Solicitors: For plaintiff, Jordan; for defendants, A. R. Daly.

Before Holroyd, a'Beckett and Hood, J.J.

IN RE CAULfield,

1901, November 12, 13; December 9. Insolvency Act 1890 (No. 1102), s. 139-Insolvency Act 1897 (No. 1513), s. 92-Insolvency-Certificate -Condition of Payment of Seven Shillings in the Pound-Repeal by Implication-Going Behind Judgment—Infancy-Lapse of Time. Section 92 of the Insolvency Act 1897, which provides that the Court may, as it thinks just (a) grant or refuse an immediate absolute certificate of discharge; (b) suspend the certificate from taking effect for such time as the Court may think fit, not exceeding two years; or (c) suspend the certificate until such dividend as the Court may fix, but not exceeding 7s. in the £, has been paid to the creditors, or until secur. ity for the payment of such dividend has been given to the satisfaction of the Court, does not, by implication, repeal the provision in section 139 of the Insolvency Act 1890, viz., that a certificate shall not be granted unless it is proved to the Court that a dividend of not less than 7s. in the £ has been, or will be paid out of the insolvent estate, or might have been or might be paid, except through the negligence or fraud of the assignee or trustee, with power to the Court to dispense with the condition if the insolvent proves that the failure to pay 7s. in the £ has arisen from circumstances for which he cannot be justly held responsible.

So held by a Beckett and Hood, JJ. (Holroyd, J., dissenting.)

A judgment was obtained against A, who was then an infant, and did not raise the defence of infancy. On that judgment A was made insolvent. Eighteen years afterwards A applied for a certificate of discharge:

Held, that the Court of Insolvency ought not to behind the original judgment.

go

Appeal from the Court of Insolvency. This was an appeal from a judgment of Acting Judge Neighbour. The judgment appealed from was as follows:

"This estate was voluntarily sequestrated by the insolvent on June 22nd, 1883. He had not then attained the age of twenty-one years, and it has been so admitted on this application. The total amount of his debts stated in his schedule was £383 11s. 3d., and his assets 10s. The only debt proved was for the sum of £92 11s. 6d., being a judgment debt and costs obtained by one Thomas Hayes, in an action against the insolvent in the County Court at Melbourne, on the 23rd October, 1882. The action was brought to recover the sum of £75 from the insolvent as a stake holder, upon entering into an agreement for the sale by one David Buckley to the plaintiff of a lease and

obtained against the defendant after two trials before juries. The defence of the defendant's infancy does not appear to have been raised or notified to the Registrar in accordance with the practice of the County Court. Insolvent's office, furniture and effects were sold under this judgment. After the insolvent had sequestrated his estate, Hayes proved for the balance of his judgment on August 4th, 1883, the proof being filed on November 19th, 1883. On June 24th, 1884, an order of this Court was made on a compulsory certificate application by Hayes against the insolvent, whereby the insolvent was found guilty of the offence of unlawfully expending for his own use property which he had at the time charge of as a trustee. His certificate of discharge was refused, and he was ordered three months' imprisonment. This order was set aside by the Full Court on August 30th, 1884, on appeal by the insolvent. A second compulsory certificate application was made by Hayes against the insolvent in October, 1884. This application was dealt with by Judge Noel on November 14th, 1884. Hayer opposed the grant of a certificate of discharge; the first objection relied upon being that the insolvent in this matter of Hayes, and the Robert Burns Hotel, had, out of the £75 which had been deposited with him, retained £37 10s., and he was therefore charged, in the first ground of objection, with unlawfully appropriating the amount to his own use. The judge dealt with that objection, and held that there was no foundation for the charge, and he observed that the verdict in the County Court manifested the opinion of the judge that the insolvent was liable to Hayes, but nothing more, and he said, 'I therefore think this objection cannot be supported.' The second objection was that the insolvent had, by horse racing and gambling, reduced his means and become unable to pay his debts. That objection was held by the learned judge to have been supported. [His Honor read from the judgment, and continued.] I may say that I agree with these findings of the judge from what I have seen of the case. The insolvent now applies for his certificate of discharge and dispensation with the statutory dividend. He is opposed by Hayes, who has lodged objections. No evidence has been given on those objections. Two of them only have been relied upon, and they are the same as the two objections raised when the question of grantiug the certificate of discharge was before Judge Noel. I agree with the views of the learned judge, stated in his judgment of November 14th, 1884. Therefore the creditors only objection left is whether the same effect is now to be given to the offence which Judge Noel found to be established, and in consequence of which he refused the certificate. I think not. The insolvent has been examined at considerable length before me, and there is no fault appearing from his evidence which I am able to attribute to him. The habit of gambling and horse racing, which, when a mere youth, led to his downfall, have been abandoned since his insolvency, and he appears to have led ever since an honest and reputable life-financially, not successful, but, at

least, he has paid his way. Moreover, of his scheduled debts, amounting to £383, he has paid in full £177. I adapt the language of the Full Court in In re McIntyre, 11 V.L.R., 312, at p. 319, to this insolvent. I think that he has suffered sufficient punishment for his offence by being deprived of his certificate for eighteen years, and that further punishment is unnecessary.' I therefore grant him his certificate of discharge.

"The next question is whether I can make the order of dispensation dispensing with the statutory dividend. In dealing with the question I am bound by section 139 of the Insolvency Act 1890, the same precisely as section 136 of the Insolvency Statute 1871. The power to dispense with the statutory dividend can only be exercised if the insolvent shall prove to the satisfaction of the Court that the failure to pay 7s. in the £ has arisen from circumstances for which the insolvent cannot, in the opinion of the judge, be held responsible. In the first place, judge Noel held that the gambling led to the insolvency. Then on this application, the insolvent in his affidavit in support, has not attempted to deny or explain the fact so found against him. This affidavit is devoted almost exclusively to giving an account of the action of Hayes against himself. If I am to regard events which have occurred since the insolvency, I find that his present position is far from being unsatisfactory. For the last four or five years he has been engaged as manager of institutions for alcoholics. About March, 1900, he came to Melbourne and started the Caulfield Institute for Alcoholics. He has stated in his evidence that this institute is the property of his wife and his brother, and that he is employed as manager at a salary of £6 a week, with an allowance for expenses of from £2 to £9 per week, that he has his board and lodging, and that he is doing a flourishing business. Under all these circumstances, I can only come to the conclusion that he has not proved to my satisfaction that the failure to pay 7s. in the £ has arisen from circumstances for which, in my opinion, he cannot justly be held responsible. I feel that I have no alternative but to refuse the order of dispensation. Mr. Braham has referred me to the case of In re Davies, 17 A.L.T., 260. He argues that the circumstances which constituted the offence of gambling, and which caused the refusal of the certificate, cannot now be used against the insolvent a second time, to cause the refusal of the order of dispensation. The judgment of the Full Court in that case appears to me to afford no foundation for that argument. The Court says 'The offence, however, and the provision (in section 139 as to dispensation) are entirely distinct, and should not in any case be mixed up so as to act upon one another.' The only question there was whether the dispensation should be granted, and the attention of the Court was confined entirely to the question whether or not the insolvent had proved that he was not to blame for the absence of any dividend; and at the conclusion of the judgment it is stated that if the insolvent had committed, or is suspected of having committed, any offence, the matter

should be investigated under another section, and in another manner, and the application for a dispensation under section 132, should be dealt with upon its own merits alone, in the mode provided by the Legislature. There is nothing in that judgment to show that the very same facts which constitute the offence must not also be considered in considering whether or not the order for dispensation should be made. In fact in In re MacIntyre, 11 V.L.R., 312, the Full Court took the same circumstances into consideration in dealing separately and independently with the questions of granting the certificate and dispensing with the statutory dividend, the decision on both points being in favour of the insolvent.

"The next point to be considered is in what manner and to what extent the present application is affected by the fact that the insolvent was an infant at the time of the voluntary sequestration. The debts in the schedule may be divided into three classesjudgment debts, trade debts, and debts contracted for necessaries. Of judgment debts there are three

the debt due to the opposing creditors Hayes, a debt due to one Rogers under a Supreme Court judgment, and a debt for £10 due to one Davis under an order made by the District Court. The last mentioned has been paid in full. It has been contended by Mr. Braham that the Court has power to examine into the consideration for a judgment debt, as in Ex parte Kibble, L.R. 10 Ch., 373. Where the interests of the creditors generally are concerned, this may be so. But in a contest between the creditor and the debtor, as upon an application by the creditor on an order nisi for sequestration, it was decided by the late Mr. Justice Molesworth, in Ex parte Gregory, 1 W. W. & A'B. (I.), 57, that a judgment could not be set aside by the Court of Insolvency, except in the two cases of where an equitable defence could not have been raised at law, or in case of collusion between debtor and creditor. The present proceeding before me is a contest purely between the creditor and the insolvent, and I am of opinion that I am bound by the case of Ex parte Gregory. Cases such as Ex parte Kibble, might apply where the trustee, or a creditor, or the insolvent moved to expunge Hayes' proof of debt, in the interests of the creditors generally, but not in a case like the present application.

"In the view I have taken, the insolvent will have to pay 7s. in the £ on the judgment debts due to Hayes and Rogers. As to the rest of the debts in the schedule, I accept the insolvent's affidavit as true. He says in paragraph 18 :— The said debts owing by me at sequestration were all trade debts, except the following, that is to say, the debt to Messrs. Cantor and Loel for the sum of £9 18s.; that to A. Bennett for the sum of £2 3s.; and that to W. Barry for the sum of 11s.' With regard to the trade debts, I am of opinion that, by reason of the insolvent's infancy, they are not debts provable in insolvency, or if through ignorance on the part of the trustee of the fact of infancy such debts might have been proved, then upon discovery of the infancy, the trustee, or any creditor, or the insolvent himself, under section 109 of the

Insolvency Act 1890, might apply to expunge such proof, on the ground that a contract is not binding upon an infant except for necessaries, and is voidable. For this proposition, I rely upon sections 77, 101, 108, and 109 of the Insolvency Act 1890. In this view I think I am supported by the English authorities -see Archbold's Bankruptcy.

"The result of the whole matter is, therefore, that the insolvent will have to pay 7s. in the £ on £151 12s. 6d. It is to be regretted that the £177 odd which has been applied by the insolvent in paying certain of his scheduled creditors had not been distributed pari passu amongst those creditors who had debts provable in insolvency. Had that been done the order of dispensation would have now been made as a matter of course. If I were to give any other effect to the payment of this sum of £177, I should frustrate the policy of the insolvency law, which requires that the assets should be distributed equitably amongst all the creditors, with the exception of those who by that law are given a preferential claim. There will be no costs."

From this judgment the insolvent now appealed. Mr. Isaacs and Mr. Bevan, for the appellant, referred to Hardcastle on Statutes, p. 244; In re Fleming, 8 A.L.T., 58; 12 V.L.R., 719; Ex parte Kibble, L.R. 10 Ch. 373; Ex parte Gregory, 1 W. W. & A'B. (I.) 57; Henry v. Archibald, Ir. R. 5 Eq. at p. 563; In re Myers and Davis, 13 A.L.T., 41; 17 V.L. R., 351; In re Carne, 6 Morrell, 55.

Cur. adv. vult. HOLROYD, J., read the following judgment.-In my opinion section 92 of the Insolvency Act 1897, No. 1513, has materially modified section 139 of the Insolvency Act 1890, No. 1102. The two Acts are to be read as one, and where they come into collision, the later must over-ride the earlier. Section 139 of 1102 distinctly declares, that an insolvent's certificate of discharge shall not be granted unless it is proved to the Court that a dividend of not less than 7s. in the £ has been or will be paid out of the insolvent estate, or might have been or might be paid except through the negligence or fraud of the assignee or trustee; but it proceeds immediately afterwards to cut down this prohibitive declaration by permitting the Court to dispense with the condition, or to modify it by reducing the amount of dividend required, in the event of the insolvent's proving to its satisfaction that the failure to pay 7s. in the £ has arisen from circumstances for which the insolvent cannot in the opinion of the judge justly be held responsible. Section 92 of 1513, enacts that the Court may, as it thinks just, (a) grant or refuse an immediate absolute certificate of discharge, (b) suspend the certificate from taking effect for such time as the Court may think fit not exceeding two years; or (c) suspend the certificate until such dividend as the Court may fix, but not exceeding 7s. in the £, has been paid to the creditors, or until security for the payment of such dividend has been given to the satisfaction of the Court. The power to grant an immediate absolute certificate under section 92 of 1513, may possibly remain restricted by

the prohibitive declaration of section 139 of 1102. I am not sure of this; but I will concede it so far as my present argument is concerned. However that may be, the prohibition appears to me quite inapplicable to the powers of suspension conferred upon the Court by clauses (b) and (c) of section 92, and if it could be applied to clause (c), would render that clause either nugatory or superfluous. The expression to suspend a certificate from taking effect for a certain period, or to suspend it until something is done, is tantamount to granting the certificate, to take effect at the expiration of the period fixed, or when the thing required is done. Suppose the case of a first voluntary application on the part of an insolvent for a certificate of discharge under section 138 of 1102. Could not the Court order the certificate to be suspended until a dividend of 2s. 6d. in the £ had been paid to the creditors, although there had been no proof adduced that the failure to pay seven shillings arose from circumstances for which the insolvent could not justly be held responsible? Would not such an order entitle the insolvent to his discharge on proof of payment of the two and sixpence? Shortly, is not the manifest object of section 92 to enlarge the discretion of the judge with respect to the dividend, if any, which the insolvent should be compelled to pay? In many instances there may be no prospect of the insolvent being able for many years, if at all, to pay the seven shilling dividend; and it may be all his own fault that his estate has been wasted; but he may not have heen guilty of any of those offences which are specially named in the Acts for condign punishment. Was not the Legislature purposely authorising the judge to substitute, for a too protracted withholding of his discharge, a suspension for a brief but certain term, or a term to last only until the performance of a condition which it would be within his power to fulfil. I think we are at liberty to infer as well from our knowledge of the operation of the Insolvency Acts, as from the context of the enactment under discussion, what the mischief was which the Legislature desired to alleviate. Insolvency may be brought upon a man by his own recklessness ignorance or folly, but it may be too harsh to cut him off from all hope of starting afresh as a free man. I think the Legislature felt this harshness and desired to soften it.

While holding the opinion which I have expressed as regards the interpretation of section 92 of Act No. 1513, I think that Mr. Caulfield has, by his own conduct, entirely precluded himself from getting the benefit of it. Excepting as to the claims which the Legislature has constituted preferential, the rule that has always prevailed in insolvency in this country, as in bankruptcy in England, has been an equality of distribution amongst creditors. Mr. Caulfield, being still an uncertificated insolvent, has paid certain of his creditors in full, and now comes to be relieved from paying any dividend to others. The money which he so expended would have sufficed, as the acting judge has told us, to pay a 7s. dividend all round. What right had the insolvent to prefer one creditor to another? To dispense with the 7s. dividend now, directly or in.

directly, would be like sanctioning a fraudulent preference. I think the appeal must be dismissed. The order below appears to be wrong in form, and should be amended by altering it to a dismissal of the application for a certificate.

A'BECKETT, J., said.—I am unable to agree with the views of my brother Holroyd as to the effect of the Insolvency Act 1897 upon the positive prohibition in the Act of 1890 against granting a certificate where the estate has not paid, or will not pay a dividend of 7s. in the £, in the absence of certain excusing circumstances which the judge of the County Court may take into consideration. A general discretion appears to be given by section 92 of the Act of 1897, and there is a provision enabling the Court to impose a condition, and 7s, in the £ is fixed as the limit of the dividend the Court may require to be paid before the certificate is granted. It seems to be going too far to infer from that the repeal of a section such as section 139 of the Act of 1890, with a distinct policy, the propriety of which there is nothing in the amending Act in any way to question. It may be said why should there be in the amending Act this limitation of 7s. in the £ upon the extent of the dividend to be paid? But I think it is not necessary to consider every motive which may have weighed with the Legislature in fixing that amount, and I may point out that under the Act of 1890 the application might successfully be made where the estate was expected to pay in the future 7s. in the £. It may be that it was thought advisable to withhold the coming into effect of the discharge of an insolvent whose estate had not paid, but would pay, 7s. in the £, until that dividend had actually been paid. I think, looking at the sections in the amending Act dealing with the subject of the certificate, they are not introducing a new system, they are not abolishing injunctions upon the Court as to where it shall not grant a certificate, but they are, to my mind, merely simplifying the methods of dealing with the certificate. I think it would be going too far to say that the intention was to repeal the prohibition contained in section 139, a prohibition expressed in the most positive terms. I think the appeal should be dismissed with costs.

Hoop, J., read the following judgment. This is an appeal from the Court of Insolvency, and it is based upon two grounds. The first is that section 139 of the Insolvency Act 1890 (No. 1102), is impliedly repealed by section 92 of the Insolvency Act 1897 (No. 1513). With this contention I do not agree. Repeal by implication assumes an oversight on the part of the Legislature, and is never favorably looked upon by the Courts. Sometimes such a conclusion is irresistible, but it is only arrived at when the provisions of a later enactment are so inconsistent with or repugnant to the provisions of an earlier one that the two cannot stand together. Dobbs v. Grand Junction Waterworks Coy, 9 Q.B.D., at p. 158; West Ham v. Fourth City Mutual Building Society, (1892) 1 Q.B., 654. Where the later Act is in affirmative terms only, it does not affect the previous statute especially when that earlier enactment is negative,

unless it is impossible to reconcile them. Now in the present instance the first Act is negative and the second affirmative. The Legislature declared by section 139 of No. 1102 that under certain circumstances a certificate of discharge should not be granted to an insolvent. Then the subsequent Act enabled the Court as it thinks just to grant or refuse an immediate absolute certificate, or to suspend the certificate from taking effect until certain time has elapsed, or certain conditions have been complied with. The two sections run perfectly well together though they may or may not cause hardship, a matter with which the Legislature alone can deal. A certificate must be refused if the dividend be not paid, unless the Court dispenses with that condition. In all other cases the Court may grant or refuse, or suspend as may seem just. The effect is that the insolvent has two barriers placed in his path. He may be stopped at the first. Even, however, though he surmounts that obstacle he still may be barred by the second. He may for instance satisfy the Court that he is not to blame for the failure of a dividend, and yet for other reasons his certificate may be refused or suspended for a time, or he may be ordered to pay a dividend. So that in my opinion the sections are not irreconcilable, and there is, therefore, no repeal by implication. The first ground of this appeal, consequently, cannot be sustained. The other point upon which this appeal was based, also, in my opinion, fails. It was contended that the Court of Insolvency should have enquired into the circumstances under which the creditors judgment had been obtained and that then it would have appeared that the insolvent was an infant at the time that the debt was incurred and the judgment obtained, and it was urged that this would make the judgment invalid. The judgment was for money had and received, and it is very doubtful if infancy is any answer to such a claim. See Re Seager, 60 L.T., Pollock on Contracts, 5th ed., 74, note r. It is also doubtful if the insolvent has not ratified the transaction by the long lapse of time (18 years) since the judgment was recovered, notwithstanding that he was insolvent all that time. It is also probable that the present is not the proper time to take such an objection, but that an application should have been made to expunge the proof. But passing by all these points the appellant has not satisfied me that this is a case in which the Court ought to go behind the judgment. No doubt the Court of Insolvency may in many cases investigate the transaction so as to see if there was really a debt dne. But this will only be done where it appears that the judgment has been obtained by fraud or collusion or mistake or that there has been some miscarriage of justice (Re Flatau, 22 Q.B.D., 83), and this power has never been extended to cases in which a judgment has been obtained after issues have been tried out before a Court as in the present instance (ib. p. 87). Nor should it, I think, be extended to enable a defendant to raise a defence which he might have raised but did not, 18 years ago especially as that defence does not touch the real merits. If there were in fact no debt at all, so that the judgment were

665;

a mere sham the Court would interfere, (Ex parte Lennox, 16 Q.B.D., 315; Ex parte Kibble, L.R. 10 Ch., 373), but in both these cases the judgment was by default and that fact is largely dwelt upon by all the judges and much also turned upon the words of the sections immediately in question and upon the stage at which the matter arose. It might be different if the defence now suggested would have made the debt void, but that is not so, for infancy under our law only makes the contract voidable. And it is clear from the illustration given by Mellish, L.J., in Ex parte Kibble, about the defence of want of notice of dishonour to an action on a bill of exchange, that in his opinion the Court of bankruptcy will not open up a judgment upon a technical point that might be waived. In our Court it has been held that even on a proof of debt the Court cannot review a judgment except upon equitable grounds or for collusion, (Ex parte Gregory, 1 W.W. & ▲'B, 57). The judgment attacked in that case was founded upon a verdict of a jury as in the present instance and the decision seems to me one that should be adhered to. In my opinion therefore the appeal should be dismissed. Solicitors: For the appellant, Braham & Pirani.

PRACTICE COURT.

Before Holroyd, J.

MCMANAMNY v. GOODWIN.

December 18.

Stamps Act 1890 (No. 1140), 88. 89, 92--Receipt Duplicate Receipt-Stamps Duty. A creditor of a Waterworks Trust received a sum of money, for which he gave a receipt duly stamped. He afterwards gave a duplicate of this receipt for the purpose of being forwarded to the Water Supply Department.

Held, that the duplicate receipt came within the definition of "receipt" in s 89, and was liable to stamp duty.

Order nisi to review the decision of the Court of Petty Sessions at Charlton on the ground that the document in question should have been stamped.

The defendant was charged under section 92 of the Stamps Act 1890 with giving a receipt liable to duty and not duly stamped.

It appeared that the defendant was carrying out some work as a contractor for the Charlton Waterworks Trust. In August, 1901, he received the sum of £20 as a progress payment, and gave the Trust a duly stamped receipt therefor. In September he forwarded another document to the Trust, which purported to be a receipt for the sum of £20, and which bore the same date as the first document, but was not stamped.

The only evidence given at the hearing was as follows:-"The voucher produced was signed by the defendant on 9th September, 1901, but the defendant

did not then receive any cash. The voucher was only a duplicate intended for Government inspection. The defendant had already signed for the £20 on the original voucher which was stamped on the date he received the amount, viz., 3rd August, 1901. The original voucher is in the possession of the Charlton Waterworks Trust." It was stated at the Bar during the argument that the Waterworks Trust obtained the second document for the purpose of forwarding it to the Water Supply Department and that the Department, for the purpose of auditing, in all instances required stamped vouchers in cases where the Stamps Act 1830 required a stamp to be affixed. The Bench dismissed the information. Mr. Moule moved the order absolute.

Mr. Dethridge to show cause. This document is not a "receipt" within the meaning of section 92 of the Stamps Act 1890. The receipt for the payment had already been given duly stamped, and the second document was not the receipt, and was not intended to be such. It is a question for the Justices to determine, and they have held that this document was not a receipt. The act only contemplated that one of duplicate documents should be stamped. He cited Smith v. Maguire 1 F. & F. 199.

Mr. Moule in reply.-Section 89 of the Stamps Act 1890" interprets the meaning of the term "receipt." By that section, "receipt means and includes any note memorandum or writing whatsoever whereby any money is acknowledged or expressed to have been received." This document acknowledges the receipt of money, and therefore comes within the section. In the English acts express exemptions are made in the case of duplicates or counterparts of instruments, the originals of which have been stamped; but those provisions do not occur in our acts. the Legislature intended to exclude duplicates of any particular documents express provision is made, as in section 88, and in section 21 (5) of act No. 1274.

Where

this matter HIS HONOR said. I must decide according to the plain language of section 89 of the Stamps Act 1890. The document falls within the definition of a receipt under that section, it is unstamped, and therefore the penalty attaches. There is no doubt that a document may be given which is merely a copy of a receipt previously given, and may not be really intended for the purpose of a receipt; but the difficulty of coming to the conclusion whether that was or was not the fact was not intended by the Legislature to be left to the justices to go into when a case of this kind came before them. It is frequently impossible to say for what purpose a receipt is required. A duplicate receipt may be required, that is, a duplicate valid receipt such as it is stated is required by the Department in cases like the present. Such a receipt may not have been so required, but may have been given by the person who received the money and signed by him, and that is the outward and visible sign of its being a receipt. The order nisi will be made absolute with costs.

Solicitors: For informant, Guinness, Crown Solicitor; for defendant, Stawell & Nankivell.