State of Victoria v Mansfield

REASONS FOR JUDGMENT the court: introduction 1 Ms Michelle Mansfield, who is the respondent to this appeal, received some 72 parking infringement notices ("infringement notices") in respect of a motor vehicle registered in her name. The infringement notices were issued to her by an officer of the Port Phillip City Council under the Road Safety Act 1986 (Vic) ("the Road Safety Act") and the Road Safety (General) Regulations 1999 (SR No 27/1999) ("the General Regulations"). The appeal raises the questions (1) whether the respondent's statutory liabilities for parking infringements were provable debts within the meaning of s 82(1) of the Bankruptcy Act 1966 (Cth) ("the Bankruptcy Act"); and (2) whether it was open to the Court to make an order under s 60(1)(b) of the Bankruptcy Act staying any legal process against the respondent or her property in respect of the non-payment of amounts due in respect of the infringement notices, or in consequence of her failure to comply with the enforcement orders made under cl 5(1) of Sch 7 to the Magistrates' Court Act 1989 (Vic) ("the Magistrates' Court Act"). background facts 2 Each of the infringement notices received by the respondent alleged, in substance, that her vehicle had been unlawfully parked in the City of Port Phillip and specified a penalty for the alleged offence ("the infringement penalty"). The infringement notices each informed the respondent that "[p]ayment of the penalty may be made by cash …, money order, or 'not negotiable' cheque payable to the Port Phillip City Council". Each notice informed her that, if she wished to query the notice, she should send "a letter of explanation" to the Port Phillip City Council ("the Council"), or call in at the Council's offices and "record [her] query in person". If she paid the penalty within 28 days of the issue of the notice, then, according to the notice "no further proceedings shall be taken" and "no conviction for the infringement recorded". If she did nothing, then the notice stated that "costs will be added to the penalty and a 'Courtesy Letter' issued". Each notice warned her that if she did not respond after receiving this letter, then "perin court action will be initiated" and, ultimately, an enforcement order "will be issued to recover monies owed adding further costs". (The term "perin" is an acronym for "Penalty Enforcement by Registration of Infringement Notice".) 3 The respondent did not pay the infringement penalties specified in the infringement notices. Nor did she query the notices. In due course, the Council sent her the 'Courtesy Letters' mentioned in the notices. The letters informed her that payment of the infringement penalties was overdue and that, within 28 days, she must either pay the infringement penalties and costs to the Council; or ask for the matter to be dealt with by a court; or provide a statutory declaration identifying a person other than herself as the driver of the vehicle at the time of the alleged offence. The respondent did not take any action following these letters. 4 On the expiration of the 28 days referred to in these letters, the Council applied to a registrar of the Magistrates' Court of Victoria ("the Magistrates' Court") for registration of the infringement penalties under cl 4(3) of Sch 7 of the Magistrates' Court Act. The registrar subsequently made orders under cl 5(1) of Sch 7 that the respondent pay to the Court the infringement penalties and the prescribed amounts for costs. 5 Following the presentation by the respondent of a debtor's petition and acceptance of the petition by the Official Receiver on 29 March 2001, the respondent became a bankrupt from that date. By an application to this Court dated 17 May 2002, she sought an order staying any legal process in respect of her non-payment of the infringement penalties and costs, as well as declaratory relief. On 27 September 2002, a judge of the Court declared that the unpaid penalties or fines and costs payable by her in respect of parking infringements in the City of Port Phillip prior to her bankruptcy on 29 March 2001 were provable debts in her bankruptcy. His Honour ordered that there be a stay of any legal process against her or her property. The State of Victoria appeals against his Honour's judgment. the decision at first instance 6 At first instance, counsel for Ms Mansfield submitted that if the Road Safety Act, the General Regulations, and the Magistrates' Court Act were properly construed, then the infringement penalties and costs were debts imposed by statute and provable debts for the purposes of the Bankruptcy Act. This was denied by the State of Victoria, which contended that, as a matter of statutory construction, the infringement penalties and costs were debts imposed by orders of the Magistrates' Court and were not, in consequence, provable debts for the purposes of the Bankruptcy Act. 7 In his reasons, the primary judge noted that there were a number of matters that were common ground, including that the amounts owing by Ms Mansfield were in respect of parking infringements as defined in s 3(1) of the Road Safety Act; the amounts of the infringement penalties were determined in accordance with the General Regulations; and the City of Port Phillip was a public authority responsible for collecting and receiving the infringement penalties: see Mansfield v State of Victoria [2002] FCA 1175 ("Mansfield"), at [13] and [16]. 8 After giving careful consideration to the relevant statutory provisions, the primary judge concluded that the role of the Magistrates' Court was to enforce a pre-existing statutory liability in respect of the infringement penalties and costs. Since the pre-existing liabilities for parking infringements were debts or liabilities to which Ms Mansfield was subject at the date of her bankruptcy, they were provable debts for the purposes of the Bankruptcy Act. His Honour stated, at [20]: Save and except in the case of an owner electing to have the matter dealt with by a court or filing a statutory declaration identifying the driver of the car at the time of the infringement, under the statutory scheme … and the notices required to be given in accordance with the perin procedure: · the owner becomes liable to pay the penalty payable for the parking infringement penalty; and · where there is a failure to pay the penalty within 28 days, the penalty plus the additional costs incurred are payable. In the present case the applicant, who is the owner of the vehicle in respect of which the parking infringements occurred, did not elect to have any of the infringements dealt with by a court nor did she send in a statutory declaration stating that a person other than herself was the driver. Accordingly, in respect of each of the parking infringements, the applicant became liable to the City of Port Phillip to pay the amount of the penalty and the costs incurred prior to the initiation of any court process under the Magistrates Court Act. The amount of the liability was the penalty payable in respect of each infringement plus the costs incurred by the City of Port Phillip. The liability of the applicant to pay the penalty was one which was imposed by the Road Safety Act and the Regulations upon service of the parking infringement notice on the applicant in accordance with that Act and the Regulations. 9 At [31], the primary judge added: It follows that, as the statutory liabilities of the applicant for her parking infringements are debts or liabilities to which the applicant was subject at the date of her bankruptcy they are provable debts within the terms of s 82(1) [of the Bankruptcy Act]. As the liabilities are imposed by statute they fall within the terms of s 60(1)(b) thereby activating the Court's power to make a stay order under the sub-section. 10 The perin procedure (discussed below) was, in his Honour's analysis, merely "an alternative to prosecution in respect of parking infringement offences" and "the court involvement in the perin process is properly characterised as one of enforcement of payment of a pre-existing statutory liability in respect of penalties and costs payable for parking infringement offences": see Mansfield, at [23] and [30]. Even if the Magistrates' Court orders imposed a liability on Ms Mansfield, the orders could, his Honour considered, nonetheless be stayed under s 60(1)(b) because they were part of the legal processes designed to enforce the payment of a provable debt: see Mansfield, at [34]. In granting Ms Mansfield the relief that she sought, his Honour said, at [35]: In summary, the statutory liabilities of the applicant for her parking infringement penalties are provable debts. The perin procedure is a procedure for the enforcement of payment of those provable debts. That procedure, which includes court orders, does not impose a new liability but, rather, enforces payment of a pre-existing statutory liability. the legislative framework (1) The Bankruptcy Act 11 In order to understand the parties' submissions, it is necessary to refer to certain provisions of the Bankruptcy Act. When Ms Mansfield became a bankrupt on 29 March 2001, she became subject to the legal regime governing bankruptcy. Broadly speaking, the Bankruptcy Act gives effect to the principle that, where a person is unable to pay his or her debts, his or her assets should be realised and the proceeds distributed equitably amongst creditors. Once she became a bankrupt, Ms Mansfield's property vested in the Official Trustee (s 58) and, subject to exceptions, was divisible amongst her creditors (s 116). Another effect of her bankruptcy was that she was discharged from future liability for existing debts. 12 Where a petition for bankruptcy has been presented, s 60(1)(b) of the Bankruptcy Act empowers the Court to stay certain legal process against the personal property of the debtor and to discharge the debtor out of custody. Section 60(1) relevantly provides: The Court may, at any time after the presentation of a petition, upon such terms and conditions as it thinks fit: (a) … (b) stay any legal process, whether civil or criminal and whether instituted before or after the commencement of this subsection, against the person or property of the debtor: (i) in respect of the non-payment of a provable debt or of a pecuniary penalty payable in consequence of the non-payment of a provable debt; or (ii) in consequence of his or her refusal or failure to comply with an order of a court, whether made in civil or criminal proceedings, for the payment of a provable debt; and, in a case where the debtor is imprisoned or otherwise held in custody in consequence of the non-payment of a provable debt or of a pecuniary penalty referred to in sub-paragraph (i) or in consequence of his or her refusal or failure to comply with an order referred to in sub-paragraph (ii), discharge the debtor out of custody. As Gibbs CJ (with whom Mason, Wilson and Brennan JJ agreed) said in Storey v Lane (1981) 147 CLR 549 ("Storey v Lane"), at 556: Stated shortly, the effect of the provision is to empower the court to relieve a debtor, against whom a petition has been presented, from process (civil or criminal) instituted against him because of his failure to pay a provable debt. 13 Provable debts are a concern of s 82 of the Bankruptcy Act. At the relevant time, s 82 provided: (1) Subject to this Division, all debts and liabilities, present or future, certain or contingent, to which a bankrupt was subject at the date of the bankruptcy, or to which he or she may become subject before his or her discharge by reason of an obligation incurred before the date of the bankruptcy, are provable in his or her bankruptcy. … (3) Subject to subsection (3A), penalties or fines imposed by a court in respect of an offence against a law, whether a law of the Commonwealth or not, are not provable in bankruptcy. … (3A) An amount payable under a pecuniary penalty order or an interstate pecuniary penalty order is provable in bankruptcy. Schedule 4 of the Proceeds of Crime (Consequential Amendments and Transitional Provisions) Act 2002 (Cth) amended ss 82(3) and 82(3A), with effect from 1 January 2003. The amendments are not material to the present appeal. 14 Pursuant to the Bankruptcy Act as it stood prior to these amendments, the term "pecuniary penalty order", as defined in s 5(1) of the Bankruptcy Act, had the same meaning as in the Proceeds of Crime Act 1987 (Cth). Section 4(1) of the Proceeds of Crime Act 1987 defined "pecuniary penalty order" as an order under s 26(1) of that Act, being an order that a person pay to the Commonwealth an amount equal to the benefits derived by the person from the commission of an offence. Subsection 82(3A) of the Bankruptcy Act had no application in this case and may, therefore, be put to one side. 15 The relevant issues on the appeal are to be defined by reference to ss 82(1), 82(3) and 60(1)(b) of the Bankruptcy Act. If the liabilities arising under the State's legislation in respect of the respondent's parking infringements are properly characterised as "penalties or fines imposed by a court in respect of an offence against a law", then they cannot give rise to debts that are provable in the respondent's bankruptcy; and the Court cannot make an order under s 60(1)(b). If the liabilities do not fall within s 82(3), then they fall within s 82(1) and, as they are provable debts, the Court may exercise the power conferred by s 60(1)(b). 16 It is necessary to examine the relevant State legislation in order to answer the critical question, "Are the relevant liabilities properly characterised as penalties or fines imposed by a court in respect of an offence against the law of the State?" (2) The Road Safety Act 17 Section 87 of the Road Safety Act provides, amongst other things, for the service of parking infringement notices by a person (fitting the descriptions in ss 87(1), (1A) or (1B)) if he or she has reason to believe that a parking infringement (as defined in s 3(1)) has been committed in respect of any vehicle. By virtue of s 87(2) of the Road Safety Act and reg 502 of the General Regulations, an infringement notice must contain certain particulars. These include "the date, time and place of the alleged parking infringement"; "the nature, and a brief description, of the alleged parking infringement"; "a statement as to the manner in which the infringement penalty may be paid"; "a statement as to the time … within which the penalty must be paid"; and "a statement that if the amount of the infringement penalty is paid before the end of the time specified in the notice, the matter will not be brought before the Magistrates' Court". (By virtue of reg 201 of the Road Safety (Road Rules) Regulations 1999 (Vic) (SR No 120/1999), the Road Rules (as defined in reg 105) are to be read and construed as if they formed part of the Regulations. Accordingly, the parking of a vehicle in contravention of the Road Rules will constitute a parking infringement within the definition of "parking infringement" in s 3(1) of the Road Safety Act.) 18 Subject to s 86(3) of the Road Safety Act, pursuant to s 86(1), "[t]he owner of a vehicle in relation to which a parking infringement occurs is guilty of an offence … as if that person had been the actual offender who was guilty of the infringement, unless the court is satisfied that the vehicle was a stolen vehicle or that the number plates displayed on the vehicle were stolen". Subject to provisions not presently relevant, a vehicle owner upon whom an infringement notice is served becomes liable to prosecution by a municipal council (amongst others): see s 77(2)(b). If convicted, the vehicle owner is subject to court order fixing the amount of any penalty in accordance with regulations made under the Road Safety Act. 19 A vehicle owner upon whom an infringement notice is served may avoid prosecution by paying the amount of the penalty shown on the infringement notice. Subject to some presently irrelevant exceptions, the amount of the penalty appearing in the notice is the amount prescribed by regulations under the Road Safety Act: see s 87(3). The Road Safety Act provides, in subs 89(1), as follows: Subject to sub-section (4), if before the expiration of the period specified in the infringement notice for the payment of the penalty or, where the person giving the notice so allows, at any time before the service of a summons in respect of an infringement, the amount of the penalty shown on the notice is paid at the appropriate place - (a) the offender must be taken to have expiated the infringement by payment of the penalty; and (b) no further proceedings may be taken in respect of the infringement; and (c) no conviction for the infringement may be regarded as having been recorded. (3) The Magistrates' Court Act 20 Where an alleged offender (also referred to below as an infringer) does not "expiate" the infringement by paying the penalty, an enforcement agency may either commence a proceeding by way of charge pursuant to ss 25 and 26 of the Magistrates' Court Act, or, pursuant to s 99 of this Act, invoke the procedure set out in Sch 7 to the Act ("the perin procedure"). Where a summons is issued to answer the charge, it will direct the infringer to attend a particular venue on a certain date to answer the charge: see Magistrates' Court Act, ss 28, 30 and 33. Pursuant to s 51 of the Magistrates' Court Act, the hearing and determination of summary offences is, subject to s 99, conducted in accordance with Sch 2. Schedule 2 provides for a hearing in court, following which the defendant may be convicted. 21 Pursuant to s 99 of the Magistrates' Court Act, the perin procedure may be used for a prescribed offence, or an offence for which an infringement notice or a penalty notice within the meaning of Sch 7 can be issued. Clause 1 of Sch 7 also provides that the perin procedure may be used for the enforcement of infringement penalties and penalties imposed by penalty notices. In this case, the perin procedure was invoked against the respondent, who had received infringement notices (as defined in cl 2 of Sch 7), for the purpose of enforcing infringement penalties (also defined in cl 2 of Sch 7). It was common ground that the parking infringements alleged in the infringement notices served on the respondent were capable of attracting the perin procedure. 22 Part 2 of Sch 7 sets out the procedure that applies in the case of infringement notices: see cl 1(3). The relevant steps in the procedure are set out in the following paragraphs. (1) Before an infringement penalty can be registered under Pt 2 of Sch 7, the enforcement agency (here, the Council) must serve a "Courtesy Letter" on the infringer (cl 3 and cl 4(2)(b)). This letter must state that the infringer has a further 28 days in which to pay the infringement penalty and the prescribed costs and that, if no payment is made within this time, he or she may be dealt with in accordance with the perin procedure (cl 3(1) and (2)). The letter must also contain information about the steps that the infringer may take if he or she was not in charge of the relevant motor vehicle at the time of the infringement. The infringer may elect to pay the infringement penalty and the costs (cl 3(5)) or may decline to be dealt with under the perin provisions (cl 3(6)). If the infringer makes the latter choice, proceedings in relation to the alleged offence may be taken by way of prosecution. (2) If, however, the recipient of a Courtesy Letter elects to do nothing, then the perin procedure moves to the next stage. After the period of response mentioned in the Courtesy Letter has expired, the enforcement agency (here, the Council) may seek to have the infringement penalty registered (cl 4). Before registration can be effected, the agency must provide a Magistrates' Court registrar with a document containing the prescribed details and a certificate in the prescribed form (cl 4(1)). The certificate must indicate that the agency has complied with the perin procedure and that the infringer has not declined to be dealt with under the perin provisions. The certificate must also state that a charge has not been filed, although a charge might still be filed, having regard to the time at which the offence is said to have been committed. If s 87 of the Road Safety Act was applicable to the case, the certificate must also state that, at the time of the alleged offence, the person was either the owner of the vehicle or in charge of the vehicle as shown in a statement made under s 86(3)(a) of the Road Safety Act. (3) If it appears to the registrar from the certificate prepared by the agency that the relevant requirements have been satisfied, then the registrar may register the enforcement penalty and any prescribed costs, for the purpose of enforcement under Pt 2 of the Sch 7 (cl 4(3)). Once the infringement notice is registered, then the registrar must make an enforcement order in the terms of cl 5(1). Such an order is deemed to be an order of the Magistrates' Court (cl 5(2)). (4) Once an enforcement order is made, the infringer receives a third communication, this time from the registrar. The registrar must cause a notice in the prescribed form to be posted to the person against whom the order is made, stating that he or she has a further 28 days in which to pay the fine and that, if payment is not made within this time, then a warrant will issue (cl 6). (5) If the infringer fails to pay the fine in the stipulated time, then, in the case of a natural person, the registrar must issue a penalty enforcement warrant against him or her, and, in the case of a corporation, a warrant to seize its property (cl 8(1)). Other provisions of Sch 7 provide for the execution of the relevant warrants (cl 8(2)-(6) and cl 8A). (6) A person against whom an enforcement order has been made, or an enforcement agency, may, subject to certain exceptions, apply to the registrar for revocation of an enforcement order (cl 10). In addition, the registrar may, on his or her own initiative, revoke the enforcement order and refer the matter of the alleged offence to the Court for hearing and determination if satisfied that the matter would be more appropriately dealt with by the Court (cl 10A, cl 13). the parties' submissions on appeal 23 On the hearing of the appeal, counsel for the appellant submitted that the mere service of an infringement notice did not create a legally enforceable obligation to pay the amount of the infringement penalty. Service of the notice did not, therefore, give rise to a provable debt within the meaning of the Bankruptcy Act. The appellant submitted that, where the perin procedure was invoked, liability to pay an infringement penalty arose on the making of an enforcement order under cl 5(1) of Sch 7 of the Magistrates' Court Act and that, in consequence of s 82(3) of the Bankruptcy Act, there could be no debt provable in bankruptcy. The appellant further submitted that s 60(1)(b) of the Bankruptcy Act did not apply, because an enforcement order under cl 5(1) of Sch 7 of the Magistrates' Court Act was not a legal process in respect of the non-payment of a provable debt or in respect of a pecuniary penalty within the meaning of s 60(1)(b)(i); and there was no court order for the purposes of s 60(1)(b)(ii). 24 Counsel for the respondent relied on the analysis of the primary judge to the effect that the making of an enforcement order under the perin procedure was in respect of a pre-existing statutory liability. The respondent's counsel submitted that the local authority imposed this liability, which was a provable debt for the purposes of the Bankruptcy Act. Relying on a notice of contention, he also submitted that, even if the registrar's making of an enforcement order imposed the fine, this "perin court" was not a court for the purposes of s 82(3) of the Bankruptcy Act. It was open to the judge at first instance to exercise the power conferred by s 60(1)(b) of the Bankruptcy Act, so the respondent's counsel contended, because the legal process in respect of the respondent's fines related to the non-payment of provable debts or was in respect of pecuniary penalties payable in consequence of the non-payment of such debts. Alternatively, if the perin court were a court for the purposes of s 82(3), then the penalties were payable in consequence of the respondent's failure to comply with an order of a court for the payment of a provable debt. penalties or fines imposed by a court? (a) What is the effect of an infringement notice and an enforcement order? 25 The respondent's counsel began by submitting that a statutory liability to pay a penalty arose "once the parking offence has been committed and the motorist served with an infringement notice". On the respondent's argument, an infringer incurred a liability to pay the penalty set out in an infringement notice when the notice was served pursuant to s 87(1) of the Road Safety Act. If this were accepted, then a liability to pay an infringement penalty was imposed under the Road Safety Act by the Council; and s 82(3) of the Bankruptcy Act had no application in this case. 26 We reject this analysis. By virtue of s 87 of the Road Safety Act, an infringement notice notifies a person on whom it is served that an officer of an enforcement agency (in this case, a Council officer) believes that a parking infringement has been committed. It provides relevant particulars of the alleged offence, as well as information about what the recipient may do to bring the statutory processes to an end. The service of an infringement notice does not of itself give rise to a legally enforceable liability to pay. The enforcement agency is unable to sue for recovery of any monies merely upon service of the notice. Service of the notice is but the first in a series of steps that may lead to a liability to pay being imposed on the recipient of the notice. The position is the same in this regard whether the enforcement agency subsequently chooses to institute a proceeding by way of charge or to invoke the perin procedure. Plainly enough, in the former case, an alleged offender cannot be required to pay an infringement penalty unless and until the prosecutor proves in a prosecution under s 77(2)(b) that he or she committed the offence as charged and the Court, being satisfied to the requisite degree of his or her guilt, by order, imposes a penalty in accordance with the Act. 27 In the event that the recipient of an infringement notice does not take the requisite steps to bring the statutory processes to an end, the infringer will incur a liability to pay under the perin provisions if (a) the enforcement agency invokes these provisions; (b) the infringer does not opt out of the perin procedure; and (c) upon having regard to the matters in cl 4(1) of Sch 7 of the Magistrates' Court Act, the registrar determines to register the infringement penalty (and costs). On registration, according to cl 5(1), the registrar must make an order that the infringer pay the infringement penalty and the prescribed amount of costs. Once an infringement penalty is registered and an enforcement order made, then - and only then - does the infringer incur a liability to pay the amount of the penalty and the costs stated in the order. Before registration, the infringer is not, however, under any liability to pay the infringement penalty or any other amount. 28 It does not necessarily follow from this conclusion, however, that s 82(3) of the Bankruptcy Act applies in the present case. The critical question is whether an enforcement order under cl 5(1) of Sch 7 is properly characterized as an order of a court, which imposes a penalty or fine in respect of an offence against the law. The respondent submitted that, having regard to the Magistrates' Court Act, a registrar of the Magistrates' Court acting under cl 5(1) of Sch 7 was not a "court" for the purpose of s 82(3) of the Bankruptcy Act. In order to consider this submission, it is helpful to examine the policy to which s 82(3) seeks to give effect and the legislative history of Sch 7 to the Magistrates' Court Act. (b) The policy behind s 82(3) of the Bankruptcy Act 29 The Bankruptcy Act 1924 (Cth) ("the 1924 Act") (which was repealed and replaced by the current Bankruptcy Act) made provision for provable debts in s 81. Neither s 81 nor any other provision of the 1924 Act contained any provision equivalent to s 82(3) of the current Act. Save for this, s 81 was in substantially the same terms as the present s 82. Section 81 expressly excepted from the class of "provable debts" only "demands in the nature of unliquidated damages arising otherwise than by reason of a contract, promise, or breach of trust". 30 In Re Bradbury; ex parte The King; The Official Receiver (1931) 3 ABC 204 ("Re Bradbury"), Lukin J held that a fine imposed by the Court of Petty Sessions at Swan Hill, in Victoria, upon the bankrupt's conviction for offences under the Game Act 1928 (Vic) was not a provable debt within the meaning of s 81 of the 1924 Act. At the heart of his Honour's reasoning was the concern that: [I]f this fine be a debt provable in bankruptcy, this Court is enabled to free the bankrupt, by making an order of discharge, from a pecuniary penalty imposed by the Federal or State Courts for a criminal offence. See Re Bradbury, at 209 (and compare Re Caddies; ex parte Stapleton [1963] QWN 5). 31 In contrast to Re Bradbury, in Re Curtis; ex parte The Deputy Commissioner of Taxation; The Official Receiver [1951] St R Qd 246, Stanley J held, at 251-2, that an order that a defendant (who became a bankrupt) pay a monetary penalty following upon his conviction for an offence against the Sales Tax Procedure Acts 1934-40 (Qld) was "a judgment debt obtained in civil proceedings" and a debt provable in the defendant's bankruptcy. 32 Some years later, on 23 February 1956, Senator John Spicer, the then Attorney-General, appointed a committee to review Commonwealth bankruptcy law. The Spicer Committee, as it became known, presented its report to Parliament on 14 December 1962. In relation to s 81 of the 1924 Act, the Spicer Committee concluded "that the provisions of section 81 of the present Act defining what debts and liabilities are provable in bankruptcy are satisfactory": Commonwealth of Australia, Report of the Committee Appointed by the Attorney-General of the Commonwealth to Review the Bankruptcy Law of the Commonwealth, Parliamentary Papers Session 1964-65-66, vol XIII, par 114. It recommended that there be no change to the provision. There was no provision equivalent to s 82(3) of the current Act in the draft Bill produced following the Spicer Report. Section 82(3) was introduced into the Bill prior to its Second Reading on 20 May 1965. The then Attorney-General, Senator Sneddon, did not refer to s 82(3) in his Second Reading Speech. The researches of counsel have not disclosed the immediate occasion for the inclusion of s 82(3). It may be assumed, however, that it constituted a legislative adoption of the approach espoused by Lukin J in Re Bradbury in 1931. 33 Section 82(3) is framed on the premise, first, that a penalty or fine in respect of an offence is imposed by a court to meet the public interest in punishing the offender for his or her offence; and, secondly, that the interests of ordinary creditors should not be adversely affected by the criminal or quasi-criminal conduct of the bankrupt. (If fines or penalties were to be treated as provable debts, then the funds available to ordinary creditors would be diminished: see M Murray, "Fines and Penalties - Provable in Bankruptcy?" (2000) 10(3) New Directions in Bankruptcy 13, 13-14.) (c) History of the perin procedure 34 Bearing this in mind, we turn to the legislative history of the perin provisions. In Cameron v The Secretary of the Department of Justice (unreported, Supreme Court of Victoria, 28 October 1994) ("Cameron") at 2, Byrne J sketched the background to the perin provisions in the following terms: By 1985 it had become apparent to those concerned with the administration of justice in this State that a large proportion of proceedings in the Magistrates' Court for parking offences and certain traffic infringements were dealt with as undefended cases and involved relatively modest fines; the cost of their collection was such that it represented an inefficient application of the resources of the Court and of the prosecuting authorities. An administrative procedure called "Procedure for Enforcement by Registration of Infringement Notices" (perin) was devised for these less serious cases where, for the most part, only a modest pecuniary penalty was provided. 35 Before the introduction of the perin procedure, where an enforcement agency determined to prosecute a person in respect of alleged parking infringements, it was open to the agency to invoke the "alternative procedure" set out in Pt VII of the Magistrates (Summary Proceedings) Act 1975 (Vic) ("the 1975 Act"). This "alternative procedure", which related to traffic and other offences, enabled a stipendiary magistrate to convict a defendant and impose a penalty upon reading an information and affidavit material in chambers and without hearing oral evidence in open court. A decade later, in January 1985, a Joint Task Force, consisting of the Victoria Police and the Law Department, reported on "the procedure recommended for the handling of that part of the Alternative Procedure which is initiated by the issue of an infringement notice": see Joint Task Force, Penalty Enforcement by Registration of Infringement Notice; Courts Management Change Program (May 1985), Pt I, "Introduction". The Joint Task Forces' Report recommended the introduction of what was to become the perin procedure. The Report contemplated that "[a]ll actions under this scheme will commence with the issue of an Infringement Notice"; and that "[w]here the infringement penalty has not been paid, the next step in the scheme is to serve upon the alleged offender a courtesy letter which is intended to act as a reminder of the outstanding infringement notice": see Pt II, "Outline of the Scheme". The report added: The courtesy letter will contain full details of the offence for the assistance of persons who fail to receive the infringement notice. According to the Report, this letter was to give the infringer the opportunity to opt out of the perin provisions and to have his or her case determined by a court, "either because of a wish to plead not guilty to the alleged offence or to place matters before the Court in mitigation of the offence": see Pt II, "Outline of the Scheme". In the event that the infringer did not respond to the courtesy letter, an enforcement agency issued a certificate which "virtually [took] the place of the Information under the present system …": see Pt II, "Outline of the Scheme". 36 The Report was substantially given effect when Pt VIIA was introduced into the 1975 Act by the Magistrates (Summary Proceedings) (Amendment) Act 1985 (Vic) ("the 1985 Act"). The new Pt VIIA was headed "Procedure for Enforcement of Infringement Penalties". In his Second Reading Speech on the Bill on 30 October 1985, the Minister for Police and Emergency Services said: Generally known as perin - Penalty Enforcement by Registration of Infringement Notice - it will introduce new technology to the Magistrates Courts system and facilitate the disposition of uncontested matters where an infringement notice has been issued. … The latest available statistics indicate that approximately 30 per cent of all cases before Magistrates Courts in Victoria are dealt with through the alternative procedure process. Of these, 93 per cent are handled by a Stipendiary Magistrate in Chambers in the absence of either party, and only 7 per cent are referred to open court for hearing. These figures indicate that Magistrates are spending a good proportion of their time out of court dealing with minor uncontested cases when they ought to be in open court hearing contested or more serious matters. [Legislative Assembly, Parliamentary Debates, Magistrates (Summary Proceedings) (Amendment) Bill 1985, 1514 at 1515.] 37 When the Magistrates' Court Act repealed the 1975 Act, Pt VIIA of the 1975 Act became Sch 7 to the Magistrates' Court Act. The Magistrates' Court (Amendment) Act 1994 (Vic) subsequently amended Sch 7, by extending the definition of "infringement notice", providing for the issue of penalty enforcement warrants, and setting out the procedure for the execution of these warrants. 38 Other States and Territories have enacted procedures comparable to the perin procedure: see Fines Act 1996 (NSW), Pts 3 and 4; Fines, Penalties and Infringement Notices Enforcement Act 1994 (WA), Pt 3; Expiation of Offences Act 1996 (SA); Magistrates Court Act 1930 (ACT), Pt 8; State Penalties Enforcement Act 1999 (Qld), Pts 3 and 4; Justices Amendment (Infringement) Act 1997 (Tas), as amended by the Justices Amendment (Infringement) Act 1999 (Tas); and Fines and Penalties (Recovery) Act (NT) 2001, Pts 2 - 5. Each State and Territory has made legislative provision for the registration and enforcement of fines and penalties relating to certain offences, including parking infringements. There are, however, some material differences between the Victorian legislation and that of the other States and Territories. It is unnecessary to consider the significance of these differences in these reasons. (d) The character of the perin procedure 39 The legislative history of the perin provisions indicates that a number of matters were regarded as important for its future operation. (a) As already noted, upon service of a Courtesy Letter, a person may decline to be dealt with under the perin procedure (Sch 7, cl 3(6)). (b) The exercise of power by a registrar "vested in the registrar as registrar under Schedule 7" is not a "proceeding" within the meaning of s 3(1) of the Magistrates' Court Act (definition of "proceeding" in s 3(1)). (c) If an enforcement order is made in relation to an offence alleged to have been committed by a person, the person "is not thereby to be taken to have been convicted of the offence", although he or she is "not liable to any further proceedings for the alleged offence" (Sch 7, cl 9). (d) An enforcement order is deemed to be an order of the Court (Sch 7, cl 5(2)). (e) Any amount recovered as a result of an enforcement order is dealt with in the same way as an amount recovered as a result of a conviction (Sch 7, cl 9(2)). (f) A person against whom an enforcement order is made may apply to the registrar for a revocation of the order, and the Court may proceed to determine the matter of the alleged offence (Sch 7, cl 10(6) and cl 13). 40 It is plain enough, as the trial judge noted, that the perin procedure provides an enforcement agency with an alternative to commencing a proceeding by way of charge. In other cases concerned with the perin procedure, it has been said that the procedure is "administrative in character": see St Kilda City Council v Kenyon (1993) 18 MVR 349, at 357 per Ashley J; also Cameron, at 2; Zaffiro v Springvale City Council (unreported, Supreme Court of Victoria, 28 March 1996) at 1, 5 per Byrne J. Counsel for the respondent relied on this aspect of the perin procedure in submitting that, if an infringement penalty was imposed otherwise than by the service of an infringement notice, then the penalty was not imposed by a "court" within the meaning of s 82(3) of the Bankruptcy Act. (In this connection, see also G Webster, "perin Court Fines: Provable in Bankruptcy?" (1998) 72(7) Law Institute Journal 53 and Australian Law Reform Commission, Securing Compliance: Civil and Administrative Penalties in Australian Federal Regulation, Discussion Paper 65, April 2002, pars 14.36 - 14.39.) The respondent's argument was, in effect, that an infringement penalty was "imposed by a court" within s 82(3) in consequence of a proceeding instituted pursuant to a charge or following a referral of the matter of the alleged offence to the Court pursuant to cl 10(6) or cl 10A of Sch 7 of the Magistrates' Court Act, but not otherwise. 41 The respondent's analysis is supported by the fact that Sch 7 itself draws a distinction between an exercise of power by a registrar and the hearing and determination of the matter of an alleged offence by the Court: see, e.g., cl 13. As the respondent pointed out, in the Supreme Court of Victoria, Byrne and Beach JJ have held that an order for imprisonment in default of payment of a penalty does not fall within the expression "term of imprisonment imposed by a court" in s 16(1) of the Sentencing Act 1991 (Vic): see Cameron, at 12-14 and Alpay v Hargreaves (unreported, Supreme Court of Victoria, 29 October 1998) at 6-7, per Beach J; cf In re Savundra [1973] 3 All ER 406. In reaching this conclusion, Byrne J (with whom Beach J subsequently agreed) observed in Cameron, at 13: In my opinion, the expression 'term of imprisonment imposed … by a court' is not as wide as it might first appear. In R v Governor of HM Gaol, Coburg; ex parte Coman [1962] VR 375, Dean J, considering the legislative predecessor of s 15 of the Sentencing Act 1991, concluded that a term of imprisonment imposed in default of payment of a forfeited recognisance was not a term of imprisonment within the meaning of that section. These, like orders under the Imprisonment of Fraudulent Debtors Act, orders for attachment, maintenance orders or orders committing a person for contempt were equally not comprehended by the section in question before his Honour. In my opinion, orders for imprisonment in default of payment of a penalty imposed under the perin procedures likewise fall outside the purview of s 16. 42 In R. v Governor of Her Majesty's Gaol, Coburg; Ex parte Coman [1962] VR 375, Dean J held that a period of imprisonment served in default of payment either of a fine or the amount of a forfeited recognisance was not a term of imprisonment within the meaning of s 535 of the Crimes Act 1958 (as it then was). His Honour stated, at 377: In some senses, an order imposing a fine and in default of payment a period of imprisonment does impose a "term of imprisonment", but in other senses that is not the case. The context in which one finds s 535 makes it clear, I think, that "term of imprisonment" means that it is the punishment imposed for an offence. … The language of s 535 is inapt to describe a case where the punishment inflicted by a court is a fine and in default of payment of the fine a term of imprisonment. In such a case, the punishment inflicted by the court is a fine and the consequence of non-payment is the term of imprisonment which has been fixed by the court imposing the fine. I consider that orders under the Imprisonment of Fraudulent Debtors Act, orders for attachment, maintenance orders, orders committing a person for contempt of court and the like, are all analogous to the case where a person is imprisoned in default of payment of a fine. The above passage makes it clear that Dean J and, more recently, Byrne and Beach JJ, were concerned with another question of statutory construction, arising in an entirely different context. Their Honours were not concerned with the question whether an enforcement order made by a registrar pursuant to cl 5(1) of Sch 7 to the Magistrates' Court Act is aptly described as a penalty or fine imposed by a court in respect of an offence, for the purposes of s 82(3) of the Bankruptcy Act. 43 Putting aside these decisions, there are, plainly enough, important differences between the processes in Pt 2 of Sch 7 and the processes in proceedings instituted under the Magistrates' Court Act by way of charge. As the respondent noted, once an infringement penalty is registered, the registrar must make an enforcement order. At this stage, the registrar has no discretion in the matter. This, so the respondent submitted, was to be contrasted with the position of the Court, which in a proceeding under Sch 2 to the Magistrates' Court Act, retains a discretion with respect to such matters: cf, e.g., Re Higgins; ex parte Higgins and Nicholson (1984) 4 FCR 533 ("Re Higgins"). The respondent also contrasted the procedure under Sch 7 with that under Pt VII of the 1975 Act. 44 The absence of discretion in the registrar's making of an enforcement order and the administrative character of the perin process are not necessarily incompatible with a court process. Courts may exercise administrative powers from time to time, and a controlling statute may limit the extent of a relevant discretion. Although the making of an enforcement order is critical to the infringer's liability and, as a result of an enforcement order, a person incurs a liability to pay an infringement penalty and the prescribed amount for costs, there are other steps or stages in the process that confer relevant discretions on the registrar: see, e.g., cl 4(3), cl 7(2), cl 10(7)(b), and cl 10A of Sch 7. Whilst the registrar must make an enforcement order under cl 5(1) in the event of registration under cl 4(3), it does not follow that the enforcement order is not an order of a court (pursuant to which the penalty is imposed). Indeed, such a conclusion appears to be contrary to the express terms of cl 5(2) of Sch 7, which deems the enforcement order "to be an order of the Court". 45 We interpolate here that the respondent contended that a penalty or fine imposed by an order that is "deemed" to be an order of a court although, in reality, an order of a body other than a court, is relevantly different from a penalty or fine "imposed by a court", as s 82(3) of the Bankruptcy Act requires. The respondent's counsel referred to certain observations in El Ali v Government Insurance Office of New South Wales (1988) 15 NSWLR 303, at 310 per Kirby P and in Michael J Doyle and Associates (a firm) v Oronico Pty Ltd [2002] VSC 423 per Gillard J. As one might expect, an examination of these references shows that the effect of a deeming provision of this kind depends upon the relevant statutory context and the circumstances that are said to attract its operation. 46 We accept that there is a difference between an order of a court and an order of another body that, by virtue of statute, is deemed to be an order of a court. Is this difference relevant in deciding whether an enforcement order under cl 5(1) of Sch 7 of the Magistrates' Court Act falls within s 82(3) of the Bankruptcy Act? The respondent submits that it is and, again, relies on what is said to be the administrative character of the perin procedure and the fact that, as already noted, Sch 7 of the Magistrates' Court Act distinguishes between the perin process and the hearing and determination of "the Court". 47 In the present context, we reject the submission that an enforcement order, which is made by a registrar of the Magistrates' Court, and is deemed, by cl 5(2) of Sch 7, to be an order of the Court, is not aptly characterized as giving rise to a penalty or fine "imposed by a court in respect of an offence against the law". For the reasons referred to earlier, s 82(3) of the Bankruptcy Act exempts this class of debts and liabilities from the operation of s 82(1) of the Bankruptcy Act. We accept the appellant's submission that the amounts payable pursuant to an enforcement order under cl 5(1) of Sch 7 fall within the exempted class. The amount payable pursuant to an enforcement order is "the amount of the infringement penalty … and the prescribed amount for costs" (cl 5(1)). As Spender J said in Re Higgins, at 537, the amounts for costs are "but components of a total sum which has a punitive character in that non-payment … is visited by imprisonment": cf Sch 7, cl 5(1)(a). The penalty is payable pursuant to the order of a registrar who, by virtue of s 4(2) of the Magistrates' Court Act, is a part of the Magistrates' Court. The order is, moreover, deemed to be an order of the Court: see Sch 7, cl 5(2). By virtue of cl 5(1), the registrar constitutes the Court (as s 4(3) of the Magistrates' Court contemplates) when he or she makes an enforcement order. The penalty is payable in respect of the offence for which the infringement notice was issued: see the definition of "infringement penalty" in Sch 7, cl 2. If the penalty is not paid, it is to be recovered, in the case of an individual, by a penalty enforcement warrant: see Sch 7, cl 8(1). The reason that Sch 7 draws a distinction between the role of a registrar under Pt 2 of Sch 7 and a hearing and determination by the Court is that Pt 2 of Sch 7 is concerned with an alternative procedure for the imposition and the enforcement of penalties for parking offences. Both the ordinary court procedure (in this context governed by Sch 2) and the perin procedure are procedures of the Magistrates' Court and involve the imposition of a penalty by that Court (either by a magistrate or a registrar). So far as s 82(3) of the Bankruptcy Act is concerned, it is immaterial whether the Court imposing the penalty in respect of an offence is constituted by a magistrate or a registrar. The amount payable pursuant to an enforcement order under Sch 7 of the Magistrates' Court Act has the characteristics of a penalty or a fine imposed by a court in respect of an offence against a law, within the meaning of that provision. (We also note that s 82(3) of the Bankruptcy Act says nothing about any conviction for an offence and, as already noted, where an enforcement order is made, a person is not thereby taken to have been convicted of an offence.) can section 60 have any application? 48 Since the penalties imposed on the respondent were not provable debts within s 82(1) of the Bankruptcy Act, s 60(1)(b) can have no application. An enforcement order under cl 5(1) of Sch 7 of the Magistrates' Court Act is not an order within s 60(1)(b)(ii), because it is not an order "for the payment of a provable debt". Further, s 60(1)(b)(i) cannot apply because there is no provable debt for the purposes of any part of that paragraph. As the appellant observed, the circumstances of this case are entirely different from that which arose in Storey v Lane. 49 Storey v Lane was relevantly concerned with the conviction of Storey (who became bankrupt) for three offences. They were (1) paying a lesser amount of wages than that prescribed by a State award; (2) failing to pay an employee an amount of holiday pay; and (3) failing to keep a proper time and wages book. Storey was fined $100 plus costs for the first offence, and ordered to pay the amount of the wages underpaid. He was fined $100 for the second offence, and ordered to pay the amount of holiday pay unpaid. For the third offence, he was fined $30 and ordered to pay costs of $18. The High Court held that it was appropriate to exercise the power conferred by s 60(1)(b)(i) in respect of the orders made on the first and second offences, because the amounts of unpaid wages and unpaid holiday pay were provable debts, and the fines were pecuniary penalties in respect of the non-payment of these debts: see Storey v Lane, at 558 per Gibbs CJ. The Court, however, did not exercise the power conferred by s 60(1)(b) in respect of the order made on the third offence, because this order imposed a fine (plus costs) alone. It was not an order imposed in respect of the non-payment of a provable debt: Storey v Lane, at 558. 50 The enforcement orders in the present case are analogous to the order in respect of the third offence in Storey v Lane. The enforcement order is for a penalty or fine (plus costs) alone. The enforcement order made under cl 5(1) of Sch 7 to the Magistrates' Court Act is not in addition to an order for the payment of an infringement penalty. The enforcement order is not "in respect of the non-payment of a provable debt or of a pecuniary penalty payable in consequence of the non-payment of a provable debt" within s 60(1)(b)(i). Instead, the enforcement order is the source of the respondent's liability to pay the penalty or fine. 51 The conclusion we have reached follows from the language of s 82(3) and is confirmed by the policy that underlies this provision: see [29]-[33] above. Moreover, the policy of the Bankruptcy Act in this respect points towards acceptance rather than rejection of penalties or fines imposed for offences against the law through schemes such as perin, as being within the exempted class of debts and liabilities for the purposes of proof in bankruptcy. The policy of the Bankruptcy Act points, in this respect, against any unduly narrow construction of s 82(3) where, in reality, a penalty or fine has been imposed for a breach of the law. Furthermore, this policy embraces a penalty or fine imposed by a court for an offence irrespective of what the seriousness of the particular offence might be thought to be. disposition of the appeal 52 For the reasons given, we would allow the appeal. The orders made by the primary Judge should be set aside and the respondent's application to this Court should be dismissed. I certify that the preceding fifty-two (52) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Court.