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

Ex parte Lyons, In re Wilson (1839) 1 Legge 140; [1839] NSWSupC 89

reception of English law, bankruptcy - bankruptcy

Supreme Court of New South Wales

Dowling C.J., Willis and Stephen JJ, 26 November 1839

Source: Australian, 28 November 1839 [1]

The Chief Justice.  This was a petition on the part of Mr. Saul Lyons to the Judges, in virtue of the Equitable Jurisdiction of the Supreme Court, given by the New South Wales Act, 9 Geo. IV., c. 3. 83, s. 11, praying that a Commission of Bankruptcy might issue under the seal of the Court, in pursuance of the English Bankrupt Act, 6 Geo. IV,c. 16, against John Thomas Wilson, dealer and chapman, late of Sydney, it being al1eged that he had become bankrupt within the meaning of the last mentioned statute by, departing from the colony and remaining abroad with intent to defeat and delay his creditors.  It was contended in support of the petition, that by force of the 9 Geo. IV, c. 88, e. 21 the English Bankrupt Act, 6 Geo. IV, c. 16, is applicable to this Colony and that the Judges are bound to carry it into effect.  I own I have not yet recovered from the surprise I experienced when I first heard it intimated that an argument was to be gravely raised on this question, because I know that it had been the impression of every Judge who has sat on this Bench since the establishment of the Supreme Court, and, I believe of every professional man in the colony, that however desirable it might be to have some bankrupt law enacted by the local legislature, yet that the bankrupt law of England was wholly inapplicable to, and could not be carried into operation in, this part of Her Majesty's dominions.  The question, however, being now solemnly raised, we are bound to decide it.  The 24th section of the New South Wales Act enacts ``That all laws and statutes in force within the realm of England at the time of the passing of this Act, (not being inconsistent herewith, or with any charter, or letters patent, or order in council, which may be issued in pursuance hereof,) shall be applied in the administration of justice in the Courts of New South Wales, so far as the same can be applied within the colony; and as often as any doubt shall arise as to the application of any such laws or statutes in the said colony, it shall be lawful for the Governor, by and with the advice of the Legislative Council, by ordinances to be by them for that purpose, made, to declare whether such laws or statutes shall be deemed to extend to the colony, and to be in force within the same, or to make and establish such limitations and modifications of any such laws and statutes within the colony as may be deemed expedient in that behalf: provided always, that in the mean time, and before any such ordinances shall be actually made, it shall be the duty of the Supreme Court, as often as any such doubts shall arise upon the trial of any information or action, or upon any other proceeding before them, to adjudge and decide as to the application of any such laws or statutes in the said colony."  Assuming that the petition now presented comes within the words, ``or upon any other proceeding," upon which a doubt has arisen, which I take to be questionable, because referable as ejusdem generis with the trial of any information or action over which the court had clearly jurisdiction, as a proceeding actually pending, I shall at once apply myself to the discharge of the duty thus required to be performed by the Court.  The question then is, whether the bankrupt law of England, which was in force before the 9 Geo. IV, c. 83, can, as a whole, or even in part, be applied or fitted to the wants of this colony?  The actual necessity for a bankrupt law is not to determine this question -- the point is, whether the English bankrupt law is in itself applicable?  There is one preliminary condition stipulated in the twentyfourth section, as to the applicability of any English law or statute to the colony, namely, that it shall not be inconsistent with the New South Wales Act.  Now in the outset of this case there appears to me to be one paramount difficulty in applying the English bankrupt law: the principal officers by whom the law is to be carried into execution, are commissioners to be appointed by the Lord Chancellor, who are paid certain fees of office, sanctioned by the authority of Parliament.  Assuming, therefore, that by a strained construction, we could assume the powers given in terms to the Lord Chancellor of England, in issuing a commission; what authority have we to create the office of a commissioner with the right of demanding and receiving fees for his trouble?  This Court derives no authority but what is expressly carved out by the New South Wales Act, which establishes the Supreme Court.  By that Act, the Judges of the Court are to be appointed by the Crown.  Taking it that we might assume the authority of appointing the commissioners, by what right could we order the payment of their fees?  I hope this Court will never so far forget its province, as to usurp the power of taxing Her Majesty's subjects. This power is extended even to the local legislature in a very guarded and limited manner.  The 25th section enacts, ``that the Governor and Council shall not impose any tax or duty, except only such as it it [sic] may be necessary to levy for local purposes; and the purposes for which every such tax or duty may be so imposed, and to or towards which the amount thereof is to be appropriated and applied shall be distinctly and particularly stated in the body of every law or ordinance imposing every such tax or duty."  Now, if the English bankrupt law were in force here, the Commissioners would be entitled to a fee of twenty shillings for every meeting, and the like fee for other duties specified in the 22nd section.  This Court, it is true, is authorised to make rules of practice for the conduct of business but it is a novelty to me (as was contended) that the Judges have power to make rules, importing the creation of a new jurisdiction not conferred upon them by Act of Parliament.  But waiving the difficulty thus pointed out, it is quite obvious from every clause in it, that the English bankrupt law could not be carried out into practical operation in the colony.  It contemplates a state of things that does not exist here.  The initiatory jurisdiction is given to the Lord Chancellor alone; it authorises the appointment of commissioners and other officers, and amongst others a secretary in bankruptcy by him only; provides for the publication of proceedings in the London Gazette, and English newspapers; the appointment by the Commissioners of Messengers, with powers under their warrant to break open houses and do other stringent acts; it imposes penalties on different parties, says what shall be done with bankrupts having privilege of Parliament, points out the course to be taken in seizing the effects of a bankrupt in Ireland and Scotland, prescribes the duties of Masters in Chancery and Masters Extraordinary, points out the course to be taken with the bankrupts' estates abroad and in colonies, regulates the mode of enrolling the proceedings under the Commission, makes provision as to copyhold lands, exempts proceedings from stamp and auction duties, -- in short, every clause of the Act contemplates a vast variety of matters and things unknown in this Colony, and we could no more fit the law, as it is thus enacted, to the state of this young country, than we could apply the English Marriage Act, the English Poor Laws, Tithe Laws, Usury Laws, Revenue Laws, and many other laws not necessary nor convenient for this part of the world.  It may be, and I think it is absolutely necessary for this Colony to have some Law of Bankruptcy, but it is neither convenient nor practicable to adopt the English Bankrupt Law, even if it were undeniably the best system ever enacted for a commercial people.  One irresistible objection, if no other existed, to the application of the 6 Geo. IV, c.16, would be the frightful expense involved, in order to carry it into operation.  It was to remedy this evil that the statutes 1 and 2 Wm. IV, c. 56, and 2 and 3 Wm. IV, c. 114, were enacted, which have had a beneficial effect in the administration of the principles of the 6 Geo IV.  But even if we were now to decide that the Bankrupt Law of England is in force in the Colony, I do not see how it could help this particular case.  All that we could determine is, that from and after the application for a petition for a Commission of Bankruptcy against John Thomas Wilson, the English Bankrupt Law 6 Geo. IV, c. 16, shall be in force in this Colony. But how would such a decision affect the alleged Bankrupt?  To make it effective, it must for some purposes be construed to have a retrospective operation.  Some of the clauses are highly penal, and especially the l6th section, which makes it a transportable felony for life, if the Bankrupt does not surrender to the Commission within six weeks.  At the time this man left the Colony, neither he nor any other person considered the English Bankrupt Law in force in the Colony.  Are we therefore now, to act as legislators in adopting a law so highly penal, and create in fact a new felony, in order retrospectively to affect a party, who, if he had known of the operation of the law here, might probably never have departed from the Colony?  In effect we are called upon to make an ex post facto law, highly penal in its consequences and deeply affecting the rights of parties.  We are called upon to usurp the powers of Parliament and of the Legislative Council.  It is an acknowledged principle, which has never been disputed in a Court of English Law, that the power of making ex post facto laws binding on the subject, resides exclusively in the British Parliament, and cannot be constitutionally exercised by any other authority.  Indeed, so sparingly and cautiously has this power been exercised even by Parliament itself, that if we look through the whole statute book scarcely six instances can be found in which it has been exerted, and those instances will be seen to have occurred in reigns not remarkable for a strict observance of the constitutional rights and interest of the subject.  It is true that in the present instance Parliament has cast upon the Judges the duty of adjudging and deciding as to the application of English statutes to this Colony; but I apprehend that this duty is to be observed with great strictness and caution; and is not to be enlarged by intendment or inference.  If I entertained less doubt than I do as to the applicability of the English Bankrupt Law to the colony, I should hesitate at this time, in coming per saltum to the conclusion that they are applicable.  It is matter of history that this important subject has in two successive sessions been under the consideration of the local legislature, and is still depending.  It is notorious that the legislature was moved to it, at the earnest representation of the Judges themselves, (two of whom are now on the Bench) upon a conviction that the English Bankrupt and Insolvent Laws, as codes, could not be carried into effect, for want of the proper appliances to give them operation in New South Wales, and that the state of the colony required a Bankrupt and Insolvent Law better suited to the wants of the community. None of us are ignorant of the fact that our respected brother Burton, with great pains and industry, framed a Bill, embracing every thing valuable in the English Bankrupt and Insolvent Laws, and at the same time suggested remedies for defects, which it is not to be denied are inherent even in those laws of the mother country.  Nothing but the grave importance of the measure (which is, as yet, ill understood, though simple and admirable in principle) has delayed its adoption, but I think we may indulge a sanguine persuasion that early in the next session the urgent want of some Bankrupt or Insolvent Law in the colony, will be satisfied.  In anticipation of this, I think it would behove this Court respectfully to abide the deliberations of the legislature, rather than come at once to the conclusion we are now called upon to adopt, even if the English Bankrupt Law were less doubtful.  This colony has, indeed, from a variety of causes -- its position on the globe -- its splendid climate -- the influx of British capital -- the genius of the English character -- its freedom from direct taxation -- and exemption from the restraints of prohibiting enactments, assumed a wonderful appearance of commercial prosperity; but this is no reason why a code of Bankrupt Law, which it has taken many ages to bring even to its present state of doubtful perfection, should at once, without due deliberation, be allowed to fetter the energies of New South Wales.  After maturely considering the question, I am of opinion that the English Bankrupt Law cannot be applied to this colony.

Mr Justice Willis. -- To the AttorneyGeneral and the learned gentleman associated with him in this case, my thanks are due, and those, I think of the public also, not only for bringing forward a question of such magnitude as to the applicability of the English Bankrupt Law to this colony, but likewise for the legal ability, and above all for the deep anxiety for the welfare and protection of the commercial community displayed on this occasion.  The Laws of Bankruptcy, (even in the unimproved state in which they were when Sir William Blackstone wrote,) are, according to that learned commentator (see vol II, s. 471.) ``considered as laws calculated for the benefit of trade, and founded on principles of humanity as well as justice; and to that end they confer some privileges, not only on the creditors, but also on the bankrupt or debtor himself."  At this time of day it would be considered a very harsh application of the term, to speak of every bankrupt as a criminal. (Exparte Stoke 7 Vess. 407.)  The spirit of the Bankrupt Law whets not the knife ``To cut the forfeit from that bankrupt there;" (Merchant Venice, Act IV, s. 2), though by fraudulently concealing his effects, he may still bring upon himself, most deservedly, the heaviest infliction of the law short of the punishment of death. (Stat. 6 Geo. IV, c. 15, s. 112).  But a bankrupt who honestly gives up the whole of his effects to his creditors, may, according to the present mild administration of justice, actually entitle himself to privileges, which debtors not liable to the Bankrupt Law cannot claim.  Thus he is, by virtue of a certificate fairly obtained, exempted, with regard to all debts which might have been proved under the commission against him, from prolonging imprisonment; (see 121st section of the Statute just cited), and an honest bankrupt may even (in cases where the dividend paid affords reasonable evidence that he has not been speculating at the risk of others without funds of his own,) entitle himself to a return of part assets (see 128th and 129th sections of the same statute).  The operation of the Bankrupt Law is, unfortunately, I think, restricted to traders, for, as a modern writer truly says, ``this affords, in comparison with the regular proceedings in superior Courts, a ready means of satisfying the creditor, as far as there is property to satisfy him, and inflicts but little unnecessary annoyance on the honest debtor, while at the same time, it awards punishment to the dishonest debtor; such being the effect of this law, it is difficult at first sight to conceive on what grounds any of Her Majesty's loving subjects should be deprived of the benefit of it; and yet they are in large numbers so deprived, all persons who are not traders being excluded from its operation."  To this I add that many traders, even who are British subjects, and trading to England, have hitherto been subject to this deprivation, and I now illustrate this assertion by its application to this colony.  True it is, that although the subjects of Great Britain, who are the discoverers and first inhabitants of a colony, carry with them their own inalienable birthright, the laws of their country, -- nevertheless, they carry only so much of these laws as is ``applicable to the condition of an infant colony," and that the artificial refinements and distinctions incident to the property of a great and commercial people, the Bankrupt Law for instance, (see AttorneyGeneral v. Stuart, 2 Mer. 143) and many other provisions, are neither necessary nor convenient for them, and are therefore said to be not in force.  What laws, however, shall be admitted, and what rejected, at what times and under what circumstances must in cases of dispute, be decided in the first instance by their own provincial judicature.  This colony, however, stands upon a much superior basis.  The statute 9 George IV, c. 83, (a statute passed forty years after the foundation of a colony, whose rapid progress in commercial prosperity has never been surpassed, or perhaps equalled in the history of the world,) enacts by the 24th section, ``That all laws and statutes in force within the realm of England at the time of passing of that Act (viz. on 25th July, 1828,) shall be applied in the administration of justice in the Courts of New South Wales and Van Diemen's Land respectively, so far as the same can be applied within the said colonies; and in case of doubt as to the application of any such laws or statutes the local legislature is thereby directed to declare whether they extend to the said colonies, or to make such modifications as may be deemed expedient.  Provided always, that in the mean time and before and such ordinances shall be actually made, it shall be the duty of the Supreme Courts, as often as any doubts shall arise upon the trial of any information or action, or upon any other proceeding before them, to adjudge and decide as to the application of any laws or statutes in the said colonies respectively."  Under this enactment the Court is now called upon to decide whether the consolidated Bankrupt Law of 6 George IV, c. l6, is so far applicable as to be in force in this colony.  ``The matter of a law," says Dr. Taylor in his summary of the Roman law, ``should be possible, reasonable and useful," and I think this rule may fairly govern the applicability of the English Bankrupt Law to this colony.  That the principles of the English Bankrupt Law could be usefully and reasonably applied to this colony, I think it is manifest.  The judges of this Court in their letter of April, l838, accompanying the draft of an ``Act for giving relief to insolvent persons, and providing for the due collection and administration of insolvent estates within the colony, and for the prevention of frauds affecting the same," compiled by Mr Justice Burton, state -- ``That the necessity of some such legislative provisions appears to them to be generally felt by the community, and instances have occurred within their knowledge, where debtors and creditors have been driven to expedients and compromises consequent upon the want of such a law, which have not always been lawful, or even just, as between the debtor and the general creditors."  This letter goes on to say, ``This measure is based upon so much of the English Bankrupt and Insolvent Laws, and the law of the code relating to cession of estates, as they (the judges) deemed applicable to the state of the colony."  In a pamphlet in support of this bill written by Mr Justice Burton, he makes this observation in the very outset. ``It" (viz. the proposed Act) ``preserves, it is conceived, a perfect uniformity in principle with the English Bankrupt Law, where the objects of that measure have been effectually attained, and only departs from it in letter, where they may be attained in a more perfect degree."  No doubt, therefore, can exist of the opinion of the judges on this subject.  The measure compiled by Mr Justice Burton was proposed by His Excellency the Governor, and a Committee of the Legislative Council, appointed to investigate the matter, and I find from the evidence of about thirtyeight witnesses, not more than two or three disputed the applicability of the principles of the bill, as founded on the English Bankrupt Law, to this colony; but the details of Mr Justice Burton's proposed enactment, were for the most part greatly disapproved of.  It may be well, however, with regard to the principle of the English Bankrupt Law, to state the evidence of two most respectable witnesses.  Mr Thomas Walker, a merchant (who, I rather think, has a partner in England), says, ``Were this bill to become law, I think it would tend to induce greater caution in giving credit, but I do not think it would operate prejudicially in giving legitimate credit.  It might have the effect of checking wild and hazardous speculations, and I think it advisable."  Mr James Norton, a most respectable solicitor, of long standing, and perhaps of more practical experience than any other man in New South Wales, says in evidence given by him on the 2nd July, 1838, ``I think paper credit has even extended to such an alarming amount in this colony, that it is capable of deeply affecting the interests of the whole community; that the increasing number of banking establishments, and the increased, and increasing capital of those which have been long established, hold out so many inducements to fictitious and undue credit, that persons are led into speculations without any capital or means that would warrant them.  I think these observations apply not only to persons who have been long resident in the colony, and accustomed to its modes of credit, but also to those who daily arrive from England, who being unfettered by the conditions and circumstances under which credit is granted at home, are completely carried away by the facility with which they may obtain the means of entering into speculations here.  I think this bill will very beneficially abridge such credits, and bring not only the commercial, but all other interests, into a more wholesome state."  In all this, so far as my limited observations extends, I most cordially coincide; I may add, also, that the evils complained of have since greatly increased.  Banking companies, loan companies, steam companies, and joint stock speculations of various descriptions, are daily springing up in this hotbed of enterprise.  Mr Justice Burton's measure was not confined to traders, and in theory I prefer it to any other legislative provision for the same purposes I have hitherto seen; but as I have already said, the details of the measure were objected to in some degree or other by most of the gentlemen who gave testimony before the committee.  The session passed, and the Bill remained suspended, notwithstanding the representation by the Judges of the urgency of some such provision.  In the December following, having occasion to communicate with the executive, I thus expressed myself  with regard to Mr Justice Burton's proposed Bill, ``I confess I was much disappointed at it not being passed; but when I find from the evidence which has been taken that there were such, and so many, objections as would render it distasteful to a great proportion of the community if passed into a law, I own I should feel very great reluctance in pressing it further.  It has recently been dicided [sic] by the Supreme Court, that the English Bankrupt Law is not applicable to this Colony; but it seems to me that if a law were made on the same principle as the Order in Council of the 12th October, 1832, for regulating the practice and machinery in Bankruptcy at Gibralter (vide Clark's Colonial Law, p. 690), there would be no further difficulty in the matter, and there would be this advantage, that instead of proceeding on an entirely new law, we should have one well known at home, and elucidated from time to time by English decisions.  In my opinion, connected as this Colony is in all its trade with the mother country, it is worth some sacrifice perhaps, (and I deem it a sacrifice to give up the Bill prepared by Mr Justice Burton), in order that a branch of the law of such mercantile importance, should be equally understood in England as in this Colony."  I have always believed that a law, to be useful, must accord in some measure with the feelings of those amongst whom it is to be carried into effect.  I think it n as in Beilby's case, but I know in some case or other, the majority, if not all the Judges of the Court, incidentally expressed an opinion that the English Bankrupt Laws were not applicable to this Colony; an opinion founded on my part on the ground that the means did not exist for carrying the Bankrupt Laws here, as in England, into execution.  I admit that in expressing this opinion, I adverted to the Bankruptcy Court, a Court of statutory erection since the New South Wales Act, which does not exist here.  But I certainly did not lose sight of the enactments of the Statute Geo. IV., c. 16.  If however in any ``obitur dictum," aye even in the most solemn decision, I should ever subsequently be convinced of having been in error, I will always be foremost in acknowledging and doing all in my power to correct any such error.  But I think it will be found in the sequel that in the instance before us I have nothing to retract.  In my communication with the Executive, which I have just stated, I adverted to the English Bankrupt Law and recommended its adoption, as in Gibralter, when I found the details of Mr Justice Burton's Bill were objected to, because, in the first place I bore in mind the importance of the following principle enforced by the Right Honorable the Colonial Secretary of State in 1831, in his circular dispatched to the Governors of certain Crown Colonies, viz: -- To the Governors of British Guiana, Trinidad, St. Lucia, and the Cape of Good Hope, transmitting to them the two orders in Council and other documents dated November 5th, l831, ``That it has been a great error in the Colonial Policy of England to overlook the expediency of bending local peculiarities to the general principles of one common legislation," and I could scarcely suppose a more fit opportunity under the circumstances that had occurred, than that which thus presented itself, for uniting to the mother country by one common mercantile law, a part of the empire which is deriving a vast proportion of its population, and its commercial capital from Great Britain -- I also bore in mind, the vast importance to Colonial Judges of the benefit of the exposition, not only on the principles of a law, but of the exact law itself, by the Judges of England; for, with all deference and respect to my learned brethern, and for the office I have the honor to hold I must say, that I prefer the elucidation of a law by the sages of Westminster to any thing that could be obtained elsewhere, even from the profound philosophy of another Minos, or from the righteous rigour of a resuscitate Rhadamanthus.  But can we say of this or of any other colony,

``Gnossius haec Rhadamanthus habet durissima regna,

Castigatque auditque dolos?"  Virg. Aeneid, c. 6.

Moreover, in a matter of such importance, I freely admit that I greatly prefer the collective wisdom of the British Parliament to the more limited ideas, whatever those ideas may be, of any Legislative Colonial Council.  ``With the most perfect respect," said the Right Honorable the Colonial Secretary of State, in his circular despatch of the 5th November 1831, to which I have already referred.  ``With the most perfect respect for the gentlemen who compose the Colonial Legislatures, I must venture to observe that the exact knowledge of the particular society in which a law is to operate, is not the only qualification for a legislator -- it is not even the highest and most important.  For so arduous an office, it is still more requisite that the lawgiver should possess the habit of dealing with large practical questions, a freedom from local and personal prejudices, an absence of all such personal interests as could warp his judgment; and a mind open to the admission of truth, in whatever direction it may come.  Without supposing men resident in Europe to possess any superior capacity to persons of equal education and corresponding rank in life in the colonies, I cannot think it unreasonable to believe that they possess in a higher degree the qualifications to which I have referred.  A gentleman who has passed his life on a plantation in the West Indies, or in the legal tribunals of those colonies, may know much of the state of slavery, of which the most profound reasoners and the most practical statesmen in Europe are ignorant; but I cannot admit that this proximity of observation is an infallible or even a safe guide to sound conclusions.  If the colonists know much of which others are ignorant, they are inevitably ignorant of much of what others know. They have few opportunities of studying the progress of public opinion throughout society at large -- they unavoidably live in a contracted circle, which is agitated by petty feuds and pecuniary embarrassments.  In those (the West Indian) colonies, neither learned leisure, nor literary and scientific intercourse, nor even the more liberal recreations, are commonly to be found.  The white inhabitants regard themselves as living in temporary exile, and are looking to a distant country as their home.  The members of the Local Legislature are contending for the maintenance of their own domestic and political authority, for the protection of their supposed and immediate interests, and in defence of their collective and personal reputation."  In all humility, and with all deference and respect, I think much of this despatch may apply to other colonies than those to which it was specifically addressed; and as it was impossible to suppose, after the objections that had been urged, that the Bill compiled by Mr Justice Burton, and recommended by the Judges, would pass the Local Legislature in its original state, I trust it was not irrational or presumptuous to think, and that it is not so still to think, that an English Law, illustrated by the decisions of experienced English Judges, must be much preferable to any legislative provision which may be framed in New South Wales.  The absence of any Colonial Law, and the rationality and utility of the principles of the English Consolidated Bankrupt Law of stat. 6 Geo. IV., c. 16, being thus, I think, fully apparent, it only remains for me to consider the possibility of its application.  That it cannot be applied at present, on the same ground as I formerly denied the applicability of the English Bankrupt Law, even when connecting it with the Act which provided for the new Bankruptcy Court in England, seems to me indisputable.  I need only say that the stat. 6 Geo. IV., c. 16, is, with regard to the bankrupt, in some respects a penal law; and that before a bankrupt could be duly convicted in any Criminal Court of Justice of offending against its provisions, it must be shown that the Act has been specifically complied with by those complaining against him.  Thus, for instance, until an office for registering proceedings in bankruptcy, and a person to have the custody of such records, both which, by the 95th section of 6 Geo. IV, c. 16, the Lord Chancellor in England is authorised, and, therefore, the Judges here would, I think, be authorised to appoint.  Now could the following, the 96th section of the Act, which directs that no commission, adjudication, conveyance, or certificate shall be received in evidence, unless entered of record according to the preceding section, be complied with?  Then have we yet a Master in Chancery? or any Masters Extraordinary for the purpose of administering oaths in bankruptcy in the country?  True, they may easily be appointed, but until such appointment, the words of the stat. 6 Geo. IV, c. 16, cannot be complied with.  Then the Government Gazette should be substituted for the London Gazette; and there may be various other ``Acts, matters, and things to be done in order that the said Act of Parliament may be carried into effect."  How far my brother Judges may feel themselves authorised under the local Act of 6 Wm. IV., No. 12, or by virtue of their inherent powers, or any statutory authority they possess, to make good these deficiencies, and ordain such rules as will enable the stat. 6 Geo. IV., c. 16, to be forthwith legally carried into effect, I know not; but when I again revert to the letter of the Judges, of April, 1838, and find that, notwithstanding the necessity therein expressed of some provision in the nature of a Bankrupt Law, two sessions of the Local Legislature have passed over and no such law has been enacted; when I reflect on the superiority of British to colonial legislation in matters, I would say, so intimately connected not only with the commercial interests of New South Wales, but with the trade of the British Empire; when I consider how much more beneficial the exposition of a law by British Judges must be than what can be made by any colonial judicature, however talented its members; when, I say, all this is forced upon my mind by occurrences of the utmost importance for the community, I confess that I am decidedly of opinion that if my brethren can bring themselves conscientiously to believe that by any rules or orders of  this Court, the means can be established for carrying the Consolidated English Bankrupt Act of 6 Geo. IV., c. 16, into effect in this colony, we shall fail in our duty to the public and ourselves, if one moment be lost in making the requisite regulations.  The date of such rules will be a period to start from, for the English Bankrupt Law cannot, I think, be considered applicable to this colony till the means are provided for carrying it into effect.  The costs attending a commission of bankruptcy, according to the table prepared by the direction of Lord Lyndhurst, appear to me so reasonable and moderate that no valid objection can be made on that account.  The table of costs to which I allude, is given in the appendix to Lord Henley's work on Bankrupt Law, p. 180, and was prepared by my friend, Mr Beames, and Mr Swanston (both of whom must be known here as the authors of very valuable Chancery Reports), and by Mr Metcalfe.  I would add that the fees payable to the Commissioner and Officers in bankruptcy are given by statute, and our duty only is to say whether that statute be in force.  This Court has, in my time, issued a Commission of Lunacy, and the Commissioners, I presume, were paid by fees; and yet I do not consider this as a taxation of the colonists by this Court.  On the whole, I am bound to conclude that, notwithstanding my conviction of the reasonableness, the utility, and applicability of the principles of the English Bankrupt Law yet that until the necessary provisions be made for its practical execution, no Commission of Bankruptcy can legally be issued; and I am therefore bound, though with much regret, to reject the prayer of the petition.

Mr Justice Stephen. -- The other members of the Court having entered into this question so fully, it seems unnecessary for me to do more, than express in few words my acquiescence in their opinion, that the Bankrupt Law of 6 Geo. IV. cannot be applied to this Colony.  There are a few observations, however, which I wish to make, having regard to those two sections of the New South Wales Act, which were relied on in the argument, -- first, as giving to this Court the powers of the Lord Chancellor, and secondly, as showing that the Bankrupt Law, thought perhaps it could not have been applied when that Act was passed, may yet be in force now.  From the latter of these positions, I must at once express my dissent.  The question, whether any particular statute is in force, may be determined, as I apprehend, with reference to the date of the New South Wales Act alone.  I cannot conceive that we are to determine the question, by nice enquiries, from time to time, as to the progress made by the colony, in wealth or otherwise.  Nor that our opinion is to be guided by considering what is or is not expedient; or which come to the same thing, by discussing what, at any given time is or is not beneficial, for the colony.  Considering the wording of the section cited, I think that if a law could physically be applied, when that Act was passed, it was (as a general rule) intended that it should be.  I do not go so far as to say, however, that a law was meant to be applied, if every way unsuited to the Colony; if in all respects, though it might easily be applied, it could be clearly shown to be inconsistent with our position and local circumstances.  But, whatever exceptions the rule may or may not admit of, there seems no ground for holding, that the question of applicability was to have reference to the future.  On the contrary, the meaning seems to me plain; that those laws only should compulsorily be applied, which then, at the passing of that Act, could be applied.  For the future, as I conceive, a local Legislature was created; by which, Statutes not then capable of application, were thereafter to be introduced either wholly or in part, as that body might determine.  So that if the Bankrupt Law could not have been applied in 1828, it cannot, according to my opinion, be in force now.  I think it material to bear in mind; because I take it to be clear, that, if this Court shall once determine any given Statute to be in force, the colonial Legislature can have no power to repeal, even if they had to amend it.  So long as there remains a doubt whether a particular Statute extends here, the Council may modify, and alter, or reject, at discretion.  But the section appears to me to show, that if there be no doubt that such Statute does extend, their legislative functions are then at an end.  As to the other section noticed by me, I confess that I think it questionable whether it does confer on us the powers supposed.  It gives this Court all the powers of the Chancellor, which belong to him either in Equity, or at Common Law.  But, the power of issuing a Commission in Bankruptcy, strictly speaking, is neither the one nor the other.  It was and is a power given to the Chancellor, by Statute; and (excepting that the Commissioners would, in such case, not be under the Great Seal,) it might have been entrusted, as effectually, to any other officer.  In exercising the power, indeed, the Chancellor was considered as bound to adjudicate on principles of Equity, though acting quasi as at Law.  But, the power remained a statutable power, notwithstanding.  Without reference to this difficulty, however, enough has been cited from the Bankrupt Law by the Chief Justice, and also by Mr Justice Willis, to show that, if a Commission issued here, it could not be worked out for want of the necessary machinery.  So that the Law cannot be applied now at all events.  The result of this judgment, is, I think, matter of congratulation.  The length and apparent complication of the Draft Law, which was last year submitted to the Legislature by the Judges, have been objected to. That Draft combines in itself, both the Bankrupt and Insolvent Laws of England; but it does not contain one half the number of sections, which those Laws contain. The latter have 227 sections; the Colonial Draft has 102.  This consideration, however, is comparatively of little importance.  Instead of two discordant systems, opposed to each other in principle, and notoriously cumbersome, dilatory, and expensive, in practice, the colony will possess one system, uniform, consistent, and intelligible, economical, and easy of execution, embodying the leading principles of the Bankrupt Law, which are of universal application, but extending them, for that reason, beyond traders, to all classes of persons:-- a system, admirably adapted to our local circumstances, and in its details embracing nearly all the improvements, confessedly important, as they are numerous, met with in the Codes, to which the learned compiler of that Draft had recourse.

Petition dismissed.



[1]   For other litigation concerning Wilson, see Polack v. Wilson, 1839.  At the end of a summary of the argument in Polack v. Wilson on 16 November 1839, the Australian of 19 November 1839 reported the following:

 ``On the rising of the Court the Attorney-General presented a petition from the creditors of John Thomas Wilson for a commission of bankruptcy to issue against him.

``Their Honours held, that as it was a question of grave importance, not yet determined, whether the bankrupt law extended to this colony, and one which would demand great consideration, they could not entertain the petition until it was settled."  (See also Sydney Gazette, 23 November 1839.)

This decision was also reported in (1839) 1 Legge 140; and Sydney Herald, 27 November 1839; Sydney Gazette, 28 and 30 November 1839.  This version is taken from the Australian of 28 November 1839, which was almost the same as that of the Sydney Herald and the Sydney Gazette.  The Australian version is used here, because our copy of it is more legible than our copies of the Sydney Herald or the Sydney Gazette.  (We rely on microfilmed versions of the newspapers, and sometimes the microfilming was blurred or it left off the beginnings or ends of lines of texts.)

Legge relied on the Sydney Herald of 27 November 1839, and included the following preliminary material:

``English Bankrupt Law - 9 Geo. IV, c. 83, s. 24-Ex post facto legislation.

``(Per the C.J.)  The adoption of this statue is beyond the power of the Court, and would be in fact ex post facto legislation.

``(Per Stephen J.)  The question of the applicability of English statutes must be determined with reference to the date of the New South Wales Act alone.

``This was a petition to the Court in its equitable jurisdiction for the issue of a Commission in Bankruptcy under 6 Geo. IV, c. 16.

``The facts appear in the judgment of the Chief Justice."

For an opposite conclusion on the reception of English bankruptcy law in British Columbia, see Anonymous, 1861.

Published by the Division of Law, Macquarie University