Calegeros v Attorney-General (Cth) [1953] HCA 57; (1953) 88 CLR 41 (11 September 1953)

HIGH COURT OF AUSTRALIA

CALEGEROS v. ATTORNEY-GENERAL FOR THE COMMONWEALTH OF AUSTRALIA [1953] HCA 57; (1953) 88 CLR 41

Bankruptcy

High Court of Australia
Williams(1), Webb(1) and Taylor(1) JJ.

CATCHWORDS

Bankruptcy - Sequestration order - Bankrupt - Failure to make full discovery - "All his property" - "Fully and truly discover" - Obligation of bankrupt - Intent to defraud creditors - Public examination - Omission to discover property - Depositions - Bankruptcy Act 1924-1950 (No. 37 of 1924 - No. 80 of 1950), ss. 68, 210 (1) (a)*, (6).

HEARING

Sydney, 1953, August 27; September 11. 11:9:1953
APPEAL from the Court of Bankruptcy.

DECISION

September 11.
THE COURT delivered the following written judgment: -
The abovenamed appellant was charged under s. 210 (1) (a) of the Bankruptcy made on 18th February 1952, he did not to the best of his knowledge and belief fully and truly discover to the trustee of his estate the sum of 4,050 pounds being part of a sum of 4,500 pounds in cash withdrawn by him from his banks and when how and to whom and for what consideration he disposed of such sum. At the conclusion of the hearing Clyne J. found the appellant guilty of the offence charged and sentenced him to imprisonment for a period of three months. (at p47)

2. It is from this conviction and sentence that the appeal is brought but before referring to the grounds which have been argued on the appellant's behalf it is desirable to refer to the circumstances which gave rise to the charge. (at p47)

3. As appears from the terms of the charge the sequestration order which was made against the appellant was made on 18th February 1952, and this order was made on a petition presented on 30th January 1952. At the commencement of the hearing of the charge against the appellant his counsel sought particulars and in response to this application the Court was informed that the sum of 4,500 pounds was part of a total sum of 7,000 pounds which the appellant had withdrawn from an account which he had in an assumed name at the Kings Cross branch of the Commercial Bank of Australia. This total amount was withdrawn in three sums, namely, 3,500 pounds on 28th July 1951, 2,500 pounds on 30th July 1951, and 1,000 pounds on 31st July 1951. Upon his public examination the appellant admitted to counsel for the trustee in bankruptcy that he had withdrawn these sums and when asked to account for them he claimed that, as to 4,500 pounds thereof, he had paid that amount to one Nicholas Keketes. According to the appellant's evidence on his public examination Keketes had entrusted him with a motor car for sale, which car apparently had been unlawfully imported from the United States of America, and having made a sale of it for 4,500 pounds and received the purchase money, he paid that sum over to Keketes and received a receipt for that amount. (at p48)

4. The relevant portion of the evidence given by the appellant on his public examination was tendered on the hearing of the charge and Keketes was called to give evidence. The appellant did not give evidence on this occasion. On the evidence of Keketes there is no doubt that the appellant had had in his possession an imported motor car which he eventually sold for a large sum. There is evidence that that car was sold to one Shaw and that his cheque for 4,500 pounds was paid into the appellant's bank account on 27th July 1951. But Keketes asserted in evidence that the car was not his property but, on the contrary, belonged to the appellant and that, although apparently he had been induced to allow his name to be used in connection with the importation of the car because, as the appellant told him, he had the right, as an American citizen, to bring a car to Australia, he had no interest in the car or its disposal. Keketes, however, said that he received the sum of 450 pounds from the appellant and claimed that this was, in part, repayment of a loan of 2,000 dollars which he had made to the appellant in the United States of America. In support of his version the appellant had produced to the Official Receiver a receipt dated 31st July 1951, in the following terms: "Received 4,500 pounds Os. Od. Payment in full from S. R. Dennis for Cadillac Convertible Reg. No. AAN044. Nick B. Keketes." The name "S. R. Dennis" was one of the names by which the appellant was known. Keketes maintained that the receipt was not in this form when he signed it. The body of the receipt is in the handwriting of the appellant and Keketes said that when he signed it the amount shown was 450 pounds and only the first line of the body of the receipt had been written in. The receipt, on its face, bears no sign of any alteration and the appellant denies that it was altered at any time after its execution. In the result Clyne J. accepted the evidence of Keketes and disbelieved the appellant and accordingly found the appellant guilty of the offence charged. (at p49)

5. The first ground of appeal which was advanced on behalf of the appellant was that the finding of Clyne J. was against the evidence and the weight of evidence. Whilst conceding that if the contest in the court below had simply been between the oral evidence given on the one hand by Keketes and, on the other, by the appellant it would not be proper for this Court to interfere counsel for the appellant laid great stress on the existence of the receipt given by the former. It bears no sign of alteration and, it was contended, the former. It bears no sign of alteration and, it was contended, irresistibly supported the version given by the appellant on his public examination and discredited Keketes. The evidence shows, however, that the capacity of the latter to read or write in the English language is extremely limited. Nevertheless Keketes categorically declared that the receipt when signed by him was for only 450 pounds. We see no reason, however, why the form of the receipt should require us to differ from the conclusion to which, on the facts, Clyne J. came. The receipt was merely one feature of a case in which the decision on the facts was peculiarly a matter for the tribunal before which Keketes was examined and cross-examined. Moreover, it is not unimportant to observe, the appellant himself did not give evidence on the hearing of the charge against him and reassert the truth of the version which he had given on his public examination. It may perhaps be said that it was unnecessary for him to enter the witness box merely for the purpose of reiterating his previous evidence but this evidence had been given some time before in the registrar's court and his failure to reassert it on oath on the hearing of the charge not only deprived Clyne J. of a full opportunity of evaluating his evidence, but in a measure at that stage, left the evidence of Keketes uncontradicted. In the circumstances, we do not think that we should interfere with the findings of fact made by Clyne J. (at p49)

6. The next submission made on behalf of the appellant was concerned with the interpretation of s. 210 (1) (a). The obligation created by that sub-section fully and truly to discover "all his property", it was argued, extends only to property passing on bankruptcy to the official receiver and since, in this case, there was no evidence that the sum of 4,500 pounds fell within this category the charge was not made out. In support of this contention we were referred to prototypes of the sub-section in some of the earlier Imperial bankruptcy statutes. Section 221 (2) of the Bankruptcy Act 1861 (Imp.) (24 & 25 Vict. c. 134) provided, in effect, that any bankrupt who, with intent to defraud or defeat the rights of his creditors, should not, upon his examination fully and truly discover, to the best of his knowledge and belief, all his property, real and personal, inclusive of his rights and credits, and how and to whom, and for what consideration, and when he disposed of, assigned, or transferred any part thereof, except such part as has been really and bona fide before sold or disposed of in the way of his trade or business, if any, or laid out in the ordinary expense of his family, should be guilty of a misdemeanour and should be liable at the discretion of the Court before which he should be convicted to a prescribed punishment. The Debtors Act 1869-1949 (Imp.) (32 & 33 Vict. c. 62 - 12, 13 & 14 Geo. 6. c. 101), by s. 11 (1) provided as follows: - "Any person adjudged bankrupt, and any person whose affairs are liquidated by arrangement in pursuance of The Bankruptcy Act, 1869, shall, in each of the cases following, be deemed guilty of a misdemeanour, and on conviction thereof shall be liable to be imprisoned for any time not exceeding two years, with or without hard labour; that is to say, 1. If he does not, to the best of his knowledge and belief, fully and truly discover to the trustee administering his estate for the benefit of his creditors all his property, real and personal, and how, and to whom, and for what consideration, and when he disposed of any part thereof, except such part as has been disposed of in the ordinary way of his trade (if any), or laid out in the ordinary expense of his family, unless the jury is satisfied that he had no intent to defraud". (at p50)

7. It was in proceedings under the latter sub-section that the case Reg. v. Michell (1880) 50 LJ (MC) 76; 43 LT 572 was decided. The accused had been charged with an offence under this sub-section and, in the words of Lord Coleridge, the particular question which arose for decision was whether the disclosure required by that sub-section "is to be restricted to property which the bankrupt had at the time of his bankruptcy." This is the very point which has been raised in the present case and in Reg. v. Michell (1880) 50 LJ (MC) 76; 43 LT 572 it was unanimously decided adversely to the accused. In that case Lord Coleridge said: "The great object of sect. 11 of the Bankruptcy Act 1869 was to create several offences, into all of which fraud of the creditors enters, and in some of which it is enacted that the fraud must have taken place within the period of four months next before the bankruptcy; and if the whole section is looked at, it will be found to contain a most complete and absolute scheme providing for the discovery of the bankrupt's property. It seems to me perfectly plain that sub-sect. 1 of sect. 11 must relate to other property than what the bankrupt has at the time of his bankruptcy. It was said that, if that was its meaning, a bankrupt might come within it if he did not disclose something relating to his dealings with property that he may have had within five years before his bankruptcy. If there was nothing fraudulent in such dealings, it does not fall within the sub-section; but if the question of fraud arises, there is no reason why it should not be inquired into." (1880) 50 LJ (MC), at p 77; 43 LT, at p 573 . (at p51)

8. Counsel for the appellant submitted that the form of s. 210 (1) (a) of the Bankruptcy Act 1924-1950 renders this decision inapplicable and that we should hold that this sub-section is restricted in its operation to property which is shown to be property of the bankrupt at the commencement of the bankruptcy. We can see no reason why the present form of the sub-section should lead to this conclusion if Reg. v. Michell (1880) 50 LJ(MC) 76; 43 LT 572 was, as we think, rightly decided. The gist of the offence is now, as in 1861 it was in England, intent to defraud and the sub-section, we think, applies to all omissions to discover which a bankrupt makes with intent to defraud his creditors, or, in the language of sub-s. (6) of s. 210, with intent to "dishonestly conceal the state of his affairs or otherwise violate or defeat the law". Clearly, an intent within the scope of sub-s. (6) may exist in connection with the non-discovery of property alienated by the bankrupt before the commencement of the bankruptcy. The manner in which the offence may be proved has undergone some change since the Imperial Act of 1861 for in a prosecution under that Act it would have been necessary to establish the specified intent as an ingredient of the offence. But in 1869 the onus of proof, as will be observed, was shifted. Similarly, under the present Act the onus of proof lies upon a bankrupt to disprove the existence in relation to any non-discovery of property of any intent of the nature specified in sub-s. (6) of s. 210. Notwithstanding these changes we think the essence of the provisions are the same and that the decision in Reg. v. Michell (1880) 50 LJ (MC) 76; 43 LT 572 applies to the present case. That decision, apparently, has not been questioned since it was decided and we see no reason why we should depart from it. (at p51)

9. The final submission made on behalf of the appellant was that s. 210 (1) (a) does not apply to an omission to discover property in the course of a public examination under s. 68. But the charge was not that he failed upon his public examination to make such a discovery and we confess to some difficulty in relating this submission to the realities of the case. It is clear from a perusal of the transcript of that part of the public examination evidence which was tendered as an exhibit that the questions which were asked on behalf of the trustee were asked in an endeavour to elucidate facts concerning financial dealings on the part of the appellant and which up to that point of time had not been forthcoming if the evidence of Keketes was correct. Indeed the appellant admitted at the beginning of that part of his public examination evidence which was tendered that "in his questionnaire" he had stated that "during July, 1949, to August 1951" he had sold motor cars for three named persons, including "one for Nicholas Keketes", and that he was not actually a car dealer but had had those cars in his possession "on consignment". It seems clear to us that on the occasion of the public examination the appellant was afforded a further opportunity of making known to the trustee the real facts in relation to his dealings with Keketes and, if Keketes' evidence is to be accepted, it is reasonably clear that he did not make a full and true discovery in the course of his examination or at any earlier time. In relation to this final submission made on the appellant's behalf we were referred to R. v. Wimpole (1931) VLR 201 in which case Lowe J. held that a failure to discover to the trustee may be constituted by a failure on the part of the bankrupt truthfully to answer in the course of his public examination questions relating to the disposal of his property. There is, of course, difficulty in holding as a general proposition, that mere failure to disclose information in the course of such an examination constitutes an offence under s. 210 (1) (a) for, if that proposition were correct, the offence would be committed upon failure to discover appropriate information whether questions seeking the information were asked or not and not only upon a refusal or failure truthfully to answer questions. But the observations of Lowe J. did not purport to lay down any such wide proposition. The question before him was as to the admissibility, upon the hearing of a charge under s. 210 (1) (a), of evidence given by the bankrupt on his public examination. In holding that such evidence was admissible his Honour said: "In my opinion, questions put by the trustee's counsel at such an examination, having relation to the property of the bankrupt, may be questions the answers to which show that the bankrupt has not to the best of his knowledge and belief fully and truly discovered to the trustee all his property, etc. It seems to me that it may be none the less a failure to discover to the trustee, even though it may be also a failure to discover to the Court" (1931) VLR, at p 206 . (at p52)

10. We are of opinion that if s. 210 (1) (a) has the wide application contended for by the respondent, as we think it has, there is a failure to make a full and true discovery only when, having the obligation and opportunity to make such discovery, the bankrupt fails to do so. Section 210 (1) (a), therefore, does not relate to a failure to disclose information in the course of a public examination where the bankrupt is not asked questions a full and true answer to which would require him to make the disclosure. But the charge against the appellant in this case does not rest upon the bare proposition that he failed to make a full and true disclosure upon his public examination for, as we have already said, it is sufficiently clear from the evidence that, if Keketes' evidence be accepted, the appellant did not at any time make a full and true discovery of the relevant matters and there was ample evidence to sustain the charge. (at p53)

11. Accordingly we are of opinion that the appeal should be dismissed with costs. (at p53)

ORDER

Appeal dismissed with costs.