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

Bradley v. Hughes [1847] NSWSupC 8

insolvency, imprisonment for debt, abolition

Supreme Court of New South Wales

Stephen C.J., 28 August 1847

Source: Sydney Morning Herald, 10 September 1847, in Supreme Court Collection, Vol. 2, pp 11-12

BRADLEY, GENT., ONE, &C., v. HUGHES.

In this matter a Judge's summons had been taken out, calling upon the plaintiff to show cause why the order of His Honor the Chief Justice, made herein on the 14th August last, and the writ of ca. sa. issued therein, and all subsequent proceedings had therein, should not be set aside, and why the defendant should not be discharged from custody herein on the grounds --- first, That the defendant was at the time of the making of the said order, an uncertificated insolvent; second, That at the time of the making of the said order he had no money, goods, or valuable securities whatsoever; third, That no summons had been served upon him to show cause against the making of the said order.

Mr. MARTIN appeared for the defendant in support of the summons, and read an affidavit, in which the defendant swore that his estate had been placed under sequestration in the month of September, 1843; and that he had not yet obtained any certificate. It was further sworn, that he had no money, goods, or valuable securities whatsoever; and that no notice of the application for the order had been served on him. There were further statements in the affidavit in answer to the affidavit of the plaintiff on which the order of the Chief Justice was made. Mr. Martin contended --- first, that that order was irregular, inasmuch as the defendant had had no opportunity to show cause against its issuing. It was true that there was nothing in the Act directing that he should be called upon to show cause against any such application; but the practice of the Court in all cases (unless the contrary was provided) was to give every person against whom any application for an order was made, an opportunity of stating his objections to or defending himself from such applications. Might be, as in this case, that the defendant was an uncertificated insolvent, and therefore unable to hold property of any description, and yet a Judge, in ignorance of this fact, which he would at once be made aware of had any opportunity been given to show cause, might make an order which ought not to have been made. Besides the granting of an order for the issuing of a ca. sa was more in the way of punishment now than as the ordinary civil process for the recovery of a debt, for it can only issue where a Judge is satisfied that there has been a fraudulent concealment. Was it therefore consistent with the spirit of English law that any man should be adjudged guilty of fraud, and punished without having had an opportunity to defend himself? The third section of the 10th Vic., No. 7, provided, that if any Judge of the Supreme Court shall be satisfied, by affidavit, that the defendant fraudulently conceals money. Goods, or valuable securities from his judgement creditor, such Judge may order a ca. sa. to be issued. Now the money, goods, or securities here spoken of, must first have been the defendant's goods, that is to say, such goods as could have been levied upon, and sold, under a writ of fi. fa.. And, secondly, they must have been concealed, and not only concealed but fraudulently concealed. Of all this the Judge was to be satisfied. In the present instance there had been no evidence by affidavit sufficient to satisfy. The plaintiff had sworn that he believed that the defendant had the means of satisfying the judgement, but no specific goods were pointed out, nor was any evidence given as to concealment, still less of fraudulent concealment. At most, the plaintiff's affidavit could only raise a slight suspicion, but suspicion was not sufficient to satisfy a Judge behind the back of a party, in a question involving that party's liberty. If it were legal to make such an order ex parte, then the most conclusive evidence ought to have been laid before the Judge. The possession of the goods ought to have been sworn to, and the removal or concealment of them ought to have been clearly shown. But this was not done in this matter. The evidence of the plaintiff merely amounted to a vague surmise, and it was directly opposed to the positive affidavit of the defendant, who swears that he has no money, goods, or valuable securities whatever. It was not to be inferred from the mere fact of a demand having been made upon him, the defendant, by the Sheriff's officer, to point out goods to satisfy that fi. fa. which had been issued, and his neglect to comply with such demand, that he had not only goods, but that he fraudulently concealed them. It was at no time the duty of a person against whom such a writ was issued to assist to officer in carrying it into effect, and the neglect of refusal of a defendant to do what he was never bound to do, even if he had goods, could not be construed into a fraudulent concealment. Yet it was upon such evidence that the order in this case was made. Independently, however, of these considerations, there was the fact of this defendant's estate having been placed under sequestration in 1843, and of no certificate having yet been granted to him, and that alone would be sufficient to show that he ought not to be detained in custody any longer. The 53rd section of the Insolvent Act enacts "That every order made for placing any estate under sequestration as insolvent, shall so soon as made have the effect in law to divest the insolvent, and all persons administering the whole or any part of his estate, for his use and behoof, and to vest in the Chief Commissioner for the use and purposes of the sequestration all the present and future estate, real and personal, and every right, title, and interest, in and to any property real or personal, wheresoever the same may be known or found, which shall belong, or be due to, or be vested in, such insolvent, at the date of making the order, or which may thereafter be purchased, or acquired by, or may revert, descend, or be devised, or come to the insolvent, while the insolvent estate shall remain under sequestration in the hands of the Chief Commissioner." Now, inasmuch as the estate of the defendant was shown to be still in the hands of the Commissioner, it was quite manifest that he could have no goods, money, or securities, which his judgement creditor could levy upon. No judgement creditor could levy upon and sell any goods belonging to his debtor. The mere possession by the debtor of goods belonging in law to some one else, could give the creditor no right to claim those goods. If levied upon and sold by the Sheriff under such circumstances, an action would lie against that officer. Any goods or money, or securities, which the defendant had in his possession, (and it was not shown in any way that he had any) by the 53rd section of the Insolvent Act, were in law vested in the Commissioner or the assignee put in his place. If therefore the defendant had goods in his possession, they were the undoubted property of his assignee. And was it to be said that if a debtor had in his custody the goods of any third party, and did not deliver them up to satisfy a judgement against himself, that he was to be adjudged guilty of a fraudulent concealment of those goods from his judgement creditors, goods which that creditor could have no right whatever to interfere with? In the present case no moneys, goods, or securities, had been shown to exist, and if they had, no evidence whatever had been adduced of concealment or fraudulent concealment, and even if it had been distinctly sworn that the defendant was in possession of goods and had concealed them, still, inasmuch as they could not have been his own, there could have been no fraud upon the creditor, who was neither deprived of any right, nor prevented from availing himself of any remedy to which the law entitled him. It could never be construed to be fraudulent to prevent a person from doing an illegal act, and it would have been clearly illegal in the plaintiff to have levied upon or sold the goods of one person to satisfy the debt of another, or in other words to sell the goods of the defendant's creditors to satisfy a judgement against the defendant. On these grounds he submitted the defendant ought to be discharged.

Mr. DARVALL for the plaintiff, contended that the order for the ca. sa. having been once made, there was no power given to any Judge to rescind it. In the Mesne Process Act, 3 Vic. No. 15, it was specially enacted by the fifth section, that it should be lawful for any person arrested on a suit of capias, to apply to a Judge for his discharge from such custody, but there was no clause in the 10th Vic. No. 7, and in the absence of such a clause, the Legislature must be taken to have intended that the order of a Judge for the issuing of a ca. sa. was to be final and conclusive. But admitting that a Judge had power to enquire into the regularity of such an order, then there was not sufficient to induce His Honor to set the present order aside: for in the case of Smith v. Dunlop, decided in the Supreme Court, in April, 1843, it was held that some stronger evidence than the mere affidavit of the defendant was necessary for such purpose. The affidavits filed in support of the order were quite sufficient, and if not, the affidavits which he would now read would be conclusive. He then proceeded to read two affidavits, by which, from certain facts there stated, the plaintiff swore that he believed the defendant had an interest in a brewery, and in certain stations, but no specific property was pointed out in the said affidavits. Ad to the 53rd section of the Insolvent Act, that in no way prevented an insolvent from having goods which might be levied upon. The fact was that an insolvent might have an interest in goods while his estate was under sequestration, and might even bring actions, and besides, his furniture or tools of trade might have been given to him by his creditors. Any goods in the defendant's custody might have been levied upon and sold, unless the assignee interposed, and unless the assignee interfered, the goods would be the property of the defendant for the purpose of being levied upon and sold. The defendant had sworn that he had no means of living except upon the separate estate of his wife. But he apprehended that any moneys which came into her possession immediately vested in him, and were liable to the payment of his debts, and therefore on his own showing he had some means at his disposal. As to the fact of concealment, it was not necessary that the property should be secretly disposed of, as concealment might take place openly, and there might be a fraudulent concealment, although the plaintiff might be aware of some interest which the defendant had in certain properties. It was manifest, from the affidavits, that the defendant hade the means of paying the judgement in this case, and therefore he ought not to be discharged.

On the point of the want of notice to the defendant of the application for the order, Mr. Darvall was stopped by the Judge.

Mr. MARTIN, in reply, said, that if any furniture or tools of trade had been given by the creditors to the defendant, that ought to have been shown in the affidavit. The defendant had sworn that he had no goods whatever, and there had been no evidence to rebut that statement. As to concealment, supposing that the defendant had goods, or could have had them, there was nothing to show that he had fraudulently prevented the plaintiff from levying upon them. If the plaintiff knew of any interest in breweries or stations, why did he not sell it. There was no concealment if he knew of it. The case of Nathan v. Legge, cited in Stephen's Practice, page 122, was an authority to show that an order to arrest could be set aside independently of any express clause giving the power. He relied, however, confidently on the 53rd section of the Insolvent Act, which left his Honor no alternative but to order the defendant's discharge.

The CHIEF JUSTICE said, he would confer with the other Judges before he decided, and on the Monday following he discharged the summons without costs, reserving leave to the defendant to apply to the Court on the point submitted under the 53rd section of the Insolvent Act, as it was a matter requiring further consideration. He thought that, as between the insolvent and his creditor, there might be property liable to a levy in the insolvent's custody, which property might be sold unless the assignee interposed. He was also of opinion, that the affidavits were sufficient to show the fraudulent concealment of goods from the judgement creditor.

On the same day, Monday, the 30th of August, a petition was presented on behalf of the defendant to Mr. Justice Dickinson for an order to place his estate under sequestration, but the Judge refused to accept such surrender, inasmuch as the defendant being already insolvent could have no estate. The Chief Justice had declined to accept the surrender before on the same grounds.

Mr. MARTIN pointed out the hardship and inconsistency of keeping a person in custody because he had property which he fraudulently concealed, and refusing to accept the surrender of his e state because he could have no property, the effect of which would be a sentence of perpetual imprisonment.

Mr. Justice DICKINSON could not help it. It did not appear to him that he could accept the surrender of an estate where there was no estate.

October 1847

Source: Sydney Morning Herald, 8 October 1847, in Supreme Court Collection, Vol. 2, p. 14-15

BRADLEY, GENT., ONE, &c., v. HUGHES.

In this case the defendant had allowed judgment to go by default, to an action brought by the plaintiff, an attorney, for work done for the defendant as such. A fi. fa. was issued in due course, but nulla bona was the tenor of the return made to the same; upon which coming in the plaintiff applied to his Honor the Chief Justice for an order, under the 3 rd section of the 10 Vic., No. 7, (an Act to simplify the law abolishing Imprisonment for Debt,) for a writ of ca. sa. to issue against the defendant for having fraudulently concealed property. This application was founded upon affidavits, which, to the satisfaction of the said Judge, made out that he had so fraudulently concealed property; and accordingly the ca. sa. issued, on the 14th of August last. On the 28th of the same month, the defendant took out a summons, calling upon the plaintiff to show cause why the said ca. sa. and all subsequent proceedings should not be set aside; and why the defendant should not be discharged from custody, on the grounds that at the time of the ca. sa. being issued the defendant was an uncertificated insolvent; that also at the time of the ca. sa. being issued, he had no property. This second summons was duly argued and debated on both sides, and was dismissed, but without costs; leave however being reserved to apply to the Court on a point made at the hearing, as to whether an uncertificated insolvent could have property to conceal.

Messrs. FOSTER and LOWE now appeared on behalf of the defendant to set aside the said ca. sa. and all subsequent proceedings; upon the same grounds as were made use of at Chambers for a similar purpose.

Mr. DARVALL, who appeared for the plaintiff at once took a technical objection to the hearing of the application, on the ground that the matter had already been once adjudicated upon, and that adjudication under the Act is final and conclusive.

This objection led to some discussion, and there seemed to be a difference of opinion on the bench on the point; when His Honor the CHIEF JUSTICE intimated, that the whole case had better be proceeded with.

Messrs. FOSTER and LOWE then contended, that although the particular power, by virtue of the 10th Victoria 7. sec. 3, had been delegated to a s ingle Judge to issue a ca. sa., upon being satisfied that the party against whom it was sought had fraudulently concealed property --- yet the Court still possessed the inherent right to examine and to review the grounds on which the Judge was so satisfied; and therefore now the full Court had such a jurisdiction as it was asked to exercise. It was next urged that if the present plaintiff, whose debt accrued since the defendant filed his schedule, should succeed in detaining him in gaol, he might be paid the whole amount of his debt in full, whereas the other creditors might have only been paid one shilling in the pound. Again, looking at the very stringent clauses of the several Insolvent Acts, as to insolvents, whilst uncertificated, holding property or disposing of it, it could scarcely but be imagined that it was the intention of the Legislature, when this particular Act was framed, that it was meant to include insolvents within its construction. \It could be only strictly construed to apply to a creditor, other than one who was insolvent and was seeking the protection of the Insolvent Laws, and who from the time of his filing his schedule could not legally possess property; and this latter fact was adduced as an additional reason to show that an insolvent was not contemplated by the ct, for he therefore could have no property to conceal. Several affidavits were read, which sought to answer those made on the other side; and their object was to negative the presumption that the defendant had property or was concealing it.

Mr. DARVAL contended that the application must fail on various grounds. At common law, the writ of ca. sa. was issued at the mere will and pleasure of the party seeking to put it in motion; it was then a mere ministerial act, but now, that writ can only be issued in a peculiar way and under certain circumstances; and one of those circumstances, --- the necessary ground-work on which the writ is granted is, that the defendant has fraudulently concealed property; and of this fact a Judge must be satisfied on affidavit; and then the Judge order it to issue. The writ therefore ceases to be a ministerial act, and is now the act of the Court. The Act in question does not, as some Acts giving certain powers to a single Judge do, contain a clause of appeal. That clause, it must be inferred, has been intentionally left out, for one of the Acts relating to arrest, and which has been repealed by the Act in question, did contain some such clause. Affidavits were then read on the merits, which flatly contradicted the case made on the other side. In the course of the argument, Young v. Rushworth 8 A. and E.; Till v. Wilson 7 B. and C.; Austin v. Dunfard 9 D. and R 601; Fowler v. Down 1 B. and P. 44; and a case in 2 B. and C. 801. And lastly if the Court should be of opinion that it has jurisdiction to hear the application, which must be by way of appeal, the Court can only entertain the same facts that were laid before the single Judge at Chambers, and this would exclude affidavits that were made since the matter was heard in Chambers.

The JUDGES after some deliberation, were unanimously of opinion, that the 10 Vic. 7, did not confer any jurisdiction on the Court, to review matters that came before a single Judge, in respect of and by virtue of that particular Act. The application was therefore discharged, but without costs.

 

Published by the Division of Law, Macquarie University