Re Hodgkinson [1947] HCA 27; (1947) 75 CLR 276 (18 August 1947)

HIGH COURT OF AUSTRALIA

Re Hodgkinson, A Bankrupt.

H C of A

18 August 1947

Latham C.J., Rich, Starke, Dixon and McTiernan JJ.

Tonking, for the bankrupt.

Blacket, for the Attorney-General for the Commonwealth, to assist the Court.

The following judgments were delivered:—

Latham C.J.

This special case raises a question of the correct interpretation of s. 219 of the Bankruptcy Act 1924-1946.

There are three sub-sections. The first sub-section provides for a penalty of imprisonment on conviction on indictment in the case of a person guilty of "an offence against this Act in respect of which no special penalty is imposed." That sub-section in respect of such an offence provides a particular penalty; in fact, that sub-section has an application only to an offence under s. 213 of the Act because, in the case of all other sections of the Act creating offences, special penalties are imposed by the Act.

Sub-section (2) deals with an entirely different subject, namely, the limitation of the period within which summary proceedings may be taken. It has no application to proceedings upon indictment. It provides that summary proceedings in respect of "any such offence" shall not be instituted after one year from the first discovery thereof either by the official receiver or by the trustee in the bankruptcy, or in the case of proceedings instituted by a creditor, by the creditor, nor in any case shall they be instituted after three years from the commission of the offence.

The question which arises is whether the words "any such offence" refer to the words "an offence against this Act" in sub-s. (1): or, on the other hand, to the words "an offence against this Act in respect of which no special penalty is imposed by this Act."

The third sub-section deals with still another matter. It is introduced by the words: "In an indictment for an offence under this Act." The sub-section deals with the contents of an indictment.

Accordingly, we have one section with three provisions dealing with three separate subject matters, but all relating to offences against the Act. There is a strong argument that effect should be given to the word "such" by referring it to the nearest antecedent, taking the nearest antecedent to be "an offence against this Act in respect of which no special penalty is imposed by this Act." On the other hand, the same principle could identify the immediately-preceding antecedent as the words "an offence against this Act." But it must be conceded that the words are "any such offence" and not "any offence" or "any offence against this Act." Thus this grammatical argument rather supports the contention that sub-s. (2) applies only in the case of an offence in respect of which no special penalty is imposed.

On the other hand there are considerations pointing in the other direction. Sub-section (1) is expressed in general terms, but it really applies only to offences against s. 213. Sub-section (2) is expressed in general terms and no reason can be suggested for applying the provision as to limitation of time for proceedings only to offences against s. 213. One would not expect to find a limitation provision applying only to s. 213 expressed in general terms, such as we find in s. 219 (2).

These two constructions are open on the words of s. 219 (2). It should be remembered that the sub-section deals with a limitation of proceedings in the case of a criminal offence, and the principle may fairly be applied in a case of doubt that a provision should be given a construction favourable to liberty and favourable, therefore, to giving a wide interpretation to the provision for the benefit of accused persons contained in the sub-section.

Finally, thirteen years ago in the case of Re Leach[1] the provision was construed in this sense, namely, that the words "any such offence" relate to "an offence against this Act" and not to the words "an offence against this Act in respect of which no special penalty is imposed." That decision was given thirteen years ago and it has since been acted upon. The Act has been before Parliament since that time and no amendment has been made.

In my opinion these considerations are sufficient to make it proper to adopt the alternative construction of the section, that is, the construction which regards the words "any such offence" in sub-s. (2) as referring to the antecedent "an offence against this Act" in sub-s. (1).

Accordingly, in my opinion, for these reasons, the question which is submitted should be answered in the affirmative; that is to say, that sub-s. (2) of s. 219 does apply to the summary proceedings against the bankrupt in this case.

Rich J.

I regret that I am quite unable to agree with what the Chief Justice has said. In construing s. 219 of the Bankruptcy Act 1924-1946 the word "such" refers, I think, to the offence in respect of which no special penalty is imposed by the Act and not to all the offences comprehended in Part XIV. of the Act. This construction is in accordance with the ordinary rule of the grammatical construction of the English language that words of relation prima facie refer to the nearest antecedent. It was contended that two decisions had adopted the contrary construction. The first case—Re Leach[2]—is directly on the point, but its reasoning and conclusion do not appeal to me. The second case—Marks v. The King[3]—apparently misses the point and therefore need not be considered. In any event this is not among the class of cases in which courts are reluctant to reconsider old authorities or to upset an interpretation which has been settled so long that people may be supposed to have acted according to it for a considerable time, and on the strength of which many transactions may have been adjusted and rights determined. These considerations do not apply to decisions with respect to the penal provisions of the Bankruptcy Act—provisions which require strict construction. For these reasons I would answer the question submitted in the negative.

Starke J.

I agree with my brother Rich. The question stated should be answered in the negative.

Dixon J.

I agree with the Chief Justice for the reasons given by him.

Section 219 is transcribed from an English original, the construction of which in that context is simple. However, the literal transcription of provisions from other sources creates difficulty. The present difficulty lies in a conflict between rules of grammar and more substantial considerations. I concur with what my brother Rich has said about the rules of grammar affecting the correct literal meaning of s. 219 (2). The whole question is whether we should apply them or whether they should give way to considerations which may be said to go deeper.

I shall not restate the substantial considerations mentioned by the Chief Justice, except to say that they amount to these: s. 219 (2) can have no serious operation if we give effect to the rules of grammar so that it can apply only to one provision, viz., s. 213, whereas on its face it is manifest that it was expressed as applicable to many. Then the liberty of the subject will be restricted in applying the interpretation which grammar favours. Next, there is the decision of Judge Lukin, Re Leach[4] which has stood for fourteen years and must be overthrown if we are to be so strictly grammatical. Finally, we would find it necessary to overrule our decision in Marks v. The King[5]. It may be that in that case we overlooked the point. But apparently we read the section instinctively in the same way as Judge Lukin construed it and I am construing it. We so read it without adverting to the consequences now found to follow from the true grammatical application of the relative "such." Judge Lukin did not overlook them, but, having discovered them, he rejected them. There is much to be said for the view that the legislature did not ever intend them. At all events the reading that was given to the sub-section appears to me to produce a satisfactory and reasonable result and it is better to leave it undisturbed even at the risk of offending grammatical sensibilities.

For these reasons I think the question should be answered in the affirmative.

McTiernan J.

I agree that the question should be answered in the affirmative.

If the strict rule of grammar is to read "such" in s. 219 (2) as applying to the offence described in s. 219 (1) and nothing else, the result would not, I think, be in accordance with the indication of legislative intention as to the scope of s. 219 (2), which, I think, is to be gathered from the whole of Part XIV., of which s. 219 (2) forms part. Reading this sub-section with the rest of Part XIV., I think that "such" should be construed as applying generally to the offences set out in that Part of the Act.

Question answered Yes. No order as to costs.

Solicitors for the bankrupt, H. J. Price & Co.

Solicitor for the Attorney-General, H. F. E. Whitlam, Crown Solicitor for the Commonwealth.

[1] (1933) 6 A.B.C. 281.

[2] (1933) 6 A.B.C. 281.

[3] [1937] HCA 21; (1937) 57 C.L.R. 58.

[4] (1933) 6 A.B.C. 281.

[5] [1937] HCA 21; (1937) 57 C.L.R. 58.