FEDERAL COURT OF AUSTRALIA Mansfield v State of Victoria [2002] FCA 1175 BANKRUPTCY – whether parking infringement penalties are provable debts – whether the penalties were imposed by an order of a court – whether the Court should stay legal process for the enforcement by the PERIN procedure of payment of the penalties WORDS AND PHRASES – "penalties or fines imposed by a court" Bankruptcy Act 1966 (Cth) ss 60(1) and 82 Storey v Lane (1981) 147 CLR 549 - applied Re Sutherland-Cropper (1985) 61 ALR 713 - cited Re Bradbury (1931) 3 A.B.C. 204 - cited Re Higgins; Ex parte Higgins and Nicholson (1984) 4 FCR 533 - cited Harris v Caladine (1991) 172 CLR 84 - cited MICHELLE MANSFIELD v STATE OF VICTORIA V7014 OF 2002 MERKEL J 27 SEPTEMBER 2002 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 7014 OF 2002 BETWEEN: MICHELLE MANSFIELD APPLICANT AND: STATE OF VICTORIA RESPONDENT JUDGE: MERKEL J DATE OF ORDER: 27 SEPTEMBER 2002 WHERE MADE: MELBOURNE THE COURT MAKES THE FOLLOWING DECLARATION AND ORDERS: 1. Declare that the unpaid penalties or fines and costs payable by the applicant in respect of parking infringements by her in the City of Port Phillip prior to her bankruptcy on 29 March 2001 are provable debts in her bankruptcy ("the provable debts"). 2. Order that there be a stay of any legal process, whether civil or criminal, against the applicant or her property: (a) in respect of the non-payment of the provable debts or of a pecuniary penalty or fine payable in consequence of the non-payment of the provable debts; or (b) in consequence of the applicant's refusal or failure to comply with orders of the Magistrate's Court of Victoria for the payment of the said penalties, fines or costs. 3. Reserve liberty to apply. 4. The respondent pay the applicant's costs of and incidental to the proceeding. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 7014 OF 2002 BETWEEN: MICHELLE MANSFIELD APPLICANT AND: STATE OF VICTORIA RESPONDENT JUDGE: MERKEL J DATE: 27 SEPTEMBER 2002 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 The issue in the present case is whether a bankrupt remains liable to pay parking infringement penalties and associated costs accumulated prior to the bankruptcy. The applicant is an unemployed pensioner. She has failed to pay outstanding penalties and costs amounting to $14,755.30 in respect of 72 parking infringements which have resulted in orders of the Magistrates Court requiring payment of the amounts due. As a result of her non-compliance with those orders the applicant has accumulated a total default imprisonment period of 170 days. 2 A debtors petition of the applicant, presented by her pursuant to s 54A of the Bankruptcy Act 1966 (Cth) ("the Bankruptcy Act"), was accepted on 29 March 2001 with the consequence that she has been bankrupt since that date. The applicant's assets do not exceed more than $500 in value. The only debts owing by her are the penalties and costs payable in respect of her parking infringements. 3 A dispute has arisen between the applicant and the State of Victoria as to whether the penalties and costs payable in respect of the parking infringements are provable debts in the applicant's bankruptcy. The applicant contends that the amounts payable by her in respect of the parking infringements are provable debts under s 82(1) of the Bankruptcy Act and, in accordance with the scheme established by that Act, her provable debts will be discharged and there be no further liability in respect of them after she is discharged from the bankruptcy. The respondent contends that the amounts owing in respect of the parking infringements are penalties imposed by a Court in respect of offences against State law and are therefore not provable debts by reason of s 82(3) of the Bankruptcy Act. Apparently, that view has been adopted by the Magistrates Court of Victoria. A registrar of that court sent a letter to the applicant dated 1 June 2001 stating that the fines imposed in respect of her parking infringements are not provable in her bankruptcy and will be enforced by the court. 4 The applicant commenced a proceeding in the Court seeking a declaration that the amounts owing in respect of the parking infringements are provable debts in her bankruptcy and for an order staying any legal process, whether civil or criminal, in respect of her non-payment of those amounts. The stay order was sought pursuant to s 60(1)(b) of the Bankruptcy Act which provides: "(1) The Court may, at any time after the presentation of a petition, upon such terms and conditions as it thinks fit: (a) … (b) stay any legal process, whether civil or criminal and whether instituted before or after the commencement of this subsection, against the person or property of the debtor: (i) in respect of the non-payment of a provable debt or of a pecuniary penalty payable in consequence of the non-payment of a provable debt; or (ii) in consequence of his or her refusal or failure to comply with an order of a court, whether made in civil or criminal proceedings, for the payment of a provable debt; and, in any case where the debtor is imprisoned or otherwise held in custody in consequence of the non-payment of a provable debt or of a pecuniary penalty referred to in subparagraph (i) or in consequence of his or her refusal or failure to comply with an order referred to in subparagraph (ii), discharge the debtor out of custody." 5 The constitutional validity of s 60(1) was unsuccessfully challenged in Storey v Lane (1981) 147 CLR 549 ("Storey v Lane"). See also Re Sutherland-Cropper (1985) 61 ALR 713 ("Sutherland-Cropper") at 715-719. 6 Debts provable in bankruptcy are provided for in s 82 of the Bankruptcy Act which, relevantly, provides: "(1) Subject to this Division, all debts and liabilities, present or future, certain or contingent, to which a bankrupt was subject at the date of the bankruptcy, or to which he or she may become subject before his or her discharge by reason of an obligation incurred before the date of the bankruptcy, are provable in his or her bankruptcy. … (3) Subject to subsection (3A), penalties or fines imposed by a court in respect of an offence against a law, whether a law of the Commonwealth or not, are not provable in bankruptcy. … (3A) An amount payable under a pecuniary penalty order or an interstate pecuniary penalty order is provable in bankruptcy." 7 A reason for excluding court imposed fines and penalties from the scheme of the Bankruptcy Act was explained by Lukin J in Re Bradbury (1931) 3 A.B.C. 204, where his Honour held that the Official Receiver had correctly rejected a proof of debt for fines and costs imposed under the Game Act (Vic), notwithstanding that at that time there was no counterpart to s 82(3) of the Bankruptcy Act. Lukin J (at 216-217) relied on American authority to the effect that it: "…cannot be supposed to have been the intention of [C]ongress that the discharge on bankruptcy should release a defendant from a fine imposed as a punishment for a criminal offence. Such section should be construed as applying only to civil liabilities. It was not intended in this indirect way in derogation of the exclusive right of the chief executors to pardon offenders or to remit fines imposed or to relieve criminals from penalties incurred for criminal acts. If so intended it would mean the frustrating of proper efforts to enforce criminal Statutes enacted for the public welfare. The provisions of the Bankruptcy Act have reference only to civil liabilities and demands between debtor and creditor as such, not to punishments inflicted pro bono publico for crimes committed." 8 Section 82(3) appears to give effect to the policy stated by Lukin J. However, because criminal procedures were sometimes used to collect provable debts s 60(1) was enacted by the Bankruptcy Amendment Act 1980 (Cth) to overcome the use of criminal procedures against a bankrupt to collect provable debts and to ensure bankrupts are not held in custody for the non-payment of such debts: see the Explanatory Memorandum in respect of cl 35 of the Bankruptcy Amendment Bill 1979 and Sutherland-Cropper at 715-716. 9 The issue in the present case is whether the amounts owing in respect of the parking infringements are provable debts. It was common ground that if the amounts owing are not penalties imposed by a court then they are provable debts and the applicant would be entitled to the stay sought by her under s 60(1)(b). Thus, the parties directed their attention primarily to the question of whether the penalties were imposed by a court. But that is not the question raised under s 60(1)(b). Rather, the question raised under that sub-section in the present case is whether the legal process in respect of the penalties is "in respect of the non-payment of a provable debt" (s 60(1)(b)(i)) or "in consequence of [the applicant's] refusal or failure to comply with an order of a court…for the payment of a provable debt" (s 60(1)(b)(ii)). The power to make a stay order under s 60(1)(b) can arise if the penalties are debts or liabilities imposed by statute, notwithstanding that, subsequently, a court order has been made in a civil or a criminal proceeding that the amount of the liability be paid. The resolution of the issues arising in the present case requires consideration of the statutory scheme pursuant to which the applicant became liable for the penalties payable by her. 10 Although the Local Government Act 1989 (Vic) provides for councils to make by-laws, inter alia, with respect to parking and to prescribe penalties and serve infringement notices in respect of contraventions of parking laws, the parking infringement penalties imposed on the applicant were imposed pursuant to the Road Safety Act 1986 (Vic) ("the Road Safety Act"). Payment of those penalties is enforced by the Procedure for Enforcement of Infringement Penalties, known as the "PERIN procedure", provided for in s 99 of the Magistrates Court Act 1989 (Vic) ("the Magistrates Court Act"). 11 The applicant contends that, on the proper construction of the Road Safety Act, the Road Safety (General) Regulations 1999 ("the Regulations") and the Magistrates Court Act, the amounts owing by the applicant in respect of her parking infringements are debts imposed by statute. She claims that the debt is not imposed by the Magistrates Court whose role is to enforce payment of the statutory debt, which is a provable debt under s 60(1) of the Bankruptcy Act. 12 The respondent contends that, on the proper construction of the relevant statutory provisions, the amounts owing by the applicant are parking infringement penalties imposed by orders of the Magistrates Court. It appears that the costs incurred in consequence of the non-payment of an infringement penalty are considered to be part of the penalty (see Re Higgins; Ex parte Higgins and Nicholson (1984) 4 FCR 533 and the definition of "fine" (which includes costs) in cl 2 of Sch 7 to the Magistrates Court Act), rather than a liability arising independently of the penalty. However, that question may be of little consequence in the present case which has been argued on the basis that the issue for decision is whether the penalties are provable debts. If that question is answered in the negative the applicant would not be entitled to a stay under s 60(1)(b) in respect of the penalties. If the question is answered in the affirmative then both the penalties and the costs are provable debts and the applicant would be entitled to the stay sought under s 60(b)(i) and (ii): see Re Sutherland-Cropper at 717-719. 13 Liability for parking infringements is provided for in Pt 7 of the Road Safety Act. Under s 86, subject to certain exceptions which are not presently relevant, the owner of a vehicle in relation to which a parking infringement occurs is guilty of an offence in all respects as if that person had been the actual offender who was guilty of the infringement. Section 87(1) provides that, if a parking officer has reason to believe that a parking infringement has been committed in respect of the vehicle, he or she may serve or cause to be served a parking infringement notice pursuant to the Regulations. A parking infringement is defined in s 3(1) of the Road Safety Act as the parking of a vehicle in contravention of an enactment, regulation or by-law. It is common ground that the amounts owing by the applicant are in respect of parking infringements as defined in s 3(1). Section 87(3) of the Road Safety Act provides that, save for certain exceptions, the penalty prescribed for the purposes of s 87 for any parking infringement is the amount prescribed by the Regulations in respect of infringements of the kind in question. It is also common ground that the amount of the penalties payable in respect of the applicant's parking infringements have been determined in accordance with the Regulations. 14 Section 89 of the Road Safety Act provides for payment of penalty: "(1) Subject to sub-section (4), if before the expiration of the period specified in the infringement notice for the payment of the penalty or, where the person giving the notice so allows, at any time before the service of a summons in respect of the infringement, the amount of the penalty shown on the notice is paid at the appropriate place- (a) the offender must be taken to have expiated the infringement by payment of the penalty; and (b) no further proceedings may be taken in respect of the infringement; and (c) no conviction for the infringement may be regarded as having been recorded. (2) Every penalty paid pursuant to this section must be applied in the same manner as if the offender had been convicted of the infringement in the Magistrates' Court on a charge filed by the member of the police force or authorised officer who served the infringement notice or caused it to be served. (3) Payment of any penalty under this section may be effected in accordance with the regulations. (4) If an infringement notice has been served and the amount of the penalty is not paid before the expiration of the period specified in the notice as the time for payment or where, in the case of a traffic infringement notice, the notice has been withdrawn, nothing in this section in any way prejudices the institution or prosecution of proceedings for the infringement in question (whether pursuant to Schedule 3 to the Magistrates' Court Act 1989 or otherwise) but in any case, where the court is satisfied that an infringement notice was served in respect of the infringement and has not been withdrawn, the conviction imposed by the court must not be taken to be a conviction for any purpose (including, without limiting the generality of the foregoing, the purposes of any enactment imposing, authorising or requiring the imposition of any disqualification, disability or higher penalty on convicted people or people convicted on more than one occasion) except in relation to- (a) the making of the conviction itself; and (b) any subsequent proceedings which may be taken in respect of the conviction itself, including proceedings by way of appeal or order to review." 15 Part 5 of the Regulations deals with the manner in which a person is to be served with, and becomes liable for payment of the amounts payable under, parking infringement notices. Regs 501 and 502 provide: "501. Service of parking infringement notices (1) For the purposes of section 87 of the Act, a parking infringement notice may be served-- (a) by giving the notice personally to the person who appears to have committed the infringement or any person who is driving or appears to be in charge of the vehicle; or (b) by fixing or securing the notice to the vehicle as set out in sub-regulation (2); or (c) by serving the notice on the registered operator of the vehicle in accordance with section 93 of the Act. (2) If a parking infringement notice is served by fixing or placing the notice on a vehicle, the notice must be fixed or placed in a position which will be conspicuous to the driver of the vehicle-- (a) by affixing an adhesive portion of the notice or a separate adhesive seal to the vehicle; or (b) by securing the notice under a windscreen wiper blade of the vehicle. 502. Prescribed particulars of parking infringement notice For the purposes of section 87(2) of the Act, the prescribed particulars of a parking infringement notice are-- (a) the date on which the notice is issued; (b) the number of the notice; (c) the name and address (if known) of the person alleged to have committed the infringement or the words 'The Owner'; and (d) the date, time and place of the alleged parking infringement; (e) the registered number or other identification of the vehicle involved in the parking infringement; (f) the nature, and a brief description, of the alleged parking infringement; (g) the infringement penalty for the alleged parking infringement; (h) a statement as to the manner in which the infringement penalty may be paid; (i) a statement as to the time (not being less than 28 days after the date on which the notice is served) within which the penalty must be paid; (j) a statement that if the amount of the infringement penalty is paid before the end of the time specified in the notice, the matter will not be brought before the Magistrates' Court; (k) a statement that if the amount is not paid before the end of the time specified in the notice and proceedings are brought before the Magistrates' Court the person on whom the notice is served is entitled to defend any such proceedings." 16 Part 7 of the Regulations provides for public authorities to collect and receive penalties imposed under the Road Safety Act and the Regulations. It is common ground that the City of Port Phillip is the public authority responsible for collecting and receiving the parking infringement penalties imposed on the applicant in respect of her parking infringements committed within the City of Port Phillip. 17 Under the Road Safety Act the City of Port Phillip is empowered to prosecute parking infringements: see s 77(2)(b). The infringement penalties imposed on the applicant are payable to the municipal fund of the City of Port Phillip which is the Council in whose area the parking infringements occurred: see s 77(5) of the Road Safety Act and reg 703 and Sch 5 of the Regulations. 18 In accordance with the Regulations the parking infringement notice served on an owner must state, inter alia, the amount of the penalty payable and the date by which payment is due: see reg 502. The payment details that are provided on the back of the notices served on the applicant state that cheques are to be payable to the "City of Port Phillip" within 28 days of the date of the issue of the notice. The notice also states that: "On payment of the penalty within the required period: · no further proceedings shall be taken; and · no conviction for the infringement recorded. If this notice is addressed merely to 'the owner', the registered owner will be responsible for the offence." 19 The notice gives instructions in relation to any query concerning the notice and states that if the owner does nothing costs will be added to the penalty and a "courtesy letter" issued. It then states that if there is still no response "PERIN court action" will be initiated and an enforcement order will be issued to recover monies owed, adding further costs. A courtesy letter, which is sent when payment is not made within a 28 day period, is provided for in Sch 7 of the Magistrates Court Act. It is unnecessary to set out the detail of the letter but it states that, as the payment of the penalty is overdue, there is an additional obligation to pay costs which are set out in the notice. The notice adds that the recipient must pay the penalty and the costs to the City of Port Phillip within 28 days or ask to have the matter dealt with by a court or, if the owner was not the driver of the vehicle at the relevant time, the owner may send a statutory declaration to the City of Port Phillip giving the name and address of the person who was the driver. 20 Save and except in the case of an owner electing to have the matter dealt with by a court or filing a statutory declaration identifying the driver of the car at the time of the infringement, under the statutory scheme set out above and the notices required to be given in accordance with the PERIN procedure: · the owner becomes liable to pay the penalty payable for the parking infringement penalty; and · where there is a failure to pay the penalty within 28 days, the penalty plus the additional costs incurred are payable. 21 In the present case the applicant, who is the owner of the vehicle in respect of which the parking infringements occurred, did not elect to have any of the infringements dealt with by a court nor did she send in a statutory declaration stating that a person other than herself was the driver. Accordingly, in respect of each of the parking infringements, the applicant became liable to the City of Port Phillip to pay the amount of the penalty and the costs incurred prior to the initiation of any court process under the Magistrates Court Act. The amount of the liability was the penalty payable in respect of each infringement plus the costs incurred by the City of Port Phillip. The liability of the applicant to pay the penalty was one which was imposed by the Road Safety Act and the Regulations upon service of the parking infringement notice on the applicant in accordance with that Act and the Regulations. 22 The respondent disputed that conclusion, arguing that the liability to pay parking infringement penalties only arises upon a court order being made. If there is no liability to pay a penalty prior to a court order being made then it would appear to follow that payment of the penalty before an order is made is a payment in the nature of a gratuity. There is nothing in the statutory scheme, or the terms of an infringement notice or a courtesy letter served pursuant to the scheme, that supports the respondent's argument. The liability to pay the penalty is contingent upon the owner not electing to have the matter dealt with by a court or not filing a statutory declaration identifying the driver. However, that is of no assistance to the respondent as neither contingency occurred in the present case. Consequently, the applicant became liable for the penalty, which liability was able to be enforced by a court order under the PERIN procedure. In any event, even if the debt is properly characterised as a contingent debt, under s 82(1) "all debts and liabilities, present or future, certain or contingent, to which a bankrupt was subject at the date of the bankruptcy" are provable debts. 23 The conclusion I have reached is supported by the fact that the PERIN procedure, which is a procedure to enforce payment of penalties imposed by statute, is an alternative to prosecution in respect of parking infringement offences. In that regard s 99 of the Magistrates Court Act provides: "The procedure set out in Schedule 7 may be used instead of commencing a proceeding against a person for – (a) an offence for which an infringement notice or a penalty notice within the meaning of Schedule 7 could be issued; or (b) a prescribed offence within the meaning of that Schedule." 24 Schedule 7 provides for enforcement of payment of infringement penalties which are defined in cl 2 as an amount specified in an infringement notice as payable in respect of the offence for which the infringement notice was issued. An infringement notice, as defined in cl 2, includes a parking infringement notice. Clause 3 provides for the courtesy letter in the form of the courtesy letter sent to the applicant. Clause 4 provides that an enforcement agency, as defined in cl 2 (which includes the City of Port Phillip) may seek to have the infringement penalty registered by providing to a registrar of the Magistrates Court the names of persons who have not paid infringement penalties. The registration is effected by the filing of a certificate in the prescribed form certifying, inter alia, that the infringement notice has been served, a courtesy letter has been served, a period of 28 days has passed since the courtesy letter was served and the infringement penalty and any prescribed costs had not been paid before the certificate was issued. 25 Clause 5, which provides for an enforcement order to be made upon registration of the infringement penalty, provides: "(1) On registering an infringement penalty or a part of an infringement penalty together with any prescribed costs, the registrar must make an order – (a) in the case of a natural person, that the person pay to the Court the amount of the infringement penalty or part and the prescribed amount for costs and that in default of payment the amount is to be levied under a penalty enforcement warrant or the person is to be imprisoned under that warrant for a period of 1 day in respect of each $100 or part of $100 of the amount then remaining unpaid; or (b) … (2) An enforcement order is deemed to be an order of the Court." 26 Clause 6 provides for notice of an enforcement order to be sent by post to the person against whom the order is made. The notice must state that, if the person against whom the order is made defaults in payment of the "fine" for a period of more than 28 days a "penalty enforcement warrant" may be issued. Under the statutory scheme reference is made to both penalties and fines. Section 3(1) of the Magistrates Court Act defines a "fine" as including a penalty. In these circumstances I do not regard any matter of substance as turning upon whether the liability of the applicant in respect of a parking infringement notice is called a liability in respect of a penalty or a liability in respect of a fine. 27 Clause 9 of Sch 7 sets out the effect of an enforcement order. The clause provides that, notwithstanding the making of the enforcement order, the person is not thereby to be taken to have been convicted of the offence although any amount recovered as a result of the making of an enforcement order is to be dealt with in the same way as an amount recovered as a result of a conviction. Clause 10 deals with revocation of enforcement orders on the application of an enforcement agency in which case the order must be revoked, or on the application of the person against whom the order has been made in which case, if there are sufficient grounds for revocation, the order is to be revoked and the matter referred to the Magistrates Court for hearing and determination. 28 The applicant claimed that the penalty or fine imposed by a registrar pursuant to the PERIN administrative procedure is not a penalty imposed by a court for the purposes of s 82(3) of the Bankruptcy Act. In particular, the applicant contended that there is an absence of any judicial process of a court nor is any judicial consideration given to whether an offence has been committed. She argued that the PERIN enforcement process, by which a court order is made, is essentially an administrative process. Each of the contentions of the applicant may be accepted but that does not have the consequence that there is no court order in respect of the penalty. Section 82(3) is concerned with penalties or fines imposed "by a court" in respect of any law, whether a law of the Commonwealth or not. Thus, there is no reason to regard s 82(3) as being concerned with fines or penalties that might be imposed by Commonwealth courts which are required to operate within the constraints of Ch III of the Constitution. 29 Further, cl 5(2) of Sch 7 provides that an enforcement order "is deemed to be an order of the Court". The Magistrates Court is defined in s 4(2) of the Magistrates Court Act as consisting "of the magistrates and the registrars of the Court". Clause 4(3) provides that the court shall be constituted by a magistrate, except in the case of any proceeding for which provision is made by any Act for the court to be constituted by a registrar. It is plain from s 99 of the Magistrates Court Act and Sch 7 to that Act that, for the purpose of the PERIN enforcement procedure, the Magistrates Court is to be constituted, and is deemed to be constituted, by a registrar for the purpose of making an enforcement order. In any event, it is not uncommon for an order of a registrar, even of a Ch III court, to be deemed to be an order of the court: see for example Harris v Caladine (1991) 172 CLR 84 at 102 and 164-165. Thus, if and insofar as a penalty is "imposed" by an enforcement order the imposition is "by a court" for the purpose of s 82(3) of the Bankruptcy Act. 30 However, the court involvement in the PERIN process is properly characterised as one of enforcement of payment of a pre-existing statutory liability in respect of penalties and costs payable for parking infringement offences. The amount of the penalty and any costs incurred are amounts payable by an owner to the relevant council or city prior to the commencement of any process in the Magistrates Court. The court process is only commenced after there has been non-payment of a penalty. An enforcement order requires payment to the court, inter alia, of the amount of the penalty and costs. It is common ground that any amount paid to the court in respect of the applicant's parking infringements would ultimately be payable to the City of Port Phillip: see Sch 7 cl 9(2) of the Magistrates Court Act, s 77(5) of the Road Safety Act and reg 703 and Sch 5 of the Regulations. The requirement that amounts recovered for a parking infringement offence under a court order are payable into the municipal fund of the relevant council is consistent with the conclusion that the court order enforces payment of an existing liability to a council which is imposed by statute. 31 It follows that, as the statutory liabilities of the applicant for her parking infringements are debts or liabilities to which the applicant was subject at the date of her bankruptcy they are provable debts within the terms of s 82(1). As the liabilities are imposed by statute they fall within the terms of s 60(1)(b) thereby activating the Court's power to make a stay order under the sub-section. Indeed, analogous circumstances led to the enactment of s 60(1) in the Bankruptcy Act in 1980. The history of the provision was considered by Gibbs CJ (with whom Mason, Wilson and Brennan JJ agreed) at 554-555 in Storey v Lane: "In its original form s 60(1) empowered the court to: ' ... discharge an order made against the property or person of the debtor under any law relating to the imprisonment of fraudulent debtors and stay any action, execution or other civil legal process against the property or person of the debtor and discharge him out of custody.' It was held by this Court in Commissioner for Motor Transport v Train that a court of bankruptcy had no power under that sub-section to order the discharge from custody of a person convicted for non-payment of charges under the Road Maintenance (Contribution) Act 1958-1969 (NSW) and ordered, under a power given by that Act, to pay the charges. The Court held that the order under which the person was in custody was not an order against his person made 'under any law relating to the imprisonment of fraudulent debtors' and that he had not been placed in custody as a result of any 'execution or other civil legal process against [his] person'. Stephen J said: 'It follows that in my view persons serving terms of imprisonment for default in payment of road charges, and who may have already served terms of imprisonment for default in payment of pecuniary penalties imposed as a punishment for non-payment of those very charges, can nevertheless not be released from imprisonment under s 60(1), despite the fact that bankruptcy has deprived them of the ability to pay and that it is that inability which may have led to their default in payment and, hence, to their imprisonment.' The parliament clearly intended, by the amendment made to s 60(1) in 1980, to give the courts of bankruptcy a wider power than had been vested in them by the sub-section in its original form--a power that had become necessary by reason of the enactment of legislation making it an offence to fail to pay certain civil debts, empowering the courts to order the offender to pay the debt and providing for the imprisonment of the offender if the order were not obeyed. The question however is whether the sub-section, in its present form, is a law with respect to 'bankruptcy and insolvency' within s 51 (xvii) of the Constitution." 32 In concluding that s 60(1) was a law with respect to "bankruptcy and insolvency" within s 51(xvii) of the Constitution Gibbs CJ stated (at 556): "Stated shortly, the effect of the provision is to empower the court to relieve a debtor, against whom a petition has been presented, from process (civil or criminal) instituted against him because of his failure to pay a provable debt. The objects of the paragraph are to ensure that if a sequestration order is (or has been) made against the estate of the debtor his assets will be available for administration in the interest of his creditors generally, to prevent one creditor, who has the right to enforce payment of his debt under some other law, from exercising that right so as to gain an advantage over other creditors, and to protect the debtor from punishment because he has not paid the debt when payment might be a breach of the bankruptcy law. Under the Bankruptcy Act, once a debtor becomes bankrupt his property vests in the official trustee (s 58) and with certain exceptions is divisible amongst his creditors (s 116) and a court of bankruptcy may order that all or part of his income shall be paid to the trustee for the benefit of his creditors (s 131). Even before he has been made a bankrupt, payment of a debt due to a creditor might be voidable as a preference under s 122 of the Bankruptcy Act. A provision such as s 97 (5) of the Industrial Act, under which a debtor can be ordered to pay a debt and imprisoned if he failed to do so, would tend to defeat the policy of the Bankruptcy Act; if the debtor complied with the order, the result would be likely to impede the due administration of the estate; if the debtor failed to comply with the order, it would be unjust to commit him to prison if his failure was due to the fact that a bankruptcy petition had been presented against him or he had been made bankrupt." And at 557: "As I have attempted to show, the provisions of s 60(1)(b) are designed to assist in ensuring that the assets of the insolvent debtor are distributed in the interests of creditors generally, to prevent one creditor obtaining an undue advantage over the others, and to prevent the scheme of the Bankruptcy Act from being defeated. They are provisions with respect to 'bankruptcy and insolvency' within s 51 (xvii). Moreover, the bankruptcy law has long been concerned to mitigate the severity of the primitive rules which gave creditors the power to secure the imprisonment of their debtors." 33 Storey v Lane was primarily concerned with the conviction of the applicant of an offence of having paid a lesser amount of wages than that prescribed by a State award and having failed to pay an employee an amount of holiday pay. Under the relevant statutory scheme the Court was empowered, in addition to imposing a penalty, to order payment of all outstanding monies owing to the employees. The Court fined the applicant, ordered him to pay costs and ordered him to pay the amount of wages underpaid and holiday pay. The applicant defaulted in payment and was taken into custody. Subsequently, he filed a debtor's petition under the Bankruptcy Act and applied for an order under s 60(1) for his discharge from custody and was released on bail pending determination of these matters. The application was removed to the High Court as it involved, inter alia, the issue of whether s 60(1) was a valid law. Because the fines in respect of the failure to pay wages and holiday pay and the order to pay wages and holiday pay arose out of the applicant's non-payment of a provable debt, the High Court ordered that the applicant be discharged out of custody and ordered that any further legal process in consequence of his failure to comply with the orders made by the Magistrates Court in relation to those matters be permanently stayed. In the present case, the debts giving rise to the court orders, which required payment of the applicant's statutory parking infringement penalties, are analogous to the debts giving rise to the court orders considered in Storey v Lane, and in the earlier High Court case of Commissioner for Motor Transport v Train, which led to the enactment of s 60(1). 34 Even if I were to conclude that the court orders "imposed" a liability on the applicant, those orders and the steps taken to enforce them are legal processes of a kind able to be stayed under s 60(1)(b) because I have found that those processes enforce the payment of a provable debt. In any event, the better view is that a court order for payment of an existing statutory debt is not an order "imposing" a liability for a penalty or fine for the purposes of s 82(3) of the Bankruptcy Act, or extinguishing the previously existing statutory liability in respect of those fines or penalties. While, in a literal sense, the penalties or fines might be said to have been imposed by the court, as the imposition is by way of enforcement in respect of an existing statutory liability, it is more consistent with the statutory purpose or object of ss 60(1) and 82, as explained above, not to regard a court order which does not create a new liability as imposing a fine or penalty: see s 15AA of the Acts Interpretation Act 1901 (Cth). Rather, it is appropriate to regard those orders as enforcing payment of a pre-existing liability and, as a consequence, they fall within the terms of s 60(1)(b)(i) or (ii) and are not excluded from falling within those provisions by reason of s 82(3). 35 In summary, the statutory liabilities of the applicant for her parking infringement penalties are provable debts. The PERIN procedure is a procedure for the enforcement of payment of those provable debts. That procedure, which includes court orders, does not impose a new liability but, rather, enforces payment of a pre-existing statutory liability. 36 Accordingly, the amounts owing by the applicant for parking infringements and costs are provable debts and the applicant is entitled to a declaration to that effect. The applicant is also entitled to an order staying any legal process, whether civil or criminal, against her in respect of the non-payment of the amounts due in respect of the parking infringement notices or in consequence of her refusal or failure to comply with the orders of the Magistrates Court made in respect of the payment of the penalties, fines or costs incurred as a consequence of non-payment of those penalties or fines. It is appropriate to reserve liberty to apply. As the applicant has succeeded in obtaining the relief she seeks, costs should follow the event. The respondent is to pay the taxed costs of the applicant of and incidental to the proceeding. I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Merkel. Associate: Dated: 25 September 2002 Counsel for the Applicant: Mr M Gronow Solicitor for the Applicant: Deacons Counsel for the Respondent: Mr PJ Hanks QC and Ms K Knights Solicitor for the Respondent: Victorian Government Solicitor Date of Hearing: 9 September 2002 Date of Judgment: 27 September 2002