FEDERAL MAGISTRATES COURT OF AUSTRALIA
BOARD OF PROFESSIONAL ENGINEERS v COWPER	[2009] FMCA 1194	

BANKRUPTCY – Entitlement to issue Bankruptcy Notice – whether a fine and ancillary costs order constitutes a final order – whether the applicant is a creditor entitled to execute the final order.	

Bankruptcy Act 1966, ss.40, 52
Professional Engineers Act 2002, ss.56, 77, 100, 113, 114, 115, 139
Justices Act 1886 (Qld), ss.151, 157, 160
Crimes Act 1914 (Cth), s.21B
Penalties and Sentences Act 1992, ss.44, 51
State Penalties Enforcement Act 1999, ss.7, 8, 34, 35	

Abigroup Ltd v Ibignano (1992) 39FCR 74
Re Barnes; Ex parte Deputy Commissioner of Taxation (1995) 30 ATR 276
Re Alvaro; Ex parte Alvaro v Commonwealth of Australia (1992) 36FCR 148
McWilliam v Jackson (2000) 96FCR 561	

Applicant:	Board Of Professional Engineers	

Respondent:	Alistair Leslie Cowper	

File Number:	BRG 527 of 2009	

Judgment of:	Wilson FM	

Hearing date:	17 September 2009	

Date of Last Submission:	17 September 2009	

Delivered at:	Brisbane	

Delivered on:	4 December 2009	

REPRESENTATION
Counsel for the Applicant:	N/A	

Solicitors for the Applicant:	Holding Redlich Lawyers	

Counsel for the Respondent:	N/A	

Solicitors for the Respondent:	Eaton Lawyers	

ORDERS
(1)	The Creditor’s Petition is dismissed.
(2)	The applicant shall pay the respondent’s costs of and incidental to the petition to be taxed if not agreed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
Brisbane	
BRG 527 of 2009
Board Of Professional Engineers	
Applicant

And

Alistair Leslie Cowper	
Respondent

REASONS FOR JUDGMENT
1.	The applicant seeks a sequestration order against the estate of the respondent.  A Creditor’s Petition was filed on 11 August 2009.  It alleges that the respondent owes the applicant the sum of $10,416.30 pursuant to a judgment dated 18 August 2008.
2.	Section 52(1) and (2) Bankruptcy Act 1966 provides:
		(1)	At the hearing of a creditor’s petition, the Court shall require proof of:
		(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 is or are still owing;
	and, if it is satisfied with the proof of those matters, may make a sequestration order against the estate of the debtor.
	…
		(2)	If the Court is not satisfied with the proof of any of those matters, or is satisfied by the debtor:
		(a)	that he or she is able to pay his or her debts; or
		(b)	that for other sufficient cause a sequestration order ought not to be made;
	it may dismiss the petition.
3.	The respondent opposes the making of a sequestration order on two grounds:
a)	The applicant is not a “creditor” who has obtained against the respondent a final judgment or final order within the meaning of s.40(1)(g) of the Act or a person who, by virtue of s.40(3)(d) is to be deemed to be such a creditor, and accordingly was not entitled to issue a Bankruptcy Notice against the respondent;
b)	The respondent has entered into a debt repayment arrangement with the State Penalties Enforcement Registry, and accordingly a sequestration order ought not be made.
4.	The applicant is a body corporate established by s.77(1) Professional Engineers Act 2002.  By s.100 of that Act a Registrar of the Board is required to be appointed, and is responsible for managing the Board’s administrative affairs.  
5.	The Act establishes a number of offences.  It was alleged that the respondent committed offences against ss.113(1)(a), 114(a), 115(a) and s.56(2)(d) of the Act.
6.	Section 139(1) of the Act provides:
	“A proceeding for an offence against the Act must be taken in a summary way under the Justices Act 1886 (Qld).”
7.	On 27 November 2007 Peta Perring, then the Registrar of the applicant, brought proceedings against the respondent pursuant to the Justices Act in respect of the alleged offences.  
8.	The respondent pleaded guilty to three of the charges brought against him on 22 May 2008.  The certificate of conviction issued by the Magistrates Courtprovides that the respondent was convicted and fined $6,000 “plus $9,500 costs to be paid to Complainant”.  The Certificate of Conviction does not provide for any default period of imprisonment or for time to pay.
9.	In reliance on the Certificate of Conviction the applicant caused to be issued Bankruptcy Notice 337 of 2009 that was served on the respondent on 4 May 2009.  The respondent’s failure to comply with that Bankruptcy Notice is alleged to be the act of bankruptcy upon which the applicant is entitled to a sequestration order.
10.	The first question that must be resolved is whether the orders made by the Magistrate on 22 May 2008 were in the nature of a final judgment or final order, either within the ordinary meaning of those terms or within the extended meaning provided for by s.40(3) of the Bankruptcy Act.  The expression “final judgment” was considered by the Full Federal Court in Abigroup Ltd v Ibignano (1992) 39FCR 74 at 80-81.  In my view the orders made by the Magistrate on 22 May 2008 were not a judgment as that term is properly understood, as resolving a dispute inter-parties, but are capable of satisfying the expression “final order”.  The orders made finally disposed of the proceedings between the Complainant and the Respondent.
11.	The second question is whether the present applicant or the complainant (putting to one side for the moment the question of the correct identity of the petitioning creditor) is a creditor entitled to issue a Bankruptcy Notice.
12.	That expression carries with it the requirement that the creditor be entitled to execute under the final order.  In Abigroup Ltd v Ibignano at 79-80 their Honours reviewed the history of s.40(1)(g) and 40(3) of the Bankruptcy Act.  Their Honours said:
	“It is clear from the reported cases and the text books on Bankruptcy, in particular the writings of the early text writers (where the English Bankruptcy Act of 1883 as amended by the 1890 Act were considered) that the ground of non compliance with the requirements of a Bankruptcy Notice now embodied in section 40(1)(g), is available only, to borrow the words of Bowen LJ in Blanchett (at 307):
	‘To a creditor who has prosecuted his claim to judgment, and if execution on the judgment has not been stayed – to a creditor between whom and the full fruition of his claim there stands only a process of the law uncompleted.  It is only this kind of creditor who is now entitled to issue a Bankruptcy Notice.  This affords an excellent reason for not extending the construction of subs (1)(g), beyond the plain letter of the words.’
	Woodall, Ide and Re Richards; Ex parte Sommers (1947) 14ABC 112 are all examples of numerous cases where execution had not been stayed, but the judgment creditor had not put himself in the position of being able to issue execution, so execution was deemed or considered to be stayed on the ground that he was not entitled at the date of the issue of the Bankruptcy Notice to issue immediate execution on the judgment: see also Re Pannowitz (supra) at 291.
	…
	These are the well established principles referred to in a long line of cases and accepted by many of the early writers on Bankruptcy Law.  It is against this background we now examine whether the Appellant is a Creditor who has obtained a final judgment against the respondent upon which execution has not been stayed.”
13.	At the outset it can be noted that there is no provision in the Justices Act 1886 (Qld) analogous to s.21B(3)(b) Crimes Act 1914 (Cth) referred to in cases such as Re Barnes; Ex parte Deputy Commissioner of Taxation (1995) 30 ATR 276 and Re Alvaro; Ex parte Alvaro v Commonwealth of Australia (1992) 36FCR 148.  In order to understand the entitlement of the complainant to recover monies pursuant to the final orders made on 22 May 2008 it is necessary to have regard to three Queensland statutes.  
14.	Pursuant to s.44 Penalties and Sentences Act 1992 a court may impose a fine whether or not it records a conviction.  Section 51 Penalties and Sentences Act 1992 provides:
	“If a court does not make an instalment order under section 50(a), it must, at the time of imposing the fine order that –
	(a)	the offender be allowed time to pay the fine; or
	(b)	the proper officer give, under the State Penalties Enforcement Act, section 34, particulars of the fine to SPER for registration under that section.”
15.	Although the documents put before this Court do not show as much, I assume that because no time to pay was provided for in the certificate of conviction, that particulars of the fine were provided to SPER for registration.
16.	By s.151 Justices Act 1886 a conviction must be drawn up in proper form and filed with the Clerk of the Court.  Section 157 of the Justices Act 1886 provides:
	“In all cases of summary convictions and orders including such a conviction for an indictable offence, the justices making the same may, in their discretion, order by the conviction or order that the defendant shall pay to the complainant such costs as to them seem just and reasonable.”
17.	Section 157, on its face, suggests that the complainant may be entitled to recover costs directly from the defendant.  However, s.160 Justices Act 1886 provides:
	“The sum allowed for costs in a conviction or order by which a penalty or sum of money is adjudged to be paid shall be recoverable in the same manner and under the same warrants as the penalty or sum of money adjudged to be paid by the conviction or order is recoverable.”
18.	In order to determine how the fine, imposed as a penalty, is recoverable it is then necessary to turn to the State Penalties Enforcement Act 1999.  Section 34 State Penalties Enforcement Act applies where a court makes an order fining a person for an offence.  That is what occurred in the present case.  By s.51 Penalties and Sentences Act, supra, because the respondent was not allowed time to pay the fine, particulars of the fine were required to be registered under the State Penalties Enforcement Act.  By s.35 of that Act on registration of the particulars “SPER” became responsible for the collection of, and may collect, the unpaid amount: s.35(2)(b).  “SPER” is the State Penalties Enforcement Registry established under s.7 State Penalties Enforcement Act 1999.  By s.8(2) of that Act SPER has the function of collecting amounts payable to it under that or any other Act.  
19.	Thus, it appears from the operation of the three Statutes to which I have referred, that the fine imposed on the respondent was recoverable by SPER under the State Penalties Enforcement Act 1999.  Therefore, by operation of s.160 Justices Act the costs ordered to be paid to the complainant were recoverable in the same way.  It follows, therefore, in my view that the complainant was not entitled to execute the final order for costs made in her favour.
20.	It follows, in my view, that the complainant referred to in the Certificate of Conviction dated 18 August 2008 was not entitled to issue a Bankruptcy Notice against the respondent.
21.	There is also some confusion because the proceedings in the Queensland Magistrates Court were brought by the then Registrar of the Applicant in her own name as complainant.  The order that was made was in favour of the Complainant.  The Bankruptcy Notice was caused to be issued by the present applicant.  It was not the complainant in the State court proceedings.  The Registrar, whilst acting as agent for the applicant in carrying out its administrative functions, is not one and the same as the body corporate created by the Professional Engineers Act 1992.  Identification of the relevant creditor is of central importance to a proper understanding to a Bankruptcy Notice and the obligations of the debtor in respect of that Notice: McWilliam v Jackson (2000) 96FCR 561 at 565.  In this case there is no identity between the complainant who has an order for costs in her favour and the applicant in the present proceedings.  
22.	In my view that is a further fatal deficiency, disentitling the applicant to a sequestration order.
23.	The applicant’s material refers to a Deed of Settlement entered into by the respondent pursuant to which (clause 3.3) he agreed to make payment to the present applicant.  The respondent defaulted in his obligations under the Deed.  However, the applicant did not obtain a judgment against the respondent pursuant to the Deed but rather seeks to rely on the Certificate of Conviction.  For the reasons I have already outlined, that reliance is misplaced.
24.	It is also apparent from the applicant’s affidavit evidence that the respondent has defaulted in any arrangement that he has made for repayment of the amount of the fine and costs order.  The second ground raised by the respondent therefore has no merit.
25.	It follows that the applicant is not entitled to a sequestration order against the estate of the respondent.  The petition is dismissed.  
26.	The applicant should pay the respondent’s costs of and incidental to the application to be taxed, if not agreed.  The respondent’s solicitors raised the legal problems with the applicant’s case in correspondence, but the applicant pressed on with the applicant for a sequestration order regardless.
I certify that the preceding twenty-six (26) paragraphs are a true copy of the reasons for judgment of Wilson FM

Associate:  Lynnette Chin

Date:  4 December 2009