Case: Commissioner of Taxation v Stuart-Jones [2000] FCA 1022 ; (2000) 102 FCR 296 
Outcome: discussed
relevant authorities were considered in this Court by Mathews J in Commissioner of Taxation v Stuart-Jones [2000] FCA 1022 ; (2000) 102 FCR 296 in a similar context. In that case the Supreme Court of New South Wales had made a restraining order under s 10 of the Drug Trafficking (Civil Proceedings) Act 1990 (NSW) against the debtor. A bankruptcy notice was served some time later whilst the order was still in force. In that case the order pursuant to s 10 related only to an identified property and not to the whole of the property of the debtor. Section 10(8) provided as follows: 'If a restraining order is in force in respect of an interest of a person in property, the restraining order does not prevent: (a) the levying of execution against the property in satisfaction, or partial satisfaction, of the debt arising under a proceeds assessment order in force against the person, or (b) with the consent of the Supreme Court, the sale or other disposition of the interest to enable the proceeds to be applied in satisfaction or partial satisfaction of that debt, or (c) with the consent of the Supreme Court, the application of the interest in satisfaction or partial satisfaction of that debt.' A 'proceeds assessment order' was an order that the person pay to the Treasurer an amount assessed by the Court as the value of the proceeds derived by the person from an illegal activity which took place within the preceding six years. Mathews J indicated that it was at least arguable that a restraining order over the whole of a debtor's property would have the effect of preventing the levying of execution in the relevant sense. However, because of the limited nature of the order in that case, the debtor failed to establish invalidity of the bankruptcy notice. Before considering the authorities, the Proceeds of Crime Act 2002 should be examined a little more closely. The relevant provisions are described as 'The confiscation scheme' and are summarised in s 7 of that Act as follows: 'Chapter 2 sets out 5 processes relating to confiscation: (a) restraining orders prohibiting disposal of or dealing with property (see Part 2-1); and (b) forfeiture orders under which property is forfeited to the Commonwealth (see Part 2-2); and (c) forfeiture of property to the Commonwealth on conviction of a serious offence (see Part 2-3); and (d) pecuniary penalty orders requiring payment of amounts based on benefits derived from committing offences (see Part 2-4); and (e) literary proceeds orders requiring payment of amounts based on literary proceeds relating to offences (see Part 2-5).' It is an offence to breach a restraining order (s 37). It is not clear whether breach of an order would be contempt of court. An order pursuant to s 18 does not appear to catch after acquired property. The Court may order that the Official Trustee take the custody and control of property covered by a restraining order (s 38). The Court may set aside a disposition contravening a restraining order (s 36). I must apply the test laid down by one Full Court in Wiltshire-Smith v Olsson (1995) 57 FCR 572 at 587 and applied by another in Boscolo v Botany Council [1996] FCA 897 whether in the eyes of ordinary fairness in business it will be said that the order has in a business sense prevented the debtor in paying. That test was not overruled in Ling v Enrobook Pty Ltd (1997) 74 FCR 19 , although the approval in that case of the decision of Heerey J in Re Ousley; Ex parte Commissioner of Taxation (1994) 48 FCR 131 concerning the effect of a Mareeva injunction is of some significance here. I have found the subsequent analysis of that topic by Madgwick J in National Australia Bank Ltd v Pollak (2001) 186 ALR 44 at [41] [52] to be valuable . (See also Taubert v Eddaglide Pty Ltd (in liq) [2001] FCA 567 at [15] [16].) I should add that Mathews J made no reference in Stuart-Jones to the debtor being able to make an application of the kind provided for by s 24 of the Proceeds of Crime Act 2002 under the New South Wales Act considered by her.