CATCHWORDS Bankruptcy - bankruptcy notice ~ notice founded upon an order for costs made pursuant to the provisions of the Family Law Act 1975 - whether the issue of a bankruptcy notice is "a proceeding in a court" within the definition of the word "proceedings" as defined in s. 4 (1) of the Family Law Act 1975 - whether the issue of a' bankruptcy notice is of a ministerial or judicial nature. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES GENERAL DIVISION BANKRUPTCY DISTRICT OF THE STATE No. B 4012 of 1978 OF NEW SOUTH WALES AND THE AUSTRALIAN CAPITAL TERRITORY RE: LEONARD ARTHUR MADDOX EX PARTE: THE DEBTOR JUDGE MAKING ORDER: LOCKHART J. DATE OF ORDER: 27 MARCH 1979 WHERE MADE: , SYDNEY THE COURT ORDERS THAT: , The application be dismissed. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES GENERAL DIVISION BANKRUPTCY DISTRICT OF THE STATE No. B 4012 of 1978 OF NEW SOUTH WALES AND THE AUSTRALIAN CAPITAL TERRITORY RE; LEONARD ARTHUR MADDOX EX PARTE: THE DEBTOR id Phicchy 1979 LOCKHART J. REASONS FOR JUDGMENT This is an application to set aside a bankruptcy notice. The bankruptcy notice claims that the sum of $1,854.73 together with interest of $388.80, making a total of $2,243.53 is due by the judgment debtor to the judgment creditor under a final order obtained against the judgment debtor in the Supreme Court of New South Wales in its Family Law Division on 25 November 1974. The grounds of the application are that the order of the Supreme Court of New South Wales is not competent to found the issue of a bankruptcy notice as the Family Law Act 1975 operates to prohibit proceedings for enforcement of the order except under that Act. The facts are not in dispute. On 25 November 1974 the Supreme Court of New South Wales in its Family Law Division in suit No. 4793 of 1973 pronounced a decree nisi for dissolution cf the marriage of the petitioner Walter George Hodgkinson (the judgment creditor) and Diana Jean ..-f2 Hodgkinson and ordered the co-respondent (the judgment debtor) to pay the costs of the judgment creditor within 14 days after service of a certificate of taxation. On 9 April 1976 the Supreme Court of New South Wales in its Family Law Division made an order: "that the co-respondent pay the costs of the husband of and incidental to this suit including the husband's costs of the application of the wife dated the 28th November, 1973". There is no evidence as to the nature of the proceedings on 9 April 1976 or as to the nature of the application of the wife dated 28th November 1978; but it is agreed by the parties that this is immaterial. On 16 July 1976 the taxing officer of the Supreme Court of New South Wales in its Family Law Division certified that pursuant to the orders made on 25 November 1974 and 9 April 1976 the costs of the petitioner as between party and party had been taxed and allowed at the sum of $1,854.73. _The description of the claim of the judgment creditor in the bankruptcy notice is incorrect. Leaving aside the claim for interest, the sum of $1,854.73 is the amount of taxed costs pursuant to the two orders of the court made on 25 November 1974 and 9 April 1976; yet the bankruptcy notice describes the final order as being made by the court on 25 November 1974 with no reference to the later order. The judgment debtor does not suggest that these matters invalidate the bankruptcy notice. A preliminary question was argued before me, namely 2/3 -3- whether the issue of a bankruptcy notice is within the definition of the word "Proceedings" as defined in s. 4 (1) of the Family Law Act 1975. It is agreed between the parties that if the answer to this question is in the negative the application is to be dismissed. If the answer to the question is in the affirmative, then a further question arises namely, whether the issue ' of a bankruptcy notice answersthe description of a "matrimonial cause" within the meaning of s. 4 (1). It is agreed between the parties that this question, if it arises, is to be determined by the court later. The Family Law Act 1975 came into operation on 5 January 1976. Section 8 (1) (a) provides:- "8, (1) After the commencement of this Act - (a) proceedings by way of a matrimonial cause shall not be instituted except ~- under this Act;..." Some of the definitions in s. 4 (1) are relevant:- "matrimonial cause" means "(a) proceedings between the parties to a marriage for a decree of - (i) dissolution of marriage; .:. (f) any other proceedings (including proceedings with respect to 'the enforcement of a decree or the service of process) in relation to concurrent, pending or completed proceedings of a kind referred to in any of paragraphs (a) to (e), including proceedings of such a kind pending at, or completed before, the commencement of this Act; " "proceedings" means "a proceeding in a Court, whether between parties or not and includes cross proceedings or an incidental proceeding | in the course of or in connexion with a proceeding "decree" means "decree, judgment or order, -4- and includes a decree nisi and an order dismissing an application or refusing to make a decree or order;" The answer to the question whether the word "proceedings" encompasses the issue of a bankruptcy notice involves an analysis of the essential character of a bankruptcy notice and of the capacity in which the "registrar in bankruptcy acts when issuing the notice. It was held by the High Court in Bond v. George A. Bond & Co. Ltd. & Bond's Industries Limited (1930) 44 C.L.R. 11 that the issue by the registrar in bankruptcy ("the registrar") of a bankruptcy notice under the Bankruptcy Act 1924 was entirely ministerial. See also James v. Deputy Commissioner of Taxation (1957) 97 C.L.R. 23 per Dixon C.J. Fullagar and Kitto JJ. at p. 32. In Re Moss; Ex parte Tour Finance Limited (1969) 15 F.L.R. 101, Gibbs J. took the same view of a bankruptcy notice issued under the Bankruptcy Act 1966. Parliament has vested in the registrar the exercise of the power to issue a bankruptcy notice: s. 41 (1) (b) of the Bankruptcy Act 1966. The office of registrar is created by the Act: s. 14. He is not an officer or functionary of the court. He is a Commonwealth officer in whom certain ministerial or administrative functions are vested. As to the distinction between judicial functions and ministerial or administrative functions, see Huddart Parker & Co. Pty. Ltd. v. Moorehead (1909) 8 C.L.R. 330 at pp. 356 -— 358, 377 - 379; Le Mesurier v. Connor (1929) 42 C.L.R. 481; and Bond's Case (supra). .-/5 -5- Section 12 (5) of the Bankruptcy Act 1929 provided that:- "the Registrars and Deputy Registrars shall be controlled by the Court and shall have such duties as the Attorney-General directs or as are prescribed." , Section 23 of the Bankruptcy Act 1929 provided:- "The Registrar may exercise such of the powers duties and functions of an administrative nature exercisable by the Court as the Court directs or authorises him to exercise." In Bond's Case the High Court held that so much of those sections as enabled the Supreme Court of New South Wales exercising Federal jurisdiction in bankruptcy to give directions or authority to the Federal Registrars to perform ministerial acts and placed upon the Registrars an obligatio to conform to such directions and execute such authority, was valid. Rich and Dixon JJ. said at pp. 20 and 21:- "It is not easy to get a clear appreciation of the meaning and legal effect of the indefinite expression 'controlled by the Court,' but it seems to amount to no more than requiring the Registrar to comply with the Court's orders and directions. Instead of forming part of its official system and exercising the authority of an office in the Court, the Registrar is now to be a stranger to the Court and its organization. But the Registrar is, nevertheless, to be amenable to the Court's orders and directions, if it choose to give him any. The purpose of the amendment of sec. 12 (5) and of sec. 23 appears to have been to put the Registrar at the disposal of the Court as a person bound by law to comply with its requirements. Such a scheme has the strange result of making the off: of Registrar in Bankruptcy, an office which, in spite of its name, is not attached to a Court at all. Unlikely as otherwise it might seem that the Legislature should mean that there should be Registrars who did not belong to Courts it must ..-/6 aR eth ae ili id ele ab lh nen all lh nla ae nha nt oti sli sma a caarnain stil eases rei las nove «ls -6- yet be remembered that sec. 12 (2) of the Bankruptcy Act 1924-1928, when it constituted the Registrars in Bankruptcy, did so not in respect of Courts, but in respect of Districts. Moreover, the amendments were evidently drawn to remove the vice found in the provisions to be amended, and it must have been plain that this could not be done if, either in substance or in form, the Registrar were given an official position in a State Court. When it appeared that it was beyond the power of the Parliament to make the Registrar an officer of State Courts exercising the authority and jurisdiction of those Courts, it seems to have been thought that it was possible at least to utilize that official for the purpose of executing such commands and exercising such authority as the Courts might lay upon or commit to him." ' Section 14 (3) of the Bankruptcy Act 1966 provide "A Registrar or a Deputy Registrar may exercise such of the powers and functions of an administre ive nature exercisable by the court as the court directs or authorises him to exercise." Its language is the same as s. 23 of the Bankrupt Act 1929 and therefore doubtless susceptible of the same comments as were made by Rich and Dixon JJ. as to s. 23 of the Bankruptcy Act 1929 in Bond's Case. There may be a question whether the decision of the High Court in Bond's Case is reconcilable in all respects with its later decisic in R. v. Kirby; Ex parte Boilermakers' Society of Austral: (1956) 94 C.L.R. 254 affirmed by the Privy Council in Attorney General of the Commonwealth of Australia v. The Queen (1957) 95 C.L.R. 529; although the applicability of that decision in Australia today may be open to some question in view of certain subsequent decisions of the High Court including R. v. Joske; Ex parte Australian Building Construction Employees and Builders' Labourers' Federation (1974) 130 C.L.R. 87; and R. v. Joske; Ex Par 6/7 \ ~-7- Shop Distributive and Allied Employees' Association (1976) ' 135 C.L.R. 194. However, none of the decisions of the High Court after Bond's Case say anything to deny that the act of the registrar in issuing a bankruptcy notice is purely _ ministerial and not of a judicial character. In Re Moss (supra) Gibbs J. said at p. 107:- " A function which' in itself does not possess any of the elements normally characteristic of judicial power may, however, involve the exercise of judicial power either because the legislature has committed its exercise to a court, or because the function has invariably or consistently been regarded as one that is appropriate for discharge by the courts. (See S R. v. Davison (1954) 90 C.L.R. at pp. 369, 382, 368.)" His Honour held that there was nothing in the Bankruptcy Act 1966 to suggest that the act of the registrar in fixing the time for compliance with a bankruptcy notice is intended to be regarded as the act of the court. I 'respectfully agree with his Honour's conclusion and reasons. I would only add for my part that the same is true of the ac of the registrar in issuing the bankruptcy notice itself. In my opinion the issue by the registrar of a bankruptcy notice does not answer the description of "proceedings" in the definition of that word in s. 4 (1) of the Family Law Act 1975. As to this I respectfully agree with the following passages from the judgment of Gibbs J. in Re Moss (supra) at pp. 105-106:- "It is true that speaking in the broadest sense, and for some purposes, it may besaid that bankruptcy proceedings are commenced by the making of an application for the issue of a bankruptcy notice (cf. In re A Judgment Debtor 1939 1 Ch. 60° at p. 607). It is, however, begging the question ../8 -8- to say that judicial proceedings are commenced by such an application. An application for the issue of a bankruptcy notice is made for the purpose of forcing the debtor either to comply with the notice or to commit an act of bankruptcy. If a debtor has failed to comply with a bankruptcy notice and has thereby committed an act of bankruptcy, a creditor may, if certain other conditions are satisfied, present a petition for the making of a sequestration order (s. 43 of the Bankruptcy Act 1966). On the hearing of the petition it is the duty of the court to decide whether an act of bankruptcy has been committed, and if it finds that none was committed the proceedings will fail (see s. 52). In other words, the commission of an act of bankruptcy is something that must have occurred before proceedings for a sequestration order are commenced. It cannot be said that the fact that a sequestration order may follow the commission of an act of bankruptcy makes everything which led to the commission of the act of tankruptcy part of the judicial process by which a sequestration is brought about. In the case of most of the other acts of bankruptcy described in s. 40 of the Bankruptcy Act 1966 the commission of the act of bankruptcy does not involve the taking of proceedings at all. In one case, that mentioned in s. 40 (1) (da), where execution has been issued under process of a _court and the debtor's property has in consequence - , either been sold or held by the sheriff for twenty-one days or such execution has been returned unsatisfied, the act of bankruptcy results from the taking of a proceeding, which, however, is not a bankruptcy proceeding. In the case of the act of bankruptcy now in question, the application to the Registrar to issue a bankruptcy notice is a proceeding, but it is a proceeding different from and preliminary to that which leads to the making of a sequestration order. In my opinion, the judicial process by which a sequestration is brought about is commenced when the petition is presented, and the act of the Registrar in fixing the time for compliance with a bankruptcy notice can neither be regarded as a step in that J judicial process nor treated as an exercise of judicial power simply because it may be followed by an exercise of judicial power." The issue of a bankruptcy notice is a power specially vested by the Legislature in the registrar. He ..-/9 ~9- does not exercise that power as an officer or delegate of the court. The act of the registrar in issuing a bankruptcy notice is not a step in any proceeding in the court. The judicial process which leads to the making of a sequestration order is commenced with the presentation of the petition and not before. It is true that the issue of a bankruptcy notice may be followed by various instances of the exercise of judicial power. The judgment debtor, on whom the bankruptcy notice is served, may file an affidavit pursuant to s. 41 (7) before the expiration of the time fixed for compliance with the bankruptcy notice to the effect that he has a counter-clain, set-off or cross demand such as is referred to in paragraph (g) of sub-section (1) of s. 40 of the Bankruptcy Act 1966. The filing of that affidavit with the registrar operates per se to extend time for compliance with the requirements 'of the bankruptcy notice until the court has determined whether it is satisfied that the judgment debtor has such a counter-claim, set-off or cross demand. However, the act of the registrar in issuing a bankruptcy notice is not converte into part of the judicial process merely because the issue of the bankruptcy notice may be followed by an exercise of judicial power, In my opinion not only is the issue by the registrar of a bankruptcy notice not a proceeding in a court within the definition of the expression "proceedings where appearing in s. 4 (1) of the Family Law Act 1975, .--/10 -~10- nor is the issue of a bankruptcy notice "an incidental proceeding in the course of or in connexion with a proceeding" where appearing in the inclusive provisions of the definition of "proceedings" in s. 4 (1). It is true that the words "in connexion with" are of the widest import; but, in my opinion, the "incidental proceeding" must itself be an incidental proceeding in a court in order to fall within the statutory definition of. the word "proceedings". . Even if this were not so, and a proceeding could be characterised as "incidental" whether it be itself a proceeding in a court or not, it would be necessary that the incidental proceeding be "in the couse of or in connexion with a proceeding". The word "proceeding" where lastly appearing in the definition of the word "proceedings" must itself be a proceeding in a court. The issue of a bankruptcy notice does not answer that description. It is not issued in the course of or in connexion with any proceeding in a court. The fact that the exercise of judicial power may follow the issue of a bankruptcy notice does not transmute a purely ministerial function into one of judicial character. For these reasons in my opinion the application fails. I order that the application be dismissed. I will hear argument on the question of costs if either party wishes to address me. .o/11 -11- 1 certify that this and ine Yew (12) eding pages are a trug copy ci ihe acemont herein cf his Honour easons fer Jucomes low 1979 IN THE FEDERAL COURT OF AUSTRALIA ) | AUSTRALIAN CAPITAL TERRITORY F.C. No. 21 of 1979 DISTRICT REGISTRY GENERAL DIVISION In the matter of THE DIPLOMATIC AND CONSULAR MISSIONS ACT 1978 BETWEEN: PETER DREW _DURACK Applicant AND: MARIO SIME DESPOJA Respondent REASONS FOR JUDGMENT Smithers J. 7 August, 1979 .. -HIS HONOUR: A notice of motion is before the Court seeking orders under ss. 4 and 5 of the Diplomatic and Consular Missions Act 1978. On the evidence I find that it is established that the respondent to this application, has been guilty of conduct in relation to a diplomatic or consular mission of a country established in Australia with the consent of the Commonwealth, namely Yugoslavia, by way of displaying or causing or permitting to be displayed, on or outside premises (other than premises at which an office of the mission of the country concerned is located) signs, flags and insignia which imply or are reasonably capable of being taken to imply that there is located at the premises at 34 Canberrée Avenue, Forrest in the Australian Capital Territory an office of a mission or residence of a member of a mission that represents in a diplomatic or consular capacity a part of the country of T25C Yugoslavia, namely, Croatia. And I make the finding that the conduct proved is conduct described also in s. 4(2) (b) of the Act. It was put to me by Mr Lioyd-Jones for the respondent that the insignia and flag and sign which was erected on the premises did not have the implication that the premises concerned had a diplomatic significance, that they were : nothing more than evidence of a protest by a section of the Croatian people living in this country, that they indicated only a meeting place oer an information centre, or that the conduct does not affect Australia. I cannot accede to these propositions. To my mind, it is quite clear that to put up the words "Croatian Embassy" eliminates all ambiguity and implies without doubt that the premises concerned are premises of a diplomatic mission of a place called Croatia, although Croatia is in fact part of Yugoslavia, and they imply more, namely, that those responsible*challenge and that these premises are an outward manifestation of a challenge to the -fact that Croatia is part of another country which is governed as an accepted independent country of the world. PSP SPO ECS NaC 2 SU TO That country, Yugoslavia, is one with which Australia is in friendly relationship. There cannot really be any doubt that if Australia permitted conduct of the kind we are dealing with to be pursued, Yugoslavia would be justified in thinking that Australia was unco-operative and Sag ey CEN CVT RCESRD YS ee 9 T26C/1/NF 56 7/8/79 Despoja canes: eae. leet, een we eM Aenea a aie BG sake T26C indeed unfriendly and relationships would certainly become detrimentally affected. It is therefore part of the good government of Australia, as a matter of government in its external erfairs, that it should take steps which are reasonably necessary to prevent the kind of conduct which has been committed in this case. It is quite inimical to good relations with other countries that minorities in this country adopting the mantle of official diplomats should be able to make public declarations concerning the invalidity of the government of another nation with respect to part of its territory. Mr Lloyd-Jones also argued that an injunction should not go, partly because the government of Australia had been tardy in asserting its rights under the Act and partly on the ground that there was no evidence that this particular mission is doing any harm. Whether an injunction should go, it seems to me, notwithstanding the fact that no action was taken for a year must be determined by reference to the evil which exists and is likely to exist if an injunction is not made.. ; In a subject matter of this kind, I do not regard the tardiness in taking action as a ground for refusing an injunction. The interests of Australia which the Act is intended to protect become more prejudicially affected the longer the conduct is permitted to proceed, and it is in the interests of Australia that an injunction must go at this stage, although it did not go earlier. And the. injunction, it appears to me, is justified by virtue of s.4(3) and (6), and s. 5 of the statute. Accordingly, I think, that the Attorney-General has made a case for an injunction in this case and that the relief in the terms of paragraphs 1, 3 and 4 of the notice of motion should be made, and accordingly I make _the same. MR LLOYD-JONES: Your Honour, I think the appropriate course is for me to ask for a stay of proceedings for a period of 28 days, your Honour, to allow the situation to be looked at. HIS HONOUR: Twenty-eight seems a little long.. It will not take long to take down these things, will it? MR LLOYD-JONES: Twenty-one days, your Honour. T27C/1/NF : 57 71/8/79 Despoja ' HIS HONOUR: Twenty-one days, Mr Masterman. Have you T27C/2/NF Despoja got any objection? In view of the time that has been taken already, it seems to me a perfectly reasonable request, and I therefore grant a stay of 21 days. We will adjourn sine die. AT 12.41 P.M. THE MATTER WAS ADJOURNED INDEFINITELY 58 7/8/79