Marks v R [1937] HCA 21; (1937) 57 CLR 58 (14 May 1937)

HIGH COURT OF AUSTRALIA

Marks Appellant; and The King Respondent.

H C of A

On appeal from the Court of Bankruptcy.

14 May 1937

Latham C.J., Dixon, Evatt and McTiernan JJ.

Badham, for the appellant.

Bradley K.C. (with him Jamieson), for the respondent.

Bradley K.C.

Badham, in reply.

The following judgments were delivered:—

Latham C.J.

This is an appeal from a conviction by the Federal Court of Bankruptcy of a bankrupt, William Henry John Marks, after proceedings by way of application for an order of discharge. The learned judge of the Bankruptcy Court acted under sec. 217 of the Bankruptcy Act, and, having reason to believe that the bankrupt had been guilty of offences against the Act which were punishable by imprisonment, made an order that the bankrupt be charged with the offences and be tried summarily. The bankrupt was, in pursuance of that order, charged with two offences—one under sec. 214 of the Act, which provides that if a bankrupt brings about or contributes to his bankruptcy by gambling he shall be guilty of an offence. The bankrupt was charged in these terms, that "during the period between the thirtieth day of June 1934 and the twenty-eighth day of August 1935 at Sydney in the State of New South Wales you being a bankrupt did contribute to your bankruptcy by gambling." The charge was heard by the Federal Court of Bankruptcy and the bankrupt was convicted.

In my opinion, although there is abundant evidence of gambling—and of heavy gambling—there is not evidence that the gambling in this case brought about or contributed to the bankruptcy. There is ample room for suspicion, but the evidence to which we have been referred does not show that any inquiry has been made into the causes of the bankruptcy or the factors contributing to the bankruptcy. The evidence shows a bankruptcy preceded by gambling, but it is quite doubtful upon the evidence, whatever may be suspected, whether there were losses upon the gambling operations or whether there was such neglect of business associated with or due to the gambling as to account for the bankruptcy. Accordingly, in my opinion, there is not evidence which can justify a conviction upon the first charge.

The second charge was made under sec. 209 (g) of the Bankruptcy Act. The section provides that whoever, "being a bankrupt, has omitted to keep such books of account as are usual and proper in the business carried on by him and as sufficiently disclose his business transactions and financial position during any period within the five years immediately preceding the date of his bankruptcy, shall be guilty of an offence." The bankrupt was charged in these terms:—That during the period between the first day of June 1932 and the eighteenth day of November 1935 at Sydney in the State of New South Wales you being a bankrupt did omit to keep such books of account as are usual and proper in the business to wit that of motor-car dealer carried on by you and as sufficiently disclose your business transactions and financial position during the said period being a period within the five years immediately preceding the date of your bankruptcy to wit the eighteenth day of November 1935.

The period referred to in the charge is a period within the five years immediately preceding the date of the bankruptcy. The charge is a charge that during this period, necessarily defined by reference to two points of time, the bankrupt omitted to keep the required books. It is therefore an offence which is being committed either during the whole of the period or on some days during the period. The offence which is charged is an offence which is alleged to begin or to have been committed during the period beginning on 1st June 1932, that is to say, more than three years before the bankruptcy.

Sec. 219 (2) provides that summary proceedings in respect of an offence against the Act shall not be instituted after three years from the commission of the offence. In this case the proceedings were instituted on 10th December 1936. Therefore, as the charge relates to a period beginning on 1st June 1932, the charge is a charge of an omission, alleged to be an offence, which occurred at an earlier date than three years before the institution of the proceedings.

For that reason, this charge, in my opinion, was not properly made. There is, in my opinion, abundant evidence of failure to keep the books required by the section, but it is not possible under the provision of sec. 219 to proceed summarily in respect of an offence which runs back to the date which is mentioned as the beginning of the period in the formal charge.

A question was raised as to the validity of sec. 217. On the view which I take of the facts and the relevant evidence it is not necessary to consider that question.

In my opinion the convictions should be set aside.

Dixon J.

I agree. A charge laid under sec. 214 of the Bankruptcy Act must be strictly proved and by admissible evidence. The proof which may reasonably be expected of a charge under that section of bringing about or contributing to the bankruptcy by gambling includes the circumstances leading up to the bankruptcy. It will not ordinarily be enough to prove gambling or even losses by gambling. For, without some knowledge of the circumstances leading up to the bankruptcy, its various causes cannot be seen. Generally speaking, without knowing what other causes or possible causes there are or may be, it is not possible to be sure that gambling materially contributed to the actual bankruptcy which has occurred. Such proof appears to be lacking in this case, and for that reason, in my opinion, the charge under sec. 214 fails.

Sec. 219 (2) imposes a restriction upon the power of the Court of Bankruptcy to try bankrupts in a summary manner. The restriction requires that the offence shall have been committed within three years from the date of the charge. In the case of a continuing offence, such as that which has been charged under sec. 209 (g), I think that the limitation prevents the offence extending backwards outside the three years. Only so much of the period over which the offence continued as falls within the three years may be made the subject of a charge dealt with summarily.

The conviction in this case is for an offence which extends outside the period of limitation by one year, six months and twenty days. The conviction, therefore, appears to me to be bad on its face and should be quashed.

Evatt J.

I agree. There are two additional points to which I wish to refer. In the first place, the procedure set out in sec. 217 (3) of the Act in reference to the proceedings on a summary trial before the Court of Bankruptcy was not followed. In the second place, the "depositions" were admitted in evidence although a very great portion of them was quite irrelevant to the issues in the case. It is of course evident that charges prosecuted under sec. 217 (1) (a) before the Court of Bankruptcy itself should be dealt with with the same degree of strictness as would be required if the prosecution were being conducted before a judge and jury.

The decision of the court makes it unnecessary to examine the question whether sec. 217 (1) (a) of the Act is valid. By that sub-section, the Commonwealth Parliament has purported to make the Court of Bankruptcy both prosecutor and judge in respect of an offence against the Act. Although the doctrine of separation of powers is only in force to a certain extent under the Commonwealth Constitution (Victorian Stevedoring and General Contracting Co. Pty. Ltd. and Meakes v. Dignan[1]), there are several statements of principle in the cases which might suggest that the valid exercise of the judicial power has been subjected by the Constitution to certain fundamental safeguards. The question need not be further discussed now.

McTiernan J.

In my opinion the conviction on each charge should be set aside. I agree with the reasons which have been given and there does not appear to me to be anything that can be usefully added.

Appeal allowed. Convictions quashed.

Solicitors for the appellant, Creagh & Creagh.

Solicitor for the respondent, H. F. E. Whitlam, Crown Solicitor for the Commonwealth.

[1] [1931] HCA 34; (1931) 46 C.L.R. 73, at p. 118.