Maslen v Official Receiver [1947] HCA 30; (1947) 74 CLR 602 (11 September 1947)

HIGH COURT OF AUSTRALIA

Maslen Respondent, Appellant; and The Official Receiver Applicant, Respondent.

H C of A

On appeal from the Supreme Court of Western Australia.

11 September 1947

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

Seaton K.C. (with him Reilly), for the appellant.

Good, for the respondent.

Reilly, in reply.

The following written judgment was delivered:—

Sept. 11

Latham C.J.,

Rich, Dixon and McTiernan JJ.

This is an appeal from an order of the Supreme Court of Western Australia made by Wolff J. committing the appellant, Edward Robert Maslen, for contempt of court. According to the caption, the order was made in the Court's bankruptcy jurisdiction, and the appeal is brought as of right on that footing. The order imposed upon the appellant punishment consisting of a term of four months' imprisonment and a fine of £100. In default of payment of the fine the order directed that the appellant should be detained for a further term of twelve months commencing with the expiration of the said term of four months. The contempt of which the appellant was thus convicted was described in the order as interfering with the course of justice by attempting to deceive the Court, in that, for the purpose of an application by Samuel Mackomel, a bankrupt, he obtained false receipts from creditors of the bankrupt in respect of payments made by him to the creditors.

The respondent, who is the Official Receiver, took a preliminary objection to the competency of the appeal, which was instituted under s. 26 (2) of the Bankruptcy Act 1924-1946. Section 26 (1) provides that the Court (that is, a Court of Bankruptcy) may review, rescind, or vary any order made by it in its bankruptcy jurisdiction. Then sub-s. (2) goes on to provide that, except where otherwise provided, an order of the Court in a bankruptcy matter shall, at the instance of the Official Receiver or trustee or any person aggrieved, be subject to appeal to the High Court. The objection made on behalf of the respondent is that the order for committal for contempt of court is not "an order of the Court in a bankruptcy matter," within the meaning of sub-s. (2).

The Supreme Court of Western Australia is a court which is invested with federal jurisdiction in bankruptcy by s. 18 (1) (b) of the Bankruptcy Act. Section 20 (1) is in the following terms:—"Every court having jurisdiction in bankruptcy shall have jurisdiction throughout the Commonwealth or within such Districts as the Governor-General by proclamation directs, and shall have the same powers and rights to commit for contempt of Court as belong to the High Court or to the Supreme Court of the State or Territory in which the jurisdiction is being exercised."

The learned judge in summarily convicting the appellant of contempt purported to exercise the federal jurisdiction so conferred. It is objected that an order made against a stranger to the bankruptcy proceedings punishing him for contempt is not an order in a bankruptcy matter. Such an order is, of course, not an order against the bankrupt and it does not affect the administration of the estate of the bankrupt by the Court. The respondent relied upon O'Shea v. O'Shea; Ex parte Tuohy[1], which draws the very obvious distinction between attachment for a criminal contempt and the proceedings in the matter before the court in connection with which the contempt had been committed by the person attached. The respondent also relied upon In re Suffield; Ex parte Brown[2], for the purpose of marking the distinction between matters of bankruptcy and orders of another character made by a court which happens to possess bankruptcy jurisdiction. There a judge of the Queen's Bench Division, having jurisdiction in bankruptcy, made an order under the Solicitors' Act 23 & 24 Vict., c. 107, charging the costs of a solicitor on funds in the hands of a receiver of assets of a partnership. It was held that in making this order the learned judge did not act in the bankruptcy jurisdiction of the court. It is not difficult to see why, for he exercised a special power given to him by the Solicitors' Act.

In the present case, however, the jurisdiction which the learned judge intended to exercise is a jurisdiction given by s. 20 of the Bankruptcy Act, which specifically confers as a matter of federal jurisdiction upon courts having jurisdiction in bankruptcy a power to commit for contempt of court. "Bankruptcy" is defined in s. 4 in the following way:—"Bankruptcy, in relation to jurisdiction or proceedings includes any jurisdiction or proceedings under or by virtue of this Act." The jurisdiction which the Court exercised in making the order for committal was a jurisdiction which was created by s. 20 of the Act. It was therefore a "jurisdiction under or by virtue of this Act" and accordingly the order was an order made in the Court's bankruptcy jurisdiction. Why then is the order not an order in a bankruptcy matter within the meaning of s. 26 (2)? No reason appears for reading sub-s. (2) of s. 26 as giving a right of appeal which does not cover all orders made by a court of bankruptcy in its bankruptcy jurisdiction. The expression "bankruptcy matter" is only another way of saying "matter in bankruptcy" or "matter of the bankruptcy jurisdiction," and that only means "matter forming a proceeding under or by virtue of the Act." The proceedings for committal were proceedings under the Act. The order for committal therefore falls within the description "order made in a bankruptcy matter" as used in s. 26 (2). The preliminary objection is therefore overruled.

The contempt of which Maslen was adjudged guilty is stated in the order to be that he interfered with the course of justice by attempting to deceive the court, in that for the purposes of an application for a discharge by a bankrupt, Samuel Mackomel, he obtained false receipts from creditors of the bankrupt in respect of payments made by him (that is, by Maslen) to the creditors. In the notice of motion for the appellant's committal it was charged that four such receipts were false, namely, "a receipt dated 2nd December 1943 from Benjamin Joseph Surman acknowledging the receipt of the sum of £14 10s. whereas in fact the sum of £10 was paid to the said Benjamin Joseph Surman; a receipt dated 24th July 1944 from Frederick Charles Washing acknowledging the receipt of the sum of £23 17s. 10d. whereas in fact the sum of £70 was paid to the said Frederick Charles Washing; a receipt dated the 3rd July 1946 from Benjamin Joseph Surman acknowledging the receipt of £43 10s. 2d. whereas in fact the sum of £14 was paid to the said Benjamin Joseph Surman; and a receipt dated the 3rd July 1946 from Frederick Charles Washing acknowledging the receipt of the sum of £71 13s. 9d."

[After a statement of the facts the judgment proceeded:]

The total result is that receipts were obtained to show that 5s. in the pound had been paid in 1943 and 1944 and another 15s. in the pound in July 1946, whereas in fact, in the case of Surman, whatever had been paid at the earlier date, much less than 15s. in the pound had been paid in July 1946, and in the case of Washing a great deal more than 5s. in the pound in the first instance had been paid. Thus one at least of the earlier receipts was false and both of the two later receipts were false in the respects stated.

Thus it is proved that documents were deliberately procured by Maslen calculated to mislead the Court if produced to it. We think that some doubt must exist, whether in 1943 and 1944 Maslen really contemplated the production of the receipts for 5s. in the pound to the court as distinguished from other creditors and the Official Receiver. But no such doubt can be entertained as to the two later receipts. Of these no satisfactory explanation was attempted by Maslen. The payments made by him to the creditors were not recorded in his books, though the receipt for £110 from Mrs. Mackomel to enable him to purchase the debts owned by Mackomel was recorded. When he was visited by an investigating officer he attempted to destroy a memorandum which would assist the investigating officers.

It is not easy to see that Maslen had any purpose of personal gain in view. Though he does not seem to have accounted fully to Mrs. Mackomel, the evidence does not justify an inference that he was in any way guided by a desire to profit from the Mackomels. It has been argued on Maslen's behalf that the substance of the transaction, taken as a whole, was that the moneys represented to have been paid were in fact paid, and that it was really immaterial whether Maslen on account of Mackomel or Mrs. Mackomel paid a dividend to Surman and paid Washing in full, or whether he purchased both of their debts. But that overlooks the important fact that it was intended to represent that 5s. in the pound had been paid to the creditors in the first instance and 15s. afterwards in order to comply with the judge's expression of opinion. The purpose of the receipts was to support that untrue picture of the facts and at least two of them were intended to deceive the court when they were prepared. How important might be the facts about which the deception was practised is a question that cannot affect the conclusion.

It has been argued for the appellant that the learned judge proceeded on a wrong principle in dealing with the matter on a motion to commit for contempt and that he should have left the matter to be dealt with on indictment. In fact proceedings for indictment for contempt of court have not been instituted for very many years, but there is no doubt that such proceedings are available. Many warnings have been addressed to judges by courts and by legal writers emphasising the arbitrary nature of the power to commit for contempt and, in particular, warning the members of judicial tribunals that they should act with care and circumspection, particularly in matters where their own dignity is concerned and where they might be thought to be in effect prosecutors in the proceedings. It may be conceded that the summary jurisdiction is properly exercisable for the purpose only of repressing interferences with the course of justice, which, because of their nature or tendency, call for intervention by the court. The reason for its existence is not so much the punishment of crime as the protection of the administration of justice. In the present case, however, a definite attempt to practise or support a deception upon the court in a pending proceeding was made and presumptive evidence of it came under the learned judge's notice. It was in our opinion in accordance with principle for the court at once to entertain a motion to commit. We see no reason why his Honour should not exercise the jurisdiction specifically conferred upon him by s. 20 of the Bankruptcy Act.

A further objection was made relating to the reception and use of evidence. In the application for committal an affidavit was sworn by a shorthand-typist to which was exhibited a transcript of the proceedings on the adjourned application of Mackomel for his certificate of discharge on 23rd December 1946. Before this Court it was contended that the transcript was inadmissible. Maslen was not a party to the proceedings on 23rd December 1946. Evidence given on that occasion is plainly not admissible in the proceedings against him in proof of the facts to which the witnesses then deposed. But in summary proceedings of this character it is open to the parties to waive the strict rules of evidence and to allow depositions to be used. No objection was made to the admission of the transcript, which in fact was not referred to during the hearing. Further, counsel for the respondent to the motion made it clear that he desired that no witnesses should be called except Surman and Washing, and that he treated the motion as based otherwise on the affidavits and exhibits. In these circumstances we think that the appellant cannot complain here that the transcript was before the judge. The learned trial judge, in his reasons for judgment, refers to some suspicion that Mackomel's wife was dummying for Mackomel, and counsel urged that the learned judge could have formed this suspicion only as a result of evidence in prior proceedings to which Maslen was not a party. But, even if that were the case, the forming of a suspicion as to the capacity in which Mrs. Mackomel carried on business had no real bearing on the question whether or not Maslen had been guilty of contempt of court, and it cannot afford to the appellant a ground for attacking the order.

We think that there was an interference with the course of justice by the appellant and that no ground appears for setting aside his conviction for contempt. But we have not in all respects taken exactly the same view of the facts as the learned judge. For instance, we think that there is sufficient doubt about the intention of the appellant to deceive the court with the two earlier receipts, however reprehensible his conduct in procuring them for the deception of creditors and others may have been, to make it proper to confine the finding of contempt to the two later receipts. Again, we do not think that it would be safe to conclude that he was actuated by any other motive than a desire to secure for the bankrupt a discharge with as little expenditure of Mrs. Mackomel's money as might be. In these circumstances we think that we are entitled to reconsider the punishment imposed by the order on the appellant and that we should do so. Maslen has already served some fourteen days in prison. To send him back to gaol for the balance of the term in addition to fining him £100 is to inflict a punishment of some severity. The period of imprisonment which he has already served and the payment of the fine and of the costs of the motion and of this appeal should provide a punishment adequate to the occasion. We think that justice will be done if the term of imprisonment is reduced to fourteen days' imprisonment, which has already been served. The order should remain unchanged so far as the fine of £100 is concerned, but the appellant should have another fourteen days to pay the fine. Otherwise the appeal should be dismissed with costs. The order will be as follows:—Vary the order of the Supreme Court dated 30th April 1947 by substituting fourteen days for four months. Stay the order for fourteen days from this date. Otherwise confirm the order and dismiss the appeal with costs.

Vary the order of the Supreme Court dated 30th April 1947 by substituting fourteen days for four months. Stay the order for fourteen days from this date. Otherwise confirm the order and dismiss the appeal with costs.

Solicitors for the appellant, Dwyer & Thomas.

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

[1] (1890) 15 P.D. 59.

[2] (1888) 20 Q.B.D. 693.