Isaacs v McKinnon

[1949] HCA 64

High Court of Australia|1949-07-01|Before: Webb JJ, Clyne J

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Source facts

Court

High Court of Australia

Decision date

1949-07-01

Before

Webb JJ, Clyne J

Source

Original judgment source is linked above.

Judgment (73 paragraphs)

[1]

High Court of Australia Latham C.J. Rich, Dixon, McTiernan and Webb JJ. Isaacs v McKinnon [1949] HCA 64

[2]

ORDER Ormonde Lloyd Jones substituted for Archibald McKinnon as respondent. Appeal dismissed with costs.

[3]

This is an appeal by Eskell Nathan Isaacs from a conviction by the Federal Court of Bankruptcy (Clyne J.) of the appellant for an offence against s. 20 (2) of the Crimes Act 1914-1946. The appellant had been convicted by the Court of Bankruptcy for offences against, first, s. 210 (3) (c) of the Bankruptcy Act 1924-1947 for that, being a bankrupt, he did dispose of otherwise than in the ordinary way of his trade, certain recorders which he obtained in February and March 1948 and did not pay for; and, secondly, against s. 212 (1) (a) for that, being a bankrupt, he did incur a debt on or about 28th January 1948 and in doing so obtained credit by means of fraud. The Court of Bankruptcy dealt with these offences against the Act upon a summary trial under s. 217 (1) (a) of the Act. The court then applied s. 20 (1) of the Crimes Act. This provision is in the following terms: - "If the Court thinks fit to do so, it may release any person convicted of an offence against the law of the Commonwealth without passing any sentence upon him, upon his giving security, with or without sureties, by recognizance or otherwise, to the satisfaction of the Court that he will be of good behaviour for such period as the Court thinks fit to order and will during that period comply with such conditions as the Court thinks fit to impose, or may order his release on similar terms after he has served any portion of his sentence."

[11]

It is argued, however, that the condition of the bond is invalid because it is contrary to the policy of the Act. In my opinion a court should be very cautious in applying some conception of "the policy" of a statute for the purpose of limiting the operation of some particular provision in cases where it cannot be said that there is any uncertainty of interpretation or any inconsistency between any relevant provisions. In this case, it is said that by virtue of the Act all the property of the bankrupt has become vested in the trustee for distribution in accordance with the statute and not otherwise. The consequence is, I understand, said to be that no order can be made by virtue of the Crimes Act, s. 20, or otherwise, for payment of any moneys by a bankrupt to the Official Receiver. In view of the provisions of the Bankruptcy Act relating to the control and disposition of the property of a bankrupt, such an order should be made, if at all, only in an exceptional case. The present question is whether there is power to make it in any case. In my opinion the argument to the contrary attributes insufficient weight to the fact that the Crimes Act, s. 20 (2), in itself creates an offence for which the Bankruptcy Act makes no provision whatever. Only convicted offenders come within its provisions. The conditions of a recognizance entered into under s. 20 (1) are intended to make it possible to create an obligation or duty which did not previously exist under any other Act. Whether such an additional obligation or duty should be imposed upon an offender is to be determined by the discretion of the Court which tries an alleged offender, subject, as already mentioned, if a recognizance is required, to the limitation of the conditions of the recognizance to such as have relevance to the original offence in respect of which s. 20 (1) has been applied. In determining what conditions should be imposed the Court of Bankruptcy may properly take into account the past behaviour, the present character and condition, and the future prospects of a bankrupt. There are various circumstances which might lead the Court to conclude that it would be proper to require the bankrupt to make regular payments of money. It may be that the bankrupt may receive assistance from friends which would enable him to make the payments which were fixed by the Court. It may be that a bankrupt has good earning power (as the bankrupt believed in the present case) and that it would be a desirable thing, from the point of view both of the bankrupt, in working his way in a regular and ascertainable manner towards his discharge, and of his creditors, that he should make regular payments to the Official Receiver without there being an inquiry from time to time as to the precise amount which was required for the support of himself and his family. There are doubtless other considerations (such, for example, as an improvident disposition, which might with advantage be subjected to some control) which might be regarded by the Court of Bankruptcy as making a requirement for the periodical payment of money a wise order in a particular case. If it were shown to the Court that the failure to comply with a condition of a recognizance was not due to any fault of the bankrupt, the Court would take such a matter into account in determining whether to convict and if so, what penalty to impose.

[14]

The conviction against which the bankrupt appeals was a conviction for an offence against s. 20 (2) of the Crimes Act. Section 20 (2) provides that the penalty for an offence against the section shall be imprisonment for the period provided by law in respect of the offence of which a person was previously convicted. The offences of which the bankrupt was previously convicted were offences against ss. 210 and 212 of the Bankruptcy Act, which provide for a penalty of imprisonment for one year. Therefore the offence against s. 20 (2) is an offence which is punishable by one year's imprisonment and is, unless the contrary intention appears, an indictable offence: Acts Interpretation Act 1901-1948, s. 42. The Bankruptcy Act, s. 217 (1), however, provides that if the Court in any application for an order of discharge, either voluntary or compulsory, has reason to believe that the bankrupt has been guilty of an offence against the Act, it may - (a) charge him with the offence and try him summarily; (b) commit him for trial before any court of competent jurisdiction. In the present case the Court of Bankruptcy applied provision (a) and tried the bankrupt summarily for the offences against ss. 210 and 212 of the Bankruptcy Act. When this procedure is followed, then the Court may, if it finds that the bankrupt is guilty, sentence him to imprisonment for a period not exceeding six months: s. 217 (2). This provision, I agree, is not applicable to offences which are not offences against the Bankruptcy Act. An offence against s. 20 (2) of the Crimes Act is therefore not an offence to which s. 217 applies. I agree also that the fact that s. 217 (2) enables the Court, in the cases to which the section applies, to try a bankrupt summarily for offences against the Bankruptcy Act does not produce the result that an offence against the Bankruptcy Act in respect of which one year's imprisonment is provided as a penalty becomes by reason of its being tried summarily under s. 217 an offence for which the maximum term of imprisonment does not exceed six months: In re Burley [1] . But it is said that as the punishment for a breach of a recognizance is, under s. 20 (2) of the Crimes Act, that which is provided in respect of the original offence (namely, one year), the offence of failing to comply with the condition of a recognizance is an indictable offence and must be tried before a jury - Commonwealth Constitution, s. 80. The bankrupt was not so tried in the present case and it is said that (s. 217 of the Bankruptcy Act not being applicable) there is no provision which enabled the Court of Bankruptcy to try him. For this reason it is contended that the Court of Bankruptcy had no jurisdiction to pronounce the conviction against which the bankrupt now appeals.

[21]

In 1928 in R. v. Archdall & Roskruge; Ex parte Carrigan & Brown [1] the question arose whether a court of summary jurisdiction could try a defendant for an offence under the Crimes Act for which a penalty of imprisonment for one year was provided. It was held that under s. 12 this could be done and that trial by jury was not necessary notwithstanding the provision which is now contained in s. 42 of the Acts Interpretation Act 1901-1948. The offence charged in that case was an offence against s. 30K of the Crimes Act, which declared that certain conduct should be "an offence," not that it should be "an indictable offence." It was argued that under the Acts Interpretation Act (the provision now contained in s. 42) the offence was an indictable offence so that it could not be punished summarily. It was held, however, that a contrary intention appeared in the Crimes Act and it was pointed out in the judgment of Knox C.J., Isaacs, Gavan Duffy and Powers JJ. that the Crimes Act in s. 12 had adopted a scheme which involved an intention contrary to that of the provision of the Acts Interpretation Act which was relied upon by the defendant. It was held that under the Crimes Act offences against the Act are divided into two categories, those declared indictable, and those not indictable, that is, "not declared by sections other than s. 12 to be indictable." The last-mentioned offences are, it was held, "by s. 12 itself declared to be both indictable and punishable summarily." Higgins J. [2] tabulated many sections of the Crimes Act where offences were expressed to be indictable, and many sections (even when the penalty exceeded six months) which were not expressed to be indictable - "they are simply called offences." His Honour proceeded - "In effect in framing the Crimes Act Parliament says "We mean this Act to say expressly what offences are to be indictable and what are not for the purposes of this Act" Parliament meant by indictable offences in s. 12 (1) offences which the Act itself declared to be indictable." Accordingly it was held that, as the offence against s. 30K of the Crimes Act was by that section declared to be merely an offence and not an indictable offence, it could be tried summarily, notwithstanding the provision of s. 80 of the Commonwealth Constitution, which requires that trial of indictable offences shall be by jury, and notwithstanding the provision which is now contained in s. 42 of the Acts Interpretation Act 1901-1948.

[40]

In summary proceedings a plea of guilty has not perhaps the same formal effect as upon indictment but it admits the facts. Thus no question of fact can now arise and the appeal must be confined to matters of law appearing on the face of the proceedings including the recognizance itself. The variances between the condition of the recognizance and the recited order have given rise to some difficulties, but for the purposes of my decision I shall pass these by. No point was made for the appellant of the fact that under s. 217 (1) (a) and (2) the jurisdiction of the Court to deal with a bankrupt summarily is confined to offences by him against the Bankruptcy Act and depends upon the Court's having, in an application by him for discharge, reason to believe that the bankrupt has been guilty of an offence against that Act. But as it goes to the power of the Court of Bankruptcy to deal with the offence without the intervention of a jury it is a fact that cannot be disregarded. The only authority possessed by the Federal Court of Bankruptcy to try an offence summarily or to deal with it summarily is conferred by s. 217. It is true that sub-s. (3) of s. 20 of the Crimes Act 1914-1946 says that the penalty provided by sub-s. (2) may be imposed by the court by which the offender was originally convicted. But it does not say that it may be so imposed summarily. Some other legislative enactment must be found if the offender is to be deprived of a jury and punished summarily by the Federal Court of Bankruptcy. It cannot in my opinion be found in the joint operation of sub-s. (3) of s. 20 of the Crimes Act and s. 217 of the Bankruptcy Act. I am prepared to concede that the opening words of that sub-section (viz. "The penalty may be imposed by the Court by which" etc.) may be expanded to mean that the charge of failing to comply with the conditions of the recognizance may be tried by, and on conviction the punishment may be imposed by, the Court by which &c. But that can only authorize a summary hearing if the court in question has a power to hear charges summarily which is capable of applying to a charge under s. 20 (2) of the Crimes Act. The Federal Court of Bankruptcy has no such power unless it can be found in s. 217. But I think that it is quite clear that s. 217 is incapable of application to a charge under s. 20 (2) of the Crimes Act. It is incapable of so applying because: - (i) it is confined to offences against the Bankruptcy Act; (ii) it depends on the Court's having reason to believe on a certificate application that the offence has been committed; (iii) it prescribes a procedure by which the Court itself then charges the bankrupt with the offence. The difficulty of applying s. 217 in this case to the offence against s. 20 of the Crimes Act is shown by the fact that the prosecution was instituted by an information laid by the respondent as an Official Receiver. Possibly the Official Receiver assumed to act under s. 15 (d) of the Bankruptcy Act, which provides that it shall be the duty of the Official Receiver to take such part and give such assistance in relation to the prosecution of any bankrupt who is deemed to have been guilty of an offence against this Act as the Court or the Attorney-General directs. But that provision relates only to offences against the Bankruptcy Act and it refers only to assistance in the prosecution and not to laying the charge, which under s. 217 (a) it is for the Court to make. What other statutory enactment can be invoked giving, whether expressly or impliedly, the Federal Court of Bankruptcy authority to convict summarily of an offence under s. 20 (2) of the Crimes Act? There is no express enactment to that effect and the implication, if it exists, must be discovered in s. 20 (3) either alone or in combination with some other statutory provision.

[45]

In the third place though, according to the decision in R. v. Archdall and Roskruge; Ex parte Carrigan & Brown [1] , ss. 42 and 43 of the Acts Interpretation Act 1901-1948 do not apply generally to the Crimes Act, they must have an application, at lowest an indirect application, to s. 20 of the Crimes Act, subject always of course to the express provision of sub-s. (3) that the offender may be brought before a court of summary jurisdiction. Sections 42 and 43 of the Acts Interpretation Act 1901-1948 provide that an offence against any Act, if punishable by imprisonment for a period exceeding six months, shall be indictable, but if for a period not exceeding six months, it shall be punishable on summary conviction. Section 20 of the Crimes Act though creating an independent offence assigns no particular punishment to it. Sub-section (2) simply concludes - "Penalty: Imprisonment for the period provided by law in respect of the offence of which he was previously convicted." Unless ss. 42 and 43 apply to this provision sub-s. (3) becomes almost pointless. For it is a provision drawn upon the assumption that some basic distinction between summary proceedings and indictment exists and that must come back to ss. 42 and 43 of the Acts Interpretation Act. It may be assumed that the offence under sub-s. (2) of s. 20 of the Crimes Act takes its character as indictable or summary from the original offence of which the offender was previously convicted. The two offences of which the appellant was originally convicted are both indictable. For the maximum period of imprisonment fixed by ss. 210 (3) (c) and 212 (1) (a) of the Bankruptcy Act which create them is in each case one year. It is true that power is given to the Bankruptcy Court to deal summarily with these indictable offences by s. 217 and that when it does so the sentence which the Court may impose is limited to six months' imprisonment: s. 218 (2). But this Court has decided that the restriction is a "limitation upon the power of the Court of summary jurisdiction to inflict the maximum punishment attached to the offence, and not an alteration in the character of the offence, or of the sanction attached to it by the statute": In re Burley [2] . Thus the limitation is not to be reckoned for the purpose of ascertaining the maximum term of imprisonment referred to by s. 21 of the Crimes Act [1] . It is difficult if not impossible to distinguish in this respect between s. 21 and s. 20. In my opinion what sub-s. (2) of s. 20 describes as "the period provided by law in respect of the offence of which (the offender) was previously convicted" must, in its application to the present case, refer to the year's imprisonment provided in ss. 210 (3) (c) and 212 (1) (a) and not to the six months to which the power of the Court is limited in s. 217 (2). Thus sub-s. (3) of s. 20 applies to the case of the appellant as if it expressly provided that the penalty of one year's imprisonment may be imposed by the court by which the offender was originally convicted (the Bankruptcy Court) or by any court of summary jurisdiction before which the offender is brought.

[70]

The condition with which the appellant failed to comply has already been fully set out and described. The Court of Bankruptcy is a court to which s. 20 (1) of the Crimes Act gives the powers contained in that provision. It adds those powers to the powers conferred by the Bankruptcy Act upon the court. Section 20 (1) gives to the Court of Bankruptcy the same general discretion in respect of the conditional release of offenders as the provision gives to any other court. The question whether any condition upon which a court orders the release of an offender is within the general discretion given by s. 20 (1) would depend upon its connection with some relevant principle such as retribution, correction or punishment and perhaps various moral and social considerations. From this point of view the discretion which the Court of Bankruptcy has under s. 20 (1) is not more limited than that of any other court to which it applies. But the discretion is one which every court is bound to exercise subject to law. Neither the Court of Bankruptcy nor any other court may impose a condition which contravenes the Bankruptcy Act or any other statute or is contrary to public policy. Compliance with the condition as to payment to the Official Receiver would not be a breach of any express provision of the Bankruptcy Act or any other Act. The question of the consistency between the condition and public policy has been raised. The public policy invoked is the common law of bankruptcy which excepts the personal earnings of the bankrupt from the rule that until discharge all the property of the bankrupt is divisible amongst his creditors. Section 101 is founded upon a recognition of this principle. If a bankrupt agreed to release to his creditors all his personal earnings the question would arise whether the law would enforce the agreement. A man has a natural right to own what he earns by his work in order that he may maintain himself and his family. Although he becomes bankrupt he is a person in whom this right inheres. There would be a question whether the law would enforce the release of this right. But the relevant condition of the recognizance in this case does not, in my opinion, raise these matters for consideration. The condition is that the appellant would during the period of five years pay to the Official Receiver for the benefit of creditors £160 per annum by quarterly instalments. The presumption is in favour of the legality of the condition which is impugned. Neither the language of the condition nor the evidence proves that the appellant released in favour of his creditors so much of his prospective personal earnings that he would be left without adequate means of subsistence. The evidence showing how the condition came to be entered into is that after conviction the Judge asked the appellant about his prospects of getting employment. The appellant said he could get a permanent position at a salary of £12 per week and "about £4 or £5 per week from radio servicing on the side at night." The judge asked him how much of these earnings he could pay his creditors and the appellant answered that he could pay anything up to £2 10s. or £5 a week and if he got the "Army contract for servicing" he could increase the amount "considerably." In answer to the Judge's question whether he "could" manage £160 a year the appellant said "Yes." The reason which the appellant gave for failing to pay more than one instalment was that the industrial upheaval prevented him from realising the expectations which he disclosed to the Court. In my opinion the attack upon the condition of the recognizance should not succeed.

[71]

For a time I took the view that the period of imprisonment provided by law in respect of each of the offences of which the appellant was convicted under s. 210 (3) (c) and s. 212 (1) (a) of the Bankruptcy Act was twelve months and not six months; that the penalty for breach of the conditions of security provided by s. 20 (2) of the Crimes Act was therefore twelve months and not six months; and that the Federal Court of Bankruptcy had no jurisdiction to deal summarily with the breach of s. 20 (2) of the Crimes Act. This seemed to follow from the reasoning in the case of In re Burley [1] , although I had misgivings about applying that decision, as it results in holding that the maximum punishment for breach of the conditions of security is twice that provided for either of the original offences when the latter is dealt with summarily, in which event the maximum imprisonment is six months. There would be nothing remarkable in this if it were the policy of the legislation so to provide; but no such policy appears, as the maximum imprisonment is the same for breach of the conditions of security as it is for the original offence when the latter is tried on indictment. Inconsistency should not be attributed to the legislature if the language of its enactment is open to a construction which avoids inconsistency. After reading the judgment of McTiernan J., I think that Burley's Case [1] is distinguishable and that the words "Imprisonment for the period provided by law in respect of the offence of which he was previously convicted," appearing in s. 20 (2) of the Crimes Act, may be taken to refer to the maximum imprisonment which the court that dealt with the previous offence could have imposed on the offender after his conviction summarily, namely six months for each offence, and not to refer to the maximum imprisonment of twelve months to which the offender became liable on committing the offence; and that the Federal Court of Bankruptcy had jurisdiction to deal summarily with the breach of s. 20 (2). Section 20 (3) of the Crimes Act was passed in 1926 - two years after s. 217 of the Bankruptcy Act 1924. Section 20 (3) was not a re-enacted provision.