connor[6] and need not repeat, the bankruptcy notice and the sequestration order in question on this appeal have been lawfully issued and made.

Solicitor for the Commonwealth, W. H. Sharwood, Crown Solicitor for the Commonwealth.

[1] [1929] HCA 41; (1929) 42 C.L.R. 481.

[2] [1929] HCA 41; (1929) 42 C.L.R. 481.

[3] [1929] HCA 41; (1929) 42 C.L.R. 481.

[4] [1929] HCA 41; (1929) 42 C.L.R. 481.

[5] [1929] HCA 41; (1929) 42 C.L.R. 481.

[6] [1929] HCA 41; (1929) 42 C.L.R. 481.

High Court of Australia

Bond v George A Bond & Co Ltd [1930] HCA 24; (1930) 44 CLR 11 (15 August 1930)

HIGH COURT OF AUSTRALIA