JUDGMENT No. 4 927,88. se CATCHWORDS Bankruptcy - application to annul bankruptcy - para. 154 (1) (a) of Bankruptcy Act 1966 - whether sequestration order "ought not to have been made" - what constitutes personal service under Rule 1i5 of the Bankruptcy Rules - whether bankruptcy should be annulled. Extradition - whether circumstances of extradition of debtor to Australia may be taken into account in deciding application under para. 154 (1) (a) of the Bankruptcy Act 1966. Public International Law - whether 1ssue concerning conduct of foreign relations between Australia and Germany ""non- justicizable" in court exercising federal jurisdiction - speciality undertaking in extradition - consequences in municipal law of breach thereof and of false statements made in relation thereto. Constitutional Law - extent of the executive power of the Commonwealth to seek extradition in absence of treaty. Acts Interpretation Act 1901 Crimes Act 1914 Income Tax Assessment Act 1936 Passports Act 1938 Bankruptcy Act 1966 Extradition (Foreign States) Act 1966 Crimes (Taxation Offences) Act 1980 Director of Public Prosecutions Act 1983 The Australia Act 1966 dudiciary Act 1903 Bankruptcy Rules Federat Court Rules Companies (NSW) Code English Rules of the Supreme Court 5 d 1852 English Common Law Procedure Act Vitzdamm-Jones v Vitzdamm-Jones (1981) 148 CLR 383 Re Anasis; Ex parte Total Australia Ltd. (1985) 63 ALR 493 Re Williams (1b85) I3 FLR id Re Scott (1975) 6 ALR 558 Re Hedrlin; Ex parte Donnelly (Full Court, 29 October 1987, unrep. ) Barton v The Commonwealth (1974) 131 CLR 477 In re Long; Ex parte Fraser Confirming Pty. Ltd. (1975) 12 SASR 13 Re Williams; Ex parte Alberton Electrical Service Pty. Ltd. (1982) 43 ALR 2 Pino v Prosser [1967] VR 835 Pigeon v Bruce and Dobson (1818) 8 Taunt. 410; 129 ER 441 Davidson v McCarten [1953] VLR 697 Rudd v John Griffiths Cycle Company Ltd. (1897) 23 VLR 350 Thomson v Pheney (1832) 1 Dowling's Practice Cases 411 Re Frank; Ex parte Pilisky (Fisher J., 23 October 1987, unrep.) Rozenbes v Kronhill (1956) 95 CLR 407 Re Mitchelson (1979) 39 FLR 366 Watkins v North American Land and Timber Company (Limited) (1904) 20 TLR 534 (HL) Levinge v Director of Custodial Services (1987) 9 NSWLR 546 Ker v illinois 119 US 436 (1886) Minister for Arts, Heritage and Environment v Peko-Wallsend Ltd. (1987) 75 ALR Baker v Carr 369 US 186 (1962) Philip Morris Inc. v Adam P. Brown Male Fashions Pty. Ltd. (IS8r} 148 CLR 457 Crouch-v Commissioner for Railways (Queensland) (1985) 159 CLR 22 Ffrost v Stevenson (1937) 58 CLR 528 A-G (U.K.) v Heinemann Publishers Australia Pty. Ltd. (High Court of Australia, 2 June 1988, unrep.) Bradley v The Commonwealth (1973) 128 CLR 557 Corporate Affairs Commission v Bradley [1973] 1 NSWLR 382 Carl Zeiss Stiftung v Rayner & Keeler Ltd. (No. 2) (1967] I Ac 853 R v Secretary of State; Ex parte Trawnik ("The Times", 21 February 19 A-G v Nissan [1970] Ac 179 c.C.S.U. v Minister for the Civil Service {1985] 1 Ac 374 Rv Burgess; Ex parte Henry (1936) 55 CLR 608 Ingram v The Commonwealth of Australia (1980) 54 ALUJR 395 Simsex v McPhee CLR Tasmanian Wilderness Society Inc. v Fraser (1982) 153 CLR 270 Schlieske v Minister for Immigration and Ethnic Affairs (Full Court, F March 1988, unrep.) South Australia v The Commonwealth (1962) 108 CLR 130 Gerhardy v Brown (1985) 159 CER 70 Huntington v Attrill [1893] ac 150 Ramirez dé Arellano v Weinberger 745 F 2d 1500 (1984) Underhill v Hernandez US 2 (1897) International Association of Machinists v OPEC 649 F 2d 1354 Sharon v Time Inc. 599 F Supp. 538 (1984) Airline Pilots Association v Taca International Airlines S.A. 748 F 2d 965 (1981) Buttes Gas and Oil Co. v Hammer [1982} AC 888 Callejo v Bancomer S.A. 764 F 2d 1101 (1985) Gunaleela v Minister for Immigration and Ethnic Affairs (1987) 74 ALR 263 Fiocconi v Attorney-General of the United States 462 F 2d 475 (1972) United States v Rauscher 119 US 407 (1886) Trimbole v The Commonwealth of Australia (1984) 155 CLR 186 United States v Jetter 722 F 2d 371 (1983) United States v Molina-Chacon 627 F Supp. 1253 (1986) Ahern v Deputy Commissioner of Taxation (1987) 76 ALR 137 Collins v O'Neil 214 US 113 (1909) Collins v Johnston 237 US 502 (1915) A-G (N.T.) v Minister for Aboriginal Affairs (1987) 73 ALR 33 Re Finn (1982) 58 FLR 54 Re Maxwell (Beaumont J., 4 February 1987, unrep.) RE: GRANT ANTHONY DITFORT EX PARTE: DEPUTY COMMISSIONER OF TAXATION NSW 1577 of 1986 CORAM: GUMMOW J. PLACE: SYDNEY. DATE: 3 JUNE 1988. IN THE FEDERAL COURT OF AUSTRALIA GENERAL DIVISION BANKRUPTCY DISTRICT OF THE STATE OF NEW SOUTH WALES No. NSW 1577 of 1986 AND THE AUSTRALIAN CAPITAL TERRITORY ) ) ) ) ) ) ) CORAM: PLACE: DATE: RE: GRANT ANTHONY DITFORT Debtor/Applicant EX PARTE: DEPUTY COMMISSIONER OF TAXATION Judgment Creditor/Respondent GUMMOW J. SYDNEY. 3 JUNE 1988. MINUTE OF ORDER APPLICATION FOR ANNULMENT THE COURT ORDERS THAT: 1. 2. Note: The application be dismissed. The applicant pay the respondent's costs of the application. Settlement and entry of orders 1s dealt with by Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA GENERAL DIVISION BANKRUPTCY DISTRICT OF THE STATE OF NEW SOUTH WALES No. NSW 1577 of 1986 ) ) ) ) ) ) ) AND THE AUSTRALIAN CAPITAL TERRITORY RE: GRANT ANTHONY DITFORT Debtor/Applicant EX PARTE: DEPUTY COMMISSIONER OF TAXATION Judgment Creditor/Respondent CORAM: GUMMOW J. PLACE: SYDNEY. DATE: 3 JUNE 1988. REASONS FOR JUDGMENT ON APPLICATION FOR ANNULMENT The Nature of The Proceedings By application filed 19 November 1987, the applicant seeks an order under s. 154 of the Bankruptcy Act 1966 ("the Bankruptcy Act") annulling his bankruptcy. A sequestration order in respect of the estate of the applicant was made by Jackson J. on 15 December 1986 and thereafter settled as required by Rule 124 of the Bankruptcy Rules. Sub-section 154 (1) of the Bankruptcy Act provides: 154. (1) Where the Court is satisfied - (a) that a sequestration order ought not to have been made the Court may make an order annulling the bankruptcy. This provision both provides for a claim giving rise to a "matter" and invests jurisdiction to give a particular remedy in respect of that matter; 1t thus performs a double function of the kind described in vitzdamm—Jones v Vitzdamm-Jones (1981) 148 CLR 383 at 411, 425, 429. The applicant submits that the sequestration order ought not to have been made, both for failure to serve process upon him personally, as required by Rule 15 of the Bankruptcy Rules, and by reason of the circumstances in which he was extradited to Australia in 1985 and thereafter treated here. He then submits that an order for annulment should be made. Upon the making of a sequestration order against the estate of the debtor, the debtor becomes a bankrupt and, by force of sub-s. 43 (2) of the Bankruptcy Act, continues to be so until he is discharged by force of s. 149, he 15 discharged by order of the Court, or the bankruptcy is annulled under s. 154 or on approval of a composition or scheme of arrangement under s. 74. Where a sequeStration order ought not to have been made, for example, because the bankruptcy notice and petition had not been served, and the order has been entered, the appropriate remedy is to apply under s. 154: Re Anasis; Ex parte Total Australia Ltd. (1985) 63 ALR 493 at 499-500 per Burchett J. The nature of proceedings under sub-s. 154 (1) such as the present was described by Gibbs J. (as he then was) in Re Williams (1968) 13 FLR 10 at 23, as follows: In determining the question whether the sequestration order ought not to have been made, the Court 1s entitled to consider not only the case as disclosed at the time the order was made, but as it would have been disclosed had all the true facts been before the Court on the making of the order (Re Cook (1946) 13 ABC 245 at p. 259). If the Court 1s satisfied that the order ought not to have been made, it 1s not bound as a matter of course to annul the order, but must consider in the light of all the circumstances of the case whether the order ought to be annulled (Delph Sing v Wood (1918) 25 CLR 497 at pp. 8-499; Re Lawson (1939) 11 ABC 137 at p. 139). The "true facts" which are considered 1n deciding whether the sequestration order ought not to have been made include those now known then to have existed, but exclude those facts which have occurred since the order was made: Re Scott (1975) 6 ALR 558 at 559. An order refusing an application under sub-s. 154 (1) ais anterlocutory rather than final in character: Re Hedrlin; Ex parte Donnelly (Full Court, 29 October 1987). The applicant was born in New Zealand on 7 February 1951. He lived in Australia between 8 August 1979 and 5 July 1982. He did not return to Australia until 23 October 1985. On 11 or 12 March 1985, he was arrested at Ludwigsburg in the Federal Republic of Germany ("Germany"), apparently on a complaint following failure to pay certain hotel expenses incurred by him in that country. On 3 July 1985, the applicant was given a twelve months suspended sentence and ordered to pay the hotel expenses plus court costs. By requisition dated 8 July 1985, the Attorney-General for the Commonwealth sought the extradition to Australia of the applicant from Germany. In the requisition, the Attorney- General stated that the applicant was accused of: . conspiring to defraud the Commonwealth of Australia contrary to paragraph 86 (1) (e) of the Crimes Act 1914 (3 counts); conspiring to prevent or defeat the execution or enforcement of a law of the Commonwealth, to wit, the Income Tax Assessment Act 1936 contrary to paragraph 66 (1) (b) of the Crimes Act 1914 (3 counts); . entered into a transaction for the purpose of securing that a company would be likely to be unable to pay future income tax payable by the company contrary to sub-sections 5 (2) and 13 (1) of the Crimes (Taxation Offences) Act 1980 (6 counts). The twelve warrants for the apprehension of Mr. Ditfort on these charges were dated 19 March 1985. The applicant was returned to Australia on 23 October 1985. The Assistant Director of Custodial Services at the Long Bay Correctional Centre has certified that the applicant was in custody at that institution from 23 October 1985 to 22 December 1986, when he was discharged on bail. The Assistant Director has also certified that the applicant was held on the twelve charges referred to in the Attorney-General's requisition. Mr. Ditfort gave evidence on the present application that on his arrival in Sydney on 23 October 1985, he was taken before a magistrate, charged on the twelve counts I have described, and remanded in custody for seven days. However, he says he was taken by police to the Metropolitan Remand Centre, Malabar, "to serve seven days for ... alleged traffic offences". also indicates that there was an appearance on behalf of the petitioning creditor by Mr. Kathner. On 22 December 1986, Mr. Ditfort was admitted by the Supreme Court of New South Wales to bail on terms that he surrender his passport pending completion of the hearing of the charges against him. On 10 June 1987, the Supreme Court disposed of an application by Mr. Ditfort seeking a permanent stay of the Proceedings against him on six charges of entering into arrangements to avoid payment of income tax contrary to the provisions of the Crimes (Taxation Offences) Act 1980. The trial on these six charges had been fixed to commence on 27 July 1987. By this stage, 1t had been determined that the prosecution would not proceed on the remaining six charges, those of conspiracy. In support of the application for permanent stay, reliance was placed upon allegedly false or misleading statements made by the Australian Government to the German Government, that, if the accused were extradited, the Australian Government would grant similar requests for extradition if sought by the German Government of the Australian Government. Finlay J. dismissed the application on the ground that any such statement made by the Australian Government to the German Government in support of its request for extradition of the accused, was a statement made in the exercise of its prerogative powers as to the conduct of foreign A warrant dated 23 October 1985, directed to the Keeper of the Prison at Metropolitan Remand Centre, Malabar, states that the applicant was on that day charged before Mr. Webb SM with "conspiracy to defraud" and commands the prison authorities to receive the applicant into custody at the prison and to keep him there until 30 October 1985. The applicant appears further to have been remanded on the same footing on 30 October and 14 November. The documentary evidence produced on subpoena to the prison authorities also indicates that on 23 October 1985 the applicant was arrested and lodged in the cells at the Central Police Station "en route to the Metropolitan Reception Prison, Malabar" on a number of warrants of commitment on convictions for parking offences under New South. Wales law. There were eight such warrants in respect of offences in 1980, 1981 and 1982; the warrants had been issued in November 1980, July 1981, May, July and December 1982, and in January and February 1983. The maximum period of imprisonment specified in any of the warrants was seven days. On 29 July 1982, that is to say more than three weeks after the applicant had left Australia, the Deputy Commissioner of Taxation recovered a default judgment in the District Court at Sydney against the applicant. The Deputy Commissioner recovered $12,319.03 on his claim and $23.00 for costs. On12 May 1988, in the course of his submissions in reply on the present application, Mr. Ditfort said that he conceded there probably was that debt. On 5 May 1986, that 1s to say after the return of the applicant to Austral1a and whilst he was in custody awaiting trial, a bankruptcy notice issued out of this 6. Court on application of the Deputy Commissioner of Taxation. It was based on the District Court default judgment and claimed a debt which with interest up to 12 March 1986 totalled $16,815.58. The proceedings in this Court went forward on the footing that the bankruptcy notice had been duly served on Mr. Ditfort at the Remand Centre at Malabar on 30 September 1986. The events on that day are a matter of debate in the present proceedings, and it will be necessary to return to them. On the basis that the bankruptcy notice had been served on 30 September, a bankruptcy petition was presented on 29 October 1986. The Deputy Commissioner relied for the act of bankruptcy on the failure of the debtor on or before 14 October to comply with the bankruptcy notice served on 30 September 1986. The petitioner now claimed a debt for a much larger sum, viz. $709,559.78, than that represented by the judgment debt and interest. The increase was attributable to sums claimed for income tax for the years ended 30 June 1981 and 30 June 1982, together with additional tax for late payment. On the present application, Mr. Ditfort strongly protested the merits of the assessments on which this increase was based, but there was no evidence enabling me to express any concluded view on that subject. I would, however, refer to what appears below in dealing with the adjournment application of 19 June 1987. Paragraph 43 (1) (b) of the Bankruptcy Act empowers the Court on the petition presented by a creditor to make a sequestration order against the estate of the debtor if, inter 6. Court on application of the Deputy Commissioner of Taxation. It was based on the District Court default judgment and claimed a debt which with interest up to 12 March 1986 totalled $16,815.58. The proceedings in this Court went forward on the footing that the bankruptcy notice had been duly served on Mr. Ditfort at the Remand Centre at Malabar on 30 September 1986. The events on that day are a matter of debate in the present proceedings, and it will be necessary to return to them. On the basis that the bankruptcy notice had been served on 30 September, a bankruptcy petition was presented on 29 October 1986. The Deputy Commissioner relied for the act of bankruptcy on the failure of the debtor on or before 14 October to comply with the bankruptcy notice served on 30 September 1986. The petitioner now claimed a debt for a much larger sum, viz. $709,559.78, than that represented by the judgment debt and interest. The increase was attributable to sums claimed for income tax for the years ended 30 June 1981 and 30 June 1982, together with additional tax for late payment. On the present application, Mr. Ditfort strongly protested the merits of the assessments on which this increase was based, but there was no evidence enabling me to express any concluded view on that subject. I would, however, refer to what appears below in dealing with the adjournment application of 19 June 1987. Paragraph 43 (1) (b) of the Bankruptcy Act empowers the Court on the petition presented by a creditor to make a sequestration order against the estate of the debtor if, inter 7. alia, at the time when the act of bankruptcy was committed, the debtor "was personally present or ordinarily resident in Australia". The petition stated in paragraph 1 that at the date of the commission of the act of bankruptcy (1.e. 14 October 1986), the debtor was ordinarily resident in Australia. It was conceded in the course of addresses on the present application for annulment that on 14 October 1986 Mr. Ditfort was not ordinarily resident in Australia. It follows that the affidavit verifying the petition was incorrect. However, 1t was urged at the hearing of the application for annulment that Mr. Ditfort was personally present in Australia on 14 October 1986 and that pursuant to sub-s. 33 (1) of the Bankruptcy Act the Court might even at the present stage allow an amendment of the petition. It will be necessary to return to this aspect of the matter. On 20 November 1986, Mr. Nicholas Harmanis, an employee of the Australian Taxation Office, made an affidavit in which he deposed to the service of the petition and supporting documents on Mr. Ditfort on Monday 17 November 1986 at 11.35 o'clock in the forenoon. Service was stated to have taken place at the Long Bay Remand Centre, Malabar. Again, the events of 17 November were in controversy on the hearing of the present application for annulment. As I have stated, on 15 December 1986, a sequestration order was made in respect of the estate of Mr. Ditfort by Jackson J. The Court file bears the notation "No appearance of or on behalf of Debtor on name being called". The file also indicates that there was an appearance on behalf of the petitioning creditor by Mr. Kathner. On 22 December 1986, Mr. Ditfort was admitted by the Supreme Court of New South Wales to bail on terms that he surrender his passport pending completion of the hearing of the charges against him. On 10 June 1987, the Supreme Court disposed of an application by Mr. Ditfort seeking a permanent stay of the proceedings against him on six charges of entering into arrangements to avoid payment of income tax contrary to the provisions of the Crimes (Taxation Offences) Act 1980. The trial on these six charges had been fixed to commence on 27 July 1987. By this stage, it had been determined that the prosecution would not proceed on the remaining six charges, those of conspiracy. In support of the application for permanent stay, reliance was placed upon allegedly false or misleading statements made by the Australian Government to the German Government, that, if the accused were extradited, the Australian Government would grant similar requests for extradition if sought by the German Government of the Australian Government. Finlay J. dismissed the application on the ground that any such statement made by the Australian Government to the German Government in support of its request for extradition of the accused, was a statement made in the exercise of its prerogative powers as to the conduct of foreign affairs and for that reason would not be examined by the Supreme Court. On 27 February 1987, Mr. Ditfort (who had been on bail Since 22 December 1986) had completed a verified statement of affairs, pursuant to s. 54 of the Bankruptcy Act. Mr. Ditfort had not commenced any proceeding to have the sequestration order annulled. On the affidavit verifying the statement, Mr. Ditfort wrote, "I have no assets other than my personal clothing and unknown liabilities". In Part II of the statement, he wrote words to the effect that his unsecured creditors comprised the Commissioner of Taxation for a taxation debt of an unknown amount contracted 1980-1982. By notice dated 10 April 1987, Mr. Ditfort's examination under s. 69 of the Bankruptcy Act was fixed to commence before a Deputy Registrar of this Court on 19 June 1987. On 19 June, he appeared with the counsel who had appeared for him in the Supreme Court. Counsel sought an adjournment, inter alia, on the basis that on his instructions the debts that were the subject of the creditor's petition were substantially the sums of money that related to the transactions, the subject of the charges under the Crimes (Taxation Offences) Act 1980, to be heard at the trial set down to begin on 27 July 1987, so that matters would be canvassed in the s. 69 examination which would bear on the charges. The second ground seeking the adjournment was stated to be that Mr. Ditfort had applied for legal aid in relation to a proposed application to annul the bankruptcy. Mr. Ditfort was examined 10. briefly and said he believed the last year he had lodged a tax return was for the year ended 1981. The examination was adjourned, pending the outcome of the trial. The trial proceeded as fixed on 27 July 1987, and on 17 August 1987, Mr. Ditfort was found guilty on four of the six charges of offences against the Crimes (Taxation Offences) Act 1980. He was acquitted on the other two charges. He was subsequently sentenced. On 22 October 1987, the examination under s. 69 of the Bankruptcy Act resumed; Mr. Ditfort by then had been released from prison. The proceedings were adjourned until 20 November 1987, and on that day the examination was adjourned generally. The present application for annulment was, as I have indicated, filed on 19 November 1987. The Circumstances of the Extradition It is necessary now to refer 1n some greater detail to certain of the events surrounding the extradition of Mr. Ditfort from Germany. On 18 March 1985, (that is to say a week after Mr. Ditfort's arrest in Germany, and the day before the issue of the twelve warrants), the Australian Embassy in Bonn sent note verbale No. 13/85 to the German Ministry of Foreign Affairs. The note included the following: The Government of Australia proposes to make a formal request for the extradition of Mr Grant Anthony Ditfort for an offence of conspiring to defraud the Commonwealth of Australia. To permit the authorities of the Federal Republic of Germany to take the 1i. necessary action pursuant to the law of the Federal Republic of Germany in connection with the proposed request for the extradition of Ditfort, the Government of Australian hereby undertakes to take the necessary legislative action to apply the Extradition (Foreign States) Act 1966 to the Federal Republic of Germany in the event that the Federal Republic of Germany requests the extradition of a fugitive from Australia prior to the coming into force of the Treaty between Australia and the Federal Republic of Germany concerning extradition signed at Canberra on 8 May 1984. The application of the Extradition (Foreign States) Act 1966 to the Federal Republic of Germany would enable Australia to deal with requests for extradition by the Federal Republic of Germany. It is common ground that at this time the Extradition (Foreign States) Act 1966 did not apply to Germany. The necessary regulations pursuant to ss. 10 and 31 were not made until later in the year: see S.R. No. 321 of 1985, made 28 November 1985. Accordingly, the authority for the making of the request for extradition and acting upon acceptance of that request was to be found not in statutory authority, but in executive power of the Commonwealth of Australia, provided for in s. 61 of the Constitution. On 21 March 1985, the German Foreign Office replied by note verbale No. 511-531E-2016/85. This stated that the Foreign Office acknowledged receipt of the note verbale No. 13/85, and had made the appropriate German authorities familiar with the matter. Certain German court proceedings ensued leading to written decisions given on 13 May , 13 September and 8 October 1985. The result was that Mr. Ditfort remained in custody pending his extradition. 12. The requisition for the extradition of Mr. Ditfort was signed by the Attorney-General for the Commonwealth, on behalf of the Government of Australia, at Canberra on 8 July 1985. As I have indicated, it listed twelve counts, all of them being for offences against federal laws, viz. the Crimes (Taxation Offences) Act 1980, sub-ss. 5 (2) and 13 (1), and the Crimes Act 1914, sub-paras. 86 (1) (e) and 86 (1) (b). In support of the formal requisition, the Government of Australia produced the affidavit of Anthony Peter Cook, sworn 19 July 1985. Mr. Cook was a solicitor and subject to the direction and control of the Director of Public Prosecutions who was charged with the conduct of the prosecution of Mr. Ditfort. Paragraphs 4, 5 and 6 of Mr. Cook's affidavit were in the following terms: 4- Grant Anthony Ditfort will not i1£ extradited to Australia, without German consent, upon any ground existing prior to his transfer other than the offence for which extradition has been granted, be subjected to any penal sanction, restricted in his personal freedom or prosecuted by means of measures which cannot also be undertaken in his absence. 5- Will not without German consent be re-extradited, transferred or deported to a third state. 6- May leave Australia after final completion of the proceedings on account of which his extradition has been granted. With note verbale No. 32/85, dated 24 July 1985, the Australian Embassy at Bonn enclosed for the German Foreign Ministry the documents in support of the request for extradition of Mr. Ditfort. The note verbale also contained the following: 13. The Embassy wishes to advise that Australia hereby gives assurances - that 1£ surrendered Grant Anthony Ditfort will not, unless the Federal Republic of Germany otherwise consents, be subjected to any penal sanction, restricted in his personal freedom or prosecuted by means of measures which cannot also be taken in his absence upon any ground existing prior to his surrender other than for the offence or offences for which his extradition is granted, - that Grant Anthony Ditfort will have an opportunity to leave Australia after final completion of the proceedings on account of which his extradition has been granted, - that Grant Anthony Ditfort will not be re-extradited, transferred or deported to a third State unless the Federal Republic of Germany so consents. Australia notes that Anthony Peter Cook of the Office of the Director of Public Prosecutions, in his affidavit accompanying the documents in support of the request for extradition, has confirmed that the assurances given by Australia in this speciality undertaking can be adhered to. The offences for which the extradition of Grant Anthony Ditfort 1s sought are not offences consisting exclusively, or at all, of a breach of military duty. The significance in international law and practice of speciality undertakings of the kind indicated in these documents 1s explained by Barwick CJ in Barton v_ The Commonwealth (1975) 131 CLR 477 at 483-485. By note verbale No. 511-531E-2016/85, dated 1 October 1985, the German Department of Foreign Affairs informed the Australian Embassy, with reference to the note verbale No. 14, , 32/85 of 24 July 1985, that, (1n translation); The Federal Government has agreed to the extradition of the New Zealand national Grant Anthony Ditfort, born on 7 February 1951 in Christchurch/New Zealand for the prosecution of the criminal acts mentioned in the 12 warrants of arrest by the District Court (Justice of the Peace) in Sydney of 19 March 1985 (File No's 0264 W/2, 4, 6, 8, 10, 12, 14, 16, 18, 20, 22, 24, resp. FIW 98- 109/785). It is suggested that the person sought be handed over to the Australian Authorities at the airport in Frankfurt/Main for transfer to Australia and that any further particulars of the transfer be settled between the Public Prosecutor at Stuttgart and the competent Australia authorities via Interpol. Mr. Ditfort was so handed over on 21 October 1985 and, as I have said, arrived in Sydney on 23 October 1985. On 5 August 1987, that 1s to say during the course of Mr. Ditfort's trial in the Supreme Court of New South Wales, the German Foreign Office sent to the Australian Embassy a further note verbale. On the present application, Mr. Ditfort relied upon this as an indication of complaint by the German Government of breach of the speciality undertaking. Omitting formal parts, the note verbale (in translation) reads as follows: The person claimed, Grant Anthony Ditfort, whom the Federal Government had agreed to extradite from Germany to Australia with its note verbale of 1 October 1985 - 511-531E-2016/85 - at the request of the Australian Government, has maintained that after he had been handed over, the Australian authorities had violated the rule of specialty [sic] several times. He essentially maintained that he has been standing trial since the 27th of July 1987 for offences for which extradition had not 15. been granted, He has so far not given any further details about these offences. He also said that he had been imprisoned in Australia for seven days starting on 25 October 1985 for traffic offences which were not the object of the extradition proceedings. Finally, the Australian authorities had "bankrupted" him, which 1s why he is unable to leave the country. With regard to the last accusation, he explained that at the request of the Australian tax authorities, bankruptcy proceedings had been opened against him by the Australian Federal Court, and as a consequence of this decision, the Australian authorities had taken away his passport. Thus, regardless of the outcome of the criminal proceedings, he is no longer able to leave Australia owing to the provision in section 272 (c) of the Bankruptcy Act from 1966, [sic] namely, that leaving Australia without the consent of the administrator in brankruptcy [sic] proceedings is punishable with up to 3 years imprisonment. The Federal Government would be grateful to the Australian Government if it would comment on the accusations made by the person concerned within a short period of time. Paragraph 272 (c) of the Bankruptcy Act provides that: 272. A person who - (c) after he has become a bankrupt and before he is discharged from the bankruptcy, without the consent in writing of the trustee of his estate, leaves Australia, or does an act preparatory to leaving Australia, is guilty of an offence and is punishable, on conviction, by imprisonment for a period not exceeding 3 years. I should also refer to para. 77 (a). This provides: 77. A bankrupt shall, unless excused by the trustee or prevented by illness or 16. other sufficient cause - (a) forthwith after he becomes a bankrupt, deliver to the trustee all the books, documents, papers and writings in his possession relating to his trade dealings, property or affairs and, if he has a passport, his passport; ... I should also note that s. 6A of the Passports Act 1938 makes it clear that an Australian passport always remains the property of the Commonwealth. The Australian Embassy replied by note verbale No. 57/87, dated 26 August 1987. Omitting formal parts, the note verbale stated: On 17 August 1987, Mr Ditfort was found guilty by the Central Criminal Court in Sydney of 4 of the 12 charges for which he was extradited from the Federal Republic of Germany. He was acquitted on 2 further charges, and it was decided not to prosecute the 6 conspiracy charges. Mr Ditfort has been remanded in custody to await sentencing for these offences. The records of the Long Bay Correctional Centre, the prison in which Mr Ditfort was confined from 23 October 1985 to 22 December 1986 (when he was released on bail), indicate that Mr Ditfort was held in custody in relation to the charges for which he was extradited from the Federal Republic of Germany. There is no evidence that Mr Ditfort was at any relevant time held in custody in relation to traffic offences. With regard to the detention of Mr Ditfort's passport, when Mr Ditfort was released on bail on 22 December 1986 the Court that granted bail imposed a condition that Mr Ditfort surrender his passport pending the completion of hearing of the charges for which he was extradited. As noted above, this matter is not yet finalised, and Mr Ditfort's passport is in the custody of the Deputy Director of Public Prosecutions, Sydney pending finalisation. In December 1986, the Australian Taxation office commenced bankruptcy proceeding [sic] 17. against Mr Ditfort. Bankruptcy 1s a civil, aS opposed to a criminal, matter and a petition for a person's bankruptcy can be lodged at any time, whether the bankrupt is in Australia or overseas. Finally, Mr Ditfort would be permitted to leave Australia after having served any sentence that the Court may impose in relation to the offences for which he was extradited and convicted, provided that he first obtained the consent in writing of the trustee of his estate. This note verbale was inaccurate or incomplete in several respects. The Australian Taxation Office had commenced bankruptcy proceedings against Mr. Ditfort before December 1986; on its petition, an order for sequestration of his estate was made on 15 December 1986. Further, as I have explained, there was before me, from materials subpoenaed from the prison authorities, evidence indicating that Mr. Ditfort was taken to prison on 23 October 1985, not only on remand in respect of extradition offences, but also on warrants of commitment on convictions for traffic offences against State law. Service of the Bankruptcy Notice and Creditor's Petition Mr. Ditfort submits that the sequestration order ought not to have been made because of failures by the creditor in compliance with the requirements of the Act as to service of the bankruptcy notice and creditor's petition. I turn to the statutory provisions. Sub-section 52 (1) provides: 52. (1) At the hearing of a _ creditor's petition, the Court shall require proof of - 18. (a) the matters stated in the petition (for which purpose the Court may accept the affidavit verifying the petition as sufficient); (b) service of the petition; and (c) the fact that the debt or debts on which the petitioning creditor relies 1S or are still owing, and, if it 1s satisfied with the proof of those matters, may make a sequestration order against the estate of the debtor. Sub-s. 52 (2) provides: 52. (2) If the Court is not satisfied with the proof of any of those matters, or is Satisfied by the debtor - - (a) that he is able to pay his debts; or (b) that for other sufficient cause a sequestration order ought not to be made, 1t may dismiss the petition. I have already set out, so far as is material, the substance of sub~s. 43 (1). Rule 15 of the Bankruptcy Rules is in the following terms: 15. Unless otherwise ordered by the Court under sub~section 309 (2) of the Act - (a) service of a bankruptcy notice shall be effected on the debtor by delivering to the debtor personally a copy of the bankruptcy notice signed and stamped by the Registrar; and (b) service of a creditor's petition shall be effected on a debtor by delivering - (1) an official copy of the petition; 19. (11) a copy of the affidavit or of each affidavit verifying the petition; and (111) where a registered trustee has consented, as referred to in paragraph 12 (3) (ba), to act as the trustee - a copy of the consent, to the debtor personally - (iv) 1f service is effected in Australia - not less than 8 days before the hearing date for the petition; or (v) in any other case - not less than such reasonable time hefore the hearing date for the petition as 1s determined by the Registrar. " gub-section 309 (2) provides that the Court may in a particular case order that service be effected in a manner specified by the Court, whether or not any other manner of service 1s prescribed. In the present case, no application was made for service under this provision. As will appear, on both 30 September and 17 November 1986, Mr. Ditfort acted as one anxious to avoid service of any process issued at the instance of the taxation authorities. However, the question of service turns upon the application of Rule 15, and upon the concept therein provided for of delivering documents to the debtor personally. In In re Long; Ex parte Fraser Confirming Pty. Ltd. (1975) 12 SASR 130, Walters J. reviewed the authorities which indicate the necessity for strictness of proof in observance of the requirements for service of bankruptcy notices and 20. .' bankruptcy petitions. The applicant properly placed much relrance upon this decision; it was he who drew it to the attention of the Court. The dispute before Walters J. arose as an application to set aside for want of due service a bankruptcy notice on which a petition had been based. Although an affidavit of service by a process server deposed to personal service of a bankruptcy notice on the debtor, Walters 3. found, after hearing evidence, that the notice had not been served personally on the debtor. Rather, the notice had been handed to the wife of the debtor at his house, and the notice had not been brought to his attention until some eight or ten days had elapsed. Walters J. held (i) that the failure of the petitioner to prove personal service of the bankruptcy notice was not a formal defect or irregularity which might be corrected by bringing it within the umbrella of s. 306 of the Bankruptcy Act, and (ii) that the want of personal service of the bankruptcy notice rendered defective the petition founded on it, despite the debtor's subsequently acquired knowledge of the existence of the notice, and even though there was no proof of substantial injustice having been done to the debtor by the defect in service. In the result, Walters J. ordered that the bankruptcy notice be set aside, and it followed that the petition was dismissed. Whilst not necessarily being of the view that s. 306 can never apply in such a case in any circumstances, I respectfully agree with what was said by his Honour as to the 21. importance of proper proof in these cases, and as to the salutary consequences for creditors of failure to comply with the Rules; similar views were expressed by Fisher J. in Re Williams; Ex parte Alberton Electrical Service Pty. Ltd. (1982) 43 ALR 552 at 558. These considerations have particular force where the petitioning creditor, as in this case, 18 a frequent litigant before the Court and there may be a tendency to follow routine procedures in the preparation of affidavits of service. In Pino v Prosser [1967] VR 835, McInerney J., in applying a Rule of the Supreme Court of Victoria which required but did not further define personal service, held that in the circumstances of the case it was sufficient that a writ of summons, although left with the wife of the defendant, had come into his possession on the same day. That decision did not deal with the position under the Bankruptcy Rules and was not relied on before Walters J. in In re Long; Ex parte Fraser Confirming Pty. Ltd. (supra). I would prefer the decision of Walters J. What then is meant by delivering documents to the debtor personally within the meaning of Rule 15 of the Bankruptcy Rules? As the decision of Walters J. indicates, delivery to the spouse of a debtor with a request to hand the documents on to the debtor will not suffice. In Pigeon v Bruce and Dobson (1818) 8 Taunt. 410; 129 ER 441, the question concerned service of a writ of capias ad respondendum upon a defendant who was in custody in the Fleet prison. It was held that service had not heen effected where (a) the process server 22. attended the prison, showed the original writ to the defendant, and tendered him a copy of the writ but the defendant refused to take a copy and threatened the process server with violence if he persisted, and (b) the process server delivered a copy of the writ to a turnkey who in turn delivered the copy to the defendant. The foundation in both eighteenth century statutes and in the practice of the superior courts of record, upon which it became sufficient to show the original and serve a copy of process, rather than serve the original, was revealed by Sholl J. in Davidson v McCarten [1953] VLR 697 at 701-702. Further, the requirement for the process server to show the original of the process to the person who is served with a copy has been removed from modern rules of court. Rule 15 of the Bankruptcy Rules is an example. Another is Order 7 of the Federal Court Rules; see also the discussion of Order 65 Rule 1 of the English Rules of the Supreme Court in "The Supreme Court Practice", 1988, Vol. 1, pp. 1031-1032. The technicalities of personal service are also to some extent mitigated by modern provisions dealing with substituted service, exemplified in the present legislation by sub-s. 309 (2) of the Bankruptcy Act. This legislative development of substituted service has as its foundation s. 17 of the English Common Law Procedure Act 1852 (15 and 16 Vict. c. 76); it was traced by Holroyd J. in Rudd v John Griffiths Cycle Company Ltd. (1897) 23 VLR 350 at 354-356. As I have indicated, there was no order for substituted service in the present case. In Thomson v Pheney (1832) 1 Dowling's Practice Cases 23. 411, it was held by the Court of King's Bench, in the words of Patteson J., that (at 443): I do not mean to say, that 1t 18 necessary to leave the process in the actual corporal possession of the defendant; for, whether the party touches him or puts it into his hand, is immaterial for the purpose of personal service. Personal service may be, where you see a person and bring the process to his notice ... I am quite of opinion, that in this case there are not sufficient facts to warrant any man in making an affidavit of personal service. If the deponent had informed the defendant of the nature of the process, and thrown it down, that would do. I accept the submission by the respondent to the present application that there may be delivery personally to the debtor of process within the meaning of Rule 15 of the Bankruptcy Rules, even though the process has not been left in what Patteson J. described as the "actual corporal possession of the defendant". If the debtor were refusing to take such actual corporal possession of the process, but the process server informed the debtor of the nature of the process and left it before or near the debtor so that the debtor had unimpeded and immediate access to the documents, that, in my view, should, in general, be sufficient to comply with Rule 15. I turn now to the present case, where, as I have indicated, there is acute disagreement as to what transpired on the dates of alleged service of both the bankruptcy notice and the petition. I turn first to the disputed facts concerning service 24. of the bankruptcy notice. On 2 October 1986, Mr. Harmanis swore an affidavit, paragraphs 1 and 2 of which were in the following terms: 1. On Tuesday the 30th day of September 1986, at T1.40 o'clock in the foranson, I served GRANT A DITFORT with a true copy of the Bankruptcy Notice signed by the Deputy Registrar by delivering it to him/HHX [sic] personally at Long Bay Remand Centre, Malabar. 2. At the time of such service I asked the person served are you GRANT A DITFORT the person referred to in this Bankruptcy Notice and he/EMH [sic] replied "Yes I am". The portions of paragraphs 1 and 2 which I have underlined are in the handwriting of the deponent, the name "GRANT A DITFORT" has been typed in, and the balance is part of what plainly is a printed form. As such, it gives opportunity for quite inaccurate representations of what takes place in particular cases. The present 18 a striking example. By his affidavit sworn and filed in the present application on 2 February 1988, Mr. Harmanis gives a much fuller account. Mr. Harmanis says that on the morning of Tuesday 30 September 1986, he attended at the Long Bay Remand Centre and completed a form of request to see Mr. Ditfort. He handed the request to the prison officer on duty who then made a telephone call. After some 45 minutes, the prison officer said to Mr. Harmanis that Mr. Ditfort would not come to see hin. Another prison officer then took Mr. Harmanis to the office of the superintendent who, in the presence of Mr. Harmanis, rang through and said, over the telephone, "Take a] 25. Ditfort to the office in the prison yard". Mr. Harmanis says that he then walked across the yard to another office and about 5 minutes later another prison officer escorted a man into the office. Mr. Harmanis asked whether this man was Grant Anthony Ditfort and received an affirmative response. He then told Mr. Ditfort that he had a bankruptcy notice to serve on him from the Taxation Office regarding outstanding moneys owed by him. Mr. Ditfort said that he would not accept it, and that Mr. Harmanis should speak to his solicitor. Mr. Harmanis replied that he had to leave the bankruptcy notice with Mr. Ditfort and proffered the notice to him. Mr. Ditfort stepped back and Mr. Harmanis said to him that even if he didn't touch the document he still would be classified as having been legally served. Mr. Harmanis continues that to the best of his recollection, he then placed the bankruptcy notice on a side table or desk not far from Mr. Ditfort, and a Mr. Ritchie told Mr. Harmanis that he would hold the document for Mr. Ditfort until he spoke to his solicitor. Other evidence shows that Mr. Ritchie was senior assistant superintendent at this time. The bland and succinct statements in the affidavit of 2 October 1986 stand in high contrast to the above account in an affidavit prepared some fifteen months later. If accepted, that account would establish compliance with Rule 15, giving to the requirement of personal delivery the meaning I have drawn from Thomson v Pheney (supra). On 7 October 1986, by letter showing as his address 26. Post Office Box 13, Matraville 2036 NSW, Mr. Ditfort wrote to the Registrar of the District Court with reference to Bankruptcy Notice 2495/86. The body of the letter reads as follows: With reference to the above, I confirm that I was served with the above document at the Metropolitan Remand Centre Long Bay Gaol. As I have no legal representation, I wish to make application for a Stay of Proceedings and to have the Judgement set aside. I would be grateful if you could grant a temporary Stay of Proceedings and forward the necessary forms to me at the above address, to allow me to complete the same for filing at your office. This will be a defended matter. I treat the reference in this letter to service of the notice as consistent with Mr. Ditfort's account of events leading to his receipt of the document from Mr. Ritchie. By letter dated 27 October 1986, the Registrar of the District Court replied to Mr. Ditfort. He advised Mr. Ditfort that he did not have power to stay proceedings commenced in the Bankruptcy Court. The letter was annexed to an affidavit sworn by Mr. Ditfort in the present application. It was not accompanied by any evidence that he took or caused to be taken any further steps to deal with the bankruptcy notice. In his evidence, Mr. Ditfort agrees, consistently with this correspondence, that he obtained a copy of the bankruptcy notice from Mr. Ritchie. However, his version of events 1s that, on the day of what he says was only attempted service, he was called out from his lunch to go to Mr. Ritchie's office and that lunch had commenced some time at or after 11.30. He was 27. told by Mr. Ritchie that there was an official from the Taxation Office to see him; he says he told Mr. Ritchie that he did not wish to see that person and that he (Mr. Ditfort) then left, apparently to return to his interrupted lunch. Mr. Ditfort says he obtained the document from Mr. Ritchie about two days later. Mr. Ditfort says that he acted in this way because he was facing a criminal prosecution he regarded as having been instituted by the Deputy Commissioner of Taxation; indeed, the charges related to what might compendiously he described as taxation offences. Mr. Ritchie was served by Mr. Ditfort with a subpoena to give oral evidence and he attended Court in compliance with that subpoena on 17 March 1988. However, he was not called by either party. Evidence was led by Mr. Ditfort from another prison officer, Mr. M.B. Ferguson. During the years 1986 and 1987, Mr. Ferguson was in charge of the property of prisoners in the Remand Centre at Malabar. The property was kept in the reception room. Mr. Ferguson also was familiar with the procedures followed at the Centre for visits to prisoners, including those by lawyers or persons on legal business. He said that he had no experience of occasions on which a prisoner had been brought to the office where "legal visits" took place, even though the prisoner did not wish to see a prospective visitor. He confirmed that there was a muster of prisoners each day which started at about 11.30 am and was followed by lunch. Mr. Harmanis, as a clerk in the Australian Taxation 28. Office, has been serving process since approximately 1985. Mr. Ditfort's version of events was first related in these proceedings in an affidavit sworn 18 November 1987 and filed the next day. Mr. Harmanis swore that when preparing his affidavit of 2 February 1988, he had not seen Mr. Ditfort's affidavit. He said that he drafted both his affidavits of 2 October 1986 and 2 February 1988, and that he did not recollect why he had not included the account, given in the later affidavit, in the earlier affidavit. He had kept a diary in connection with the service of documents, and in 1t he had kept a record of conversations at the time of service of process. However, the diary was destroyed approximately in the middle of 1987. - There 1s now in force a system in the Australian Taxation Office where such diaries must be retained in the Office. He said that the diary had not been destroyed for any particular reason but that he had "Just thought that, you know, time had elapsed, to destroy it". Accordingly, in making his affidavit of 2 February, he relied, he said "on recollection of my memory". I do not suggest that Mr. Harmanis has set out consciously to deceive the Court. He gave evidence in a hesitant fashion and whilst I make considerable allowance for the nerve-wracking nature of the occasion, I was unimpressed by the manner in which he gave his evidence and his demeanour in so doing. I believe that, 1n all the circumstances, 1t would be quite unsafe to prefer his recollection of what happened on 30 September 1986, insofar as it conflicts with the account of Mr. Ditfort. I bear in mand in particular the general 29. corroboration by Mr. Ferguson as to the system 1n operation at the relevant time for the reception of unwelcome visitors. Plainly, the bankruptcy notice was passed on by Mr. Ritchie to Mr. Ditfort in time for him to write the letter of 7 October. However, I do not accept Mr. Harmanis' recollection insofar as it involves a confrontation between him and Mr. Ditfort, the proffering of the bankruptcy notice and the rejection of it by Mr. Datfort. That brings me to the events of 17 November 1986. By his affidavit sworn 20 November 1986, Mr. Harmanis deposed that on that day he served Mr. Ditfort with copies of the creditor's petition and two affidavits in support. The matter is dealt with in paragraphs 1 and 2 of the affidavit in the following terms (the passages underlined are in the handwriting of the deponent and the balance of the affidavit 1s typed, there being on this occasion no printed form): 1. On Monday the i7th day of November 1986 at 11.35 o'clock In the forenoon, I served the abovenamed Grant A Ditfort with an official copy of the abovementioned petition together with a copy of the affidavit of Denis James Cortese sworn on the 29th day of October 1986 and a copy of the affidavit of Olga Krymsky sworn on the 30th day of October 1986 and all filed herein by delivering the same to him personally at Long Bay Remand Centre, Malabar. 2. I identified the person I served as the said Grant A Ditfort by reason of the fact that I asked him "Are you Grant A Ditfort the debtor referred to in this Creditor's Petition?" and he replied:- "Yes, but I'm not going to accept service". The statement reported in paragraph 2 of the affidavit 30. does not stand happily with the assertion in paragraph 1 that documents were delivered to Mr. Ditfort personally. Nevertheless, this affidavit was filed in the Court on 1 December 1986, and apparently was relied on when the sequestration order was made on 15 December 1986. In his affidavit of 2 February 1988, Mr. Harmanis says that on the day in question, he again completed a form of request, handed it to a prison officer who made a telephone call and who reported to him that Mr. Ditfort wouldn't come to see him. He then succeeded in speaking to the deputy superintendent who made a phone call and later told him that if Mr. Ditfort did not want to come down to see him, he could not force him to do so. However, the affidavit continues: Shortly afterwards, Mr. Ditfort arrived and I spoke to him from where I stood inside an office through bars which separated him from me to where he stood outside that office. I said:- "Mr. Ditfort, I have a_ creditors petition and affidavit to serve upon you in relation to your unpaid tax." He said:- "I won't accept them. Go and see my solicitor." I said:- "I can't do that. If you won't accept this, I will have to drop them at your feet." He then looked at me with a puzzled expression on his face and said:- "I will not accept them." I then dropped the documents through the bars and they fell down in front of him. I then left. Se. 31. These passages in the affidavit are to be compared with a handwritten note in Mr. Harmanis' writing bearing the date 17 November 1986. This note was produced before me in Court during the hearing by those instructing counsel for the respondent, after initial production of a photocopy. As I understand Mr. Harmanis' evidence, he says that he relied on this document in preparing the appropriate entry in his diary, the diary having been destroyed in the middle of 1987. He did not say that he relied on this document in preparing the affidavit of 2 February 1988. That, he said, as I have already observed, "was on recollection of my memory". The handwritten note is in the following terms: Grant A. Ditford [sic] Long Bay Remand Centre, Malabar. The defendant wouldn't come to see me at first, I then asked to see the Warden but he was unavailable so {I spoke to the deputy Warden. He phoned through to get the defendant to to come down to where I was but the Deputy Warden stated that if the defendant didn't want to see me they can't force him to. However the defendant turned up and I spoke to him from behind iron bars he stated he wouldn't accept service and to go and see his solicitor. I advised I couldn't do this and that if he wouldn't take the notice I would have to drop it at his feet. He then locked at me puzzled and again stated he wouldn't accept so I dropped the notice through the bars at his feet and walked away. N. HARMANIS PROCESS SERVER 17/11/86. In a different ink, at the head of the document, are the words "Creditors Petition 1936 of 86". 32. ' It will be observed of this note that (a) there is no teference therein to any explanation to Mr. Ditfort of the mature of the process sought to be served, other than the statement as to what would happen if he ""wouldn't take the notice", (b) the process said in the affidavits by Mr. Harmanis to have been served on 17 November was not a bankruptcy notice, but a petition with two affidavits, (c) 1f the events described in the note are those of 30 September 1986, when the bankruptcy notice was taken to the Centre for service, the account here conflicts with that of the events of that day in the affidavit sworn 2 February 1988; this states not that the notice was dropped through bars at Mr. Ditfort's feet but that, to the best of the deponent's recollection, it was placed ona side table or desk. This re-emphasises the difficulty in accepting the account of events in the 2 February affidavit. Mc. Ditfort's version of events, given initially in his affidavit sworn 18 November 1987, 1s that the attempt to serve process on him on 17 November 1986 was unsuccessful. On 26 November 1986, he made a statutory declaration at the Metropolitan Remand Centre, the material portion of which reads as follows: On 17th November 1986, an official of the Australian Taxation Office attempted to serve a document on me. Service or execution of the document was not made. The official was not given access to contact me. In cross~examination in the course of the present 33. proceedings, Mr. Ditfort said that on 17 November 1986, after lunch, which would have been after 1.15 pm (that 1s to say after the time indicated in the affidavit by Mr. Harmanis sworn 20 November 1986) he was called over the intercom system with a message that there was a visitor in the "legal visiting area". He says that he arrived and spoke to the officer and said, "Who is it to see me, please?" The officer replied that it was a person from the Australian Taxation Office. Mr. Ditfort says that he replied that he didn't want to see the person and walked away. A contemporaneous prison record produced on subpoena by the prison authorities has the following entry: "Ex visits 17-11-86: qty legal papers". The entry is on a card, the purpose and function of which was explained by Mr. Ferguson 1n his evidence. When a prisoner first arrives at the gaol, the prison authorities make a note on a card of the prisoner's property that is received from the police. The prisoner then signs the document to confirm its accuracy. In the present case, the card in evidence is a later card in the series; it commences with an entry for 23 May 1986 and continues with entries indicating the subsequent reception of property for Mr. Ditfort. In the entry in question, the expression "Ex visits 17-11-86: qty legal papers" indicates that on that day a quantity of legal papers was received from the visiting section of the prison. The property identified on these cards was retained in the reception room at the prison and the prisoners were allowed to 34, get certain things for themselves out of this property. This ancluded legal documents. However, when a prisoner did receive such materials, he signed on the card a dated entry to indicate that he had received them. There 1S no such entry on the present card directed to receipt of these papers by Mr. Ditfort. In Mr. Ferguson's understanding, this would indicate the materials were not issued to Mr. Ditfort and remained with his prison records at the reception room. The card shows that on his release on bail on 22 December 1986, all the property so held was given to Mr. Ditfort. That, of course, is not necessarily to deny that before the papers were sent over from the visiting section, they were put down in Mr. Ditfort's presence in the manner explained by Mr. Harmanis in his affidavit of 2 February 1988. The reception room was about 50 feet from the visiting section. In the area where legal visits took place there was an office in which prison officers worked and which was separated from the prison yard by bars. On Mr. Ferguson's evidence, it would have been necessary for the visitor first to have got permission to go into this office, and it was not the practice for this to be done. Once in the office, it would have been possible to put a document through the bars to drop them at the feet of a person standing in the prison yard. Mr. Ferguson was of the view that it was not the practice for prison officers who were administering the legal visiting area to permit legal personnel to have access to their office and that whilst 1t was possible for a visitor who had obtained such 35. access to poke something through the bars, he had never seen it happen. In all the circumstances, I prefer the account of Mr. Ditfort as to what transpired on 17 November 1986. As It have said, Mr. Harmanis did not set out deliberately to deceive the Court, but the effect of his evidence 1s to leave me quite unsatisfied that service of the creditor's petition and the affidavits in support was effected an 17 November 1986, in the manner explained in his affidavit sworn 2 February 1988, rather than left by him in the visiting section after Mr. Ditfort failed to appear. Accordingly, I have reached the conclusion that neither the bankruptcy notice nor the creditor's petition were served on the debtor by delivery to him personally within the meaning of Rule 15 of the Bankruptcy Rules. Further, as I have earlier indicated, the petition 1n any event was defective due to the fact that it stated that at the date of the commission of the act of bankruptcy relied upon, Mr. Ditfort was ordinarily resident in Australia: see s. 43 (1) (a) (i); see also sub-rule 12 (2) of the Bankruptcy Rules and Form 5. Whilst on 15 December 1986 the Court, if apprised of the facts as now known to have then existed, might have permitted amendment forthwith of the petition under para. 33 (1) (b) of the Bankruptcy Act so as to rely on personal residence of the debtor in Australia, the facts as now revealed show that the Court would not have been satisfied with the 36. proof of commission of the act of bankruptcy (for want of service of the bankruptcy notice) nor with the proof of service of the petition as required by sub-s. 52 (1) of the Bankruptcy Act. In my view, 1t follows from these matters that, within the meaning of s. 154 (1), the sequestration order ought not to have been made. That makes ut strictly unnecessary to consider Mr, Ditfort's further arguments that the sequestration order ought not to have been made in view of the circumstances upon which he relies as arising from his extradition. In Re Frank; _Ex parte Pilisky (Fisher J., 23 October 1987, unrep.), the expression in para. 154 (1) (a) "ought not to have been made" was interpreted as imperative in character; this meant that an order ought not to have been made only if the Court was in the circumstances bound not to make 1t, and if it had been open to the Court as a matter of discretion to have made the order, this would not mean that it was an order which "ought not to have been made". What I might call the extradition issues taken in the present proceedings, as to most of them, would, if they had been made good at the earlier stage, have gone to the exercise of discretion. However, the respondent did not take the point, and I should add that I am far from convinced that the phrase "ought not to have been made" is confined in the way indicated 1n Re Frank; Ex parte Pilisky (supra) when used 1n a remedial provision such as sub-s. 154 (1). Whilst, as I have said, it is strictly unnecessary to 37. do so, I should consider the extradition issues. Full argument was directed to them and to deal with these issues now May avoird or shorten other disputes between the parties concerning them. Extradition Issues The applicant submits that the sequestration order ought not to have been made, inter alia, because the conditions of sub~s. 43 (1) of the Bankruptcy Act were not met with regard to him. This is said to be, inter alia, because at the time when the act of bankruptcy was committed, he was not "personally present" in Australia within the meaning of sub-para. 43 (1) (b) (1) of the Bankruptcy Act. The applicant submits that although literally present in Australia, he was here only because he had been extradited here from Germany and that extradition was effected by the Australian Government employing procedures which (a) were beyond its constitutional competence and (b) in any event, involved breaches of its international obligations to Germany. If those submissions, or either of them, be made good, the result is submitted to be that the applicant was not properly personally present here within the meaning of sub-para. 43 (1) (b) (i). Implicit in this submission 1s that the words of the Bankruptcy Act are to be read with a gloss upon them. In the absence of compelling reasons for doing so, I would not read the statute other than in its ordinary meaning. I reject the construction placed upon the statute by the applicant. That, however, is not the end of the matter. The 38. ° applicant then draws attention to the discretion given the Court by the term "may" in sub-s. 43 (1); and to the specific provision in sub-s. 52 (2) (b) that the Court may dismiss a creditor's petition if the debtor satisfies it that for other sufficient cause, a sequestration order ought not to be made: Rozenbes v Kronhill (1956) 95 CLR 407 at 414; Re Mitchelson (1979) 39 FLR 366 at 371. It is established that 1f a party 1s induced by fraud of any kind to come within the jurisdiction for the concealed purpose of effecting service, the service may be set aside as an abuse of process of the court in question. The House of Lords so held in Watkins v North American Land and Timber Company (Limited) (1904) 20 TLR 534. The present applicant seeks to take this principle further. In Levinge v Director of Custodial Services (1987) 9 NSWLR 546, the New South Wales Court of Appeal held, in respect of an accused charged with offences against Commonwealth and State laws, that he was amenable to criminal process in New South Wales regardless of the circumstances in which he came or was brought there; cf. Judiciary Act 1903, s. 68, and see also Ker v Illinois 119 US 436 (1886). I would apply the same reasoning in construing the expression "personally present" in sub-s. 43 (1) of the Bankruptcy Act. However, two members of the Court of Appeal went on to state that State courts would have power to prevent abuse of their processes by staying criminal proceedings where the prosecuting authorities had procured the production there of the accused by knowing 39. circumvention of provisions of an extradition treaty otherwise applicable to the accused. In my view, the discretions reposed in this Court by the provisions of the Bankruptcy Act to which I have referred have a similar content. The discretions are such that, subject to what follows below, the Court may take into account, if it be the fact, that a debtor has been at the necessary time personally present in Australia as a result of his extradition to Australia, and that the circumstances of the extradition show the Commonwealth followed procedures beyond its constitutional competence or in breach of its obligations to the state from which the extradition took place. Non-Justiciability In the written outline of argument, submitted by counsel for the respondent, 1t was submitted that whilst the Court might act to prevent any abuse of its process, nevertheless any allegations that the Australian Government made statements to the German Government as to the granting by the Australian Government which were false or misleading, were allegations that were "not justiciable". This raises difficult questions. It has recently been observed in this Court that issues arising out of international relations have been widely regarded as "non-justiciable", and that, in particular, the courts have disclaimed entitlement to adjudicate upon decisions by the executive concerning the exercise of its treaty-making 40. power: Minister for Arts, Heritage and Environment v Peko-Wallsend Ltd. (1987) 75 ALR 218 at 253. On the other hand, in an influential judgment of the United States Supreme Court, (Baker v Carr 369 US 186 at 211 (1962)) the subject was approached somewhat differently. Brennan J., in delivering the opinion of the Court, said (at 211): There are sweeping statements to the effect that all questions touching foreign relations are political questions. Not only does resolution of such issues frequently turn on standards that defy judicial application, or involve the exercise of a discretion demonstrably committed to the executive or legislature; but many such questions uniquely demand single-voiced statement of the Government's views. Yet it is error to suppose that every case or controversy which touches foreign relations lies beyond judicial cognizance. Our cases in this field seem invariably to show a discriminating analysis of the particular question posed, in terms of the history of its management by the political branches, of its susceptibility to judicial handling in the light of its nature and posture in the specific case, and of the possible consequences of judicial action. The term "case or controversy" was taken by Brennan J. from Art III, s. 2 (1) of the United States Constitution. The term "matter" in Chapter III of the Australian Constitution was selected with the intention of ensuring that the content of federal jurisdiction in Australia was at least as wide as that given by the term "case or controversy": Philip Morris Inc. v Adam P. Brown Male Fashions Pty. Ltd. (1981) 148 CLR 457 at 507, per Mason J. See also Crouch v Commissioner for Railways (Queensland) (1985) 159 CLR 22 at 37-38, per Mason, Wilson, Brennan, Deane, Dawson JJ. 41. What then is meant by this concept of "non- justiciability" in the setting presented by the Australian Constitution? The expression "non-justiciable", when used in relation to international relations conducted by Australia, identifies several distinct legal rules or principles. First, "non-justiciability" has special application with regard to the law of evidence. While the courts are entitled to take judicial notice of the course of open and _ notorious international events of a public nature, in some cases of doubt they accept as conclusive statements provided to the courts by the executive government: Ffrost v Stevenson (1937) 58 CLR 528 at 549; Bradley v The Commonwealth (1973) 128 CLR 557 at 562; A-G (U.K.) v Heinemann Publishers Australia Pty. Ltd. (High Court, 2 June 1988, per Brennan J. at pp. 24-25 of the print); cf. Corporate Affairs Commission v Bradley [1973] 1 NSWLR 382 at 393. The statements so received have dealt with such questions as the extent of foreign territory, the existence of a state of war, belligerency or neutrality, the existence of foreign states and the identity of persons constituting the governments of recognised states. The statements provided by the executive certify that the Australian Government "recognises" a particular state of affairs; see the terms of the certificate in Corporate Affairs Commission v Bradley (supra at 390). The terms of such certificates are subject to interpretation by the courts but, once so construed, the certificates are "conclusive". The expression "conclusive" is used not only in the sense that evidence 1s not admissible to 42. contradict the certificates (Carl Zeiss Stiftung v Rayner & Keeler Ltd. (No. 2) [1967] 1 AC 853 at 901) but also, it seems, 1n the sense that the certificates cannot be questioned in proceedings for judicial review under s. 75 (v) of the Constitution or s. 39B of the Judiciary Act (cf. R v Secretary of State; Ex parte Trawnik, "The Times", 21 February 1986, which involved a certificate issued pursuant to statute, not the prerogative; and see also Warbrick, "Executive Certificates in Foreign Affairs: Prospects for Review and Control" (1986) 35 ICLQ 138). In the present case, the respondent does not rely on "non-justiciability" in this sense. However, I should at this stage : emphasise that British decisions upon "non-justiciability"" or the "unreviewability" of decisions made by the British Government are to be viewed with some care before what there is said is treated as applicable in this country. In A-G v Nissan [1970] AC 179 at 237, and in C.C.S.U. v Minister for the Civil Service [1985] 1 AC 374 at 418, Lords Pearson and Roskill respectively spoke of the exercise of various prerogative powers of the Crown in right of the United Kingdom (including the treaty making power) as of such a nature and subject matter as not to be amenable to the judicial process. However, even in Britain, the threshold question of whether an act in question was done under the prerogative power will be for the Court to decide, the point being that if it was, the Court may then decide 1t w1ll not inquire further into the propriety of that act: A-G v Nissan (Supra), C.C.S.U. v Minister for Civil Service (supra), Cane, "Prerogative Acts, 43. Acts of State and Justiciability", (1980) 29 ICLQ 680. To decide whether a question 1s "non-justiciable" 1s not to decide the alleged non-justicirable question itself. In Australia, with questions arising in federal jurisdiction, one looks not to the content of the prerogative in Britain, but rather to s. 61 of the Constitution, by which the executive power of the Commonwealth was vested in the Crown. That power extends to the execution and maintenance of the Constitution and of the laws of the Commonwealth and enables the Crown to undertake all executive action appropriate to the spheres of responsibility vested in the Commonwealth. One such sphere is the conduct of relations with other countries, including the acquisition of international rights and obligations, and in this sphere the executive power of the Commonwealth is exclusive of that of the States: The Australia Act 1986, s. 2; Rv Burgess; Ex parte Henry (1936) 55 CLR 608 at 643-644; Zines, "The High Court and the Constitution", 2nd Ed., 224-225, 244-245; Zines, The Growth of Australian Nationhood and Its Effect on the Powers of the Commonwealth in Zines (ed.) "Commentaries on the Australian Constitution", Ch. 1. The result is that a question as to the character and extent of the powers of the executive government in relation to the conduct of relations with other countries may give rise to a matter which arises under or involves the interpretation of s. 61 of the Constitution and will so affect the interests of a plaintiff as to give the necessary standing. These 44, circumstances will provide a subject matter for the exercise of federal jurisdiction pursuant to Chapter III of the Constitution; un such a case no question of "non- justiciability" ordinarily will arise. In Britain, putting to one side any questions that may arise consequent upon membership of the European Economic Community, there will be no directly comparable situations. The position in Australia is allustrated by the litigation in Barton v The Commonwealth (1974) 131 CLR 477. There, the High Court entertained proceedings instituted by prospective deportees from Brazil in which they sought a declaration that a request to that country for their detention there pending a request for their extradition to Australia was "ultra vires and beyond the executive government of Australia". It may be observed that the plaintiffs plainly had an immediate concern in the outcome, so there was no question of lack of standing. Additional considerations appear where the issue is not one of alleged lack of constitutional power, but rather one of the propriety of the conduct by the executive government of the Commonwealth of relations with foreign governments within the scope of its constitutional powers in that behalf. The plaintiff will, as in the case with claims put forward on constitutional grounds, still have to possess the necessary standing to claim the relief sought. But there being no question arising under the Constitution or involving its interpretation, where are the disputed rights supplying the 45. necessary content of a "matter" within the meaning of Chapter III of the Constitution? Dealings between Australia and foreign states will not normally, ain the absence of legislation, create rights in or impose obligations upon Australian citizens or residents: Ingram v The Commonwealth of Australia (1980) 54 ALJR 395; Simsek v Macphee (1982) 148 CLR 636. A breach of Australia's international obligations of itself will not be a matter justiciable at the suit of a private citizen: Tasmanian Wilderness Society Inc. v Fraser (1982) 153 CLR 270 at 274. However, the taking of a step in the conduct of international relations, whilst of itself neither creating private rights nor imposing such liabilities, may be a step in a process which as a whole may have that effect. In such cases, the process may give rise to matters justiciable at the suit of an individual. The cases dealing with "disguised extradition" provide examples; see Schlieske v Minister for Immigration and Ethnic Affairs (Full Court, 4 March 1988, unrep.). Another example may be provided by Minister for Arts, Heritage and Environment v Peko Wallsend Ltd. (1987) 75 ALR 218. The Cabinet decision there in question (to make a nomination for inclusion in the World Heritage List established under the World Heritage Convention) meant that the area in which the first respondents held mining interests became "identified property" within the meaning of sub-s. 3 (2) of the World Heritage Conservation Act 1983. This gave rise to the possibility that a proclamation might be made by the Governor-General with the effect of making mining operations 46. unlawful. Thus, 1t might be said that there was standing to seek judicial review (under s. 39B of the Judiciary Act, which reflects the terms of s. 75 (v) of the Constitution) of the Cabinet decision, on the grounds of want of procedural fairness and unreasonableness. The decision of the Full Court in the Peko-Wallsend Case, that nevertheless the complaints made were "non-justiciable", reflects another element in the constitutional concept of a "matter". This 1s that, even if the plaintiff has standing in respect of the complaint sought to be agitated before a court exercising federal jurisdiction, nevertheless there will be no "matter" 1f the plaintiff seeks an extension of the Court's true function into a domain that does not belong to it, namely the consideration of undertakings and obligations depending entirely on political sanctions. Such non-justiciable issues include agreements and understandings between governments within the federation (South Australia v The Commonwealth (1962) 108 CLR 130 at 141) and between the Australian and foreign governments (Gerhardy v Brown (1985) 159 CLR 70 at 138-139). Those issues do not give rise to "matters" an the sense necessary for the exercise of federal jurisdiction. Another such issue would appear to arise where a foreign government sued in an Australian court exercising federal jurisdiction andin substance sought to enforce outside its territory a claim arising out of acts of that state in the exercise of powers peculiar to government (A-G (U.K.) v 47. Heinemann Publishers Australia Pty. Ltd., High Court, 2 June 1988, unrep, a case which was not approached on the footing that the State Court was exercising federal jurisdiction, and where the principle propounded was characterised primarily asa common law rule of private international law, exemplified by Huntington v Attrill [1893] Ac 150 at 156). In Gerhardy v Brown (supra), Brennan J. referred to the United States decisions, notably Baker v Carr (supra), which treat "political questions" as lying outside the constitutional concept of "cases" and "controversies". The "political question" doctrine has attracted considerable criticism, not the least in its application to the conduct of foreign affairs: Henkin, "Is There a 'Political Question' Doctrine?", (1976) 85 Yale L.J. 597; Wright, "Law of The Federal Courts", 4th Ed., (1983) §14. An alternative path, though not always clearly marked as such in the United States decisions, has been that which emphasises the discretionary nature of equitable relief (by way of injunction = and declaration). The result is that there may be a case or controversy properly before a United States federal court, but equitable relief may nonetheless be withheld; see the authorities discussed in Ramirez de Arellano v Weinberger 745 F 2d 1500 (1984) at 1521-1523, 1560-1566, (remanded by the Supreme Court on other grounds, 86 L.-Ed. 255 (1985)). Nor, in the United States, has the position been simplified by the so-called "act of state doctrine". This provides, as a defence, the principle (propounded by Fuller 48. C.J. an Underhill v Hernandez 168 US 250 at 252 (1897)) that: Every sovereign State is bound to respect the independence of every other sovereign State, and the courts of one country will not sit in judgment on the acts of the government of another done within its own territory. Redress of grievances by reason of such acts must be obtained through the means open to be availed of by sovereign powers as between themselves. We have it on the authority of Dr. F.A. Mann ("Foreign Affairs in English Courts" (1986), pp. 164, 175) that no doctrine in such a wide form exists in the civilian states of Western Europe. Further, 1n its recent manifestations in the United States, the doctrine has been modified. Some authority suggests the foreign act of state doctrine 1s best seen as a species of the same genus which also includes the "political question" doctrine: International Association of Machinists v OPEC 649 F 2d 1354 at 1358-9 (1981); Sharon v Time Inc. 599 F Supp. 538 at 547-548 (1984). Other authority sees the doctrine as requiring a factual inquiry in each case as to whether a decision by the Court will adversely effect the conduct of foreign relations or pass judgment on the laws, conduct or motives of a foreign state: Airline Pilots Association v Taca International Airlines S.A. 748 F 2d 965 at 969~970 (1981); Ramirez de Arellano v Weinberger (supra) at 1534. Nevertheless, the adoption into English law of the doctrine in its pristine form as propounded by Fuller C.J. in 1897 seemingly now has the imprimatur of the House of Lords in Buttes Gas and 011 Co. v Hammer [1982] Ac 888. That decision is roundly criticised by Dr. Mann throughout his recent work 49. "Foreign Affairs in English Courts". It has not yet been necessary finally to decide if any such doctrine exists in this form in Australia, aithough support fer it is apparent in the joint judgment in A-G (U.K.) v Heinemann Publishers Australia Pty. Ltd. (supra at pp. 10-11, 14 of the print). In any event, the present case does not involve the doctrine. The applicant in these proceedings complains not of failings of the German Government, but of alleged shortcomings of the Australian Government. . . However, 1t may be noted that many of the decisions in which the foreign act of state doctrine was invoked as a defence were actions to try torts committed in that state or to ascertain the title to moveables once situated there. In such cases, a effect of a forergn act of state may be to render lawful what would otherwise be a tortious act committed on its territory, or to pass title to moveables situated there; Mann, "Studies in International Law", pp. 458-460; Cheshire and North, "Private International Law", llth Ed., 121-123. The Australian rules of private international law dealing with foreign torts and title to moveables may of their own force give effect to the foreign act of state without recourse to any doctrine of that name; Cheshire and North, "Private International Law", (10th Ed.,) p. 139. Indeed, some recent United States authority treats the foreign act of state doctrine as a "super choice of law rule" which obliges the lex fori to apply foreign law as the lex causae where 1t otherwise would not do so under its rules of private international law: Callejo v Bancomer S.A. 764 F 2d 1101 at 1113-1114 (1985). 50. What does follow from what has been said is that 1t 1s no sufficient answer to any attempt by the applicant to call into question the observance by the Australian Government of statements made or assurances offered to the German Government in relation to his extradition, to state merely that such questions are "non-justiciable". Within that phrase, as I have attempted to show, lie several concepts. Insofar as the applicant asserts that the Commonwealth acted in excess of the executive power with respect to foreign relations, within the meaning of s. 61 of the Constitution, then, if he has standing in respect of the matter (which I will later discuss) there 1s a justiciable matter. Insofar as he asserts some deficiency or failing on the part of the Commonwealth in the conduct of its relations with Germany, but no lack of constitutional power, the question becomes (a) does this give rise to a "matter" in the sense I have described, (b) if so, does the applicant have standing with respect to it? I have already described the nature of the proceedings brought by the applicant. As that description shows, the debtor applicant is not seeking judicial review of the decisions of the Australian Government with respect to its dealings with a foreign state. He does not allege in these proceedings the existence of grounds upon which relief is sought against officers of the Commonwealth pursuant to s. 75 (iv) of the Constitution or s. 39B of the Judiciary Act. Nor does he seek to assert with the authority and on behalf of the foreign state, and in proceedings in a municipal court, any 51. rights flowing to the foreign state against Australia by reason of what took place (cf. Tasmanian Wilderness Society Inc. v Fraser (1982) 153 CLR 270). Nor does he assert that the dealings between Australia and Germany produced personal rights which provide a cause of action enforceable by him un proceedings in an Australian Court against the Australian Government (cf. Simsek v Macphee (1982) 148 CLR 636). Rather, the conduct of relations between Australia and Germany enters into consideration by the Court, because in the course of dealing with the matter in respect of which the Court has jurisdiction (viz. the application by the bankrupt for annulment under s. 154 of the Bankruptcy Act) 1t 1s necessary to construe the terms of ss. 43 and 52 of the Bankruptcy Act which repose discretions in the Court. In my judgment, the issues which the applicant agitates would have been properly taken into account by the Court in the exercise of those discretions. Therefore, they are to be considered in deciding, under s. 154, whether the sequestration order ought not to have been made. I note that in another context the Full Court has indicated that on its proper construction, the discretion given by statute to a decision-maker permitted him to have regard to particular treaty obligations of Australia: Gunaleela v Minister for Immigration and Ethnic Affairs (1987) 74 ALR 263 at 280; cf. Mann, "Foreign Affazrs in English Courts", pp. 94-96. The applicant, in my view, plainiy has the necessary standing to agitate the issues in question, they being steps in 52. the chain of reasoning by which he seeks to make out his case under s. 154 of the Bankruptcy Act. It also follows from what I have said that the issues are elements of the "matter" in respect of which the Court has jurisdiction and are not to be classified as "non-justiciable" in the sense discussed in the Australian authorities: Commonwealth v South Australia (supra); Gerhardy v Brown (supra). The matter touches foreign relations, but that does not place the matter, as to any part of it, beyond the cognizance of the Court (cf. Baker v Carr (supra) at 211; Fiocconi v Attorney-General of the United States 462 F 2d 475 at 480 (1972)). For these reasons, I reject the submissions as to "non-justic1rability" made by the respondent. I turn to deal with the particular extradition issues raised by the applicant. The Constitutional Point It will be recalled that the Extradition (Foreign States) Act 1966 did not at the relevant time in 1985 apply to the Federal Republic of Germany. The source of power for the dealings between Australia and Germany for extradition of the applicant thus is to be found in s. 61 of the Constitution. It is settled both that the executive power of the Commonwealth extends to seeking and accepting the surrender by a foreign state of a person for trial in this country, and that this power was not displaced by the enactment of the 1966 52. the chain of reasoning by which he seeks to make out his case under s. 154 of the Bankruptcy Act. It also follows from what I have said that the issues are elements of the "matter" in respect of which the Court has jurisdiction and are not to be classified as "non-justiciable" in the sense discussed in the Australian authorities: Commonwealth v South Australia (supra); Gerhardy v Brown (supra). The matter touches foreign relations, but that does not place the matter, as to any part of it, beyond the cognizance of the Court (cf. Baker v Carr (supra) at 211; Fiocconi v Attorney-General of the United States 462 F 2d 475 at 480 (1972)). For these reasons, I reject the submissions as to "non-justiczability" made by the respondent. I turn to deal with the particular extradition issues raised by the applicant. The Constitutional Point It will be recalled that the Extradition (Foreign States) Act 1966 did not at the relevant time in 1985 apply to the Federal Republic of Germany. The source of power for the dealings between Australia and Germany for extradition of the applicant thus 1s to be found in s. 61 of the Constitution. It is settled both that the executive power of the Commonwealth extends to seeking and accepting the surrender by a foreign state of a person for trial in this country, and that this power was not displaced by the enactment of the 1966 statute: Barton v The Commonwealth (1974) 131 CLR 477. The applicant nevertheless submits that there is a limit to that power. As I understood the applicant, he submitted that the Australian executive government has no power to seek or accept the surrender of a person for trial in this country 1n proceedings the prosecution of which is not under the supervision and control of that executive. This would mean that extradition might not be sought where the offences were committed purely against the laws of one or more of the States. Questions thus arose which attracted s. 78B of the Judiciary Act 1903. Notices were given in satisfaction of the obligation imposed by s. 785. No Attorney-General intervened in the proceedings. I turn to deal with the argument on the constitutional point. It has long been accepted in the United States that, exclusive of any treaty, the federal executive power extends to extradition in respect of offences against State law: United States v Rauscher 119 US 407 at 411-414 (1886). The federal executive power in this country in respect of extradition was described in Barton's Case in plenary terms (see 131 CLR at 485, 488, 489-490, 495, 498-499, 500-501, 505). I should add that I do not read what Barwick C.J. said in the second Paragraph on p. 485 of the report, or what the Full High Court subsequently said of it in Trimbole v The Commonwealth of 53. statute: Barton v The Commonwealth (1974) 131 CLR 477. The applicant nevertheless submits that there is a limit to that power. As I understood the applicant, he submitted that the Australian executive government has no power to seek or accept the surrender of a person for trial in this country in proceedings the prosecution of which 1s not under the supervision and control of that executive. Th1s would mean that extradition might not be sought where the offences were committed purely against the laws of one or more of the States. Questions thus arose which attracted s. 788 of the Judiciary Act 1903. Notices were given in satisfaction of the obligation imposed by s. 78B. No Attorney-General intervened in the proceedings. I turn to deal with the argument on the constitutional point. It has long been accepted in the United States that, exclusive of any treaty, the federal executive power extends to extradition in respect of offences against State law: United States v Rauscher 119 US 407 at 411-414 (1886). The federal executive power in this country in respect of extradition was described in Barton's Case in plenary terms (see 131 CLR at 485, 488, 489-490, 495, 498-499, 500-501, 505). I should add that I do not read what Barwick C.J. said in the second paragraph on p. 485 of the report, or what the Full High Court subsequently said of it in Trimbole v The Commonwealth of 54. Australia (1984) 155 CLR 186 at 189, concerning the circumscribing of the exercise of the prerogative in a practical sense, aS going to the existence of constitutional power. The applicant submits that the effect of the provisions of the Director of Public Prosecutions Act 1983, particularly ss. 6, 7, 8, 9 and 11, was to vest in an officer independent of the Attorney-General, the institution and conduct of the prosecution of the applicant for the offences for which he was tried. Assuming that to be an accurate description of those provisions, the result was not that the Parliament by this means curtailed the power of the executive government to seek and accept the extradition of the applicant. My conclusion is that the applicant fails on this issue. Other Extradition Issues On the footing, as I understood him, that the Australian Government was acting within its constitutional powers, the applicant nevertheless complains that in a number of respects the Australian Government broke the assurances given to or engagements entered into with Germany with respect to his extradition, or failed to give assurances or engagements that were effective. The applicant submits that the affidavit of Mr. Cook, sworn 19 July 1985, which was produced to the German Government 55. in support of the requisition signed by the Attorney-General, was an ineffective means of giving the undertakings there set out. Mr. Cook was a solicitor subject to the direction and control of the Director of Public Prosecutions. It 1s then submitted by the applicant that Mr. Cook could not speak for the Australian Government and that the German Government was misled accordingly. There are two answers to this. First, the assurances in question were repeated in note verbale No, 32/85, the terms of which I have earlier set out, and this, on any footing, was an inter-government communication at a high level. Secondly, it 1s plain from the context that the affidavit was put forward as vouched for by the Australian Government. Secondly, the applicant relies on note verbale No. 511-2016/85 and note verbale No. 57/87, dated respectively 5 August 1987 and 26 August 1987. I have already set out the body of these communications. As I have said, the response of the Australian Government to the inquiries made of it by the German Government as to certain aspects of the treatment of the applicant after his extradition was inaccurate or incomplete in several respects. Nevertheless, there is no evidence to show that the German Government remains dissatisfied in any respect concerning that reply or any other aspect of the extradition. In my view, consistently with United States authority, it is not then for the applicant to assert for his forensic purposes that cause for dissatisfaction by the foreign government may exist when the evidence does not show the existence or continuance of any such dissatisfaction: Frocconi v 56. Attorney-General of the United States 462 F 2d 475 at 480 (1972); United States v Jetter 722 F 2d 371 at 373 (1983); United States v Molina-Chacon 627 F Supp. 1253 at 1264 (1986); O'Connell, "International Law", 2nd Ed., Vol. 2, pp. 731-733. That of itself would be sufficient to dispose of the applicant's argument on this branch of the case, but I will deal briefly with his other submissions. It was said that the evidence (particularly note verbale 32/85) showed Australia had assured Germany that the applicant would be dealt with only for the crime in respect of which his surrender was sought and given. This was described as "the speciality"; see Barton's Case 131 CLR at 483 per Barwick C.J. It was then said that the speciality had not been observed. First, it was said that the applicant was taken into custody pursuant to warrants for his arrest on parking offences committed in 1982. However, the evidence also shows that he was concurrently in custody and held on the charges for which he had been extradited and for which he was later charged. I would not regard what took place as non-observance of the speciality. That principle reflects fundamental concern that persons surrendered not be subject to indiscriminate prosecution, especially for political crimes: Fiocconi v Attorney-General of the United States (supra) at 481; Oppenheim's International Law, Vol. 1, 8th Ed., §331,332. 57. The applicant also complains that the effects of the sequestration order are penal in character. He points in particular to the obligation imposed upon him by s. 77 (a) of the Bankruptcy Act to deliver his passport to the trustee; see also s. 272 thereof and the Companies (NSW) Code s. 222. Tt has been said on various occasions that the significant effect of bankruptcy upon status means that its effect 18 penal or quasi penal in character: In_re Long; Ex parte Fraser Confirming Pty. Ltd. (1975) 12 SASR 130 at 133-134; Re Williams; Ex parte Alberton Electrical Service Pty. Ltd. (1982) 43 ALR 552 at 558; Ahern v Deputy Commissioner of Taxation (1987) 76 ALR 137 at 148. Certainly, that consideration leads the Court to look closely, inter alia, at issues concerning proper service of process upon debtors, as earlier passages of these reasons indicate. But that does not bring with it the result that the Court order pursuant to the Bankruptcy Act for sequestration of the estate of the applicant on the petition of the Deputy Commissioner, subjected the applicant to a penal sanction, restricted him in his personal freedom or prosecuted him for a crime other than those in respect of which his surrender was sought and given, within the sense of the speciality as described by Barwick C.J. in Barton's Case (supra) or as contained in the note verbale No. 32/85, the terms of which I have earlier set out. Further, highly persuasive authorities indicate that the speciality is not repudiated where the person in question is tried for offences committed in the requesting state after his return there: Collins v O'Neil 214 US 113 at 122 (1909); 58. Collins v Johnston 237 US 502 at 511-512 (1915). The terms of the speciality in the instant case were, as appears from the materials I have earlier set out, directed to penal sanctions, restrictions on personal freedom and prosecutions "upon any ground existing prior to his surrender . . .". The sequestration order was made upon a creditor's petition based on an act of bankruptcy, namely non-compliance with a bankruptcy notice, events which took place after the return of the applicant to this country. Pinally, the applicant seeks to make a point arising from the regulation making power conferred by s. 31 of the Extradition (Foreign States) Act 1966. As I have indicated, at the time of the extradition of the applicant, the Federal Republic of Germany was not a foreign state to which that Act applied pursuant to sub-s. 10 (4), although this has since come to pass. Sub-~s. 10 (4), in conjunction with s. 31, provides for the making of regulations, where the Governor-General 1s satisfied, of certain matters. These references in the statute are to be read (in the absence of contrary intention) as made to the Governor-General acting with the advice of the Federal Executive Council: Acts Interpretation Act 1901, s. 16a. There is no contrary intention, and there 1s no power reposed by the Extradition (Foreign States) Act 1966 in _ the Governor-General personally: A-G (N.T.) v Manister for Aboriginal Affairs (1987) 73 ALR 33 at 45-46. However, the applicant relies upon a passage in the decision of the Regional Appeal Court of the Federal Republic 59. of Germany of 13 May 1985, given in proceedings concerning his extradition. This makes 1t clear that the German Government had relied upon the assurance by the Australian Government given by note verbale No. 13/85, to the effect that 1t would undertake the necessary steps indicated by s. 10 to apply the Act to the Germany. The applicant's point is that this assurance was misleading because it was beyond the competence of the Australian Government to ensure that the Governor-General would act as 1t wished in the matter. The proposition misconceives the role of the Governor-General. As I have said, he has no personal role in the processes envisaged by sub-s. 10 (4) and S. 31 outside the Executive Council. The necessary authority is reposed in a collegiate body, the Governor-General-in- Council; it is quite fanciful and improper to suppose in the proceedings of that body vice~regal conduct against the considered advice of Ministers of State. It follows that the giving of the assurance in question is not open to the criticism made by the applicant. It also follows that there is no substance in any of the complaints made by the applicant on this branch of the case. Conclusions As I have indicated, there is shown to have been a failure to observe the requirements of Rule 15 of the Bankruptcy Rules as to personal service, both of the bankruptcy 60. Motice and the creditor's petition. There was also, in the petition, reliance upon the ordinary residence in Australia of the debtor, rather than the personal presence in Australia, at the time of the commission of the act of bankruptcy. Were this the only deficiency, I would have been minded to permit, at this stage, appropriate amendment of the process, pursuant to para. 33 (1) (b) of the Bankruptcy Act, as was done by Fitzgerald J. in Re Finn (1982) 58 FLR 54, However, that is not the case and, as I have indicated, these deficiencies taken together mean that the sequestration order ought not to have been made. The applicant has expressed deep dissatisfaction with the circumstances in which he was extradited to this country to stand trial, and with the treatment accorded him after his return to this country, but these grievances do not involve considerations of sufficient substance and legal character to support the conclusion, which I have reached on other grounds, that the sequestration order ought not to have been made. I have endeavoured in earlier passages in these reasons for judgment to show why the extradition issues do not have the effect the applicant urged on the Court. That leaves the question whether the order for annulment should be made in the exercise of the discretion given by sub-s. 154 (1) of the Bankruptcy Act. The deficiencies as to personal service were serious matters and I take them into account in the exercise of this discretion. On the other hand, this 1s not a case where service failed for él. circumstances quite beyond the purview of the debtor; his conduct on 30 September and 17 November 1986 was that of a person anxious to avoid service of any process issued at the instance of the taxation authorities. He did in fact receive the bankruptcy notice from Mr. Ritchie before 7 October; and certainly by 26 November he knew of the attempt to serve further process on 17 November. Nor do I believe that what I have called the extradition issues supply any ground for annulling the bankruptcy, on the footing that although it was for other reasons that the sequestration order ought not to have been made, the extradition issues nevertheless enter at this later stage into consideration as favourable to the applicant. The applicant also emphasised at the hearing of the present application his views that he has been persistently attacked by the Commissioner of Taxation over a number of years. He referred, in particular, to the further assessments for large sums in respect of the years ended 30 June 1981 and 30 June 1982, together with additional tax for late payment, these steps having been taken after he left Australia on 5 July 1982 and before his return on 23 October 1985. Whilst, as I indicated when outlining the nature of the present proceedings, there was no evidence that enables me to express any concluded view on the merits of that subject, I should refer also to what was said by Mr. Ditfort's counsel to the Deputy Registrar on 19 June 1987, on the first adjournment of the s. 69 examination as to the apparent interrelation between those large debts and the charges on which he was tried in 1987. 62. As regards the default judgment in the District Court which founded the bankruptcy notice, the applicant informed this Court, in the course of the present proceedings on 31 March 1988, that, whilst he had never had the opportunity of contesting the assessment in question, 1f he examined it and believed 1t should be paid, then he would pay it. Later, in submissions on 12 May 1988, the applicant said he conceded that probably there was that debt. Against this background, the respondent stressed that the applicant had offered no evidence to 1ndicate his solvency. Nor had he offered evidence as to his present financial circumstances. The importance of these matters had been drawn to the attention of the applicant earlier in the present proceedings, with particular reference to the decision in Re Williams (1968) 13 FLR 10 at 25. To that decision, one might add that of Beaumont J. in Re Middleton (4 February 1987, unrep.). The applicant's response largely has been to emphasise the significance of the procedural irregularities to which I have referred, and to reiterate his complaints concerning the taxation authorities. I have, as I have indicated, taken the procedural irregularities into account as a serious matter. But I also give considerable weight to the matters emphasised by the respondent. Like Fitzgerald J. in Re Finn (1982) 58 FLR 54 at 64, I have not attempted to deal exhaustively in the above passages with the relevant factors. Taking into account all the circumstances of the case as revealed in these reasons for judgment, I have come to the conclusion that the application for annulment fails. The application filed 19 November 1987 is dismissed with costs. I certify that this and the sixty two (62) preceding pages Reasons for Justice Gummow. Associate: Date: Counsel for the Applicant: Counsel for the Respondent: Date of Hearing: Date of Judgment: are a true copy of the Judgment of his Honour Mr. Phone Lane 3 June 1988. The applicant appeared in person. S. Gibb instructed by the Australian Government Solicitor. 17 and 31 March, 12 May 1988. 3 June 1988.