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Decisions of the Superior Courts of New South Wales, 1788-1899

Brown v McLeod (1831) NSW Sel Cas (Dowling) 611; [1831] NSWSupC 18

imprisonment for debt, opposition to, insolvency

Supreme Court of New South Wales

Forbes C.J., Stephen and Dowling JJ, 14 February 1831

Source: Dowling, Select Cases, Archives Office of N.S.W., 2/3466

 

[p. 37]

[A deft declared insolvent and arrested afterwards upon a Ca Sa which had been issued before the declaration of insolvency is entitled to the protection of the local ordinance pending the proceedings under the act.][1 ]

Monday 14th February 1831

Forbes CJ

In BancoStephen J

Dowling J

For Judgment

Brown v McLeod

The question in this case was whether a person who has been declared insolvent under the local ordinance, but who has not yet so far complied with the requisites of the ordinance as to be entitled to the order directed by the 5 section is liable to be personally arrested and taken into custody in under a writ of Capias ad satisfaciendum issued against him, before the declaration of insolvency, but not executed until after such declaration,  We are of opinion that he is not liable to be so arrested and taken into custody.  The second [p. 38] section of the act after providing for the declaration of insolvency imposes upon the Court the duty of "taking order" for discovering, collecting and disposing of the estates of the insolvent.  How is the Court to do this before the election of Trustees, and how is the election of such Trustees to be effected?  We are not aware of any other or better manner than that, which is the present motive of the Court viz if directing the insolvent himself to carry into effect the order of the Court, preparatory to the election of Trustees.  While in this situation the insolvent is in necessary attendance on the Court.  He is like a witness or suitor, and is protected from arrest on the same principle and for the same reason as a witness or suitor.  In a case where process has been actually [p. 39] executed against a debtor, the debtor is in the hands of the persons who holds the process against him.  Here the insolvent is in the hands of the Court, before the process in execution is actually executed.

Independently of the general principle of the act, assuming that the Insolvent shall have called together his creditors and the trustees have been duly presented and appointed and the ministerial functions of the Insolvent under the Court to beat an end and assuming further that the 5th Section of the act has been complied and the Court have granted the order for the protection of the Insolvent then here for such an order would protect him at all future times against a Ca Sa previously sued out in a point which we are not called upon to determine.  If there is any effect in the law upon this subject it, it may hereafter be amended but during the subsistence of the proceedings in [p. 40] insolvency.  If he were not free from arrest in the men time and before they are finally complete it being necessary that the insolvent should be in attendance on the Court, or assisting his Trustees we think he ought to be protected from arrest until such reasonable time shall have elapsed, for the determination of the proceedings in insolvency.  If he were not free from arrest in the meantime, it appears to us that the act would be wholly in operative it being the duty of the insolvent to be aiding and assisting his trustees in collecting, marshaling [sic] and rateably distributing his effects which he could not do, if locked up in a gaol.  On this short ground we think that for the present that he ought to be released.

Wardell for Plf   Moore for Defendant.

Notes

[1 ]On 23 December 1831, the Australian, in reporting the number of insolvencies in England, commented: "This is one of the fit occasions for repeating that the whole system of arrest for debt, serves no other purpose than to maintain pettifogging attornies, to cherish indolence and inattention to sellers, to keep alive the breed of swindlers, to foster tricks, lying, and extravagance, and to impose a heavy burden on the honest and punctual part of the community."

Insolvency touched on all classes: the Australian, 28 January 1831, noted that a master of chancery and an Attorney General (Baxter) were declared insolvent.

A colonial Act was passed in 1830 to deal with insolvency, but was found to be inadequate after two years.  In April 1832, it was replaced by 2 Wm 4 No. 11 which was a conventional insolvency Act.  Under it, an imprisoned debtor could be released from gaol on giving up all of her or his property to the creditors and engaging to pay the whole of the debt should he or she subsequently obtain sufficient property to do so.  See Bourke to Goderich, 19 March 1832,Historical Records of Australia, Series 1, Vol. 16, p. 566; and for the statute, see Sydney Gazette, 29 March 1832; Australian, 6 April 1832.

 

Published by the Division of Law, Macquarie University