Thomas v Ducret

High Court of Australia|1981-02-11|Before: Deane JJ, Smithers J

The applicant pleaded guilty before the Federal Court (Smithers J.), sitting in Melbourne, to nine charges of offences created by the combined effect of s. 5 of the Crimes Act 1914 Cth, as amended, and ss. 59(2) and 79(1) of the Trade Practices Act 1974 Cth, as amended. By these pleas the applicant admitted to the following facts. A corporation, Colourshot Pty. Ltd., in trade or commerce invited a number of persons to engage or participate in a business activity requiring the investment of money by the persons concerned and the performance by them of work associated with the investment. The corporation made, with respect to the profitability of risk or other material aspect of the business activity, statements that were false or misleading in a material particular. That conduct of the corporation amounted to contravention of s. 59(2) of the Trade Practices Act, and the effect of s. 79(1) of that Act was that the corporation was guilty of a number of offences. The pleas further amounted to an admission that the applicant was knowingly concerned in the commission of the offences and by s. 5 of the Crimes Act was deemed to have committed the offences and to be punishable accordingly. The learned judge passed sentence on 11 February 1981; in respect of each offence he imposed a fine; the fines imposed total $35,000. The learned judge said in the course of his reasons that he thought that by virtue of s. 18A of the Crimes Act and ss. 82 and 106 of the Magistrates (Summary Proceedings) Act 1975 Vict it was mandatory on the court to fix a period of imprisonment in the case of each fine. Acting on this view in each case he ordered (by par. 2 of each of the nine formal orders) that the applicant pay the fine imposed within twenty-one days after service on him of a notice given by the Registrar under s. 106(1)(c) and (d) of the Magistrates (Summary Proceedings) Act and that should he default in the payment of such fine he should be imprisoned for six months. He said that the effect of his orders was that should the applicant default in the payment of all the fines he would be imprisoned for a total period of four years and six months. However he did not direct that the periods of imprisonment to be served in default of payment of the fines should be cumulative.

In each case the applicant gave notice of appeal to the Full Court of the Federal Court on a number of grounds. The appeals came on for hearing on 30 July 1981. The solicitor for the applicant informed the court that he had no instructions and withdrew his appearance. The court was informed that the applicant had been told that the matter was listed for hearing on that date, but that the solicitor had since tried to find him without success. The appeals were accordingly dismissed and it was ordered in each case that the applicant pay the fine within fourteen days of 30 July 1981. No explanation has been furnished to us of the failure of the applicant to keep in touch with his solicitor or to attend at the hearing of the appeal in the Federal Court. In these circumstances normally the Court would not entertain an application for special leave to appeal. However for reasons that will appear the case is one in which special leave should be granted, and indeed the respondent very properly conceded that two of the grounds raised matters of public importance and did not oppose the grant of special leave so far as those grounds were concerned. The time for making this application has already been extended.

It should be added that we have been informed, although there is no evidence before us, that the applicant paid $2,000 of the fines and served fourteen months imprisonment under the orders but is at present on bail.

It was first submitted for the applicant that the Federal Court had no jurisdiction to hear the charges. That submission may be shortly dealt with. By s. 86 of the Trade Practices Act jurisdiction is conferred on the Federal Court to hear and determine actions, prosecutions and other proceedings under Pt VI of the Act. Section 79 is contained in Pt VI. The effect of s. 5 of the Crimes Act is that the applicant is deemed to have committed offences against s. 79. In Mallan v. Lee [1] , Latham C.J., in the course of a discussion of the effect of s. 5 of the Crimes Act, said [2] :

But s. 5 provides no penalty for any offence. In order to ascertain what penalty is permissible it is necessary to look at the "law of the Commonwealth" against which the offence has been committed. The person is deemed to have committed an offence against that law and is "punishable accordingly." Thus the penalty applicable is the penalty appropriate to the offence against the law of the Commonwealth which a defendant is deemed to have committed. That is the offence for which he is prosecuted, and the law relating to prosecutions for that offence is the law which is applicable. The law relating to prosecutions for an offence against s. 79 of the Trade Practices Act was applicable. Plainly the Federal Court had jurisdiction. 1. (1949) 80 C.L.R. 198. 2. (1949) 80 C.L.R., at p. 212.

The next submission made on behalf of the applicant was more substantial. It was that the learned trial judge had no power to order imprisonment in default of payment of the fines. Section 79(1) of the Trade Practices Act provides that an offence by a person not being a body corporate is punishable on conviction by a fine not exceeding $10,000. The section does not empower the court to order imprisonment in default of payment of the fine and it was common ground that there is no Commonwealth law which has that effect in a case such as the present. The learned trial judge, following his own decision in Wilde v. Menville Pty. Ltd. [3] , held that ss. 82 and 106 of the Magistrates (Summary Proceedings) Act were rendered applicable to the cases before him by s. 18A of the Crimes Act. Both s. 18A and s. 106 have been amended since the date on which the judge made the orders, and the provisions of s. 106(1)(b) have been replaced by s. 10 of the Penalties and Sentences Act 1981 Vict. However at the relevant time s. 18A(1) of the Crimes Act, so far as it was material, provided as follows:

The laws of a State or Territory with respect to the enforcement of fines ordered to be paid by offenders, including laws making provision for or in relation to -

(a) the awarding of imprisonment in default of payment of fines;

shall, so far as those laws are applicable and are not inconsistent with the laws of the Commonwealth, apply and be applied to persons who are convicted in that State or Territory of offences against laws of the Commonwealth. Section 82 of the Magistrates (Summary Proceedings) Act gave a Magistrates' Court or a stipendiary magistrate power, inter alia, to allow time for payment of any sum of money adjudged to be paid. Section 106(1) of that Act, as in force at the relevant time, provided, inter alia: Notwithstanding anything in any Act where a Magistrates' Court stipendiary magistrate or justice imposes a fine the following provisions shall apply: -

(b) Except in the case of a corporation the Court magistrate or justice shall order that in default of payment of the amount of the fine the offender shall be imprisoned -

(iv) where the amount of the fine exceeds $250 but does not exceed $500 - for a term of not more than six months;

(v) where the amount of the fine exceeds $500 - for a term of not more than twelve months.

Section 106 in terms applies only where a Magistrates' Court stipendiary magistrate or a justice imposes a fine. The question for decision is whether, as Smithers J. thought, s. 18A of the Crimes Act requires so liberal an approach that any law of the State which deals with the topic of the enforcement of fines imposed on convictons for summary offences should be applied by a judge of the Federal Court who imposes a fine. 1. (1981) 50 F.L.R. 380.

Section 18A is a section similar in intent to s. 79 of the Judiciary Act. The effect of the latter section was considered in John Robertson & Co. Ltd. v. Ferguson Transformers Pty. Ltd. [4] . In that case Gibbs J. said [5] :

It is also settled that s. 79 does not give a new and more extensive meaning to State laws which it renders binding on a court exercising federal jurisdiction; it applies those laws with their meaning unchanged: Commissioner of Stamp Duties (N.S.W.) v. Owens [No. 2] [6] ; Pederson v. Young [7] ; Re Young's Horsham Garage Pty. Ltd. [8] . To that last proposition it is, however, necessary to add a qualification. Section 79 may render applicable in a court exercising federal jurisdiction a State statute which either by its express provisions or upon its proper construction is limited in its application to the courts of the State: see per Menzies J. in Pederson v. Young [9] . If the laws of a State could not apply if, upon their true construction as State Acts, they related only to the courts of the State, it would seem impossible ever to find a State law relating to procedure, evidence or the competency of witnesses that could be rendered binding on courts exercising federal jurisdiction, because most, if not all, of such laws, upon their proper construction, would be intended to apply in courts exercising jurisdiction under State law. Mason J. said [10] : The broad purpose of s. 79 is to ensure that the laws of the States are applied by courts in the exercise of federal jurisdiction. In general that purpose is achieved by the application of a State law according to its terms. Indeed, s. 79 contains no express provision which would enable a court exercising federal jurisdiction to alter the language of a State statute and apply it in that altered form. However, the presence of the words "including the laws relating to procedure evidence and the competency of witnesses" exhibits a clear intention that State laws relating to those topics should apply to federal jurisdiction. This purpose would fail partly in its objective if State laws on these topics are to be given a literal application under s. 79 by courts other than State courts. State laws dealing with matters of procedure, as the earlier consideration of s. 37 of the Limitation of Actions Act has shown, are often expressed so as to apply to State courts only, and in some instances they refer to particular State courts.

To ensure that State laws dealing with the particular topics mentioned in the section are applied in the exercise of federal jurisdiction by courts other than State courts, it is necessary that State laws be applied according to the hypothesis that federal courts do not necessarily lie outside their field of application. Section 79 requires the assumption to be made that federal courts lie within the field of application of State laws on the topics to which it refers, at least in those cases in which the State laws are expressed to apply to courts generally. This departure from the general principle that the section requires a State law to be applied according to its terms is justified, indeed demanded, by the clear requirement that State laws on the topics mentioned are to be applied in federal jurisdiction. Whether that requirement supports the broader view that a similar approach is to be taken in applying s. 79 to substantive as well as procedural laws it is not now necessary to determine.

Although their Honours differed in the result, the principle that they were stating was the same. In its application to s. 18A(1)(a) it has the following effect. The laws of a State with respect to the enforcement of fines, including laws making provision for the awarding of imprisonment in default of payment of fines, shall, so far as they are applicable and not inconsistent with the laws of the Commonwealth, apply to an offender who has been convicted in a federal court of an offence against a law of the Commonwealth and ordered to pay a fine, notwithstanding that the State laws are in their terms confined to persons convicted in State courts of offences against the laws of the State. To that extent, and to that extent only, the State laws are given an expanded meaning. Otherwise the laws are applied with their meaning unchanged. It was a misapprehension of the effect of the judgments of Gibbs and Mason JJ. in John Robertson & Co. Ltd. v. Ferguson Transformers Pty. Ltd. [11] which led Smithers J. to the conclusion which he reached in Wilde v. Menville Pty. Ltd. [12] A proper understanding of the effect of those judgments leads to the conclusion that s. 106 of the Victorian Act, which applies only to Magistrates' Courts, stipendiary magistrates and justices, has no application to an offender convicted by a judge of a superior court such as the Federal Court. The same of course is true of s. 82, although that section is of less importance in the present case. 1. (1973) 129 C.L.R. 65. 2. (1973) 129 C.L.R., at p. 88. 3. (1953) 88 C.L.R. 168. 4. (1964) 110 C.L.R., at pp. 165-166. 5. [1969] V.R. 977, at p. 979. 6. (1964) 110 C.L.R., at pp. 167-168. 7. (1973) 129 C.L.R., at p. 95. 8. (1973) 129 C.L.R. 65. 9. (1981) 50 F.L.R. 380.

At the material time, there was no law of Victoria which enabled a judge who dealt summarily with an offender and imposed a fine to impose a sentence of imprisonment in default. Section 439(1)(a) of the Crimes Act 1958 Vict, as amended, did (and does) provide that "Where any person is adjudged by the Supreme Court or the County Court to pay a fine in respect of any indictable offence the Court shall order that in default of payment of the fine the person be imprisoned. " The section is clearly limited to indictable offences, perhaps because in Victoria only offences of that kind may be tried before the Supreme Court or the County Court. It follows from what has been said that the section had no application in the present case where the applicant was not convicted of an indictable offence.

By O. 37, r. 7 of the Federal Court Rules, the Federal Court may, in order to enforce a judgment or order of the Court, (inter alia) make any order that could be made by the Supreme Court of the State in which the order is to be enforced. That rule was not relied on by the respondent, and is of no assistance for a number of reasons, of which it is sufficient to mention only one. Order 37, r. 7 is concerned with the enforcement of orders already validly made as distinct from conferring a power to make orders in the first instance, or validating orders already made, and it does not empower a judge imposing a fine to order the offender to be imprisoned in default of payment of the fine.

For these reasons, Smithers J. had no power to make the order of imprisonment in default of payment of a fine which he purported to make by par. 2 of each of his orders. This lack of power may well have been an unintended gap in the law, which was due to the fact that Victoria, unlike some other States, had no law which empowered a judge to award imprisonment in default of payment of a fine ordered to be paid by an offender convicted of an offence which was not an indictable offence. It is unnecessary to consider whether subsequent amendments to the law of Victoria have altered the position.

It was further submitted on behalf of the applicant that Smithers J. was in error in stating that the effect of his various orders was that the imprisonment to be served on default of payment of fines was to be cumulative. On behalf of the respondent it was argued that s. 123 of the Community Welfare Services Act 1970 Vict had this effect. However s. 19(2) of the Crimes Act Cth provides:

Where a person is convicted of more offences (whether indictable or otherwise) than one before the same Court at the same sitting and is sentenced to more than one term of imprisonment, the Court may direct that the sentences shall be concurrent or cumulative. It appears, as a matter of first impression, that the intent of this sub-section is that one sentence is cumulative upon another only if the court so directs. If that is so, and if s. 123 leads to a different result, the latter section would be inconsistent with s. 19 and would therefore not be rendered applicable either by s. 18A of the Crimes Act or by s. 79 of the Judiciary Act. However, it is unnecessary to decide that question.

For these reasons it follows that special leave to appeal should be granted, and that the appeals should be allowed. In each case the order made by Smithers J. should be varied by deleting the second paragraph therefrom.

High Court of Australia Gibbs C.J. Mason, Murphy, Wilson and Deane JJ. Thomas v Ducret [1984] HCA 12

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