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

Gilchrist v. Hart [1841] NSWSupC 117d

insolvency - imprisonment for debt - New Zealand

Supreme Court of New South Wales

17 December 1841

Source: Sydney Herald, 18 December 1841

INSOLVENT DEBTORS' COURT.

FRIDAY, BEFORE MR. JUSTICE STEPHEN.

GILCHRIST AND ANOTHER V. HART.
JONES AND OTHERS V. SAME.
MAELZER V. SAME.
CAMPBELL V. SAME.
 

In the first case the action had been brought to recover £52 12s. 2d. on a promissory note, for saddlery, and the insolvent had offered to pay the same when due, - less an account due to him by Russel, of Peat and Russel, in whose favour the note had been drawn. In Jones and others, the action had been brought on a promissory note for £258, given by the insolvent to them as trustees for A. Polack. In Maelzer's case the action had been brought to recover £62 7s. 10d., for goods in his trade and costs. InCampbell's case the action had been to recover £646 11s. 10d. for tea.

            After the insolvent had been sworn Mr. WINDEYER who appeared to support the application informed the Court, that since the schedule had been filed a Ca Sa[1] had been lodged by the Auction Company, and it was the wish of both parties that the schedule should be amended in this case, by inserting it so that the case might be gone into with the others. This amendment was ordered. The Court was also informed that in the list of debts due to the insolvent, there was an inaccuracy, as a small debt had been entered as doubtful, whereas the real fact was, it was disputed. The schedule was also amended in this respect sworn to and read.

            Cross-examined by Mr. WANT. My debt to Mr. Campbell is for tea - my last bills were dated Feb. 1840, but the transaction took place in October 1839. I arrived here in the end of December 1838, before the transaction which gave rise to these bills - I had been unable to meet my engagements, and settled with some of my creditors. I failed about March 1840, when I made a settlement with my creditors, most of them have been settled with since then, in full, by paying them 20s. in the pound. After the first compromise, I again commenced business as a draper and wine-merchant. I had a little money to commence with, the proceeds of my furniture, it was about £500. I gave Mr. Campbell 7s. 6d. in the pound. I have since the compromise offered him his Tea back but he refused it.  Between the compromise and the time I opened Washington House, I had about £1,400 or £1,500 of money in my hands. Most of the goods for that hou[s]e were bought on credit, and principally pai[d] for by my bills with Mr. Hughes's indo[r]sements.  The reason why I dealt on c[r]edit was that I devoted the principal part of my cash to fitting up and altering the premises, amounting to about £600 or £700. I then had only about £500 of cash to go into the market with, and therefore, I preferred taking the accommodation of Mr. Hughes's bills. I then purchased goods with the remaining balance. I failed again in February last, when I offered to pay 20s. in the pound if they would attend my sale and purchase to the amount of half their claims and allow me time to pay the other half. I had entered into an engagement with most of my creditors. I secured your client's claim by a cognovit on which it was agreed by a clause in that document that judgment should be entered up if I attempted to leave the Colony; I had no intention of leaving the Colony when I signed that Warrant of Attorney. I made an affidavit that I was not about to leave the Colony of which I gave you a copy; when I made that affidavit I had no intention of leaving the Colony; the affidavit was not made to deceive you, but to prevent Mr. Norton from following up judgment in Mr. Polack's actions against me; since then I did attempt to leave the Colony; since I made the affidavit I had some bills of Mr. Gore's for £812 which I got discounted, and made £150 by doing so, the person for whom they were discounted took £500 for them, Carnegie, having found half the cash, got the remainder. I had a carriage and two horses since my settlement in February last, but they were sold soon after, and before I attempted to leave the colony secretly by the Vanguard. I brought all my articles on shore except one small parcel of newspapers. I paid £12 for my entire passage. I had only £5 on me when I tried to get away; I did not tender £20 nor £10 to Austin, of the Water Police; I merely told him I would procure £10 and give it to him, and till then would leave my watch with him till he was paid the offer. I did not see you within a fortnight of the 16th of October, which was the date I tried to get away in the Vanguard. It was about four days before the 16th that I saw Mr. Norton, and showed him the affidavit. My object in representing that I was not about to leave the colony was to get them not to issue execution. I deny that my doing so was attempting to practise a fraud on my creditors. I was no partner of Carnegie in the busine[s]s he was carrying on at Port Macquarie, but I supplied some goods to him by which I met a very heavy loss. I sold some goods to Mrs. Kinnear and Mr. Fattorini, out of which I recovered £150, which is part of the £300 marked as received in my schedule.

            Mr. WANT submitted that his c[l]ient was entitled to have the items composing this £300 specified.

            His HONOR granted the application when the insolvent stated that the sums which made up that was £65 from Mrs. Kinnear, £149 odd in the case Hart v.Fletcher, £100 in the case of Fattorini, and about £20 or £25 in small book debts.

            The examination was then resumed - Carnegie is my son-in-law, he went toNew Zealand about the end of August, when he took down a quantity of ironmongery, which I had received from Mr. Burdekin by my unendorsed bills, he had no security from me in the form of a house at Balmain, belonging to me. That house was not mine, but my brother's, who gave me power over it to do with it as I pleased, and I gave it to Burdekin as security for my debt. There is £200 of ironmongery belonging to me inNew Zealand, a quantity of goods, in which I have £125 interest, £110 of books, and £50 of wearing apparel.

            Mr. WANT submitted that the invoices of the ironmongery, the marks on cases, with the books, &c., should be set out. This was ordered, an[d] the examination was proceeded with as follows. The deeds of the land at [B]roulee, are in the hands of Messrs. Chambers and Thurlow, to whom I owe at least £[?0]0, I have paid them £200 already, each o[f] the allotments at Broulee is worth in goo[d] times at lest £150. The land at Bondi was purchased for £1250, there is a lien on it for [£]1000 due to the Loan Company, the land [s]tands in Carnegie's name, I have nodoub[t] but it would bring more than it cost if sol[d]. The only money I have got since I was imprisoned has been £25 by the sale of [m]y watch, and £5 on Wednesday from the Court of Requests. Since February I hav[e] bought three horses. I have also sold the[m] again and paid for them by my bill. The a[m]ount actually received from Mr. Simmons a[s] the proceeds of the three sales he made for me was £2496. Several articles were bought at that sale by my brother, and the value of these things is to be deducted from the gross amount which reduces it to the first item in the schedule. I had a diamond ring when taken into custody, which I had bought from Mr. Cohen, but had not paid for it. It was therefore returned to Mr Cohen since my incarceration.

            His HONOR expressed a hope that Mr. Want was not going to make this a charge against the insolvent, as it was honest towards Mr. Cohen.

            The court then examined the insolvent - My horse and carriage cost about £3 per week; the total amount of my debts was from £3000 and £4000; my property amounted to about £3000; so that I was not insolvent for more than £3000, scarcely so much; my whole family expenses did not amount to £25 per month; I have had the misfortune to be afflcted with amorosis, for which there is no remedy, but violent horse exercise is pre[scribed as ] delaying the fatal termination of it, [LINE OMITTED] me to keep a horse.

            Cross-examined by Mr. BROADHURST - Have had medical advice to that effect from almost every eminent medical man in Europe, and from Dr. Nicholson in this Colony. About three weeks before I was taken from on board the Vanguard I made a very strong appeal to Mr. McIntosh to get him to delay execution. In order to prove that I did not then intend to leave the Colony I may state, that, at the time I saw Mr. McIntosh, I had arranged with Mr. Hughes for my taking the Royal Hotel on very advantageous terms. This negotiation was not completed, as when the final meeting was appointed I was obliged to keep within doors to avoid going to Carter's Barracks. I have had several thousand pounds worth of goods from the Auction Company, and the last I had was about £1,800 worth; I had £2,000 in capital, all of which has been lost by stock in trade, discounting, and law expenses. During the time from July till February, which I had Washington House, I cleared about £1,400; my discounts frequently cost me £40 or £50 per cent. The Auction Company claimed £3,000, but they got a verdict for £2,400 only. The Auction Company havethemselves to blame, that they have not received the whole of their claim long ago. I employed Mr. Thurlow in the case of the Auction Company, and then left it in his hands to reduce the debt - I am not conscious that I set the Auction Company at defiance, until they got their bill passed, I believe that if a plea was filed either in the case of the action by the Auction Company or in that by Polack, it must have been with my consent, by Mr. Thurlow. The affidavit of service of notice of the application was sworn to, when the serving officer deposed that Mr. Maelzer, when served, had said that he d[i]d not think he would oppose this insolvent.

            Mr. McIntosh from Mr. Norton's office, was then called and examined at considerable length, respecting the costs in the actions brought by Gilchrist and Alexander, and also in that brought by Polack's trustees; he proved that these had been materially increased by the actions being defended.

            In cross-examination by Mr. WINDEYER for the insolvent, Mr. McIntosh admitted that the insolvent had stated that his reason for defending the action brought by Gilchrist and Alexander was that he had an off-set which would reduce the amount. He also stated that the reason why the verdict in the Auction Company's case was less than the amount sued for, was that the witness had brought the wrong document to prove the full amount sued for.

            Mr. WANT applied to have insolvent remanded to amend his schedule, as to the various amounts received since action brought, and also to allow a communication to be made to New Zealand, in order to secure the goods which had been sold to him and shipped in his name with his son-in-law, Carnegie. Mr. Want objected to the amendment which had been made by adding a new detaining creditor to the schedule, after the insolvent had been brought before the Court. He also thought the Court would be justified in punishing the insolvent for fraud, in attempting to deceive his creditors by sending away his property to New Zealand with his son-in-law; also for squandering his means by living beyond his income by keeping horses and carriages. He also submitted that the insolvent should be severely punished for attempting to leave the Colony, and having endeavoured to lead the plaintiff's attorney's astray, by exhibiting an affidavit that he had no intention of leaving the Colony, within a few days of the time when he was actually detected in the act of leaving it clandestinely. Mr. Want grounded his arguments for punishment on the evidence and the application of the provisions 7 of 2nd Vic. 14. 5. 4. of Vic. No. 24, 4 Vic. No. 14., 8th of 2nd Vic. and 4 of 5th Vic. No. 24.

            Mr. BROADHURST followed on the same side and contended, that if the Court did not punish the insolvent it would be dealing harshly by punishing others. He also considered that by the previous practice of the Court, the insolvent must be punished, as he had gone on contracting debts without reasonable means of paying. And contended, that by returning the ring to Mr. Cohen he had given a fraudulent preference. He particularly urged on the attention of the Court, the conduct of the insolvent by making a false pretence in order to induce Mr. McIntosh not to renew the writs.

            Mr. WINDEYER, in reply for the insolvent, said, that the only part of the case, which he intended to address himself to, was that in which it was alleged that the insolvent had made a false pretence to Mr. McIntosh, in order to induce him to stay proceedings. He considered that the evidence did not bear out the assertion, all that it proved was, he had made a false promise, and he did not see that it was the intention of the Legislature to punish such a case, as it was attributable to the infirmity of human nature when pressed by outward and uncontrolable circumstances. With regard to the argument respecting buying without a probability of paying, that was contradicted by his having made fourteen hundred pounds clear in six or seven months. With respect to the charge of extravagance, he thought that was negatived by the insolvent having sworn that his income was more than his family expenditure while he kept the two horses and the carriage. He thought that the merriment which was attempted to be got up about the medical advice was in bad taste: his client had already lost the sight of one eye, and he was justified in employing every means in his power to preserve the other. He did not think that an annual family expenditure of £300 per annum was extravagant for a person who had arrived with the same capital as Mr. Hart, and engaged in bu[s]iness to the same extent as he had been. He thought that no impediment could be in the way of the plaintiff's recovering the goods which had been sent to New Zealand, and selling them there at a profit of one hundred per cent., which would produce £100[0]. Again, as the Loan Company had advanced £1000 on the Bondi property, it might with all fairness be presum[e]d that it would realize £3000, which after retiring the mortgage would leave £2000 m[or]e; there was, besides, the £300 of schedule debts, and the surplus of the value of the Bronleeallotments after Messrs. Chambers and Thurlow's lien on them was retired; so that it was evident there was between £3000 and £4000, which was ample to satisfy all the claims of the creditors. On the whole he saw nothing in the case to prevent his client from being discharged in usual course of law.

            His HONOR said he should not pronounce a decision in the case until next Wednesday, and observed, with respect to the charge of having, by false representations, induced Mr. McIntosh to forbear issuing the writs, it was enough that it was proved that he attempted to obtain a forbearance of the proceedings, it must be proved that he had actually obtained a forbearance by such representations. With respect to the medical advice given to the insolvent he thought Mr. Windeyer should give him some evidence to establish it. He did not consider that an insolvent who had no manner of living would be justified in living up to the amount of any windfall accident might throw his way; such as that of getting gain by acting as an agent for discounting a bill, or for selling a house. He also ordered the insolvent to amend his schedule, by annexing a statement explanatory of the mortgage of the Bondi property, and of his interest in the property that had been sent to New Zealand.

            With regard to the appointment of an assignee for the insolvent's estate, his Honor named Mr, Windeyer. He also stated that if Mr. Want intended to persist in his objection to the Auction Company being allowed to come into Court, and become opposing creditors by their name being inserted in the schedule, he would bring the matter before their Honors in Chambers, where it would be gone into and the point settled.

Stephen J., December 1841

Source: Sydney Herald, 23 December 1841

BEFORE MR. JUSTICE STEPHEN.

            The insolvent William Hart, whose examination was reported in the Herald ofSaturday last, was brought up to hear the decision of the Court in his case.

            Mr. WANT applied to his Honor to re-open the case, as he was now provided with witnesses to prove that when the insolvent swore on his examination that he had but £5 in his possession when taken on board the Vanguard, he had sworn that which was false, as his witnesses would prove that he then had £100 in money.

            His HONOR did not consider that even if proved it would materially affect the case, on which the insolvent was now before the Court; but there was one point on which he was desirous of receiving information, and that was as to whether the detaining creditors who had opposed the insolvent's discharge had agreed on another assignee. It was intimated that Mr., Archibald Campbell had been, by consent of parties, nominated, and His Honor immediately appointed him.

            Mr. WANT then enquired through the Court, if the insolvent had any bills of lading connected with the goods belonging to him which had been sent to New Zealand with his son-in-law, Carnegie, and which were alleged to be in his possession.

            The insolvent said, that he had not these documents, they had been given to Carnegie before his departure, nor had he obtained the third set. He also stated that his schedule had been amended according to the orders of the Court.

            His HONOR stated that he had no intention to put any questions to the insolvent which might tend to criminate or place him in worse circumstances than he was already in, he had been brought up to receive the judgment of the Court, in answer to his petition for his discharge under the insolvent law, which had beenopposed by his detaining creditors on three grounds:-

            1st. That he had squandered his means while not in solvent circumstances, by keeping a carriage and horses, and also by the purchase of a diamond ring value £25. He did not mean to punish him on this ground, as whatever had been his intention when he purchased this ring, it had most properly been given up to the person it had been obtained from. With respect to the carriage and horses, although it was highly improper in any insolvent while his creditors were unsatisfied to keep such an establishment, yet as it had been shown that during that time his expenses had not been extravagant, the Court in consideration of the alleged excuse would not award any punishment on this ground.

            The second ground on which he had been opposed, was, that he had obtained a forbearance of his debt by fraud, or under false pretences. The proof that he had done so, was, that within two days of his attempted absconding from the Colony, he had admitted seeing Mr. McIntosh, the attorney's managing clerk for one of the plaintiffs, and had assured him that he did not intend leaving the colony; and the reason assigned for his so doing, was to prevent that plaintiff from issuing execution; and, from the evidence before the Court, it was clear that, to a certain extent, he had succeeded in obtaining a forbearance, by making the fallacious statement referred to. But it was not only a false pretence - he had obtained the forbearance fraudulently; he had even gone the length of offering a man a bribe (he could call it by no other name) to induce him to allow him to escape. The very land in the Colony belonging to the insolvent, was in the name of his son-in-law, who might thus have it in his power to set the creditors at defiance, by alleging that it was his own, while the insolvent had not in any way shewn his creditors how they might rebut such a claim if set up; and the same remark applied to the goods being sent to New Zealand, while even the bills of lading had not been retained to enable the insolvent to establish his claim to them, should his creditors feel it for their interest to prosecute it before the Courts there.

            Mr. WINDEYER here suggested to his Honor, that the insolvent's obtaining a forbearance under false pretences had not been urged.

            The Court admitted that such was the case, and that to a certain extent Mr. Windeyer's argument against it had been successful; but then there was ample evidence to convince him (the Judge) that a false pretence had been made with a fraudulent intent, and with such evidence before him, he would lament ever after if he had come to a wrong conclusion as to the insolvent having been guilty of the offence urged against him. He had a heavy, responsible, and unpleasant duty to perform in such cases; for that reason he had always been anxious that the law had been so framed as to have admitted of such cases being dealt with before a jury, as he was in such circumstances compelled at once to convict and to punish. In order to avoid any mistake or error respecting the question before him, he had done as usual in such cases: drawn an indictment and carefully compared the evidence with it, and the conclusion which he had arrived at, as if upon his solemn oath, was, that the individual before him was guilty of the offence charged against him.

            The insolvent here informed the Court that the goods had been put into Carnegie's possession long before he had seen Mr. McIntosh, and that when he did so he had not intention of leaving the Colony.

            His HONOR said, that besides these evidences of fraudulent intent, there were others: Where was the land; was it not in Carnegie's instead of the insolvent's name? Who had also the documents by which the insolvent's right, for the benefit of the creditors, might be most readily established? Were not the goods shipped for New Zealand, also, in Carnegie's name, who had also the bill of lading to enable him to demand them when they arrived there? Where was the insolvent's family? Was it not where the goods were? and was not he on his way thither disguised when brought again on shore; after looking at these facts and connecting them with the other parts of the case, could any man for an insta[n]t doubt but he had arrived at a [r]easo[n]ableconclusi[o]n, and come within the meaning of the 11[t]h Section of the present insolvent law, which provided for the punishm[en]t of such insolvents as might [be] guilty o[f] dami[n]ish[in]g their goods and estat[e] [w]ith i[n]f[?] de[m]and their creditors. Th[is] was apparen[t] from t[h]e fact that the insolv[ent], w[h]en he saw Mr. McIntosh, did not, as an honest man, tell him that his goods had been sent off to New Zealand; if he had even left a letter to his creditors, stating where he was going to and what property he was taking with him, and that he would as soon as they were disposed of remit them the proceeds, he would have had some claim to the leniency of the Court; but as it was there was no such grounds sought to be set up. If it was not to defraud his creditors that the goods were so clandestinely sent away, he knew of no other interest which the insolvent had in view; there was no jury of honest men who, with such evidence in support of such an indictment, could fail in finding him guilty. He felt it his duty to inform the insolvent that, of what he himself must be aware, his conduct had blasted his character and destroyed his honest repute; what might be the consequence to those guilty of such conduct when the new law came into force, it was not for him to declare - whether the punishment might be more severe or more lenient, than at present; but the opinion of his Brother Judges was in unison with that which he (Mr. Justice Stephen) had arrived at on the case, which was, that for each offence he should be confined for two calendar months.

            He was then ordered to be confined in the common gaol of Sydney during four calendar months, after which to be again brought before the Court for his discharge.

Notes

[1]              Capias ad satisfaciendum: the writ of arrest for debt on the final process, that is for non-payment of a judgment debt.

 

Published by the Division of Law, Macquarie University