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

Robinson v. McLaughlin [1842] NSWSupC 51

insolvency

Stephen J., 31 December 1841

Source: Sydney Herald, 1 January 1842 [1]        

In this case the insolvent had been remanded to amend his schedule, and that he might produce evidence to rebut the charge of having fraudulently caused his goods to be concealed, and ordered to be brought up yesterday; but he had declined pressing his application, and consequently had not come up with the other insolvents.

Mr. Gouland applied to His Honor to be allowed costs out of the insolvent's estate, on the ground that he had been put to considerable trouble and expense in making enquiry, as well as in bringing witnesses to Court, in order that they might be examined in support of his case against the insolvent.

His Honor was of opinion that the insolvent could at any time withdraw his petition for a discharge, provided none of the opposing creditors objected to his doing so, but the court would take care in such cases that the proper forms for making such a retraction were complied with, which had been done by the present insolvent. His Honor did not recollect any case in which an insolvent [had] applied for his discharge, and thus put himself into the hands of the court; he had, when he found that the case was likely to be attended with serious consequences to himself, been allowed to withdraw his application. As matters stood at present he considered the insolvent as still in the hands of the Court, and should therefore direct that all questions connected with it should be reserved till next [???] when he would order the insolvent to [be bro ] ught up, and would also order the costs applied for to be paid, in the mean time he would consult his brother judges on the case. He did not see that the insolvent by withdrawing his application would at all prevent Mr. Gouland from proceeding against him for a misdemeanour under the 13th section of the present Insolvent Law. It was not necessary that the case against the insolvent under this clause should be carried on in that court. Mr. Gouland might bring it on before a magistrate in the Police Court. And if he made out the case against the insolvent, the latter might be sentenced to imprisonment for any period not exceeding three years.

The Court then adjourned till Monday.

Stephen J., 7 January 1842

Source: Sydney Herald, 8 January 1842

            The insolvent in this case had been brought up by an order from the Court, in order that he might answer an application which had been made by the plaintiff's attorney last Court day, to be allowed the costs of the day for appearing to oppose the insolvent who had been remanded till then to amend his schedule, and to allow time for the production of additional evidence in opposition to the insolvent's petition for discharge. But instead of appearing the insolvent had declined to press his petition, and therefore did not appear as he ought to have done in compliance with the order of the Court.

            His Honor now informed Mr. Broadhurst, who appeared to support the insolvent, that since he had ordered the insolvent to be brought up he had submitted his own conduct in the case to the opinion of his brother Judges, and they were of opinion that he had acted in the spirit of the law by bringing the insolvent up to the Court. It was the unanimous opinion of the Judges that after an insolvent had by schedule or petition brought his affairs under the consideration of the Court that he of himself had no power to withdraw his application for the purpose of putting a stop to the investigation.

Mr. Gowland, for the plaintiff, stated that if the insolvent was able and willing to make settlement with his client, by paying him the amount of the bill and costs, that he would offer no opposition.

The Court stated that it would not by any means become a party to concur in or give its consent to any compromise, and that the reason why the insolvent was ordered to be brought up was, that it had no means of making the insolvent pay the costs, which he by non-compliance with the order of the court had needlessly subjected the plaintiff to, by first filing the necessary documents, and, after the case had been partially heard withdrawing the application, the present was a case in which the plaintiff had a fair and just claim for being paid these costs, and therefore the court felt itself bound to order their payment from the proceeds of the insolvent's estate, prior to the settlement of whatever other claims there might be against the same.

Mr. Broadhust wished to have any farther proceedings in the case postponed till next sitting of the Court, as a proposal had been made to the other side and which was still under consideration, viz., that the insolvent should give security for the payment of the plaintiff's claims by instalments.

His Honor repeated his determination not to become a party to any compromise, stating at the same time that he had no power to force on any inquiry that was likely to lead to such a result as the present; neither had the Court any power to prevent any plaintiff from arranging with a defendant in custody while the case was before the Court on a petition. At the same time the law gave full power to the judge, before whom any case may be pending, whenever there was reasonable ground for suspecting that manifest fraud had been committed, to bring the whole proceedings before the Attorney-General and leave it to him to proceed criminally or not as he might see proper, and however the plaintiff might act he had made up his mind to follow this course with the present case. At the same time on looking over the new insolvent law he did not observe any provision made for such a case; and as the present law would be extinct in a few days it was not likely that any proceedings would be commenced. His Honor then read the 13th clause of the present insolvent law and pointed out that if found guilty of a breach of this clause, he would be punishable as for a misdemeanor, by being sentenced to any period of imprisonment not exceeding three years. He afterwards read the 7th clause, by which the Judge, before whom the case is heard, has power to send the insolvent to the common gaol. As the case stood at present with the insolvent, it had not been fully made out that he had been guilty of a breach of this clause, and it lay entirely with the plaintiff to follow it up and if possible complete by evidence those parts which are still defective. There was a new circumstance added to the case since it was last before him, and that was by the insolvent having filed a new schedule, instead of amending the old one; the law did not allow the schedule when filed to be withdrawn without the consent of both parties, but by filing, both the insolvent rendered himself liable to be examined on each of them. In conclusion he did not mean to assert that the insolvent had committed such acts as would render him liable to be punished under either of the cited clauses, but such circumstances had been partially envolved as made it a part of his duty to lay the case before the Attorney-General, who, for the public weal, as well as in justice to the insolvent, was bound to give the case his most serious consideration as to whether he should place him on his defence or not before a jury.

Mr. Broadhurst considered that what had fallen from his Honor strengthened his application for the further hearing of the case being postponed, as even if carried out to its utmost extent before his Honor it was still but a preliminary step, and therefore, the sooner the case was put in a train for being finally disposed of the better, by this mode it would also be unnecessary for him to trouble the court with witnesses to explain those circumstances which at present aroused suspicion, although, according to his instructions, they might be shown to be harmless, and that they did not amount to the offences contemplated by the act.

After a brief consultation between the professional gentlemen on both sides, it was arranged that the offer to pay by instalments with security should be acceded to by the plaintiff.

Mr. Gowland applied to have the insolvent remanded till a future day in order that these proposals should be followed up.

The Court was of opinion that by remanding the insolvent for such a purpose it was making itself a party to the contemplated compromise, but as neither side was going on, the only mode in which it could act was to revert to the original application, and either comply with or dismiss the petition, and as no good grounds had been adduced in support of it, the petition must be dismissed, which was done accordingly, and the insolvent returned in custody on the original writ.

Note

[1] See Robinson v. McLaughlin, 1841.

Published by the Division of Law, Macquarie University