insolvency act 1890. - australasian legal …. 1102.] insolvency act 1890. 1429 any bail security...

1428 INSOLVENCY. [54 VIOT.

INSOLVENCY ACT 1890.

54 T^ICTORIA. An Act to consolidate the Law relating to Insolvents No. 1102' , , , . T , L ,

— and their Estates. [10th July, 1890.]

T ) E i t enacted by the Queen's Most Excel lent Majesty by and with Statute 187i, jy ^ advigg ftn(j consent of the Legislative Council and the Legis

lative Assembly of Victoria in this present Par l i ament assembled and by the authori ty of t h e same as follows ( tha t is to say ) :—

Short titta com- 1. This Ac t may be cited as the Insolvency Act 1890, and shall d[tbto£ent ond come into operation on the first day of August One thousand eight

hundred and ninety, and is divided into Parts and Divisions as follows:—

PART I.—Constitution of Court ss. 5-19. PART II.—Practice ss. 20-33. PART III.—Voluntary Sequestrations ss. 34-36. PART IV.—Compulsory Sequestrations ss. 37-51.

" Division 1.—Assignees and Trustees, their Appointment and Election ss. 52-58.

Division 2.—Vesting and Realization of Estates ss. 59-105.

Division 3.—Proof of Debts ss. 106-122. Division 4.—Distribution of Estate ss.

123-127. PART VI.—Insolvent ss. 128-133. PART VII.—Examination of Insolvent and other Persons ss.

134-137. PART VIII.—Certificate ss. 138-152. PART IX.—Liquidation by Arrangement s. 153. PART X.—Composition with Creditors ss. 154 and 155. PART XL.—Offences against Insolvent Law ss. 156V163.

Repeal. 2 . The Acts mentioned in the Schedule to this Ac t to the extent Schedule to which the same are thereby expressed to be repealed are hereby

repealed. Provided that such repeal shall not affect any sequestration composition liquidation appointment election application rule regulation order affidavit or declaration made, or any resolution passed, or any petition presented, or any attachment disclaimer registration or service effected, or any notice given, or any certificate or summons issued, or

PART V.— Adminstration < of Estate.

No. 1102.] INSOLVENCY ACT 1890. 1429

any bail security warrant or other written instrument taken or granted, "Insolvency

or any warrant of attorney cognovii actionem, alienation contract covenantstStati 1S71-" conveyance gift delivery transfer se t t lement surrender release bill of sale mor tgage pledge or any deed whatsoever in force entered into or executed under the said Acts or ei ther of t h e m before the commencem e n t of this A c t ; provided also t h a t any person who shal l before the commencement of this Ac t have committed a n act of insolvency under t h e "Insolvency Statute 1 8 7 1 " sha l l be deemed to have committed a n act of insolvency under this Act .

3. Subject to the provisions of Part IV. of the Supreme. Court Act Act nno tt affect 1890, nothing in this Act contained shall affect the provisions of any Jf BfuJ/w*/" Act now in force relating to the winding up of companies for trading ****Aet oo-or mining purposes.

The Transfer of Land Act 1890 shall with reference to estates-sequestrated under this Act be construed as'if the same had been passed after the coming into operation her-eof.(o>

Where in any Act of Parliament passed before the commencement Previous Acts n .r • A j. i1 „ , J ^C „„„4.~*+;„„ y™ „J™J, '«„4 .^« s.f relating to Insol-

ol this Act mention is made or any sequestration or adjudication 01 veneytoappiyto sequestration or insolvency or chief or other commissioner of insolventthlsAot-estates or official or creditors' assignee or insolvent, the same shall be construed with reference to sequestrations adjudications of sequestration judges assignees trustees and insolvents under this Act.w

4. In the construction of this Act unless it be otherwise expressly Definition of

provided or unless the subject or context requires a different con- J^1^ struction—

"Adjudication of sequestration" shall mean an order absolute "Adjudication." under Part IV. of this Act.

" Chief clerk" shall mean chief clerk of the court of the district "Chief clerk," in which the proceedings are being prosecuted, and in Parts n- '•wa-IX. and X. shall mean the chief clerk of the district in which the debtor might present a petition for sequestration.

" Court" shall mean the Court of Insolvency. "Court." "Debt provable in insolvency" shall mean any debtor liability ;• Debt provable

or claim made provable by this Act against the insolventminBOlTency'" estate.

"District" or "the district" shall mean the district of the "District." Judge of the Court of Insolvency in which the insolvent respondent or debtor shall reside or to which the proceedings may be transferred; and an insolvent respondent debtor or other person shall be deemed to reside in that district in which he has lived or carried on business during the six months immediately preceding the sequestration or debtor summons or for the longest period during such six months.

"Insolvent estate" shall mean the property vested in an assignee -• Insllvent or trustee under this Act. estate."

" Judge " shall mean judge of the court of insolvency of the " Judge." district in which the proceedings are being prosecuted.

(a) Upon the trial of an insolvent for an offence him.—Reg. v. McCooey, 5 V.L.K. (L.), 38. under this Act, his deposition, taken at a com- (b) The Crown is not named, and ia therefore pulsory examination taken under sections 134 and notboundbythisAct.—Reg. v. Griffiths,9 V.L.B, 137 of this Act, is admissible as evidence against (L.), 45.

1430 INSOLVENCY ACT 1890. [j54 V I C T .

"Insolvency Statute 1871." "Older of or for eemiestifttion" ana "sequestra. Won."

"Property." tt2 & 33 Vict, c. 71 s. 4.

" Respondent."

' Rules." * Prescribed.**

(' Order of or for sequestration " and " sequestration " shall mean and include an order of sequestration under Part III. and an order nisi under Part IV. of this Act; " before " or " after sequestration " shall mean before or after an order under Part III. or an order nisi tinder Part IV. has been made ; and " before " or " after adjudication of sequestration " shall mean before or after an order absolute under Part IV. has been made ; and an estate shall be deemed to be " sequestrated " when an order under Part III. or an order nisi under Part IV. has been made and an estate shall be deemed to be " adjudged to be sequestrated " when the order nisi has been made absolute. .

'Property" shall mean and include money goods things in action land and every description of property whether real" or personal, also obligations easements and every description of estate interest and profit present or future vested or contingent arising out of or incident to property as above defined.

' Respondent" shall mean any person against whom an order nisi under Part IV. has been made.

'Rules" shall mean the rules for the time being in force or to be made under this Act, and "prescribed" shall mean prescribed by the rules.

Court of Insolvency. Ib. 8, 6. See it*, s. 66-

Jurisdiction of

J Vm 8m I •

P A R T I . — C O N S T I T U T I O N O F C O U R T .

5. A court of record, to be called the Court of Insolvency, is hereby declared to have been and the same is established in and for Victoria. The Court of Insolvency shall be a court of law and equity/M and shall have a seal wherewith shall be sealed all records documents proceedings and copies thereof which may require sealing, and whereof all courts judges and justices shall tafee judicial notice; and such court shall for the purposes of this Act have and use all the powers rights incidents and privileges of the Supreme Court of Victoria; and the judges of the said court when sitting in chambers for the despatch of business shall have and may exercise all the same and the like powers as are now possessed by any judge of the Supreme Court sitting in chambers; and all barristers-at-law and attorneys of the Supreme Court may practise and be heard in such court subject to the rules.

6. The court shall have original jurisdiction and control in all matters of insolvency save where it is otherwise by this Act expressly provided, and may hear and determine any matter relating to the disposition of the insolvent estate or of any property taken under the sequestration, and claimed by the assignees or trustees for the benefit of the creditors, or relating to any acts done or sought to be done by the assignees or trustees in their character of assignees or trustees by virtue or under colour of the sequestration, and also in any matter of insolvency as between the assignees or trustees and any creditor or other person appearing or otherwise submitting to the jurisdiction of

(a) The making the Court of Insolvency a court c. 5.—ire re HecUey, 2 V.E. (I.), 34; and see of equity, &c, does not confer a jurisdiction to Dallimore v. The Oriental Bank Corporation, set aside a settlement as fraudulent under 13 Eliz. 5A.J.R.. .38.


the said court/"* and in any other matter where the court has jurisdiction "jmatmes by virtue of this Act. statute mi."

7. The Governor •with the advice of the Executive Council may, Appointment in case of the death resignation or removal of any judge of the o" j»$ge. on' court of insolvency, appoint a fit person in his place to be a judge of/&.». s. the said court, who shall be a barrister-at-law of Victoria of seven years, standing, or who shall have practised as an advocate or barrister either in England Ireland Scotland Victoria or any of them for such period as shall make an aggregate of seven years.

A judge appointed under this section shall not during his con-jud^e not to tinuance in such office practise as a barrister-at-law or be capable of j^'steror'sit being elected or of sitting as a member of the Legislative Council or inr»fllt™ont. Legislative Assembly. cfnsl el.3 Vwt*

8. All judges of county courts in Victoria shall be judges of the judffes of the court, and such court may be held by and before any of the judges C!?M'(. thereof at different places in Victoria at the same or at different times.

The Governor in Council shall and may, in case of necessity, power toappoint appoint some fit and proper person possessing the qualification afore-od™sjuds*3' said to act for and in the stead of any of the judges of the court; and such person when so acting shall have use and exercise all the powers authority jurisdiction rights and privileges of the judge in whose stead he is appointed.

The Governor in Council may from time to time by notice in the ^Districts tobe Government Gazette assign one or more districts to all or such one or awCTnor more of the judges of the court as he may think fit, and appoint places at which and the periods within which the court shall be held within such districts, and may in like manner revoke any such appointment or alter such places and periods/81'

9. Any judge after sequestration under Part I I I . of this Act or Power of judge adjudication of sequestration at the request in writing of the majority prJo eedings in number of the creditors who have proved debts shall and upon the u0n

etoSothertm' like request of the assignee or trustee may direct that all or any part district. of the proceedings in any estate attached to his district shall be conducted in some other district.*0'

10. The Governor in Council may, subject to the provisions of the Power to appoint Public Service Act 1890, appoint one or more chief clerks of the court , . i e t^" *• for eacli district, and any such chief clerk may remove, and upon the death resignation or removal of any such chief clerk may appoint another in his stead.

(a) This section relates to the insolvent's estate quently transferred to another district prior to which reaches the hands of the assignee, not to such application: Held, the judge of the district property in the hands of the insolvent or anyother to which the proceedings were removed had juris-person which ought to have reached his hands.— diction to entertain the renewed application.—In In re lioiriley, 3 V.L.R. (I.), 12. re /fwme&erg, 8 VX.R. (I.), 7.

(ti) The jurisdiction of the judges is limited to Where DJI order has been duly made transfer-the districts assigned to them respectively.—Reg. ring the proceedings under this section to another v. Poole, 3 V.R. (L.), 181; and see Bank of Aus- district, a subsequent order made ex parte, upon f.ralaMa v. Porch, 2 A.L.T., 148. the application of the official assignee, directing

(c) Where a person was made insolvent in one that no further action should be taken on the district and his application for a certificate was former order: Held, on appeal bad.—In re Cotton, refused by the judge of that district, butwith leave 6 V.L.B, (I.), 24. to apply again, and the proceedings were subse-

° VOL. I I . Z S

1432 INSOLVENCY ACT 1890. [54 VICT.

"jiwoiuew 11. Any person desirous of appealing from any orderW of the Statute 1871" cour t sh&U be entitled to appeal against such order to the Supreme Appeal to Court upon giving notice within fourteen days® next after the same Supreme Court. i n i t i j? i i * j_ j_i *±. ± i*\

shall have been pronounced of such desire to the opposite party'"' together with a statement in writing setting forth briefly and distinctly the grounds on which it is intended to support such appeal/* and in all cases except appeals against the granting suspension or refusal^of any certificate upon also payinsr into court^ within the like time the sum of twenty pounds as security for costs to abide the event of such appeal; and the Supreme Court may on such appeal confirm reverse or vary such order, with or without costs as it may think fit; and such appeal shall be heard at such times and subject to such directions as the judges of the Supreme Court shall by any rule or order direct: The judge who made the order appealed against shall forward to the Supreme Court a copy of his notes of the evidenced taken before him together with a statement of his reasons for making such order.

No proceedings under any order so appealed against shall be stayed pending such appeal except by the order of the court on such terms as to costs security or otherwise as the said court may think proper to impose.

12. The Governor in Council may appoint any two of the judges of the said court together with a law officer two of whom shall form a quorum to frame rules for the following purposes:—

(i.) For regulating the practice and procedure of the court of insolvency, and the fees to be paid therein, and the several forms of petitions affidavits orders summonses warrants commissions and other proceedings to be used in the said court in all matters under this Act.

(n.) For regulating the duties of insolvents the trustees and assignees and other officers of the court.

Appeal not to operate as stay of proceedings.

Power to make

(a) An appeal to the Supreme Court lies from an order in chambers of a district judge of the court of insolvency. Per Mnlesworth, J.—'Where theorder is proved to have been made erroneously, I think it should be open to review upon application promptly to the judge who made it."—In re Glarton, 5 "v^Tj.R. (I.), 47.

An appeal from an order of a judge will not be entertained where no order has been drawn up. —In re Murphy, 1 V.L.R. (I.), 50.

An irregularity in the action of a judge as to the time of hearing an application for a certificate is not a matter of appeal.—In re Were, 6 V.L.R. (I.), 43.

This includes an order under section 55 confirming the appointment of a trustee.—In re Mackay2 2 V.R. (I.), 22.

(6) Service of notice of appeal upon the respondent personally after 3 p.m. on the last day held good.—In re Gddsmith, 5 V.L.R. (I.), 18.

(c) I t is sufficient if served on the attorney of the opposite party.—Inre£>alli>tu>re,5 A.J.R., 1.

(d) Where the facts do not sufficiently appear upon the judge's notes of evidence and reasons, the court may remit the case for further re-statement, with power to the judge to re-hear the case.—In re Rwldock, 5 V.L.R. (I.), 51.

(e) Where the grant of a certificate is suspended, the proper time for appealing against the ultimate grant of the certificate is immediately after the suspension, and if no appeal be then made the certificate will, at the expiration of the period of suspension, issue as of course.—In re Mttrray, 2 V.R. (I.), 11.

(f) The deposit upon an appeal may be paid into either the court of insolvency or the court of appeal, but for convenience should be paid into the court of insolvency.—In re Thoneman, 13 V.L.R., 204.

This deposit of £20 may properly be paid into the court of insolvency from which the appeal is brought.—In re Nichol and Po/yroux, 4 V.L.R. (I.), 81.

This provision does not apply to any appeal about a certificate.—jfe Dyte, 2 V.L.R. (I.), 42.

Upon an appeal by an insolvent from an order refusing his certificate and sentencing him to imprisonment, no deposit is required.—In re. Goldsmith, 5 V.L.R. (I.), 18.

{g) The provision as to forwarding notes of evidence only applies to cases where evidence is taken, and does not refer to cases of orders made without evidence.—In re Mackay, 2 V.R. (I.), 22.


( I I I . ) For regulating the transmission of orders depositions and "insolvency other documents, and the transference of proceedings st&Me 1S71-" from one district to another,

(iv.) For regulating service of process of any kind issuing out of the said court, including provisions for substituted service,

(v.) For regulating the proceedings at meetings of creditors the notice to lie given thereof and the places where the same shall be held.

The rules may prescribe regulations as to the valuing of any debts s«j 32 & s3 viot. provable in insolvency as to the valuation of securities held by credi- °*71 "•78-tors as to the giving or withholding interest or discount on or in respect of debts or dividends and as to any other matter or thing whether similar or not to those above enumerated in respect to which it may be expedient to make rules for carrying into effect the object of this Act. And any or all of such rules may be repealed varied or altered as occasion may require ; and all rules made under the powers hereby given shall be promulgated by and take effect from the date of publication in the Government Gazette. So far as rules do not extend the principles practice and rules on which the Supreme Court has heretofore acted'in dealing with insolvency proceedings shall be observed

All rules to be made under this section shall be laid before both Houses of Parliament within ten days after their being promulgated, or if Parliament be not then sitting as soon as Parliament shall thereafter assemble for the despatch of business, and allsuch rules shall be judicially noticed/"*

13 . The judges of the Supreme Court or of the court of insolvency Power to award

may in all matters before them whether in court or chambers award l?5ts'„ •,-1 1 J> i t • 1 J . 1 i - I i J * - * ' M -

either out 01 the insolvent estate or against any person or persons such costs as to them shall seem just .w

14. The court may commit any insolvent or .other person whom Powertocommii it may believe to have committed or who may be charged before i t with £f ,. the commission 01 any 01 the oitences specified in Part XI. of this Act to take his her or their trial and may grant or refuse bail to such insolvent or other person, and for the aforesaid purposes shall have all the powers of a police magistrate.

15 . In any insolvency or any other proceeding within the inris- Questions raised diction of the court the parties concerned or submitting to s u c h 7 j i l & jurisdiction may, at any stage of the proceedings by consent, state any question or questions in a special case for the opinion of the court, and the judgment of the court shall be final, unless it be agreed and stated in such special case that either party may appeal; and the parties may, Paymentof if they think fit, agree that upon the question or questions raised by SSHSf t such special case being finally decided a sum of money, fixed by thepropertyby parties or to be ascertained by the court or in such manner as the said Judgment being court may direct, or any property or the amount of any disputed debts iven ' or claim shall be paid delivered or transferred by one of such parties to the other of them either with or without costs.

(a) For existing rules, see Appendix to this Act, them, and also to questions of disputed ownership page 1495, post. of property. But we think that this section does

(b)Per ffiginbotham, CJ.—"Tee terms of this not extend to the case of a person who attends section are large. They apply generally to and for examination under Part VII. in the character include the numerous cases in which the insolvent of a witness merely, so as to render him liable and the trustee or assignee and creditors are en- to have the costs of such examination awarded gaged as parties in matters in contention between against him."—Exparte Watsoti, 15 V.L.R., 740.

2 S 2

1434 INSOLVENCY ACT 1890, [54 VICT.

lb. ak lfl.

16. No action^ shall be brought or suit instituted in any court *. 17. of law or equity t0 recover any chattels personal taken or claimed by b™rehontobe any ass^§Dee or trustee or the value thereof or any damages" in chattel'of 'aspect oi the taking thereof, provided the value of such goods and taken under the chattels or si^h damages do not exceed the vam*; 0 l ^ 0 hundred and

ramivto'niake i y , " i , .-. v t : MI JJ AI r o r I* oider in the chattels upon the application^ of the assignee trustee or any person**' matter. claiming to be entitled thereto and may make such order for the

delivery up to or retention of such chattels by the assi<niee or trustee or such person or if the same shall have been sold then for the payment of the value thereof and if any damages are claimed for the payment of such amount as may be awarded by the court out of the estate of the insolvent or by the assignee or trustee or such person as the court may think fit to the person entitled thereto to

. - ,ii , »,i . . \ i n , n i • ,i

orders how to be 17. All orders of the court or a nidge shall be enforced in the same enforced. „„ nvdprs of r h p Suni-Pine C o u r t n r T f T i u < W of t h e Srmrpirip Co t n * *& vi are now enforced or in such other mode aa may ye erescribed/"1

c. 71 s. «c . g ™ coTirt mav in all matters within its iurisdiction take the betaken, whole or any part of the evidence either viv& voce on oath or by

interrogatories in writing or upon affidavits or by commission. The evidence of persons examined before the court shall be reduced to writing- bv HIP imW (A)

, f t A 1 ] , i ' . , , . , . , , . , , .

aubjeottoAot' • ••. ' f p ,. ™c ^ r F h a u s ?*? enizens and persons having n. a. 20. r11)1? ef6 u ^Filament snail De capaD e o becoming insolvent or be seeib.also, 11a e to_ e maae insolvent unaer jnis ct, and sn* (1 be subject to all

LAIC JJAVVlQlOilQ LAlt^lcUA i i l l u . e l l L l b l ^ U LU M I e fcUC-MLo Llit^lCAJJr g l V c L l .

Copy of or PABT II .—PKACTICB. sequestration to A A m i I ^ P I I i 11 o j i * j i i. i a

besenttothe SO. Ihe chiei clerk snail forthwith forward a copy oi every Gerleni, order of sequestration under Part I I I . of this Act or adjudication of

(a) This section does not apply to actions of section for property seized by the assignee of her trover.—Cain, v. Allen, 4 A.J.R., 158. husband (an insolvent), as being her separate

(b) In the case of chattels delivered by way of property, need not apply by her next friend, and fraudulent preference, this jurisdiction arises only Rule 41 does not apply to her.—In re Summers, ex where they remain specifically at the date of the •parte Hasher, 10 V.L.R. (I.), 78. sequestration, and where they might have been (/) The wife of an insolvent purchased with claimed by the assignee though not actually money advanced by his sister a partof his stock in claimed before conversion.—In re Thompson, 5 trade from the assignee, and carried onthebusiness A.J.R., 3. See In re Maley, 4 A.J.R., 49, as a upon the same premises altering the name to hers, case where this section does not apply. purchasing stock, paying rent, and being assisted

(c) " V a l u e " means the price which can be by the labour of the insolvent, of all of which the obtained for the chattel and in the case of pawned assignee was aware. Upon motion by the assignee goods would not be determined by the amount an order was made, and affirmed on appeal, for the advanced upon them. Damages cannot be delivery up to assignee of the stock in trade as awarded without deciding the right of property, after acquired property of the insolvent.—In re and the right of property can be decided only Mtdeahy, 5 V.L.R. (I.), 7. concerning chattels of less value than £250. (g) The court may issue a writ of Ji. fa, under Where the value exceeds that sum, the court this section.—Slack v. Winder, 5 A.J.R., 72. has no jurisdiction.—Cain v. Allen, 4 A.J.R., (h) There is nothing in this section to render 130. inadmissible written admissions or statements

(d) Where an applicant under this section which have been used in other proceedings.—In omits from his notice of motion the note in form re Mcdey, 4 A.J.R. , 7. No. 60 to the rules, which states notice of («) As soon as the estate of a debtor has been opposition to be necessary, he cannot at the sequestrated either voluntarilyor compulsorily, all hearing object to the trustee being heard, as he the provisions of this Act, necessary for the pur-has given no such notice of opposition.—In re pose of forcing an examination into his affairs, are Acock, ex parte Dixon, 2 V.R. (I.), 45. applicable to his case whether lie be resident in Vic-. (e) A married woman who applies under this toria or abroad.—Inre Thoneman, 13 V.L.R., 204.

No. 1102.] INSOLVENCY • ACT 1890. 1435

sequestration to the Registrar-General who shall, cause the same "imdvcnsy n y to be registered as the rules may direct. fa!*" W71

21. The duly authorized agent of any creditor whether a corpora- Agentot crediior tion • or not shall have, authority to do all acts matters and things creator." authorized or required to be done by any creditor under or by virtue of *&• «•M-this Act as fully and effectually as such creditor could or might do.(a> t^iiVm.^1"

22. Any petition for sequestration of the estate of any debtor to a signature by firm signed with the name or style of such firm by any partner thereof J^j w shall be held to be duly signed for the purpose of any such petition, and any acceptance of any offer of composition or security for composition or any release and any authority to vote or to do any act matter or thing under this Act shall be deemed duly signed if signed with the name or style of the firm by any partner thereof; and any proof of debt may be made by one partner on behalf of the others.

23. In reckoning: the votes at- any meeting of creditors, the vot otpirtnera i. j- n ° i *V • , , • . . j . • , J.. oradroinia'

partners oi any firm and any persons in whom the joint administration tutors. of any estate is vested as aforesaid shall be entitled to one vote only'*•***• and shall be considered as one person.

24. The judges of the Supreme Court may make rules in the same supreme court way as rules of the Supreme Court may now be made for the purpose ^ n ^ c r u l e 9

of giving effect to this Act in all matters in which jurisdiction is given ' ' • by this Act to the Supreme Court or a judge thereof.

25. In all suits or actions and in all informations under this Act, Proof of insol-

where it shall be necessary to allege or prove that any party became or ^5^™™^ was insolvent or that his estate was sequestrated or adjudged to be proceeding. sequestrated, it shall be sufficient merely to allege that such partyn- *• being insolvent within the meaning of this Act his estate was sequestrated, without setting forth any order for sequestration or setting forth or proving any petition or any petitioning creditor's debt or act of insolvency; and proof of such allegation may be made by the production of an office copy of the order of sequestration or adjudication of sequestration and (on proof of the identity of the party therein named) such proof shall be sufficient for the purposes of such allegation.

26. When the votes of creditors are to be counted in number, no mat creditors creditor whose debt is below twenty-five pounds sterling shall be fnnumb d0

reckoned in number, but the debt due to such creditor shall be computed what in value. in value; and in all cases in which any deduction is directed by this J*'sST" Act to be made from the amount of the debt of any creditor, the vote of such creditor shall still be counted in value to the extent of the balance remaining after such deduction, and such creditor shall also be reckoned in number provided such balance amounts to twenty-five pounds and upwards.

{a) Where a petition is presented, signed by an (b) Where the petitioning creditor is a partner-agent, the authority of such agent must be proved, ship firm, it is sufficient for one partner to sign' In the case of a petition on behalf of a corporation, the petition in the name of the ffrm. I t is un-• it is sufficient if the seal of the corporation be duly necessary that the order nisi should disclose on its affixed and attested.—/» re Jenkins, 15 V.L.R., face the names of the individual partners.—In re 271. Vajy, 13 V.L.R., 172.

. 1436 INSOLVENCY ACT 1890. [54 VIOT.

" Insolvency Statute 1871" I. 28. Affidavits.

Judicial notice to be taken of signature of judge or chief clerk and of the seal of the court. lb.8. 29.

Commissions to take evidence to be under hand of judge and seal of court. H>.s. 30.

Applications for summonses &c may be before judge in chambers. Subpcenas may be issued by clerk of court. Act Jfo. 411 s. 4.

Want of form not to invalidate proceedings. lb. & 31.

27. Any affidavit or declaration required to be sworn or made in relation to any matter under this Act may be lawfully sworn:—

(i.) In Victoria before any commissioner of the Supreme Court for taking affidavits,

(n.) In any other place under the dominion of Her Majesty before any court judge or person lawfully authorized to take affidavits.

(m.) In any foreign parts out of her Majesty's dominions before a magistrate the oath being attested by a notary or before a British consul or vice-consul,

(rv.) Any affidavit of any prisoner in any prison or gaol in Victoria to be used in any matter under this Act may be sworn before a commissioner of the Supreme Court for taking affidavits or before the keeper of such prison or gaol, and every such keeper is hereby required and authorized to administer the oath upon any such affidavit without fee or reward.

And all courts judges justices commissioners and persons acting judicially shall take judicial notice of the seal or signature (as the case may be) of any such court judge magistrate commissioner keeper or other person attached appended or subscribed to any such affidavit.

28. All courts judges justices and persons acting judicially shall take judicial notice of the signature of any indged or chief clerk appointed under this Act and of the seal of the court subscribed or attached to any judicial or official proceeding or document to be made or signed under this Act.

29. All commissions to take evidence under this Act shall be under the hand of a judge and the seal of the court, and shall if the witness reside in Victoria be directed to a chief clerk of the court, and if the witness reside out of Victoria to such person as the court may think fit.

30. Applications for summonses or warrants of the court under this Act and all ex parte applications to the court may be heard and disposed of by a judge sitting in chambers. Provided nevertheless that summonses in the nature of subpoenas for'witnesses may at any time be issued by the chief clerk without the order of a judge, and shall have the same force and effect as if issued under such order.

31. No petition order summons warrant commission or other proceeding or document of or to be used by or before the Supreme Court or court of insolvency or a judge thereof shall be invalidated by reason of any want of form or omission therein**) unless the court or judge shall

{a) The court takes judicial cognizance of the signature of one of its judges to an order nisi for sequestration, and of the office by virtue of which he signed it.—In re Cooper, 2 V.L.R. (I.), 82.

(b) Where an order niH for sequestration was made "upon reading the petition of P.X.," with-out also stating that the petition was presented or addressed to any person, but the petition itself was regular in that respect, upon the hearing the court amended the order accordingly. fit re-Johnson, 4VX.R, (I.) 69.

When the petitioning creditor's debt is stated in the order nisi as "for goods sold and delivered," an objection to it as informal, not being "for

money payable for goods, 4c , , " is not sustainable. ~ / n re Wolter, 4 V.L.R. (I.), 75.

Where an order nisi for the sequestration of an estate recited that ft petition had been presented, but did not show that a petition had in fact been addressed to the judge signing the order, the court held that, in the absence of such petition, the order could not be amended, and, therefore, it was discharged. The court takes judicial cognizance of the signature of one of its judges to an order nisi for sequestrating and of the office by virtue of which he signed it.—In re Cooper 2 V.L.R. (I.) 82.

An insolvent resided,in the Eastern Insolvency District. The order nisi named A. as the assignee


be of opinion that substantial injustice has been caused by such want of "insolvency form or omission and that such injustice cannot be remedied by order of statutt 1&7i" the court or judge fa> and every warrant of the court*** to do any act or to take or keep any person in custody if in the form prescribed by the rules shall be deemed and taken to be good valid and sufficient in law.

32. All orders of the court office copies summonses and warrants Order8 fro. to be

shall be under the seal of the court and signed or certified by a chief clerk. lf^ed™ A A T I J U , 1 , 1 1 r-l . * J . , Ik, B. 3£L

««• wnen the court has power under tnis Act to sentence appre- cnattmtrt t0 hena or commit any person to prison the oomimtment may be by "8™1* warrant directed to sum person as the court may think nt and to such S e ^ ^ 3S Viot

\i n i . Jfc . . ' ? . : ; ' , xpeaie t. e y c.es.77. snail De surncient autnonty to sucn person to act as tnerein directed and to tne Keeper oi sucn prison to detain tne person sentenced appred

34. A judge or chief clerk, upon petition to the court in writing Ajudgocrcbief of any person setting forth that he is insolvent and desirous of surrender- j V<iurSiereof ing his estate for the benefit of his creditors, may upon proof thereof to the *sta*eo' »ny i * A - J* i i J> 1 i t J i . i i person by peti-

his satisfaction accept the surrender of such estate and by order under tron declaring his hand place the same under sequestration in the hands of one of the indent, assignees the costs of such sequestration shall when taxed be allowed J*- «. &3 and paid by the assignee or trustee out of such estate.

35. A judge or chief clerk of the court may, upon the like petition surrender by of any person legally vested with the administration of the estate of J^htUe™ ,. any person deceased or with the estate of any other person situate in •"'/"^j01! °[,Jho

Victoria in trust for creditors stating the insolvency of such estate or p,, „. 36, upon the like petition stating the insolvency of the estate of any firm trading or having any estate or effects within Victoria made by the greater number of the partners of suchfirm^ who at the time of presenting the petition are within Victoria, upon proof thereof to his satisfaction accept the surrender of any such estate and place the same under sequestration in manner aforesaid f® and after the order for any such sequestration the like proceedings^ shall and may be had and take place concerning such estates and the persons in whom the administration

of the estate, describing Mm as "an official (6) A warrant of the court committing for con-assignee for the colony of Victoria." I t was tempt need not prescribe any term of imprison-admitted that A. was an official assignee for the merit.—In re Slack, 2 V.R. (L.), 64. central district only. Held, that the objection (c) Allegations in an order nisi that the debtor was fatal-—Ee Hehir, 12 A.L.T., 4. called a meeting of his creditors under Part I I I . ,

(a) Where the petitioning creditor's debt is and that at such meeting he was requested to sur-alleged as upon a judgment of the Supreme Court render his estate under the Act, not stating under-upon two bills of exchange, but when produced it what Part of the Act, may be amended if required, appears to be a judgment entered up upon a cer- —In re Webster, 5 V.L.B. (L), 16. tiocate of a judgment in the county court, this is (d) As to whether a majority of partners, by such a variance as the court will not amend.—In sequestrating the partnership estate, sequestrate re Synnot, 4 V.L.R. (I.), 89. Semble, that the also the separate estate of the majority, gwsre, omissions which can be supplied under this section see Bates v. Loewe, 1 W. & W. (E.), 7. are omissions of words accidentally dropped out (e) See In re Yorston, 1 W. & W. (I.), 96. of a paragraph, and not statements essential to ( /) Where the executors have committed a show jurisdiction.—Re Penglase, 15 V.L.R., 434. devastavit and afterwards sequestrated their testa-

A clerical error in the order nisi for the seques- tor's estate, the official assignee may sue in respect tration of an estate, which puts a case out of thereof, and recover the amount of such devas-' court, cannot beamended.—Zra»*e.ffea<fe,2 V.L.R, taint for the benefit of the creditors.—Hasher v. (I.), 83. McMillan, 5 V.L.R. (E.), 217..


•• iimiwnaj thereof is legally vested and the partner or partners of such firms as are statute 1871* Tiflvinn Tiwvirifliirl /•^rii"»£n1Tnn(V rttliin* actfttiia flrifl rttYiai* incnTviiTifQ (&)

HT21VL11 JJ1UV1LHJLI ^jUl i^CI l i i l l f t U L l i t l CSUttCH UfilVl UOilGi lUSVAVCllLH.*

District tn which 36 . All petitions under this Part of this Act shall be presented to praent^Lto the judge or chief clerk of the court of the district in which the peti-a. e. so. tioner resides, or in the case of a firm to the judge or chief clerk of the

court of any district in which such firm has traded or carned on business for the preceding six months or the longest period during such six months and except as by this Act otherwise provided all proceedings under the sequestration shall be prosecuted in such dis t r ic ts

JTAET I v .-^COMPULSOEY SEQUESTRATIONS.

Actsof im»i. 3 7 . A single creditor or two or more creditors if the debt due creditors mB^ to such single creditor or the aggregate amount of debts due to such petition. several creditors from any debtor amount to a sum not less than see'sa&savict. ^ t y pounds*"* may present a petition^ to a judge of the Supreme c. 7is. .. Coort or of fhe eourr praying that the estate of fhe debtor may be

sequestrated for the benefit of his creditors, and alleging as the ground for such petition any one or more of the following acts or defaults, hereinafter deemed to be and included under the expression "acts of insolvency":—

(1.) That the debtor has, in Victoria or elsewhere, made a conveyance or assignment of his property to a trustee or trustees for the benefit of Ids creditors generally>>

(tt) As to effect of this section, see McAuey v. Beatty, 12 V.L.E., at page 642.

(b) Petitions under this Act must be presented to the judge or chief clerk of the court in the district in which the insolvent resides.—~Beg. v.. Poole, 3 V.R. (L.), 181.

(c) Interest may be included in the debt, and a debt originally under £50, but amounting to £50 with accumulated interest, is a good petitioning creditor's debt.—In re Wihon, 3 V.L.R. (I.), 95.

Where a judgment was recovered in the County Court for £1076s. 8d., to be reduced to a shilling on a certain house being given up, mid such judgment was transferred to the Supreme Court, Held, that such judgment did not constitute a good petitioning creditor's debt.—In re Kellacky, 3 V.L.R. (I.), 96.

Payment by one of several sureties on behalf of the debtor may constitute a good petitioning creditor's debt.—In re Inglis, 3 V.L.R. (I.), 100.

A debt due at the time of the act of insolvency might be assigned afterwards to petitioning creditors, so as to form a good petitioning creditor's debt.—In re Smith, 3 A.J.R., 18.

(d) A petition for compulsory sequestration need not be dated. I t must state that the alleged insolvent has been required to satisfy the debt.— In re Oibbs, 2 W. &, W. (I.), 40.

The defendant is entitled to be accurately informed of the act of insolvency alleged, for he does not necessarily see the affidavit; and a petition only alleging that the defendant had a judgment against him not satisfied, without alleging that the defendant had been required to satisfy it, was bad.—Zftre Chambers, 1 W. & W. (I.), 172.

Under a former Act, 28 Vict. No. 273, s. 13, it

was Held that the petition should state that the alleged insolvent had property in Victoria at the time of the alleged act of insolvency.—In re Mackimum, 6 W.W. & a'B. (I.), 1.

Where personal representatives are petitioning creditors they must all join.—Exparte Staughtoti, in re Hewitt, 1 W.W. &, a'B. (I.), 15.

(e) A creditor who has assented to any conveyance or assignment under this section cannot take advantage of it as an act of insolvency.—In re Vail, 1 V.L.R. (I.), 5. Qiwsre, whether the principle of In. re Vail (ubi sitpra) should be extended to the case of a creditor disabled from petitioning inducing another not so disabled to petition.—-In re Wiecteman, 5 V.L.R., (I.), 32.

The execution of a deed of assignment under 28 Vict. No. 273, s. 115, by one member of a firm as a trustee of the deed was Heldto be of itself no bar to proceedings by the firm for compulsory sequestration of the assignor's estate.—In re Crate, 3 W.W. & a'B. (I.), 13.

A deed of assignment by a debtor of all his property to trustees in trust to pay all costs, charges, and disbursements, and then to pay and discharge in full such claims as would have beeji preferential claims, and entitled to be paid in full if the estate of the assignor had been sequestrated, and then to apply the residue towards payment of the debts owing by the assignor to the parties thereto of the third part rateabiy (except those entitled preferentially as above) but subject as to those holding security to the provisions in that behalf therein contained is an assignment for the benefit of creditors irenerally andthere-fore an act of insolvency under this sub-section. —Jji re Vanq 13V.L.R. 172.

The assignment must be for creditors generally. Quaere, whether all the property of the debtor


(n.) That the debtor has, in Victoria or elsewhere, made a con- " insolvencyu veyance gift delivery^* or transfer of his property or of any * part thereof, "with intent to defeat or delay his creditors/*'

(in.) That the debtor has, with intent to defeat or delay his creditors, done any of the following things, namely, departed out of Victoria, or being out of Victoria, remained out of Victoria, or departed from his dwelling-house or otherwise absented himself, * or begun to keep house.

(iv.) That the debtor has filed in the prescribed manner in the court a declaration admitting his inability to pay his debts.((f>

must be assigned.—InreDerhatn, I V.L.R. (I.), 2, To constitute an assignment of property to n.

trustee for creditors fin act of insolvency, it must be on its face for the benefit of creditors generally. Where the intention was toincludeall creditorsbut some were omitted from the schedule by mistake, Held that the deed did not per se constitute an act of insolvency. SeinbU, that such a deed would be an act of insolvency under sub-section (x.), as amounting to a fraudulent preference of the scheduled creditors.—J» re Haslwm 3 V.L.R. (I.) 10.

A deed of assignment for the benefit of creditors which provides that the trustee thereof shall " pay and discharge in full, so far as he or they shall deem proper, all such claims as would have been preferential claims if the estate of the assignor had been sequestrated, empowers the trustee to pay certain preferential claims in full, others not at all, at his discretion, and is not, therefore, for the benefit of creditors generally so as to be an act of insolvency. Qutere whether as to a deed of assignment to trustees for creditors where there are no proceedings in insolvency under the Act, any claim can be preferential. In, 1*C Thoneman 12 V.L.R. 691; and see also In re Thomas and Gotoh 9V .L .R . ( I . ) 2 ' 5 A . L T 95. ' , • > . . ,

A deed of assignment which gives the trustees the power of preferring some creditors is not a deed for the benefit of creditors generally.—In re Ritchie, 8 V.L.R. (I.), 1; 3 A.L.T., 88.

The execution of an assignment for the benefit of such creditors as the trustees may approve of is not an act of insolvency under this sub-section. Although such a deed be unfair as to creditors, yet, if approved of by them, it would not of itself be evidence of intent to defeat or delay or to prefer certain creditors, and some evidence in addition to the mere contents of the deed is necessary to make it available as an act of insolvency under sub-sections (<i.)or(x. )of this section,

In, re Wiedeman 5 V.L.K. (I.) 32. The execution of a deed of assignment for the

benefit of creditors, which, by reason of giving to the trustees of the deed a discretion as to the extent to which they will recognise preferential claims, Btld not to be an act of insolvency within this sub-section, as not being for the benefit of the creditors generally, and is not of itself evidence of MI intent to defeat or delay creditors within the meaning of sub-section (11.) of this section. Davey v. Danby, 13 V.L.IL, 957.

(a) The word "delivery" must be restricted to mean delivery with intent to pass property.—In re Johnston, 5 Yv.W. & a'B. (I.), 10. •

(J) An actual sale made on the eve of insolvency with an intention known to the purchaser of using the purchase-money for the purpose of making a voluntary preference, or to defeat or delay some of the vendor's creditors, is not void under the combined effect of this sub-section and section 71, as a transfer of property with intent to defeat or delay creditors.—In re Ward, 14 V.L.R., 733.

The word "creditors" will include a single creditor.—In re Richards, 5 A.J.R., 103.

A bill of sale given by adebtorbon&jSde overall his stock, in order to secure a past debt and for further advances, is not per se art act of insolvency under this sub-section, although such an assignment to secure apast debt only would be.—Jac&mb v. Ross, 4 A.J.R., 97; and In re, Martin, 5 V.L.E. (I.), 13.

Where an absolute transfer of property by a trader, unable to pay his debts as they become due is made to a creditor within three months of insolvency, but is intended by way of security only for a present advance as well as a past indebtedness, the true mode to ascertain whether the transaction should be allowed to stand is under this sub-section to discover what was the intention of the debtor and borrower, and not that of the creditor and lender.—'Michael v. Oldfield, 13 V.L.R., 793.

Where a debtor transfers the whole or nearly the whole of his property to one creditor for an antecedent debt, the law presumes an attempt to defeat or delay the other creditors. But this presumption does not arise where a material portion is left unassigned; it then becomes necessary to prove the intention by some act of the debtor. Masher v. Moorhead, 2 V.L.R. (L.), 160.

(c) Where traders who owed considerable debts and had no property in Victoria except their business, stock-in-trade, and book debts, sold the same for an amount sufficient to pay their debts and left Victoria without making any provision for their payment, but under no concealment, having stated that they intended in a few months to return to Victoria the court found that they intended the natural consequences of their act and left with intent to defeat or delay their creditors. —In re Dionisio and Co. 14 V.L.R. 326.

As to a debtor departing out of Victoria absenting himself, seeEx parte Whitby, 1851, R.J. , 71 ; In re Martin, 4 W.W. & a'B. (I.), 4 ; In re Fox, 2 W. & W. (I.), 35 ; In re Oppenheiwier and Co., 3 A.J .R , 128 ; In re Fyson, 6 V.L.R. (I.), 19; 1 A.LIT., 124; InreRoclx, 1 A.L.T., 112.

(rf) A petition for liquidation under section 153 is not a declaration of inability under this section. —In re Smith, 3 A.J.R., 17-

1440 INSOLVENCY ACT 1890, [54VICT.

(v.) That execution issued against the debtor on any legal Statute 1871." ^ « « o B O f™ l U m M ^ o o « f ^ l l » ™ V » -^n-,™™*- ,-,£ «.-.+ i „ .

process lor me purpose 01 ODtaining payment 01 not less than fifty pounds has been levied by seizure: unless such pic-cess be bond fide satisfied^ by payment or otherwise within four days from the seizure. Provided a petition for sequestration be presented within twelve days from the seizure.

(vi.) That the creditor presenting the petition has served*"* in the prescribed manner on the debtor a debtor s summons requiring the debtor to pay a sum due, of an amount 01 not less than fifty pounds, and the debtor has for the space of fourteen daysW succeeding the service of such summons neglected to pay such sum or to secure or compound for the same.'"'

S'JiS'A? Viot" C™') )h^t the eebtor ras sbee ndjudged dr declared dankrupt or insolvent by any .oritish court out 01 Victoria havmg jurisdiction in bankruptcy or insolvency, and it shall not be necessary to produce any other evidence of such act of insolvency than a duly certified copy under the seal of the court of the order or adjudication by which such person was declared or adjudged bankrupt or insolvent,

(van.) When execution or other process issued on a judgment decree or order obtained m any court in favour of any creditor in any proceeding instituted by such creditor is returned unsatisfied in whole or m part. Provided that the debtor has been called upon to satisfy such judgment decree or order by the officer or other person charged wren the execution thereof and has failed todo so/ '

(a) Upon an order nisi for sequestration, based for the sequestration of his estate. I t is proper upon neglecting topay a debtor's summons, the only and reasonable that an intimation should be given evidence of service of the summons was an order to the debtor that insolvency proceedings may be of a district court judge refusing an application taken if he fail to satisfy the judgment, but quaere by the debtor to dismiss the summons, and the whether such intimation is essential. In order to debtor's affidavit filed and used on the occasion: determine whether a reasonable time has been Held, this was not sufficient evidence of service. allowed to elapse between the demand being —In re Graham, 4 A.L.T., 168. made and the order nisi being taken out, the

(6) The fourteen days required by this sub- court will regard the circumstances of each section between service of the debtor summons particularcase(theamountofthedebt, thenature and issue of the order nm are not affected by of the property if any, and the position in which Rule 4 of the Court of Insolvency as to compu- the respondent stood with regard to it). Where tation of time, and the intercalation of two the respondent who lived at Brighton did not Sundays and three holidays is immaterial—In re at the time of the demand state that he had Crisp 5 V.Ii.R. (I.) 1. property and desired time to realize but merely

(c) Costs' of a defendant in an action constitute said he would call on the creditor and arrange a good petitioning creditor's debt on which a matters, three days were held a sufficient time. debtor summons may be granted, which may form Though a defendant in an action who has ob-the foundation of an act of insolvency under this tained judgment for his costs cannot found a sub-section.—In re Eantjan, 7 V.L.R. (I.), 124. petition for the sequestration of the plaintiff's

(d) There must be a distinct demand for pay- estate upon it under this sub-section, inasmuch as ment of the judgment . - In re WUlison, 4 V . O t . the proceeding was not instituted by him, yet, if (I ) 67 he sue nnon it and recover a further judgment

A reasonable time should be given to the even wi tn the express object of taking advantage debtor to find the money. An answer to a de- of this sub-section, he can make the further j u d t mand of satisfaction implying that the debtor has ment the foundation of such a petition.-lrc re no means justified a return of nulla bona.-In re Merry, 13 V.L.E., 19& . . Hodgson, 5 A.J.R.,133. Where after demand for payment time is al-

I t is not necessary on a demand being made upon lowed on an indefinite promise to pay, there must the debtor to satisfy the judgment that the be a new demand.—In re Femter, 7 V.L.R. {!.), debtor should refuse to pay. If he fail to satisfy 13; 2 A.L.T., 145. the judgment that is sufficienttojustifyapetition An order nisi obtained on an alleged act of


(ix.) If at any .meeting of creditors*0' a debtor shall consent to" Insolvency

present a petition under Part III. of this Act for the SUUute im*" sequestration of his estate, and such debtor shall not within forty-eight hours from the date of his consenting as aforesaid present such petition he shall be deemed to have committed an act of insolvency on the expiration of such time;^ and if at any meeting of creditors a debtor shall admit that he is in insolvent circumstances, and he shall be then requested by a resolution of the majority*0' of the creditors present at such meeting to surrender his estate under Part III. of this Act, and such debtor shall refuse, he shall thereby be deemed to have committed an act of insolvency.^

(x.) That the debtor has given or made any preference to or in favour of any creditor which -would if the estate of such debtor were sequestrated under this Act be a fraudulent preference of such creditor.

But no person shall be adjudged an insolvent on any of the above grounds unless the act of insolvency on which the adjudication is grounded has occurred within six months before the presentation of the petition for sequestration; moreover, the debt of the petitioning creditor must be a liquidated sum due at law or in equity, and must not be a secured debt unless the petitioner state in his petition*** that he will be ready to give up such security for the benefit of the creditors after adjudication of sequestration- or unless the petitioner is willing to give an estimate of the value of his security,V> in which insolvency under this sub-section for failing to satisfy a judgment need not state the nature of the debt for which the judgment was recovered nor that the judgment was recovered in a proceeding "insti tuted" by the creditor, nor the amount of the judgment nor the bailiwick of the sheriff to whom the writ of fi. fa. was directed for execution.—In re Hall, 13 V.L.R., 233.

The creditor whose judgment is returned unsatisfied must be identical with the person who instituted the proceedings.—Inrej4ttCTt,5 V.L.R. (I.), 25.

To constitute an act of insolvency under this sub-section it is not necessary that the judgment which the debtor has failed to satisfy should be a judgment of £50 and upwards.—•/» reDroithet, 10 V.L.R. (I.), 4.

The business of a sheriffs officer charged with the execution of a judgment under this Act is to obtain payment thereof, and he is not bound to' endeavour to sell mortgaged property when pointed out by the debtor, even if he is told that it is more than sufficient to satisfy the judgment. —In re Douglas, 12 V.L.R., 265.

(a) All creditors both secured and unsecured have a right to notice of and a right to attend meeting.—Inre Clemesandlleach, 2 V.L.R. (I.), 37.

(6) ' ' This is not an act of insolvency of which the natural or necessary effect is to defeat or delay creditors."—Per Hodges, J., In re Cohen, 11 A.L.T., 42.

(c) The word "majority" relates to number and not value. Proxies can be used at a meeting under this sub-section.—In re Southey, 5 V.L.R. (I.), 4.

(d) In order to maintain an act of insolvency under this sub-section the evidence must show that

at the meetinga definite demand to sequestrate was made and a definite refusal given.—Inre Webster, 5 V.L.R. (L), 16.

A meeting convened by some of the creditors, at which a chairman is appointed and resolutions are passed in the debtor's presence indicative of an intention to proceed according to this subsection, and to which no objection is then made by the debtor, is a sufficient meeting under this sub-section. InreIng&U, 3 V.L.R. (L), 100.

(e) A petition for sequestration by a creditor holding mining shares as a security for his debt should set a value on them; or if they are valueless, should say so, and offer to give them up for the benefit of creditors; it is insufficient merely to state that they have no marketable value.—In re Harwood, 4 V.L.R. (I.), 65.

If a petitioning creditor seeking the sequestration of his debtor's estate holds a security for his debt and does not so state in his petition and in the rule nisi, the rule will be discharged, although he has before the hearing given notice of his security, with an estimate of its value, and signified his willingness to give it up.—In re MclfatncePa, 10 V.L.R. (I.), 84.

(/) The fact of the petitioning creditor not disclosing the existence of a security for his debt is not a ground for setting an order for sequestration aside. In re Rowfay, 2 V.L.R. (I.), 50.

The promissory note of a debtor is not a security within the meaning of this Act for payment of the amount due upon it. Where, therefore, a petition for sequestration of a debtor's estate is founded upon the debt due upon and by virtue of his promissory note, no offer need be made to give it up, nor any estimate of its value given. In re Cohen, 15 V.L.R. 664.


4f hi&oZeewiy Statute 1871/'

Proceedings in relation to a debtor's summons. lb. & 33. See 32 & 33 Viot.

Sequestration upon petition of creditor against an insolvent person. lb. s. 39.

latter case he may be admitted as a petitioning creditor to the extent of the balance of the debt due to him after deducting the value so estimated, but he shall on an application being made by the trustee within the prescribed time after adjudication of sequestration give up his security to such trustee for the benefit of the creditors upon payment of such estimated value.

38. A debtor's summons may be granted by the court on a creditor proving to its satisfaction^ that a debt sufficient to support a petition for sequestration^* is due to him from the person against whom the summons is sought, and that the creditor has failed to obtain payment of his debt after using reasonable efforts to do so. The summons shall be in the prescribed form. It shall state that in the event of the debtor failing to pay the sum specified in the summons, or to compound for the same to the satisfaction of the creditor a petition may be presented against him praying that his estate may be sequestrated. The summons shall have an endorsement thereon to the like effect or such other prescribed endorsement as may be best calculated to, indicate to the debtor the nature of the document served upon him and the consequences of inattention to the requisitions therein made Any debtor served with a debtor's summons may applv to the court in the prescribed manner and within the prescribed time ) to dismiss ,such summon*^ on the ground that he is not indebted to the creditor serving such summons or that he is not indebted to such amount as will justify such creditor in presenting petition for sequestration ae-ainst him ; and the court may dismiss the summons with or without costs if satisfied with the allegations made by the debtor or it mav nnon such security (if anvl being sriven as the court may'require foruavment to the creditor of the debt alleged by him to be due inrl flip co<?fs of establishing such debt, staV") all T> oceerTnes o th fo such time as will be recmired for the trtnl ofthpmiesF , l r g i„ uf,i dfhfV)

39. Any judge of the Supreme Court or of the court may upon petition against any person having committed an act of insolvency by any creditor or creditors whose debt or debts amount to the value

(a) Proof of debt is not restricted to proof by creditor on his own personal evidence. Affidavit by the manager of a firm is sufficient.—McDonald v. Lloyd, 3 A.J.R., 43.

The sufficiency of facts upon which the summons may issue is for the discretion of the judge, and is not subject to review.—In, re Lyon, 4 A.J.R., 13.

(6) The words "sufficient to support a petition for sequestration" apply to the amount of the debt irrespective of any securities held by the creditor. I t is not necessary for a secured creditor, in order to obtain a debtor's summons, either to realize or value his securities or to offer to give them up or have them valued.—InrePortch, 7 V.L.R. (I.), 126; 3A.L.T. ,50.

(c) Fourteen days from the service of the debtor's summons.—JteCowahan, 4 A.L.T., 83.

(d) A debtor's summons will not be set aside on the ground that the debt is one the non-payment of which will not support an act of insolvency.— lure McDonald, 5 A.J.R., 42.

An order was made by the court of insolvency, on an application to dismiss a debtor's summons, directing the debtor to give security, and if such securitv was given staying proceedings-on the

summons, but the order made no provision for the event of the security not being given and did not reserve further directions or costs. No security beinggiven within the time limited, the court has jurisdiction, on the application of the creditor on notice to the debtor, to make an order dismissing with costs the application to dismiss the summons.

Jnre Fisher, ex parte Greenlaw, 2 V.E, (I.), 26. (c) A motion was made to dismiss a debtor's

summons on the ground that no debt was owing, because the alleged debtor was partner in a Mauritius firm which had become insolvent, of which the alleged creditor was aware, and had received a dividend on the estate: Held, that the question was one which should be sent to the Supreme Court for trial proceedings on the summons to be stayed on the debtor giving security; as the probability of the debtors succeeding did not seem so ereat as that of the creditor's succeeding it was anroner case for security.—De Beer v. Besntastcres 1 A L T 120

(/) A writ of prohibition will not be issued to restrain a judge of the court of insolvency from proceeding on a debtor's summons of which a copy only has been served upon the debtor. The remedy is by appeal.—Ex parte Levy, 1 V.L.R. (L.), 271.

No. 1102.J INSOLVENCY ACT 1890. 1443

hereinbefore provided, and setting1 forth the amount of the debt or debts <• fntoizxnat of such creditor or creditors and the cause thereof and the alleged act of st"*^'1871-" insolvency and praying that the estate of such person may be seques- 0. n a. 8 l ' trated- for the benefit of his creditors, .upon proof thereof to his satisfaction by order nisi under his hand place the estate of such person under sequestration*^ in the hands of one of the assignees until the said order nisi shall be made absolute or be discharged in manner hereinafter mentioned :(*> and every such order nisi shall name a time when cause may be shown before the Supreme Court against the same being made absolute and the Supreme Court may enlarge such order nisi from time to time as it may deem necessary/0'

40. The creditor on whose petition any order nisi for sequestration costs of shall be made shall at his own cost prosecute all the proceedings in the ûeâtion, sequestration until after the close of the meeting for the election of trusteed; and (the same having been first taxed) the assignee or trustee shall reimburse the said creditor out of the first money which shall be received; and the costs incurred under any sequestration shall be paid out of the insolvent estate.

41 . Any creditor of a firm may in like manner as aforesaid petition sequestration against all or any one or more of the partners of such firm to have the °\ 1^^^ estate of such firm placed under sequestration, provided any such n>,e,n. partner has committed an act of insolvency whereby the creditors of îb- . s m

such firm may be defeated or delayed in obtaining payment of the debts due by such firm $*> and every order for sequestration issued upon such petition shall be valid although it do not include all the partners of the firm; and after the order for sequestration of any such estate is made, the like proceedings shall and may be had and take place concerning such estate and such partner or partners as are herein provided to be had and take place concerning other estates and other insolvents. Provided always that nothing herein contained shall extend or be "Pwif" tori \ TI (VB.

construed to prevent the creditor of any firm from proceeding against °salnsj: W"5

auv partner or the separate estate^' of any partner thereof in respect of "'partners.

(a) The omission of the words "under seques- merit, otherwise they will be deemed waived.—In tration"in theorderisimmaterial.—InrePalmer, reMcMurrey, 1 W. & "W. {!.), 103. Semble, on 5 A.J.R., 157. the lapse of an order nisi, the estate revests in

Where an order mti is granted and comes on the alleged insolvent, without any order diseliarg-for hearing, it is too late to take an objection that ing the order nisi.—In reBay, 1 V.L.R. (I.), 56. the order was granted on insufficient materials.— (d) Where the debtor had voluntarily seques-In re Tucker, 13 V.L.R., 552. trated his estate, and an order nisi to sequestrate

(6) The grantof the order nisi confers an inchoate i t was without his knowledge obtained elsewhere, right, which cannot be defeated by a composition upon an application to discharge the order nisi under section 154 entered into subsequent thereto made by the petitioning creditor, the creditor and before the order absolute. —In re Maris-, 3 was allowed costs out of the insolvent estate.— A.J.R., 6. Be Looby, 11 A.L.T., 197.

.Proceedings for obtaining an order nisi should (e) Not satisfying a judgment is not the kind be entitled " I n the Insolvency Court" and not of act of insolvency pointed at by this section, as " I n the Supreme Court."—In re Byan, 1 V.L.R. its operation is not per se necessarily to defeat (I.), 4.; but see In re Cooper, 2 V.L.R. (L), 82. and delay the general body of creditors.—In re

(c) Rules nisi for compulsory sequestration are Martin, 5 V.L.R. (I.), at page 14. not without good grounds shown to be enlarged (y)Oncompulsorysequestrationason voluntary " i n hopes of a settlement" where the official sequestration the joint sequestration of the joint assignee is not in possession.—In reKeighran, 1 estate of partners is a sequestration of theseparate "VV. & W. (I.), 8. estate of each partner; and there need be no

Adherence to a stricter practice of enlargement separate order of sequestration of any one of the of rule nisi approved.—In reDoimiie awl Murphy, separate estates. But when the joint estates and 1 W. & W. (I.), 102. separate estates are administered they must be

Preliminary objections to a rule should be kept distinctas to claims upon them respectively taken when counsel appears to oppose an enlarge- — In re Turiibull, 1 W. & W. (I.), 105.


"jjuojcwicy debts bne by sucs firm in the same way in whiwh ic hi terein provided statute lm. j . ^ ^ crgditor of any person may proceed against him and hii sstate

in respect of debts due by such person in his individual capacity.

Sequestration 42 . Any creditor of the estate of any person deceased may in like deceisecTpmons manner as aforesaid petition to have such estate placed under seques-in certain rases, tration as insolvent, provided the person in whom the administration of

suck estate is legally vested has committed an act of insolvencyW whereby the creditors of such estate may be defeated or delayed*6* in obtaining payment of the debts due by such estate, and after the order for any such sequestration is made, the like proceedings shall and may be had and take place concerning such estates and the person in whom the administration thereof is legally vested as are herein provided to be had and take place concerning other estates and other insolvents.

lb. >. 42.

order nwi, lb. i. 43.

Service of order

lb. •. 44.

43. Every order nisi under this Part of this Act shall set out the nature and amount of the petitioning creditor's debt and the act or acts of insolvency relied on.

44. Every order nisi under this Part of this Act and any order enlarging the same shall be served personally on the respondent by delivering to him an office copy(i,> thereof unless it be proved to the satisfaction of a judge of the Supreme Court or of the court that the respondent is keeping out of the way to avoid service or has left Victoria, in which case such judge may order that service of an office copy of the order nisi or any order enlarging the same at the usual or last-known place of abode or business of the respondent by delivering the same to some adult person resident thereat® or if such

{a) The expression " act of insolvency" is limited to the acts of insolvency specified in section 37. Anorderjtwjforthe sequestration of the estate of a deceased person will not be granted where the only act of insolvency alleged is a failure to satisfy a judgment, as that does not necessarily defeat or delay creditors generally within the meaning of this section, Ee Carey, 13 V.L.R., 161.

The nature of the act of insolvency which must be committed by an executor in order to make his testator's estate liable to sequestration under this section is an act of insolvency within the meaning of section. 37, the natural effect of which is to defeat or delay creditors.—In re Cohen, 15 V.L.R., 664.

{&) These words are an adjectival sentence qualifying the preceding term " a c t of insolvency.— In re Cohen, 11 A.L.T.,42. . (c) The signature of the judge who made the

order is necessary in the copy for service.—Zre re Han/ Hi, 4 A.J.K., 43,

Where an order nw is made by a district judge the office copies, &c , should be certified by his clerk and not by the clerk or associate of another judge.—In re Steed, 3 A.J.R., 62. . Where an order nisi is not personally served

upon a debtor and the name therein is incorrectly stated, the debtor may appear and take objection thereto.—In re Wolter, 4 V.L.R, (I.), 75.

Personal service of an order nisi for sequestration may be made upon a respondent out of the jurisdiction. The provision made by the latter part of this section for effecting substituted service on a respondent who has left Victoria is merely

auxiliary to the general rule requiring personal service.—In re Thonemtm, 13 V.L.R., 162.

An affidavit of service of an order nisi at the usual or last-known place of abode or business of the debtor should state the means of knowledge of the deponent that such place was the usual or last-known place of abode or business.—In re Hayes, 3V.L.R. (I.), 98.

{d) The order for substituted service should not be made part of the original order nisi.—In re Merriman, 4 A.J.R., 31.

An order to substitute service upon an adult person being at, not resident at, her place of business, is bad.—In re Richards, 5 A.J.K., 103.

An order for substituted service should direct service at the last-known place of abode of the respondent, and not at any specified place.—In re O'Connor, 4 A.J.R., 139.

The order for substituted service should not describe the last-known place of abode; such description may be treated as surplusage.—In re Oppenhebn&r, 3 A.J.Tt., 94.

Affidavits relating to substituted service of orders nisi should show a strict compliance with this section and with the order for substituted service, and should also state the means of knowledge of the person effecting such service, and that the place at which service is directed and made was the usual or last-known place of abode or business of the respondent.—In re Rook, 3 V.L.R. (I.), 107.

An affidavit of substituted service as to residence of insolvent should be madeonpersonal knowledge not on information.—In re Thompson, 1 A.L.T., 123.


person Tvill not receive the same or if there be no such person by "insolvency affixing such copy upon some conspicuous place upon the premises S(*<u(*187:u' shall be deemed good service upon the respondent, and the judge may by such or any other order fix a time within which the respondent may file or post a notice of objections.*0'

45. Every respondent shall if he intends to oppose the order nisi Notice of being made absolute**' within four days*"' after service of the order oppoU'petition. nisi or such further time as a judge of the Supreme Court may appointIb- *•45-file in the office of the associate of such one of the judges as they may by a mle appoint when the residence of such respondent is within twenty miles of Melbourne or when it is at a greater distance shall within the said time put into the nearest post office addressed to the said associate a notice in writing signed^ by him of such his intention, and such notice shall state whether he disputes the act of insolvency or the petitioning creditor's debt or both, and if he intends to rely on any special defence such notice shall contain the particulars of any such defence and such notice shall be a waiver of all technical objections to the proceedings/"'

46. Upon the hearing of any such petition if the respondent appear " f'lillJ'JJ merely for the purpose of objecting that the order nisi has not been &, s. &,

(a) An order for substituted service should not specify an absolute time for filing notice of objections without having regard to the time of effecting such service.—Inre Mayes, 3 V.L.R. (I.), 98.

The fixing in the order for substituted service of an order nisi of an absolute time for lodging objections is not a ground for discharging the order nisi, but is a matter for consideration by the court in allowing further time to file objections.—In re Wolter, 4 V.L.R. (I.), 75.

Deposition of a sheriff's officer in support of a motion for an order for substituted service stated that six days after the order nisi was made he went to the respondent's residence, but found him not at home, and, on making inquiry, ascertained he was in New South Wales: Held, not sufficient materials on which to grant an order for substituted service.—/« re CampbeU 2 A.L.T., 4.

(6) When no notice of intention to oppose a rule nisi forsequestrationhasbeen filed, an affidavit of that fact is unnecessary on moving the rule absolute.—In re Moisling, 2 V.R. (I.), 7.

Preliminary objections should be taken when counsel appears to oppose an enlargement of the rule nisi, otherwise when cause comes to be shown they will be deemed waived, though grave ones.— In re Mc3fttrref/, 1 W. & W. (I.), 103.

(el On an application to fileJiwncjiro <«uc a notice of objections to a petition for sequestration, where there has been an omission to file them at the proper time, the court requires an affidavit stating that they are true. In re Fitzpatrick, 10 V.L.R. (L) 6.

Sunday counts within the four days allowed for filing objections to an order nisi. BeffiWe, the court will almost as a matter of course allow further time if there are affidavits explaining the delay and showing merits, In re Counihan, 8 V.L.R. (I.) 14. . Wlieij service is substituted, and no time fixed, the obligation to serve objections four days before

hearing does not apply.—In re Brovm, 3 A.J.R., 105 ; In re Rickctrds, 5 A.J.R., 103.

This section only applies where it is intended to dispute facts or set up facts by way of avoidance; it does not apply to objections on the face of the proceedings.—In re Reade, 2 V.L.R. (I.), 83.

The objection that there is an omission in the jurat of the affidavit supporting a petition is a special objection of which notice should be given. —In re Ityati, 7 V.L.R. (I.), 122.

(d) Notice of objection must be signed by the insolvent personally.—Inre McDottOtld, 1 A.L.T., 112.

(e) An objection based upon a formal defect in what constitutes the foundation of jurisdiction, making the efficacy of all subsequent proceedings and the liability for perjury by witnesses giving evidence doubtful, is not a technical objection within this section; as where the petition contained no prayer for sequestration, the rule nisi will be discharged.—/& re Richards, 5 A.J. It., 103.

When the petitioning creditor's debt is stated in the order nisi as "for goods sold and delivered," an objection to it as informal, not being "for money payable forgoods, &c.," is not sustainable. —In re Wolter, 4 V.L.R. (I.), 75.

Where the act of insolvency relied upon is non-satisfaction of an execution, the debtor will not be permitted to impeach the judgment upon which execution issued.—In re Morris, 2 V.R. (I.), 2.

Where the respondent, on the hearing of the order nisi, objected that it did not appear on the face of the proceedings that there was any act of insolvency, it not appearing that the petition was presented within twelve days from seizure, as required by section 37 (v.): Held, that the objection was not a technical objection within the meaning of this section which the respondent had waived by giving a notice of objection and that it was a fatal objection. Order discharged without costs.—In re Walker 1 5 V . I A R . 684.


"Insolvency Statute mi."

The Supreme

ort^i&olute or discharge the tiaine and effect

If petition unfounded or malicious. lb. s. 48.

Sequestration revived by other creditor and effect of though superseded as to original petitioning creditor. lb. s. 49.

duly served^ and it shall appear to the Supreme Court that such order nisi has not been duly served the order nisi shall no't be discharged, but the said court may adjourn the hearing thereof subject to such directions and upon such terms as to costs or otherwise as to the said court may seem just.

47. Upon the day named in the order nisi or on the day to which sucn order shall have been finally enlarged, the Supreme Court may adjudge and finally determine thereon or postpone the adjudication and determination for such time as it may think fit; and upon the hearingW of an order nisi if the respondent do not appear, or if the respondent appear and no notice of opposition has been given, the said order nisi may be made absolute and the estate be adjudged to be sequestrated upon an affidavit of service of the order nisi; but if the respondent appear and notice of opposition has been given the proceedings upon the hearing shall be conducted in the same manner as nearly as may be as upon a trial at law and the order nisi may be made absolute or discharged with or without costs as may be just; and whenever any such order nisi shall be discharged by the said court, all questions affecting the property of the respondent or the validity of any transaction deed act matter or thing relating thereto shall be determined as if such order nisi had never been made/"* When an order nisi is made absolute the associate shall forward the order absolute to the chief clerk.

48. If it shall appear to the Supreme Court upon the hearing of the order -nisi that the petition for sequestration was unfounded and vexatious or malicious, the said court may allow the respondent on his application for the same, then or at some other time to be named by the said court, to prove any damage alleged to have been by him sustained thereby; and may award to the respondent such damage not exceeding Two hundred and fifty pounds as the said court shall deem fit, and compel payment thereof by summary process or leave the said party to his action for the said injury.

49. If after any order nisi has been made for the sequestration of an estate, the debt of the petitioning creditor be found insufficient to entitle such creditor to apply for and obtain such order nisi, or if such order nisi shall be discharged or allowed to lapse in consequence of the consent or default of the petitioning creditor or his collusion with the insolvent/* the Supreme Court or any judge thereof or of the court

(a) Where an order nisi is not personally served, and the name therein U incorrectly stated, the debtor may appear and take objection thereto.— In re Waiter, iV.L.R. (I.), 75.

Where an order nisi was not served on a respondent in time to give him. four days to lodge objections before the rule was returnable, the court enlarged the order for a week, and directed service of the order mwi and the order enlarging it on the respondent.—In re Parsons, 7 V.L.R. (I.), 118.

(b) On an order?iiti where the petitioning creditor's debt is an unsatisfied judgment, the court will not go behind the judgment, or allow the respondent to impeach i t ; but in order to ascertain whether it forms a sufficient petitioning creditor's debt will inquire how much is due on the juds»-ment.—In re Monks 12V.L.R. 712.

(c) Where the petitioning creditor before the

return of the order nisi intimates to the respondent that he abandons the proceedings and tenders costs up to date: Held, that the respondent is entitled to have the order nisi discharged, and not simply struck out; and also to the costs of coming to court to have that done.—In re Bhwne, 15 V.L.R., 812.

(d) In this sentence the word "consent" relates to an express consent; "default" relates to not appearing to enforce the order nisi; and "collusion" applies to a case in which there is all the semblance and appearance of supporting the order but only a colourable and not a real support. If a creditor's petition to revive the sequestration allege both default and collusion, it is not necessary for the petitioner to prove all tiiat he has alleged. I t is sufficient to prove mere default.— Ex var'te Stawihton M* re Hewitt 1 W.W. & a'B. (I 1 15 , , • •

I

No. 1102.] . INSOLVENCY ACT 1890. 1447

may upon the application^ of any other creditor whose debt amounts "tntoimneg to the value hereinbefore provided and has been incurred prior to the ffl<M"<'18'1,

order nis,, and upon proof thereof to the satisfaction, of the said court or judge, order that the said sequestration shall be revived and be proceeded in as if it had been originally obtained on th.e petition of the last-mentioned creditor; and thereafter the said sequestration shall be revived with all the consequences and effects thereof as if the order nisi had not been discharged or allowed to lapse/*)

60. If any person against whom an order nisi for sequestration AStopaymonta has been made shall pay any money to the person who obtained the fSm^^ient same or any one on his behalf or give or deliver to any such person t° petitioning

, . - * r . ., A . P i i . r n jf T creditor after any satisfaction or security tor nis debt or any part thereof, suchordertor payment gift delivery satisfaction or security shall be a new act 0f *">ue '*tlOTi

insolvency upon which a petition for sequestration may be presented; ' and every person so receiving such money gift delivery satisfaction or security shall deliver up such security and shall repay or deliver the said money or gift or the full value thereof to the assignee or trustee of the insolvent estate for the benefit of the creditors of such insolvent,

"and shall pay all the costs which shall be incurred by any other creditor in obtaining the revival of the sequestration.

51. Every petition under this Part of this Act shall have endorsed Endorsement thereon the district in which the respondent resides, or in the case of a ™ P**"*"™-nrm any district in which such nrm has traded or carried on business during the preceding six months or the longest period during such six months,**and except as by this Act otherwise provided all proceedings under the sequestration shall be prosecuted in such district. The absence of any such endorsement as aforesaid shall not be deemed to render the order nisi invalid or to affect the jurisdiction to make such order absolute.

PART V.—ADMINISTRATION OF ESTATE.

DIVISION 1.—ASSIGNEES AND TRUSTEES; THEIR APPOINTMENT AND ELECTION.

63. The Governor in Council may appoint such number of fit Assignees. persons to be and be called assignees of insolvent estates as may be J*-*-63' from time to time required. The present official assignees shall be the assignees under this Act, and any of such persons or assignees the Governor in Council may remove. The assignees shall give such security as the Governor in Council may from time to time direct, and shall be officers of the court and subject to its orders, and the court may at all times summon the assignees and examine them on oath and require them to produce all books papers deeds and documents relating to insolvent estates in their possession.

(a) Notice to the original petitioning creditor (6) I t is not necessary that the creditor seeking afterapplicationisnotnecessary.—Exparte White, to revive should prove that the original petition-ittre Hctvitt, 1 W.W. & a'B. (I.), 24. ing creditor's debt was a good one, although he

An order i i ) i obtained under this section to must prove the insolvency in other respects, and revive an order for the sequestration of a respon- prove his own to be a good.petitioning creditor's dent's estate must, upon its face, disclose juris- debt.—Ex parte Staughtcm, in reHetoitt, 1 W.W. diction. Where, therefore, such an order msi did & a'B. (I.), 15. not show that the respondent was indebted to the (c) Under this section it is the.petitioner's duty petitioner before the order nisi was obtained, or to indorse on the petition the right district. If at all, it was discharged. Such a defect could not the wrong district is indorsed there is no power be amended under section 31.—Ee Penglase, 15 to' make the order absolute.—/« re Piatt, 15 V.L.R., 434. V.L.R., 668; seealso EeHehir,12 A.L.T.,4.

VOL. II . 2 T


"Insolvency 53 . The cliief clerk shall after sequestration under Part I I I . of SMultS i87i" J.L' A „ L _,-, o j ; , , ^ . . * ; ™ ~f o o m i o o t ™ t i A n A r t h u r , i t , n o n o a .._,+ ...__

>. 63. tnig Act or atguaication 01 sequestration iortnwitn cause notice IinJiiotie'e"* ' i f j 1° +if S 1 ^ 1 1 m j e G<w*/',MWf™ b-azette, or m any mode pre-nieetjngef s c r l y *; TO e , ^ y PP n P a c e o r a creditors tor general meet ing of the creditors of such estate, and the creditors tonstw" assembled a t such meeting shall and mav do as follows • Mb Urf3 s ^ _______ k/J.1__\_l Vlt s U V U 11IWU1UC Oi iw l l UIUU 111UIJ U.U U0 IITIXIS Tl 19 *

See 32 & 33 Vict.

H!»b^i«5 ^ y m a J b 3 r . r e s o l a t l 0 1 1 a P P ° m t s o m e fit Person or persons, not exceeding two, whether creditors or not, to nil the office of trustee of the property of the insolvent at such

e ntm Cif anv". a tlie creditors mav from ti to Hmp detprrm c • or thev mav resolve toleave lm

m* x I I- flip'committee of insnection lip ci aft mentioned.

(n,) They may whet they appoint a trustee, ny resolution declare what security is to be aiven, and to whom, by tne person so appointed belore ne enters on the office ot trustees

(in.) They may by resoluoion appoint some other fit persons not exceeding fire in number, and being crefitors qualified to vote at a gineral meeting of creditors as is in this Act mentioned or authorized in the prescribed form by creditors so qualified ho vote, to form a committee of inspectios for the purpose of superintending the administratiof by the trustes ef ths insolvent's property:

(iv.) They may by resolution give directions as to the manner in which the property is to be administered by the trustee; and it shall be the duty of the trustee to conform to such directions" unless the court for some just cause otherwise orders.

Assigneetf t 54 . The assignees shall be remunerated in manner following (that

a trustee be elected by the creditors or appointed by the committee of inspection such trustee shall nav to the assie-nee for his own use and benefit in addition to such

^ _ _ _ _ _ _

•I m e is to say\:— statttlv 1811" / - \ T _ _ __ __ 1. . _ . . _ _.. TL • __ I I _i

TS (l.) jf a trustee be elected by the creditors or appointed by the committee of inspection such trustee shall pay to the assie-nee for his own use and benefit in addition to such costs charges and expenses as may be allowed by the court or judffe for the interim management of the estate^ the sum of five -pounds when the gross assets do not exceed two hundred -pounds in value and ten pounds when the assets exceed two hundred pounds,

(fi \ If no trmtftp be elected or aimointed trip assignee sha.1 receive such remuneration as the creditors shall at meeting decide or failing- such meeting as the court award not exceeding- five pounds per centum on the PTos=i assets,of the estate

Confirmation of

trustee. g g T k e judge or chief clerk may upon the acceptance in writ ing ' of offic. bv the trustee and unon beinsr satisfied t h a t the reauisite

(a) The discretion vested in the commissioner the parties might know something about it and under 5 Vict. No. 17, s. 51, was a judicial discre- object to it.—i!x parte Bank of Auslralama, in re tion, and was to be exercised in such a way as that Eutledge, 2 W. & W. (I.), 6 ; see section 123.

No. 11021] INSOLVENCY ACT 1890. 1449

security (if any) has been given make an order*3* confirming his 'g£j?jtef3i][. election or appointment

Every trustee on being confirmed shall forthwith cause notice Notjpei tniatee thereof to be given in the Government Gazette, and the chief clerk shall J Jf »mmt" cause notice of every order made for the removal of any assignee or trustee to be given by advertisement in the Government Gazette.

56. If no trustee be confirmed the assignee for the time being it m> trustee _1, A 11 V A j r t A t » . j L ~ "Urt j-"Lrt 4-ui-inf^^ i*-*.A ^"Urt-»rt„rt^ * „ j."UCrt A „i. i"U~ —.~ ~ . l confirmed

snail be deemed to be the trustee ana wherever in this Act the word tenee to t» trustee is used the same shall apply to an assignee if no trustee be jj^^j?to be

confirmed. Act s<li 4n ti 6 57. The court may remove the assignee or trustee of an insolvent Removal of

estate for insolvency absence from Victoria or for any misconduct in his t™Ke?°r

office as assignee or trustee and upon the death^ resignation*") refusal to "JnmftKwsff , 1 i? j.i_ • J . J . j i. j . L l i • i BtalntelSJl"

act or removal ot the assignee or trustee of an estate shall appoint». w. another assignee or order the election of a new trustee and the same &>*32 & •<-• in<& proceedings shall be had thereon as on the original election.^

58. If an assignee or trustee desire to resign**' his office he may AS to ressgnatton apply to the court for leave and if no valid objection be stated and if assignee3 or1^ the court be satisfied that he has complied with the provisions of thistruat68-Act and with the rules his application may be granted by the court; ' *' ' but if any objection be stated thereto, the court shall proceed to determine the same and shall make such order thereon as it shall deem fit; and if the application of the assignee or trustee for leave to resign be granted the court may make such orders as may be necessary for the preservation and administration of the estate until a new assignee or trustee be appointed or elected and confirmed and for the discharge and acquittance of the said assignee or trustee and for the security and payment of any unclaimed dividends to the parties entitled to the same. Provided always that no order of the court allowing an assignee or trustee to resign shall prevent the assignee or trustee thereafter appointed or elected and confirmed in his stead from calling upon him to account as assignee or trustee prior to his resignation.

(a) An appeal to the Supreme Court lies against he has searched, or caused search to be made, and such an order.—In re Mackay, 2 V.R. (I.), 22. is satisfied that the insolvent had or had not

An order confirming the election of a trustee in creditors, and, if he had, that they had been insolvency is conclusive evidence of his due ap- served with notice of the application. Notice of pointment, although the meeting for his election the application should also be served on the was in fact held after the time prescril>ed by the assignee said to have resigned, and on the person rules, and thoingh he never accepted the office as proposed to be appointed in his place.—In re provided by this section.—Shiels v. Drysdale, 6 STtowbaU, 11 V.L.R., 112. V.L.R. (E.), 126. (d) Under the analogous section of a former

(6) On an application for the appointment of a Act, 5 Vict. No. 17, s. 51, an application for new assignee in place of one deceased, there the appointment of a new trustee of an insolvent should be a statement of what creditors, if any, estate in place of an official assignee erroneously there are, and that they have been served with appointed was to be made either on notice to notice of the application; and this affidavit should such official assignee or with his concurrence.—In be made by the applicant's solicitor, and not by re Rucker, 1 W./w. & a'B. (I.), 39. that solicitor's managing clerk.—In. re WriijM, 11 If a trustee resist the wishes of the creditors V.L.R., 111. properly conveyed to hint he should be removed

(c) On an application by an uncertificated in- under this section.—In re Macfcay, 3 A.J.R., solvent for the appointment of a new assignee in 10. place of one stated to have resigned, the motive (e) Order made granting leave to resign on for his so applying must be stated. • There must ground of ill-health and going to England.—In. re also be an affidavit of the applicant's solicitor that McLetatan, 2 A.L.T., 112.

2 T 2


DIVISION 2.—VESTING AND REALIZATION OF ESTATE.

••insolvency 5 9 . Every order placing an estate under sequestration in the hands s<o(«te mi" of an assignee shall vest in such assignee absolutely t he property of the Order of seques- insolvent of or to which he is then seised possessed or entitled or of or System™ th« to which he may become seised possessed or entitled before he obtains {JJaSvent*'"" tt*s certificate under this Act / " ' Sttfi 3-2 o5 3s Vict* Af\ . . . , L L r L J , l J? l •" l J . J. l i

o.7iB.i7. GO. Where an estate is sequestrated ot which a t rustee has been Whereestate appointed under P a r t I X . of this Act such trustee shall be appointed trustees by the order or order nisi for sequestration instead of an assignee, and the i s ' T ^ property of the debtor both present and future shall vest in such trustees A&Ho. i n s. 2. in the same manner as if they were assignees appointed under th is Act,

and such trustees shall have all the duties powers r ights and liabilities of a trustee duly confirmed.

Orderof court 6 1 . The order of the court confirming the election or appointment elect!™'"? of a trustee shall divest the assignee and shall vest t he insolvent estate trustee shait m such t r u s t e e , ^ and the order confirming the election or appointment divest official „ . . ' , J J . J T . - I l • S t 1 ^

assignee. ot any trustee or a copy thereot signed by a judge or chief clerk and •vInsolvency certified by such judere or chief clerk to be a copy thereof shall be J- «o. received and taken by all courts of justice in Victoria as conclusive See ib. s. IT. evidence tha t such trustee has been duly elected or appointed and con

firmed. order or o judge 6 2 . The order of a judge or chief clerk confirming the election or be deemed" an*0 appointment of a trustee shall be drawn up as and be deemed to be an order of the order of the court. court. Act No. 411 s. 3. _ r t TTTI j-i T n_ * i ' i j? *

Effect of order w . Whenever on the death resignation or removal of any assignee tor eonfirmation or trustee any assignee or new trustee shall be appointed or elected and 01 new trustee. * . J « 1 * i r» • i i j i i • "imUvmcw confirmed in manner hereinbetore provided, the order appointing t he statute i9Ji" new assjcrnee or confirming t he election or appointment of such new See ib. s. 83 (6). t rustee shall vest in the new assignee or trustee as the case may be

the whole of the insolvent estate, and every power r igh t t i t le privilege and remedy vested in or competent to the former assignee or trustee as such assignee or trustee before his death resignation or removal as fully and to the same extent as the same was vested in the former assignee or trustee by the order appointing him or confirming his election or appointment, and the death resignation or removal of any assignee or trustee shall not affect the validity of any lawful act done by him. as assignee or t rustee prior to his death resignation or removal.

(a) An insolvent's right of action arising before An order for the sequestration of the estate of insolvency out of breach of contract vests upon a firm vests in the assignee the joint and separate insolvency in his trustee, though that trustee be estates of the partners; and upon the election of a the person against whom the right of action exists. trustee of the estate, the joint and separate estates To maintain an action by an insolvent against his become vested in him. Separate trustees may trustee, there must be shown the probability of a not be appointed.—In re Curtain and ffealey, 5 surplus after payment of debts, and, semble, some V.L.R. (L), 109. misconduct in the defendant as trustee.—Vail v. As to what this order is evidence of and its Gilmow, 11 V.L.R., 381. operation upon the estate. The signature of the

(b) The trustee of an estate of an insolvent chief clerk need not be proved. The order is tenant is liable to the landlord for the rent of the sufficiently authenticated by the seal of the court. premises from the time of sequestration to the time —See Beg. v. Prendergaat, 4 A.J.R., 79. of disclaimer.—Jirascherv. Mktvey, 12 V.L.R., 343.

http://jj.jt.-i

Ho. J. 102.] INSOLVENCY ACT 1890. •1451

64. The following regulations shall be made with respect to the "iwoiwney trustee and committee of inspection:— f ^ u 1871

(i.) The creditors may "when two trustees are appointed declare Kceulationsasto e g, ± c.

I ±i J i J i * i i "S T i JLI trustees &c*

wnetiier any act required, or antaorizeu to be aone Dy tlie See 3ft & S9 Vict. trustee is to lie done by both or one of such persons; but «• >i «• ss.

both such persons are in this Act included under the term "trustee," and shall be joint tenants of the insolvent estate. No person dealing with any trustee or trustees under this Act shall be bound to inquire whether such trustee or trustees has or have been required or authorized to do any particular act or whether the sanction of a meeting of creditors or of the committee of inspection has been obtained as required by this Act but the trustee shall not be exonerated if he omit to comply with any of the provisions of this Act. The creditors may also elect persons to act as trustees in succession in the event of one or of th e persons first named declining to accept the office of trustee:

(n.) If through any cause whatever there should be no trustee the court or judge may appoint an assignee to act as such trustee:

(in.) If any vacancy occur in the office of trustee by death resignation or otherwise, the creditors in general meeting may fill up such vacancy, and a general meeting for the purpose of rilling up such vacancy may be convened by the continuing trustee if there be more than one, or by the chief clerk on the requisition of any creditor:

(iv.) If the estate of a trustee be sequestrated he shall cease to be trustee, and the chief clerk shall if there be no other trustee call a meeting of creditors for the election of another trustee in his place:

(v.) The trustee of an insolvent may sue and be sued by the official name of " the trustee of the property of an insolvent," inserting the name of the insolvent, and by that name may hold property of every description, make contracts, sue and be sued, enter into any engagements binding upon himself and his successors in office, and do all other acts necessary or expedient to be done in the execution of his office:

(vi.) Any member of the committee of inspection may resign his office by notice in writing signed by him and delivered to the trustee:

(VO.) The creditors may by resolution fix the quorum required to be present at a meeting of the committee of inspection:

(vm.) Any member of the committee of inspection may be removed by an ordinary resolution at any meeting of creditors of which the prescribed notice has been given, stating the object of the meeting:

( I S . ) On any vacancy occurring in the office of a member of the committee of inspection fey removal death resignation or otherwise, the trustees shall convene a meeting of creditors for the purpose of filling up such vacancy:

1452 INSOLVENCY ACT 1890. [54 VIOT.

*' Insolvency StaMalsn."

Attachment of vButvC

10. 8* (Rt*

Seizure of property of msolveDC. lb. ft. 64. 32 & 33 Vict. c. 71 s. 99.

(x.) The continuing members of the committee of inspection may act, notwithstanding any vacancy in their body; and where the number of members of the committee of inspection is for the time being less than five, the creditors may increase that number so that it do not exceed five:

(xi.) No defect or irregularity in the election of a trustee or of a member of the committee of inspection shall vitiate any act bond fide done by him; and no act or proceeding of the trustee or of the creditors shall be invalid by reason of any failure of the creditors to elect all or any members of the committee of inspection:

(xn.) If a member of the committee of inspection become an insolvent his office shall thereupon become vacant:

(xm.) Where there is no committee of inspection, any act or thing or any direction or consent by this Act authorized or required to be done or given by such committee may be done or given by the court or a judge on the application of the trustee.

65. The assignee or trustee of an insolvent estate may by his messenger authorized by -warrant under his hand seize and lay an attachment on the insolvent estate and make an inventory thereof.

The messenger making, such attachment shall leave with the person in whose possession any such property is attached a copy of the warrant under the seal of the court together with a copy of the said inventory, having subjoined thereto a notice that the property of the insolvent has been attached by the said messenger, and that any person who knowing the same to have been so attached shall dispose of remove retain embezzle conceal or receive the same or any part thereof with intent to defeat the said attachment is liable on conviction of such offence to be imprisoned with or without hard labour for any period not exceeding three years. The messenger may secure on the premises by sealing up any repository room or closet any articles which in the discharge of his duty it shall seem to him expedient so to secure or may leave some person on the premises in custody thereof.'"'

66. Any person acting under warrant of the court may seize any property of the insolvent divisible amongst his creditors under this Act and in the insolvent's custody or possession or in that of any other person, and with a view to such seizure may break open any house building or room of the insolvent where the insolvent is supposed to be, or any building or receptacle of the insolvent where any of his property is supposed to be; and where the court or judge is satisfied that there is reason to believe that property of the insolvent is concealed in a house or place not belonging to him, the court or judge may grant a search warrant to any constable or prescribed officer of the court, who ,may execute the same according to the tenor thereof.

(a) " The assignee is appointed by the Governor in Council, and is an officer of the court. The estate of the insolvent is vested in the assignee, and either the assignee, or the trustee who may succeed him, can direct his messenger, by warrant under his hand, to seize the estate of the insolvent. The assignee, unlike the sheriff, issues a warrant, instead of receiving one to be executed by him.

His position is more like that of a private individual issuing a warrant; eg., a landlord issuing a warrant to distrain. If the messenger exceed the instructions given to him in the warrant, it is the messenger and not the assignee who is responsible."—Per Scurry, J., in WUlelt v. Turner, 1 V.L.R. (L.), at page 296.

No.1102.] INSOLVENCY ACT 1890. 1453

67. General meetings of creditors shall be held in the prescribed "insolvent manner and subject to the prescribed regulations as to the quorum, fte6> adjournment of meeting, and all other matters relating to the conduct Re iiationsas of the meeting or the proceedings thereat. Provided that— creditors"

(i.) The meeting shall be presided over by the chief clerk, or by ^ { ^ i|s ' '

(H.) A person shall not be entitled to vote as a creditor unless at or previously to the meeting he has in the prescribed manner proved, a debt provable under the insolvency to be due to him:

(in.) A creditor shall not vote atthe said meeting in respect of any unliquidated or contingent debt, or any debt the value of which is not ascertained :

(iv.) A secured creditor shall, for the purpose of voting, be deemed to be a creditor only in respect of the balance (if any) due to him after deducting the value of his security; and the amount of such balance shall, until the security be realized, be determined in the prescribed manner. He may however at or previously to the meeting of creditors give up the security to the trustee, and thereupon he shall rank as a creditor in respect of the whole sum due to him:

(v.) A "seemed creditor" shall in this Act mean any creditor holding any mortgage charge or lien<nJ on the insolvent estate or any part thereof as security for a debt due to him:

(vi.) Votes may be given either personally or by proxy: (vn.) An ordinary resolution shall be decided by a majority in

• value of the creditors present personally or by proxy at the meeting and voting on such resolution:

(vm.) A resolution of creditors under this Act shall unless otherwise provided mean an ordinary resolution:

(ix.) A special resolution shall be decided by a majority in number and three-fourths in value of the creditors present personally or by proxy at the meeting and voting on such resolution:

(x.) The assignee or' trustee may at any time call a general See ib... 20. meeting of the creditors and shall call such meeting when required by one-fourth in value of the creditors who have proved their debts. The minutes of general meetings of creditors upon proof of the signature of the person presiding at such meeting shall be primd facie evidence in all courts of justice of what passed at such meeting.

68. The assignee*** until the confirmation of a trustee shall as Duties of assignee. Ib, & 66.

nearly as may be preserve the estate in the same condition as it is atU83l?tiefc

the date of the order or order nisi for sequestration. Provided that

(a) Agarnisheeorderjwiissuchachargeassoon necessary to .prove that no trustee has been ap-as served.— Watson v. Morrow, 6 V.L.R. (L.), pointed,or thatthesanctionofajudgeorcreditors

.134. has been given.—SiniSQii .v. Gitfhne, 4 A.J.R., (6) In proceedings by the assignee it is not 123.


" JntQtwncy Statute 1871."

Gene™] duties of assignee.

with the sanction of a judge or the creditors a t a meeting the assignee may realize or take proceedings to recover any portion of the insolvent estate.

If no trustee be confirmed the duties powers rights and liabilities of the assignee of an insolvent estate shall be the same (except as by this Act otherwise expressly provided) as those of a trustee confirmed by the court, and whenever in this Act any powers rights duties or liabilities are conferred or imposed upon a trustee such powers rights duties and liabilities shall be deemed to be conferred and imposed upon an assignee if no trustee be confirmed.

General duties 6 9 . The trustee shall after the order confirming his election or of trustee. n ^ ^ A ^ a ^ ^ ^ t "k^~ I,^,,, *^^jn n ^ i . ^ i .:« A A n ^ « J J : , ™ ^ , * 4> +k r t , . . 1 . - 1 -it> «. 6T appointment nag been made collect get m sell ana dispose 01 m e whole sec sa & as viot. o . the insolvent estata in such manner and a t such times as he may c 71». m think proper subject nevertheless to the provisions of this Act and the

directions of the creditors at a general meeting or of the committee of inspection; but the directions of the creditors a t a general meeting shall override those of the committee of inspection/^

Descriptions of 7 0 . The property of the insolvent divisible amongst his creditors pertydivisive' shall not comprise the following particulars:—

(i.) Property held by the insolvent on trust for any other person: (n . ) The tools (if any) of his trade and the necessary wearing

apparel and bedding of himself his wife and children, to a value inclusive of tools and apparel and bedding, not exceeding twenty pounds in the whole; but the creditors may by resolution a t a general meeting direct tha t the whole or such par t as they may think fit of the tools of trade furniture and wearing apparel of the insolvent his wife and children be granted to the insolvent/^

But it shall comprise the following particulars:— ( in . ) All such property as may belong to or be vested in the

insolvent a t the date of the order of sequestration or may be acquired by or devolve on him before he obtains his certificate.^

(iv.) The capacity to exercise and to take proceedings for exercising all such powers in or over or in respect of property as might have been exercised by the insolvent for his own benefit.

amongst

lb. s. 68. See ib. s. 16.

(a) The creditors at a general meeting cannot under this section direct the trustee to use his special powers in section 134 and summon the insolvent for examination and employ a specified solicitor for the purpose.—In re il/ackay, 4 A.J.B., 10.

Where the court sees that there have been irregularities in the proceedings of a meeting at which a resolution was passed, it will not compel the trustee to carry out the resolution.—In re Thomson, 2 A.L.T., 108.

For circumstances under which a trustee was not considered to have acted negligently in realizing assets and accepting tenders, see In re

,Lefebvre, 3 A.J.R.,,5.

(J) An insolvent making false representations to his creditors to induce them under this subsection, to direct that his furniture be granted to him, does not commit an offence within section 157, sub-section (xvi.), such direction not being an "agreement" within that section.—In re Aarons, 6 "V.L.R. (L), 56; 2 A.L.T., 28.

(c) The wife of an insolvent purchased with money advanced by her sister part of insolvent's stock-in-trade from the assignee, and carried on business on the same premises, being assisted by the labours of the insolvent, of all of which the assignee was aware. The assignee claimed the stock-in-trade as after-acquired property of the insolvent. Order made and affirmed on appeal. -~In re Mukahy 5 V.L.R. (I.), 7.


(v.) All goods and chattels being at the date of the sequestra-",/jwoitciwy. tion in the possession order or disposition^ of theSto(u(*13T1-insolvent by the consent and permission of the true owner^ of which goods and chattels the insolvent is reputed owner, or of which he has taken upon himself the sale or disposition as owner; provided that things in action, other than debts due to him in the course of his trade or business, shall not be deemed goods or chattels within the meaning of this sub-section.

71. Every conveyance assignment gift delivery or transfer of any AII conveyance . , • -? nJ i 11 ™ . . 1 ° 1 J ^ T . i j > * f &c whiih are

property which, would under this Act be deemed, to be an act oi msol- acts of insolvency shall be and is hereby declared to be absolutely voidw against SS^urostee. the assignee or trustee appointed or elected under this Act but in the Assignment case of a conveyance or assignment of all the debtor's property for the 're-nto!^°' benefit of all his creditors all dealings with such property and all acts p^cted. and things bondjide made or done by the trustee of such conveyance or n' "'m' assignment shall be valid and not affected by the sequestration unless the trustee had before or at the time of any such dealings acts or things notice that proceedings had been or were about to be taken to sequestrate the estate of the debtor.

72. Any settlements of property not being a settlement made Avoidance

before and in consideration of marriage*^ or bondfidii in pursuance of annulments' ante-nuptial contract, or made in favour of a purchaser or incumbrancer a.». TO. in good faith and for valuable consideration^* or a settlement made on or sec & & si vict. j? j.1 -j> l - i i (• n , n i> i i - i i n , c. 713.91.

lor the wrte or children or the settlor ot property which has accrued to the settlor after marriage in right of his. wife, shall, if the settlor becomes insolvent within two years after the date of such settlement, be void as against the assignee or trustee of the insolvent estate imder this Act, and shall, if the settlor becomes insolvent at any subsequent time within five years after the- date of such settlement, unless the parties claiming under such settlement can prove that the settlor was at the time of. making the settlement able to pay all his debts without

(a) Moneys due or to become due to a contractor (with which this section corresponds), that that by or from the Government is property within section had no retrospective operation upon a the "order or disposition of the insolvent."—The settlement executed before it. — Dtdlimwe v. Board of Land and Works v. Ecroyd, I V.L.R. Oriented Bank, 5 A.J.R., 38. (B.), 304; 2 V.L.R. (E.), 45. (e) The exception in this section of a settlement

(b) Where the grantee of a bill of sale has madewithin two yearsof insolvency, "beforeand rightly or wrongly put a man into possession of in consideration of marriage," applies only to a the chattels conveyed such chattels cannot be said settlement of property of which a settlor is then to be " in the possession order or disposition" of the possessed, or of some estate or interest of a settlor grantor by the consent and permission of the true present or future vested or contingent in pro-owner within the meaning of this sub-section. — perty then existing, and does not apply to a settle-Cohen v. The Oriental Banking Corporation, 6 ment by anticipation of property which niay or V.L.R. (L.), 278; 1 A.L.T., 198. maynotcome into existence,^—FranMyn\. Danby,

(c) PerNod,J.—"An assignment to trusteesfor 12 V.L.R., 863. the benefit of creditors generally is included in this A gift of money by husband to wife for meri-section, without any reservation, and is void."— torious but not valuable consideration, although In re Finney, 1 A.L.T., 187. the transaction is perfectly fair and though the

In order that an assignment for the benefit of husband be perfectly solvent at the time of the creditors, which, by reason of giving to the gift, is absolutely void if his estate be sequestrated trustees of the deed, a discretion as to the extent within two years after the gift, and if the gift to which they will recognise preferential claims, * has been invested in lands the trustee has a right should be held void under this section, some to follow the money into the investments.—Cohen evidence, outside the deed itself, must be given v. LinU, 10 V.L.R. (E.), 149. to show such an intent.—Davey v. Danby, 13 (f) The omis of proof under this section is upon V.L.R., 957. those claiming land under the settlement.—Cray

(d) I t was decided under Act No. 379, s. 70 v. Faram, 5 V.L.R. (E.), 270.

1456 INSOLVENCY ACT 1890. [ 5 4 VICT.

"Insolvency the aid of the property comprised in stieh settlement, be void against statute i87i87 g^k 1asjgDee e o rrusteee Any covenant to rontract made en considera

tion of marriage, for the future settlement upon or for his wife or children of any money or property wherein he had not at the date of his marriage any estate or interest, whether vested or contingent in possession or remainder and not being money or property of or in right of his wife, shall upon his becoming insolvent before such property or money has been actually transferred or paid pursuant to such contract or covenant, be void against his assignee or trustee appointed under this Act. "Settlement" shall for the purposes of this section include any conveyance or transfer of property .W

Avoidance of 73. Every conveyance or transfer of property or charge thereon princes. made, every payment made, every obligation incurred, and every judicial ib. >. 7ii proceeding taken or suffered by any person unable to pay his debts as c0?i3sV3Vkt *^ey become due from his own moneys in favour of any creditor or any

person m trust for any creditor, with a view of giving such creditor a preference over the other creditors*6) shall, if the person making taking paying or suffering the same become insolvent within three months after the date of making taking paying or suffering the same, be deemed

(a) Adeedof assignmentforthebenen'tof creditors is not a "se t t lement" within the meaning of this flection.—Davey v. Danby, 13 V.L.R., 957.

K. made a voluntary settlement of lands, and subsequently, with the consent of the trustees, mortgaged part of the lands (he alone conveying), and the trustees received the mortgage money and applied it in the purchase of a ship. On the official assignee of the settlor seeking to set aside the settlement, and to charge the trustees as liable to account for the mortgage moneys: Held, that the trustees could not be made personally liable, but that the plaintiff was entitled to follow the mortgage money so far as it could be earmarked.

HtUfeyv. Tait 1 V.L.R. (E,) 8. (b) Under the analogous section of 5 Vict. No.

17, s. 8, it was held that when the consideration for a conveyance executed within sixty days preceding an order for sequestration of the gran-tor's estate was the release of a debt due by the grantor to the grantee, such a conveyance was a "preferring" of the releasing creditor within the meaning of that section. Jacottib v. Donovan, 1 W.W. &a'B. (E.), 66.

An actual sale made on the eve of insolvency, with an intention known to the purchaser of using the purchase-money for the purpose of making a voluntary preference or to defeat OT delay some of the vendor's creditors, is not void as a fraudulent preference under this section.—In re Ward, 14 V.L.R., 733.

A payment within sixty days of insolvency was not void under 28 Vict. No. 273, s. 31, if it merely had the effect of preferring the payee to another creditor. The preference must have been fraudulent to make it void. I t was not fraudulent if made under compulsion. — Sheldrich v. Aithen, 6 W.W. & a'B. (L.), 59.

Within four days before his insolvency, a debtor conveyed all his available assets to his creditors in consideration of debts due to them upon bills of exchange. ftcld,pwMolesworth,<F.,"th&ta.lt)io\iBh the debts were of a class the debtor was specially bound to pay, and (irrespectively of the Act)

would be morally justified in paying preferentially the payment, was within the mischief of the first part of this section and was not protected by subsection (m.) of the following section."—In re Maley, 4 A.J.R., 7.

Per Molesworth, J.—" Payment resulting from pressure is not fraudulent though upon the verge of bankruptcy, or the person paying may be partly influenced by a wish to prefer. —ire re ScMieff, 6 V.L.R. (I.), at page 54.

A trader being very heavily indebted to the defendant and several other creditors, and unable to pay his debts as they became due, executed an assignment to the defendant, who already held certain securities for his debt of all his book debts which were his only remaining free asset, in consideration of his antecedent indebtedness to him and a further advance of £200 to enable the trader to pay three of his cheques that had been dishonoured. The deed of assignment provided that the defendant should place a man in possession of the business and should carry on the business, though still in the same name ; but it was intended by way of security only for the past indebtedness and the present advance. The trader voluntarily sequestrated his estate within three months of the assignment. Held that the assignment was a fraudulent preference and void under the section.

Michael v OldHfld 13 V L R. 793. A. being sued by B. on an overdue promissory

note, and being indebted to C , who was not pressing for payment, by arrangement between A. B., and C. in consideration of a further advance of trifling amount from C , and C. forbearing to sue A. for a reasonable time, and also obtaining from A. forbearance from B., executed an assignment to C. of the greater part of his stock-in-trade and trust to pay B. and C. rateably, and

* pay over any surplus to A. and immediate possession was given to C. Held, that the pressure t>v B. made the assignment good as to his debt then due but that it was for the jury to say whether under the special circumstances of the case the, assignment was a fraudulent preference


a fraudulent preference and fraudulent and void as against the assignee "ijwotwnw or trustee 01 the insolvent appointed or elected under this Act; butstatateK7V' this section shall not affect the rights of a purchaser payee or incumbrancer in good faithW and for valuable consideration.

74. Nothing in this Act contained shall render invalid— Protection of

(i.) Any payment made in good faith and for value received to J^,," ^^ any insolvent before the date of the order of seques- insolvent

N . i n 1 ' J> 1 , , . J . VlCt.

[ix.) Any payment or delivery or money or goods belonging to °- n *• 9*-an insolvent, made in good faith to such insolvent by a depository 01 such money or goods before the date of the order 01 sequestration:

(m.) Any contract or dealing with any insolvent, made in good faith and for valuable consideration, before the date 01 the order 01 sequestration.

75. All warrants of attorney and cognovits actionem alienations Alienation &c transfers gifts surrenders deliveries bills of sale mortgages or pledges trattonvoht of any property made by an insolvent after sequestration and before he n>- *• "*$• shall have obtained his certificate shall be and are hereby declared to be fraudulent and absolutely void.***

76. No sale shall take place by a sheriff or any county court Effect of the bailiff of any property under any judgment or process for the sum of tntlonuponf Fifty pounds or upwards until after eight days from the seizure or judgments, attachment thereof and if such property be sold the sheriff or bailiff s ' *A, s 8) shall retain the proceeds for four days after the sale and if a sequestration^ of the debtor's estate be made within such time the sheriff • or bailiff shall hand over such proceeds to the assignee or trustee to be dealt with by him as part of the insolvent estate but if no such sequestration takes place such sheriff or bailiff shall pay the proceeds to the judgment creditor, and further execution of any judgment or process against the person® or property of an insolvent shall after an order as to C. , and, the jury having found that it was right may maintain a, complaint before a warden such afraudulent preference, that the assignment for trespass on a residence area, and his assignee could be treated as good in part, and bad in part, is not ft necessary party to such a proceeding.— and be upheld so far as it provided for payment Fancy v. North Hurdsfield, <fcc, Co., 8 V.L.R. of B.'s debt, though invalid so far as related (M.), 5. to C.'s debt.—Cohen v. McOee, 4 V.L.R. (L.), (c) The sheriff executed a writ of fi./a. against 543. an incorporated mining company by seizure and

Where a material portion of the insolvent's sale of plant, &c. Three days afterwards an property was left unassigned, the fact that the order was made for winding up the company, transfer was made under pressure upon the debtor Hitd, a "winding-up order" is not a seques-himself of a threat of criminal prosecution, or even tration " within this section, and that the execu-an agreement to stifle such prosecution does not tion creditor was entitled to the proceeds of the invalidate the transfer. A bill of sale in such sale.—The Oriental Banting Corporation v. WcMc circumstances, given before the maturity of a Gully U. O. M. Co., 1 V.L.R. (L.), 28. promissory note on the same account, is not a (d) A defendant in custody under an attach-fraudulent preference.—Hosier v. Moorkead, 2 ment for non-payment of costs subsequently V.L.R. (L.), 160. sequestrated his estate under 5 Vict. No 17, s- 3.

(a) Semble, "good faith" here means that the On a motion for his discharge from custody: Held, creditor and purchaser had no notice that any that the attachment was a "process against the fraud or preference was intended by the debtor. person " within the meaning of 5 Vict, No. 17, Michael v. Oldfield-,1 V.L.R., ,93. ss .0 , and that the eefendant must bb eischarged.

(b) An uncertificated insolvent can make a valid • —Laiiig v. CampbcU, 1W. & W. (E.), 372. transfer of property acquired by him subsequently A solicitor who has been arrested for contempt to his insolvency in the absence of any interference of court for non-payment of money under an order by his official assignee.—Sartoriv. Laby, 9V.L.R. of the court upon filing his schedule is entitled to (L.), 329. his discharge: —Jre re Burton, 3 W.W. & alS.

An uncertificated insolvent who holds a miner's (L.), 3.

1458 INSOLVENCY ACT 1890. |_54 VICT.

Statute 187L1*

Effect of &oquea* tration upon actions against 11J S O I Tl CZL(r»

lb. #* 7&* Costs of exeau* tion creditor,

of sequestration of such estate has been made be stayed; and the person having right to such judgment may prove his debt against the insolvent estate; andiriiere any property has been seized or attached by legal process and has not been sold, such property shall be placed under sequestration in the same manner as any other part of the insolvent esaate^

71?. No action shall be brought against an insolvent for a debt provable in insolvency and all proceedings in any action then pending*6) shall upon an order of sequestration being made be stayed; and the plaintiff in such action may prove his debt together with the taxed costs of it then incurred against the insolvent estate; but any creditor who shall be prevented by the sequestration of the debtor's estate from proceeding to sell under an execution levied before the order of sequestration was made shall be entitled to be paid Ms taxed costs incurred in the action suit or other proceeding under which such execution issued out of the proceeds of the insolvent estate, but no such payment shall exceed Fifty pounds; and all action*^ pending against any insolvent for damages alleged to have been sustained from any injury or wrong or breach of any contract committed by him (such damages being uncertain) or for recovery of any claim unliquidated as to its amount and all proceedings therein shall upon any order being made for the sequestration of his estate be stayed jw and the plaintiff in such action after summoning the assignee or trustee to take up and defend the said action may proceed to obtain the judgment of the court thereon; and the said judgment when recovered together with the taxed costs of suit shall be a debt provable against the said estate/**

Effect of order 78 . An insolvent who shall be in custody of the sheriff or of any ofnnloirenttn11 gaoler or officer either under mesne process or in execution on any custody under iuderment decree or order for any debt or demand provable in insolvency legal process. J , 9, , , . . 1 1 . 1 . T i X T , * 1 1 -u 1 * » n * . f

shall be entitled to be on the order of a judge and shall be forthwith discharged out of custody in respect thereof, either absolutely or on such condition as such judge shall think fit to imposed

testate's estate be sequestrated while the action is pending, the action is permanently stayed by the first part of this section ; and it is wrong to proceed to have the trustee of the estate made a defendant under the latter part of the section. Any judgment obtained will be a nullity. Qttrwe, whether a claim for a devastavit could be joined in such action. If it could*, a judgment upon it, based upon a judgment on the principal claim obtained as above would fall with such judgment. *—I&cAulzy v. H&atti} 12 V.L.R** G33.

(c) During an equity suit which was un» defended, the defendants estate was sequestrated. Pw Jfolroyd) J.—**I cannot take judicial notice of the insolvency."«—JUcCarthifVt I£yct7tt 7 V.L.EL (E.), 136.

(d) If one of several defendants become insolvent after action brought, the action may proceed against the other defendants.—H/X,pGrrte rVdlsh, 4 V.Lr*K* (XI.),52.

(e) This section does not apply to an appeal under this Act which is not a proceeding in an action so as to be stayed by insolvency.—In TC JPortch, 7 V.L.R. (I.), 126.

(_/*) A debtor imprisoned under an order under the Imprisonment of ^iTtttdalcftit j&tbtovs Act 1890 is not in custody or in execution on a judgment

lb. ** 7(k

(a) A writ of foreign attachment was issued under 4 Vict. No. 6, and was served on the garnishees on 25th February. Judgment was obtained on 28th February. An order tttsi for compulsory sequestration of the estate of the defendant was made on the 5th March. An order of a judge for payment of the money attached was made on the 8th March. The money was paid into court by the garnishees on the 20th March. The order vitsi of sequestration was made absolute on the 22ndMarch. The official assignee of the defendant's estate took out a summons for the plaintiff to shoir cause why the money so paid into court should not be paid out of court to the official assignee on the ground that the insolvency of the defendant vested the money in him. I t contended that this debt not beinf?nroi>erty within the meanhu? of 5 Vict* Wo 17 s 30 (the anala-cous section 1 it was not nlaced undersequestration tinder that AeL and that the order of attachment was equivalent to £?ivim? him a securityupon that "Dart of t h e insolvent e s t a t e u n d e r section 39 of t h a t A c t and tha t lie w\i ent i t led to res t iinnn t h a t

se tu r i tv Ordr^r made in term** of summons JUfFtttHM. v tPhfmifi&ftti- A "R fif-h A p r i l lftfiO

(6) In an action against an administratrix for a debt of a kind provable in insolvency, if the in-

No. 1102.'] INSOLVENCY'ACT 1890. 1459:

79. All actions^ commenced by an insolvent before sequestration "Insolvency for any debt or demand, and all proceedings therein, shall upon the».77f order of sequestration being made be stayed until the assignee or Effect of the trustee shall make election to prosecute or discontinue the same; and sequestraiion he shall make such election within six weeks after notice shall be uponi^t™fv.

l ' n I J » T • i x * J_I * I n commenced &y

served upon him by any defendant in any sucn action or otherwise snail insolvent be deemed to have abandoned the same.^ Provided however that an see 16 & IB viot. insolvent may continue in his own name and for his own benefit any action commenced by him before sequestration for any personal injury or wrong done to himself or to any of his family/"*

80. The trustee may upon entering on the record a suggestion of Actions byor the sequestration take up and continue in his own name the process in tf"n8..'0trustee3* any suit or action to which, the insolvent may be a party or discontinue the same as he shall see fit, and also on entering a like suggestion defend any suit or action pending against the insolvent relating to or affecting the insolvent estate.^*

Whenever an assignee or trustee shall resign be removed or die or a new assignee or trustee shall be appointed or elected and confirmed no suit or action relative to the insolvent estate shall be thereby abated; but the court in which any such suit or action is depending or any judge thereof may, upon the suggestion of such resignation death or removal, and that a new assignee or trustee has been appointed or elected and confirmed, allow the name of the new assignee or trustee to be substituted in the place of the former; and the said suit or action shall proceed as if such new assignee or trustee had originally commenced or defended the same.

The trustee may take advice on any legal question affecting the insolvent estate or the administration thereof, and may employ an attorney-or solicitor to commence conduct or defend actions and suits or any other proceedings for or against the insolvent estate, and may charge against such estate all fees allowed upon taxation by the proper officer/0)

Possession of 81 . Where any portion of the property of the insolvent consists of f"J.^ j r

stock shares in ships shares or any other property transferable in the jt,. s. 70.

or order for a debt or demand provable in insol- service upon him of the order.—Prigg v. John-vency within this section, and has no right to his stone, 5 v.L.R. (E.), 311. discharge hereunder.—In re Ogle, 13 Y.L.R., 330. (c) The only actions which an insolvent may

A debtor committed to prison by an order of continue in his own name are actions for personal justices under section51 of the Marriage Act 1890 injuries or wrongs. An application to stay pro-till he should pay arrears of maintenance of his ceedings,whethermadeunderthissectionorunder wife is not entitled to his discharge under this the general practice of the court, will be granted section.—lie Harris, 6V.L.R. (L.), 47. whenever it is shown that the plaintiff has Decome

(a) This word does not include suits in equity. insolvent, and that the causes of action are not for — WUlisim v. Warburton, 4 A.J.R., 66. personal injuries or wrongs which he might con-

(6) Where a sole plaintiff in a suit becomes thine in his own name.—Merry v. The Queen, 13 insolvent, a notice by the defendant calling upon V.L.R., 264. his assignee to take up or discontinue the suit (d) A suit by one member of an association should be served at least six weeks before the against the other members (the insolvent being motion is heard.—'Wood v. Gordon, 6 V.L.R. the collective association represented by the official (E.), 37. assignee) is not within the meaning of these

Where o, suit becomes defective by the insol- words.—-Dodds v. Foxtoii, 1 W. & W. (E.), 271. vency of the plaintiff, the defendant should apply "Thereis great difficulty in extending the mean-to his assignee to elect whether he will continue ingof this section beyond an action at law."—Per the suit or not. Where application was so made, Chapman, J., ibid, 275. and the assignee did not reply, the court ordered (c) This section does not relate to the employ-,the dismissal of the bill with costs if the assignee ment of solicitors for examining insolvents.—In did not elect to continue within eight days after re Maclxiy, 3 A.J.R., 10.

1460 INSOLVENCY ACT 1890. [54 VIOT.

" Insolwncy Statute 1871." 32 & 33 Vict c 71-8. 22.

Trustee to keep

J 0+ 4T+ S v .

or a juOftfl. lb. 8. 81+

S e e i b . £+ 20+

books of any company office or person, the right to transfer such property shall be absolutely vested in the trustee to the same extent as the insolvent might have exercised the same if he had not become insolvent.

83. The trustee shall keep in the prescribed manner proper books, in which he shall from time to time make or cause to be made entries or minutes of proceedings at meetings and of such other matters as the rules shall direct; and any creditor of the insolvent may, subject to the control of the court, personally or by his agent inspect such, books.

Assignee or 8 3 . An assignee or trustee may apply to the court or a judge upon apply foffSvios a statement in writ ing verified by affidavit for the opinion advice or ^k*£,!£»c<mrt direction of the court or a j u d g e on any question respecting the manage-

ment 01 the insolvent estate, and notice 01 such application shall be served upon or the hear ing thereof be attended by all persons interested or such of them as the court or judge shall th ink expedient ;W and the assignee or trustee acting upon the opinion advice or direction of the court or judge shall be deemed to have discharged his duty in the subject mat ter of the application. Provided tha t such assignee or trustee shall not have been guil ty of any fraud or wilful concealment or misrepresentation in obtaining such opinion advice or direction; and the costs of such application shall be in the discretion of the court or judge.

84. When any part of the insolvent estate consists of land of any tenure burdened with onerous covenants, of unmarketable shares in companies, of unprofitable contracts, or of any other property that is unsaleable or not readily saleable by reason of its binding the possessor thereof to the performance of any onerous act or to the payment of any sum of money, the trustee, notwithstanding he has endeavoured to sell or has taken possession of such property or exercised any act of ownership in relation thereto, may by writing under his hand disclaim^ such property, and upon the execution of such disclaimer the property disclaimed shall if the same is a contract be deemed to be determined from the date of the order of sequestration, and if the same is a lease be deemed to have been surrendered on the same date, and if the same be shares in any company be deemed to be forfeited from that date, and if any other species of property it shall revert to the person entitled on the determination of the estate or interest of the insolvent ; but if there shall be no person in existence so entitled then in no case shall any estate or interest therein remain in the insolvent.

Any person interested in any disclaimed property may apply to the court, and the court may upon such application order possession of the disclaimed property to be delivered up to him, or make such other order as to the possession thereof as may be just.

Any person injured by the operation of this section shall be deemed a creditor of the insolvent to the extent of such injury, and may accordingly prove the same as a debt under the insolvency.

Disclaimer as to onerous property. 10+ s* 33+ Ib. s 23.

(a.) Upon a petition under this section the judge (Noel, J.) gave advice to a trustee as to his duty in following the resolutions passed at a general meeting of creditors. — In re Lempriere, 3 A.L.'X., 20.

(b) Atrusttie of the estate of an insolvent tenant is liable to the landlord for the rent of the premises from the time of the sequestration to the time of

the disclaimer. Where a trustee has entered upon the premises to make an inventory of the goods of the insolvent, and has kept the goods there for some time before selling them, he is, in the absence of sufficient assets hi the insolvent's estate, personally liable for the rent until he gives tip possession to the landlord.—Brasher v. Dttvey, IS V.L.R., 343.


The trustee shall not be entitled to disclaim any property in pur- "insolvencya suance of this Act in cases where an application in writing has been j ^ ^ v i c t made to him by any person interested in such property, requiring such <=. n a. 24. trustee to decide whether he will disclaim or not, and the trustee has for a period of not less than twenty-eight days after the receipt of such application or such further time as may be allowed by the court declined or neglected to give notice whether he disclaims the same or not.

85. Subject to the provisions of this Act, the trustee shall have power of trustee power to do the following things :— property.1*

(1.) To receive and decide upon proof of debts in the prescribed ib. >. 8s. manner, and for such purpose to administer oaths: Ib-a a6>

(11.) To carry on the business of the insolvent so far as may be necessary for the beneficial winding up of the same:

(in.) To bring or defend any action suit or other legal proceeding relating to the property of the insolvent:

(iv.) To deal with any property to which the insolvent is beneficially entitled as tenant in tail in the same maimer as the insolvent might have dealt with the same; and Part VI I I . of the Real Property Act 1890 shall extend and apply to proceedings in insolvency under this Act as if the said Part were here re-enacted and made applicable in terms to such proceedings:

(v.) To exercise any powers the capacity to exercise which is vested in him under this Act, and to execute all powers of attorney deeds and other instruments expedient or necessary for the purpose of carrying into effect the provisions of this Act :

(vi.)*To sell all the property of the insolvent (including the goodwill of the business, if any, and the book debts due or growing due to the insolvent) \>y public auction or private contract, with power if he thinks fit to transfer the whole thereof to any person or company, or to sell the same in parcels:

(vn.) To give receipts for any money received by him, which receipt shall effectually discharge the person paying such moneys from all responsibility m respect of the application thereof:

(vni.) To prove rank claim and draw a dividend in the matter "of the insolvency or sequestration of any debtor of the insolvent.

86. The trustee may appoint the insolvent himself to superintend power to aiiow the management of the property or of any part thereof, or to carry on mwit pro-the trade or business of the insolvent (if any) for the benefit of the Perty-creditors, and in any other respect to aid in administerinjf the "property **• **SL

in such maimer and on such, terms as the creditors direct.

87. The trustee may with the sanction of a special resolution of.a Powerof trustee general meeting of creditors or of the committee of inspection do all or _™1Pr<om'se

any of the following things:— n.«. ss. (1.) Mortgage or pledge any part of the property of the in-Ib- "•2r-

solvent for the purpose of raising money for the payment • • of' his debts:

1462 > INSOLVENCY ACT 1890. [54 VIOT.

" fntd/ttcnw (n.) Refer any dispute to arbitration, compromise all debts stattiieisn." claims and llabillties whether present or future certain or

contingent liquidated or unliquidated subsisting or supposed to subsist between the insolvent and any debtor or person who may have incurred any liability to the insolvent upon the receipt of such sums, payable at such times and generally upon such terms as may be agreed upon:

( in.) Make such compromise or other arrangement as may be thought expedient with creditors or persons claiming to be creditors in respect of any debts provable under the insolvency:

(iv.) Make such compromise or other arrangement as may be thought expedient with respect to any claim arising out of or incidental to the property of the insolvent made or capable of being made on the trustee by any person or by the trustee on any person:

(v.) Divide in its existing form amongst the creditors according to its estimated value any property which from its peculiar nature or other special circumstances cannot advantageously be realized by sale.

The sanction given for the purposes of this section may be a general permission to do all or any of the above-mentioned things or a permission to do all or any of them in any specified case or cases.

Truste,, jt a 8 8 . Where the trustee is himself a solicitor he may contract to be 8aw'torsSSicel P a ^ a c e r t a iu sum by way of percentage or otherwise as a remuneration r>. t. so. ror bis services as trustee, including all professional services, and any S2&33 vict euch hontract thall lotwithstanding gny yaw t t ohe eontrary yb eawful. Ci t L fit £tf*

Tmstee to pay 8 9 . The trustee shall pay all sums from time to time received by moneys into i_ • * . „v v.~«1.. «~ 4.u~ w.rt-.V-.«4-.. rt^ i.\*^ ^ « ^ J i i A ^ ; ~ - * . * - ^ l . . * _ - j

bank. him into sucn bank as the majority 01 the creditors m number and ib. s. 87. value at any general meeting shall appoint, and failing such appoint-ib. s. 30. ment into such bank as the rules may from time to time appoint; and

if he at any time keep in his hands any sum exceeding fifty pounds for more than ten days he shall be subject to the following liabilities, that is to say:—

(i.) He shall pay interest a t the rate of twenty pounds per centum per annum on the excess of such sum above fifty pounds as he may retain in his hands :

(il.) Unless he can prove to the satisfaction of the court tha t his reason for retaining the money was sufficient, he shall on the application of any creditor be dismissed from his office by the court, and shall have no claim for remuneration, and be liable to any expenses to which the creditors may be put by or in consequence of his dismissal. ,

In case of a 9 0 . If an insolvent shall a t the date of the order of sequestra-beontmig inso™ tion be a member of a firm, a judge may authorize the trustee upon authorlieaotion ^is application to commence or prosecute any action or other innameofthe proceediue in the name of such trustee and of the remaining trustee and re- x . ° • . i i j . 1* XT „ j . I ' I i * i .

maining partner. partner against any debtor ot the partnership, and such judgment is.«. 88. decree or order may be obtained therein as if such action suit


or other proceeding had been instituted with the consent of such •• iiuoimncn partner and if such partner shall execute any release of the debt or statfUe 13rt" demand for which such action or suit is instituted such release shall be see 12 & is vt<*.c void provided that every such partner shall have notice given him of °'106 s'15^

"L v * j - ' j u x 1"L j . L 1. * j . * j . i *j? Partner to nave

sucn application and De at liberty to snow cause against it and 11 nO notice ana be at benefit be claimed by him by virtue of the said proceedings shall be in- JjiUJeT demmfied against the payment of any costs in respect of such action suit or other proceeding in such manner as a judge may direct, and the judge may upon the application of such partner direct that he may judge may receive so much of the proceeds of such action as such court shall ^Tpartot" *° d i r e c t . proceeds.

91. No assignee shall be personally responsible or liable for any Assjpieeor act bon&Jide done by him or by his order or authority in the execution pSsomSiriiaMe of his duty as such assignee by reason of the order nisi for sequestra- ex'ec ion'at'his tion being discharged, and no assignee or trustee shall be deemed per- duty. sonally answerable for or by reason of his having received any money Ib'"'aa' bills notes or other negotiable instruments in his character of assignee or trustee provided he shall have paid or deposited such money rails notes and other negotiable instruments in some bank to his credit as assignee or trustee of the insolvent estate to which they belong and shall have given notice of such payment or deposit (as the case may be) to the person claiming such money bills or other negotiable instruments of the assignee or trustee. And provided also that the assignee or trustee after such payment or deposit shall not have dealt with such money bills notes or other negotiable instruments otherwise than in the execution of his duty as assignee or trustee, and if an action shall be brought against any assignee or trustee for any such act done by him or by his order or authority in the execution of his duty either solely or where there shall be two trustees by a trustee jointly with any other trustee in respect of such money bills notes or other negotiable instruments the court in which the same shall be brought or a judge thereof may upon application of the assignee or trustee and upon an affidavit of facts set aside the proceedings in such action so far as the assignee or trustee is concerned with such costs or without costs as to the court or judge shall seem meet.<°>

92. If an insolvent shall at the date of the order of sequestration Where the

as trustee be seised possessed of or entitled to, either alone or jointly, trustee'tii™ any real or personal estate or any interest secured upon or arising out supreme onirt of the same, or shall have standing in his name as trustee either alone conveyance or or jointly any government stocks funds or securities or any stock of Unothertru e. any public or joint stock company, the Supreme Court may on the i>>.«. so. petition^' of the person entitled in possession to the receipt of the rents lh~ *•m

issues and profits dividends interest or produce thereof on due notice

(a) A., being tenant of B., gave to C. a bill of to claim against it, instead of paying one, and sale over his goods, who seized the same. Sub- leaving the other to claim against a lodgment re-sequently B. put in a distress for rent due. A. presenting the demand only; and the official then voluntarily sequestrated his estate, and by assignee ordered to pay all B.'s costs in the court arrangement between C. and the official assignee, of insolvency and on appeal.—In re Stezemy, ex the latter sold the goods in question, paid the parte Digging, i V.L.R. (I.), 1. amount of B.'s distress into a bank, and the (6) A trustee of real estate, who had become overplus, less commission, to C Held, that to possessed of personal estate, and held it subject entitle the official assignee to claim the protection to the trust, carrying on business with it for the of this section he should have paid the whole of benefit of the cestui que trusient voluntarily the proceeds into a bank, leaving B. and C. each sequestrated his estate. Upon petition by cestui

VOL. I I . 2 U


"Imolutney

Mortgage may be redeemed by assignee. lb. s. 01.

given to all other persons (if any) interested therein order the trustee an( all whose acc or consent thereto ii neceesary to ccnvey assign or transfer the said real or personal estate stocks funds or securities or the said stock of any public or joint stock company to such person as the said Supreme Court shall think fit upon the 'same trusts as the said estate interest stocks funds and securities were subject to before sequestration or such of them as shall be then subsisting and capable of taking effect and also to receive and pay over the rents issues and profits dividends interest and produce thereof as the said Supreme Court shall direct.

93. If an insolvent shall have conveyed or assigned any real or personal estate or deposited any deeds such conveyance or assignment assurance or deposit being upon condition or power of redemption at a future day by payment of money or otherwise the trustee may before the time of the performance of such condition make tender or payment of money or other performance according to such condition, and after such tender payment or performance such real or personal estate may be sold and disposed of for the benefit of the creditors.

94. Any mortgagee with the leave of the court first obtained may bid ac any aalo ft the mortgaged proprrly.

95. Where under^ a settlement or will an insolvent shall be entitled to a life estate in remainder expectant upon the cteath or deaths oi any previous tenant or tenants for me with any remainder over to the insolvent s issue or to the heirs of his body or any of them as purchasers ^he life estate of such insolvent shall not be sold before it falls into possession without an express order of the court.

court may order 96. The trustee may by summons call upon any person alleged to dul'to'tne'insoi De indebted to the insolvent estate to pay the amount of such indebted-vent-s estate. ness and the court may order that such person shall forthwith or at such ib. s. w. time and in such manner by instalments or otherwise as to the court

may seem expedient pay the amount if the same does not exceed Two hundred and fifty pounds to the t rusteed

Limitation of 97 . Every action brought against any person for anything done in action, pursuance of this Act shall be commenced within six months next after lb. a. 95. f, j> j . - i . j 'j? M. i i i j . 1 . i. T_ 1-the cause or action has arisen, ana it it shall appear that such action was

Mortgagee may bid at sole subjecttoorters Or vile court. Jb. ». 92. Life estate in remainder not to

court. It>. *. S3.

que trustent for his removal under this section, he consented thereto, asking, however, for an indemnity against, and account of, his dealings in the business. Held, that in view of the complicated transactions, and the order asked for by the trustee, the court had no jurisdiction under this section to make the summary order, but that the proper'course was by a suit.—Inre Clarke's trusts, 5 V.L.R. (E.), 28.

Where a petition is presented under this section to remove an insolvent trustee, it should be served on all parties interested, including children entitled in remainder.—Zre the trust estate ofHea-ley, 6 V.L.R. (E.), 240.

On such an application it is necessary that all persons entitled in possession to the settled property should concur in the petition. Qu&re, whether there is any jurisdiction to remove a

trustee as being insolvent, apart from this see. tion, except in a suit. I t is unnecessary to have a guardian ad litem appointed of infants who are not respondents to the petition, but have been served with notice of it.—ira the trust estate of Healey, 7 V.L.R. (E.), 1.

(a) Under this section a creditor may be compelled to repay money fraudulently received from a debtor, through friends, as a consideration for accepting a composition.—In reJobson,S A.J.Ki, 154.

"Where the trustee invokes the court's aid to compel the payment of debts due to the estate, the terms of this section are obligatory, and, upon adequate materials being presented to it, the court ought to make the order."—Per Noel, J., In re JtfaWe, 3 A.J.R., 63.


commenced after the time limited as aforesaid for bringing the same the "insolvency jury shall find for the defendant. stamemi."

98. No person shall be entitled as against the trustee to withhold Insolvenesbooks possession of the books of account or any papers or documents relating i!en,™b*!Ct t0

to the accounts of the insolvent or to claim any lien thereon. J*.». 96.

99. The court may in its discretion order such portion of the pay portion ot my half-pay salary emolument or pension of an insolvent to be paid to the Sj enmmo?7

trustee to be applied in payment of the debts of such insolvent and inso,1.ve"f *? 1 i i • i -i -i • it j*» J» J » • ; -i applicable for

such order being lodged in the omce ot any omcer or person appointed creditors. to pay or paying any such pay half-pay salary emolument or pension re- **97-such portion of the said pay half-pay salary emolument or pension asc.Tis.89. shall be specified in such order shall be paid to such trustee until the court shall otherwise order.

100. The trustee of an estate sequestrated by the executor orTrusteeof administrator of any person deceased may after the whole of the nf rppiyloT311

personal estate has been administered if the same be not sufficient to pay ^etlt

c'veatreal

the debts proved and provable against such estate apply to the court JJ,. s. $%. upon notice to the persons to whom the real estate of the said deceased may have descended or been devised for an order vesting such real estate in the trustee for the purpose of distribution amongst the creditors of the deceased and the court may make such order and thereupon such real estate shall vest in the trustee for the whole estate of the persons served and the same shall be realized and distributed in the same manner as the real estate of any insolvent.

101. If any debt or sum of money due to any insolvent be charged court may order upon any land by way of equitable mortgage the trustee may apply to under equltaue the court upon notice to all parties interested for an order for the sale cnarse-of the lands comprised in such equitable mortgage and the court may make such order.

103. The estate real or personal of any person deceased whose Mode of distribu-

estate is sequestrated by his or her representative shall be distributed pfrao'n'flState!1

and administered upon the same principles and in the same way as the -n*.«. io». estate of any living person.

103. Where an insolvent has property real or personal elsewhere court may >i . -VT' j . * * j . i . j . i ' i j . T * • * requiri convey.

than in Victoria or any interest therein whether in possession reversion mce by insolvent or expectancy the court may upon the application of the trustee order ouur 'toina. such insolvent to execute all necessary deeds instruments and writings ib.». 101. and to do all such acts matters and things as may be necessary to enable the trustee to realise or make available the whole or such part thereof or the proceeds thereof as the court may think proper for distribution amongst the creditors of the said insolvent.

104. If upon the application of the assignee or trustee it shall be Post kttors may i j ±i . . fi . . r. ^ * j _ n . J I ^ A * . . ^ ^ ^ ^ i.n 1 i ; „ _ ^ 4."L^± be re-addressed

proved to the satisfaction ot a judge that there is reason to believe that an^ e t to o the insolvent has been guilty of fraud or concealment of property or hasjadg*' absconded such judge may order that for a period of three months from the date of the order of sequestration all post letters directed or addressed to an insolvent shall be re-directed re-addressed sent or delivered by the Postmaster-General or the officers acting under him to the judge by whom such order is made, and upon notice by transmission of an office

2 V 2

http://asc.Tis.89

1466 INSOLVENCY ACT 1890. [ 5 4 VICT.

"insoimncff yopy of any such ordor to the Postmaster-General or the officers acting s/aiiiu van." jyyjer him mf the mating gf such order the eostmaster-General or such

officers as aforesaid in Victoria may re-address re-direct send or deliver all such post letters to the said judge who may deal with the same as he may think proper, and a judge may upon any application to he made for that purpose renew any such order for a like or for any other less period as often as may be necessary.

If produce of 105. If the produce of an insolvent estate shall be sufficient to pay tSy^Miintfj twenty shillings in the pound as hereinafter mentioned and leave a sur-iea sQtphis""1 P m s the c o u r t m a v upon the application of the insolvent after three such surpiua to dayss notice in writing to the trustee, order the remainder of the insoll insolvent* vent estate to be conveyed assigned and delivered to such insolvent his ib. *. K>3. executors administrators oo asssgnss and every such insolvent shall be

entitled to recover the remainder (if any) of the debts due to him.

When and how dG[)ts nuiy he proved. lb* s. 104.

Votes at tueetings. lb* 9, 10£>.

DIVISION 3 . — P K O O F OF DEBTS.

106. All debts provable in insolvency may be proved*0' and every creditor of the insolvent or any one or more of several joint creditors may after sequestration prove his or their debt by delivering or sending through the general post to the assignee or trustee as the case may be an affidavit or declaration by the creditor containing a full true and complete statement of account between the creditor and the insolvent and that the debt thereby appearing to be due from the estate of the insolvent to the creditor is justly due and all bodies politic and incorporated companies may prove by an agent provided such agent shall in his affidavit or declaration state that he is such agent and that he is authorized to make such proof and such affidavit or declaration shall be in such form as may be directed by the rules.

107. No person shall vote at any meeting if notice of an application to expunge or reduce his proof has been given; and if before or at any meeting of creditors any creditor or the assignee trustee or insolvent shall give notice of motion to expunge or reduce a proof of debt sought to be used at such meeting, it shall if the majority in number of the creditors present or represented at such meeting so desire be adjourned until such motion has been disposed of or until such time as they may direct.

Trustee to ex 108. The trustee shall examine all the affidavits and declarations STr ™^™* of proof aforesaid and compare the same with the books accounts and ana w watte QUI r Mr v

iriiohavT1™^ other documents of the insolvent, and shall from time to time make out T*0*.i«Pm a list of the creditors who have proved stating the amount and nature

of such debts, which list shall be open to the inspection of any creditor who has proved, and all proofs of debt delivered or sent to a trustee shall be filed by him in the office of the courts

Proof may be 109. The court may at any time admit reject expunge or reduce ^JET"or a proof of debt on the application of any creditor or of the trustee or of

the insolvent. (a) "An insolvent cannot prove on his own estate

tinder a power of attorney from another creditor." —Per Norlt J., In. re Jatism,, 1 A.L.T., 78.

(6) An assignee cannot legally admit or reject a proof of debt before it is ascertained that his

management will not be superseded by the election of a trustee; the only power which he has of investigating the proofs of debt sent in to him is to ascertain whetheror not they comply with the provisions of section 106.—Inre Blight, 15V.L.R..175.


1 1 0 . No distress for rent*"* shall be made levied or proceeded i n " Insolvency

after sequestration ; but the landlord shall be entitled to receive out of f i ^ " 1 3 7 1 " the insolvent estate so much rent as shall be then due, not exceeding Landlord to be three months' rent, and shall be allowed to come in as a creditor and month? Em?™ share rateably with the other creditors for the ballace/6* see 82 & aa vict.

1 1 1 . When by reason of the absence of any person from Victoria As to securing to

or for any other cause the court shall be of opinion that a claimant ^Xmay e b t s

who has not proved his debt may eventually be able to establish the ev*n^u;iJ^be

i i n -i -i . i J i * n I • established.

same, the court may allow such claim to be entered m the proceedings Ib,,. 1<xt, in the insolvent estate and may give reasonable time for proving the see Lb. e. 442 same, and in the meantime may make such order for securing the amount thereof in case the said claim shall be afterwards established as the court shall think fit.

1 1 3 . Any debt provable in insolvency may be proved a t any time Within what

before the final distribution of the es ta te ; but when any debt is so pro\'at*e ™dre

proved after any dividend has been paid to the creditors, such dividend ^dte^

treof on

shall not in any way be disturbed or affected by or in respect of any previous made. such debt; but such creditor shall receive payment of his debt out of the f6* '•1W-future assets of the estate in the same proportion as the other creditors shall have already received and shall afterwards receive payment.

113. A person entitled to enforce against an insolvent payment of P"*' tor ™<»w any money costs or expenses by process of contempt issuing out or any which pajwnt court shall be entitled to come in as a creditor under the sequestration 'Ww enforced and prove the amount payable under the process subject to such ascer- contempt? °f

tainine; of the amount as may be properly had by taxation or otherwise n' **11L

^ S i a ~i J.'tJ

114. Demands in the nature of unliquidated damages arising Description ot otherwise than by reason of a contract or promise shall not be movable febts 1 K > ™ b l * in insolvencv Jt-TiiT"*'

Save as aforesaid all debts and liabilities present or future certain See82&33V)oe-or contingent to which the insolvent is subject a t the date of the order o n *3* of sequestration or to which he may become subiect before he obtains his certificate bv reason ofany obligation incurred oreviouslv to the date of the order of sequestration shall be deemed to be debts orovable in insolvencv and may be proved in manner aforesaid <*>

(a) I t is only where goods of the insolvent section is made a preferential claim.—Davey v. would be liable to distress that this section is re- Bank of New South Wales, 9 V.L.R. (L.), 252. strictive of the rights of the landlord. Its opera- (b) This section is for the protection of general tion is to deprive the landlord of the right to creditors against the superior powers of landlords distress, giving him a preferential claim to be paid distraining, and does not vary the rights of land-rent due for not more than three months'tenancy, lords and mortgagees.—In re Sweeney, ex parte I t does not mean that every landlord shall be paid ZH/jfttiis, 4 V.L.R. (I.), 1. three months'rent as a preferential claim, but The provisions of this section do not apply when such landlords only as it deprives of the right a distress for rent has been made on the goods of of distress.—In re Brown, ex parte Tdson, 1 W. & joint tenants, and one of them subsequently W. (I.), 93. sequestrates his estate. fyacere, whether the goods

A landlord who has distrained before seques- of a tenant assigned by a bill of sale are by this tration cannot sell thereunder after sequestration, section protected from distress upon a subsequent and, where he has done so, he is liable to pay the insolvency.—Officer v. Haynea, 3 V.L.R. (E.), assignee the full value of the goods.—In re Nichol 115. §• Payroux, 4 V.L.R. (I.), 81. (c) The amount due by a contributory in the

Upon the sequestration of a tenant's estate after winding up of a mining company is provable in in-a distress for rent, and before sale of the goods solvency.—See Companies Act 1890, sections 292 distrained, the landlord has no lien on the goods and 296. distrained for the three months' rent which by this A debt which has been satisfied by a fraudulent


An estimate shall be made according to the rules of the court for the tung being in fooce, so far as the same may be applicable, and where they are not applicable at the discretion of the trustee, of the value of anydebt or liability provable as aforesaid, which by reason of its being subject to any contingency or contingencies or for any other reason does not bear a certain value.

Any person aggrieved by any estimate made by the trustee as aforesaid may appeal to the court, and the court may if it think the value of the debt or liability incapable of being fairly estimated make an order to that effect, and upon such order being made such debt or liability shall for the purposes of this Act be deemed to be a debt not provable in insolvency; but if the court think that the value of the debt or liability is capable of being fairly estimated it may direct such value to be assessed with the consent of all the parties interested before the court itself without the intervention of a jury, or if such parties do not consent by jury either before the court itself or some other competent court, and may give all necessary directions for such purpose, and the amount of such value when assessed shall be provable as a debt under the insolvency.

" Liability" shall for the purposes of this Act include any compensation for work or labour done, any obligation or possibility of an obligation to pay money or money's worth on the breach of any express or implied covenant contract agreement or undertaking, whether such breach does or does not occur, or is or is not likely to occur or capable of occurring before the grant of a certificate to the insolvent, and generally it shall include any express or implied engagement agreement or undertaking to pay or capable of resulting in the payment of money or money's worth, whether such payment be as respects amount fixed or unliquidated; as respects time present or future certain or dependent on any one contingency or on two or more contingencies; as to mode of valuation capable of being ascertained by fixed rules, or assessable only by a jury or as matter of opinion.

ii li The debts hereinafter mentioned shall be paid in priority to all other debts. .Between themselves such debts shall rant equally and shall be paid in full, unless the property of the insolvent is

Preferential debts. lb, 1.113. S2&33Vfct c 71 a. 32.

preference before sequestration is revived, by setting aside the preference, and should be admitted to proof.—In re Walker, 3 A.J.R.., 89.

Where a debtor enters into a composition with his creditors, and gives bills for such composition, and his estate is afterwards sequestrated, a creditor who has unlawfully received, under secret compact with the debtor, a larger sum than the other creditors is. still nevertheless entitled to prove for his original debt, charging against such debt all sums which may have been received under the secret compact.—In re Jobsoti, 5 A.J.R., 134.

The amount of bills discounted by a creditor for an insolvent, but not matured, is only a contingent debt, and cannot be proved as an absolute debt. —In re Bayldon, ex 'parte Bank <if Atistralaskt, 1V.L.B. (I .)2.

This section does not enable the surety, who has not paid the debt due by the insolvent, and the principal debtor, to prove. Under such circumstances, a surety cannot prove.—In re Hyam,, 5 A.L.T., 112.

A. and B. entered into a written agreement with C. not to enforce a judgment about to be obtained against him until he was entitled to the payment of money expected to be recovered by him from Government. The judgment was subsequently obtained by consent, under the terms of the agreement, and more than six years after, C. who had not become entitled to the payment of the money from the Government, became insolvent. A. and B. then claimed to prove absolutely against his estate for the whole amount of the judgment and six years interest, and their proof was allowed. Held, that the proof of the debt, being an absolute proof, was an enforcement of the judgment con-trary to the agreement, and that, although A. and B. might have a right to prove for the estimated value of the contingent liability—i.e., the chance of being able to enforce the judgment under this section—yet they had not taken steps to do so in the way provided by the section, and that the proof of debt ought to be expunged.—/™ re Merry, 14 V.L.R., 176.


insufficient to meet them, in which case they shall abate in equal "InsoiMncj/ proportions between themselves (ttiat is to say):—

(i.) All local rates due from him at the date of the order of sequestration and having become due and payable within twelve months next before such time,

(n.) All wages or salary of any clerk or servant^ in the employment of .the insolvent at the date of the order of sequestration, not exceeding four months' wages or salary and not exceeding Fifty pounds; all wagesof any labourer or workman*6) in the employment of the insolvent at the date of the order of sequestration, and not exceeding four months' wages.<**

Save as aforesaid all debts provable under the insolvency shall be paid part passu.

116. Where at the time of the order of sequestration any person Preferential J« - ™ _ — i * j • t • i i i i L. IA • i ^ J. i"L _ j £ claim in case of is apprenticed or is an articled clerk to the insolvent, the order ol apprenticeship. sequestration shall, if either the insolvent or apprentice or clerk give n>. t. m. notice in writing to the trustee to that effect, be a complete discharge ^V3^0*" of the indenture of apprenticeship or articles'of agreement; and if any money has been paid by or on behalf of such apprentice or clerk to the insolvent as a fee the trustee may, on the application of the apprentice or clerk or of some person on his behalf, pay such sum as such trustee, subject to an appeal to the court, thinks reasonable, out of the insolvent's estate to or for the use of the apprentice or clerk, regard being had to the amount paid by hirn or on his behalf and to the time during which he served with the insolvent under the indenture or articles before tne commencement of the insolvency, and to the other circumstances of the case.

Where it appears expedient to a trustee he may on the application of any apprentice or articled clerk to the insolvent, or any person acting on behalf of such apprentice or articled clerk, instead of acting under the preceding provisions of this section transfer the indenture of apprenticeship or articles of agreement to some other person.

117. When any rent or other payment falls due at stated periods, Proofin ™se of i j _ i i j? J J * » i j L* j . i j . iT rent and perlodf-

and the order ot sequestration is made at any time other tnan One cai payment. of such periods, the person entitled to such rent or payment may prove n, 1.115. for a proportionate part thereof up to the day of the date 01 theIb-a* ^ order of sequestration as if such rent or payment grew due from day to day.

118. Interest on any debt provable in insolvency may be allowed interested by the court or trustee under the same circumstances in which interest ^ " ^ would have been allowable by a jury if an action had been brought for n,, s. $& such debt.

(a) The words "clerk or servant" include a manager of a company under Part I. of the Com-^XMttes Act 1890.—Re The Intercolonial Smdt-»«j7, <fcc, Co., 13 V.L.R., 896.

(6) A claim was not allowed in the case of piecework where the workman was not under a stipulation to work exclusively for the insolvent, though

in fact he worked for no other person.—J* re Murray, 5 A.J.R., 3.

(<:} A commercial traveller who receives remuneration by percentage on all goods sold, whether by himself or any one else, is not entitled to a preferential claim under this sub-section.—In re Ed¬ wards and Sons, exparte Tomlins, 11 V.L.R., 304.


lb. s. 118. lb. e. 38.

Ib. a+ 119. See ib. s. SO*

119. If an insolvent is at the date of the order of sequestration steH|(is is7i7 ija)jie ej vespect of distinct contracts as member of fwo or more distinct Proof in respect firms, or as a sole contractor and also as member of a firm, the circum-wjrtraeta stance that such firms are in whole or in part composed of the same 32&33Viot. individuals, or that the sole contractor ig also one of the joint con

tractors, shall not prevent proof in respect of such contracts against the properties respectively liable upon such contractors.

Allowance to 120. The trustee may from time to time make such allowance !£ten^oo or as may be approved by the court the committee of inspection or resolu

tion passed by a general meeting of creditors to the insolvent out of his property for the support of the insolvent and his family, or in consideration of his services if he is engaged in winding up his estate.

Set-off. 131. Where there have been mutual credits mutual debts or other mutual dealings between the insolvent and any other person proving or claiming to prove a debt under the sequestration, an account shall be taken of what is due from the one party to the other in respect of such mutual dealings, and the sum due from the one party shall be set oflW against any sum due from the other party, and the balance of such account and no more shall be claimed or paid on either side respectively.

Provision as to 133. A creditor holding a specific security*6' on the property of 8.t:Ql^ireditor. the insolvent or any part thereof may, on giving up his security, prove IP. s. 120. j> l . l - i i i i . o J J 7 J ,

it. s. 40. tor his whole debt. He shall also be entitled to a dividend in respect of the balance

due to him after realizing or giving credit for the value of his security, in manner and at the time prescribed.

A creditor holding such security as aforesaid and not complying with the foregoing conditions shall be excluded from all share in any dividend.

DIVISION 4.—DISTRIBUTION OF ESTATE. Order of distri- 123. The trustee of an insolvent estate shall subject to the pro-""L •--'•*- visions of this Act pay and apply the proceeds arising from the collection

tetting in and sale or mortgage of the insolvent estate in manner blowing (that is to say) :—

(i.) In payment of all taxed costs charges allowances and expenses properly incurred by or payable by him in the execution" of his office of trustee.

(li.) In payment of the remuneration or commission allowed by this Act.

(a) Under this provision a bank was allowed Held, under section 39 of that Act, thafchewasnot to set off against a claim for the amount standing bound to value his security on the separate estate, in their books to the credit of an insolvent, the and that the words "any security or lien on any amount of a bill accepted by the insolvent and part of the insolvent estate" applied in each discounted with the bank by the drawer, but not instance to the particular estate, whether joint or due at the time of the sequestration.—In re separate, which is at the time the subject of Morris and McMurray, 5 A.J.R., 157; affirmed administration. Ex parte Flower, in re Rutledge, on appeal, ibid, 185. 1 W, & W. (I.) 143; 2 W. & W. (I.), 16. Eolfe

(b) Under the Act 5 Vict. No. 17, where the v. Mawer, L.R., 1 P.C., 27. joint estate of a firm was sequestrated, and the A petitioning creditor, who is jointly interested separate estate of each partner was also separately with others in a security, may, so far as he is sequestrated, and a creditor of the firm, who held concerned, value it at nothing and give it up for a security on the separate estate of one of the the benefit of creditors generally.—In re InyOs, partners, tendered proof against the joint estate: 3 V . L R . ( L ) , 100.

bution of estate. Ibr s. 121.

No. ]102. ] I N S O L V E N C Y ACT 1890. 1471

( i n . ) I n payment of all preferential debts and sums of money "inwiveneg directed or authorized by this Act to be paid to creditors Stot"te8871" or others in priority to the general creditors and if t h e estate be insufficient to meet such preferential debts and sums of money they shall abate in equal proportions between themselves,

( iv . ) I n payment to and amongst all other creditors who have proved their debts rateably in proportion to the amounts of their respective proofs.

Provided t h a t the t rus tee shall not declare any dividend unti l after the expiration of the prescribed t ime or such t ime as the court or a judge may order.(a)

1 2 4 . The t rustee shall a t such periods as may be fixed by t h e Trustee to me - - - - -- - - , . . _ . . - . - statement.

Ib. a, 122. rules file in the office of the court statements^ showing how the insol- st"-tt!mo,,t' vent estate has been applied and disposed of under the following heads (that is to say):—

(i.) Costs charges allowances and expenses. (n.) Remuneration or commission. (m.) Preferential payments to creditors or others directed or

authorized to be made by this Act. (iv.) Dividends to general creditors.

And if any part of the insolvent estate be not at the time of firing any such statement collected got in sold or disposed of such statement shall also specify shortly the nature of such, unrealized estate.

The trustee shall make out and file such further or fuller state- Further ments or accounts as the court or a judge may order. amounts.

125. The court may upon the complaint of any creditor or person courttw pecuniarily interested inquire into and allow or disallow as may be just cha &c?1,3

all or any part of the costs charges expenses and payments charged ib. *. 12s. claimed or made by the assignee or trustee and make such order thereon as the court may think fit.

126. The trustee shall cause notice to be given in the Government Trustee to give Gazette when and where dividends or moneys are payable to creditors diSrTd. and others- interested in the insolvent estate, and t h e remedy to obtain ib.». 124. payment shall be by application to the court and the order of t h e court fe^^ '1

1830vkt•

thereon. s$« 32 & 33 Vict

127. Al l dividends in insolvent estates now in the han(*s °* an3r ^"^™[^ )be 01 the present oincial assignees 01 insolvent estates and which have not ^ intt> been claimed by the part ies enti t led thereto for the space of six months SjiiJiSihnid. next after the same shall be payable^ shall unless the court shall other- n, g. 125. wise order be paid into H e r Majesty's Treasury to the credit of a fund see^&^s vict. to be called t h e " Inso lvency Unclaimed Dividend F u n d ; " and a l l divi- ^ tounc]uimed dends in insolvent estates administered under t h e provisions of this Act ^ ^ j j 1 * ^ unless t h e court shall otherwise order which shall be unclaimed by the tSbAct

(a) This section relates to the acceptance of the section to file a statement as to how the estate has composition from the estate, as it is after the been realized and collected. He must, however, deduction of preferential payments.—In re Bail- shortly describe any portion of the estate re-liere, 2 A.L.T., 57. maining unrealized.—iii re DaUimore, 3 A.J.R.,

(6) The trustee cannot be required tinder this 12.

14/2 lis SOLVENCY ACT 1890. [54 VICT.

Statute 1871."

<( Insolvency Suitors' Fund.'

Unclaimed dividends may under circumstances be paid to persons entitled.

Attorney-General may Older certain expenses to be pud out of " Insolvency Suitors' Fund."

parties entitled thereto for the space of six months next after the same shall be payable shall be paid into Her Majesty's Treasury to the credit of the said fund.

The Governor in Council may direct that all sums paid to the credit of the said fund shall be invested in debentures of the Government of Victoria, and the interest arising from, such investment shall be paid to the credit of a fund to be called the "Insolvency Suitors' Fund."

Any person entitled to receive any dividends hereby directed to be paid into the said " Insolvency Unclaimed Dividend Fund " may apply to the court for payment of such dividends to him, and the court may order such dividends to be paid to him; and upon every such order the Governor shall issue his warrant for the payment of the amount specified in such order, and the Treasurer of Victoria shall pay the same out of the said fund.

If it shall appear to the Attorney-General upon the application of the assignee or trustee that inquiries or proceedings relating to an insolvent estate ought to be instituted or carried on or any prosecution ought to be carried on against any person for any offence under this Act and that there are no funds in the particular estate available for such inquiries proceedings or prosecution, the Attorney-General may direct the payment of the costs of any such inquiries proceedings or prosecution after taxation thereof out of the said "Insolvency Suitors' Fund;" and upon every such order the Governor shall issue his warrant for the payment of the amount of such taxed costs and the Treasurer of Victoria shall pay the same out of the said fund.

PAET VI.—INSOLVENT.

Conduct of 128. Every insolvent before he obtains his certificate shall from insolvent. j . : « , A A A il**„ „„ ±"uA « „ i A A ^."u^n j;*„„4. : « j?^ ,« , 4.i,~ n*„l*.~.-~ ~« 4-».-.«4. ~J J J ^ J J time to time as tne rules snail direct lniorm tne assignee or trustee 01 see 32 * S3 viot, any change in hih residence end of hih mode and means of livelihood, c 71 a. IBi a n ( j jjjg innolvent shall, , t ohe utmoss to his power, ,id i i nhe eealiza

tion of his property and the distribution of the proceeds amongst his creditors. He shall produce such a statement of his affairs and shall give such inventory of his property, such list of his creditors and debtors and of the debts due to and from them respectively, submit to such examination in respect of his property or his creditors, attend such meetings of his creditors, wait at such times on the trustee, execute such powers of attorney conveyances deeds and instruments, andgenerally do all such acts and things in relation to his property and the distribution of the proceeds amongst his creditors as may be reasonably required by the trustee, or may be prescribed by rules of court, or be directed by the court by any special order or orders made in reference to any particular insolvency or made on the occasion of any special application by the trustee or any creditor. If the insolvent wilfoUyfail to perform the duties imposed on him by this section or ttny of them or if he fail to deliver up possession to the trustee of any part of his property which is divisible amongst his creditors under this Act and which may for the time being be in the possession or under the control of such insolvent he shall in addition to any other punishment to which he may


be subject be guilty of a contempt of court and may be punished "iimivenea accordingly.™ flrt*m'

. 129. The court may, by warrant^ addressed to any constable or Arrest of prescribed officer of 'the court, cause an insolvent to be arrested, and oertnin eir™^ any books papers moneys goods and chattels in his possession to be stances-seized, and him and them to be safely kept as prescribed until such £*' j,1?™Vot time as the court may order under the following circumstances :— c. 71 s. se.

(1.) If, after sequestration or the commencement of the liquidation, it appear to the court that there is probable reason for believing that the insolvent is about to go abroad or to quit his place of residence, with a view of avoiding examination in respect of his affairs, or otherwise delaying or embarrassing the proceedings in insolvency:

(n.) If, after sequestration or the commencement of the liquidation, it appear to the court that there is probable cause for believing that the insolvent is about to remove his goods or chattels with a view of preventing or delaying such goods or chattels being taken possession of by the trustee or that there is probable ground for believing that he has concealed or is about to conceal or destroy any of his goods or chattels or any books documents or writings which might be of use to his creditors in the course of his insolvency.

(in.) If after the service of a debtor after tration or the commencement of the liquidation the debtor or insolvent remove any goods or chattels in his, possession above the value of Five pounds without the leave of the trustee or if without sow. cause shown he fails to attend any examination ordered by the court ,

ISO. If an insolvent shall die after sequestration under Part I I I . court may pro. or adjudication of sequestration the sequestration shall after notice has stan ing deatn been given to such persons (if any) as the court may think fit be pro- 0l insoll'eilt-ceeded m as if such insolvent were living. see is & 13 v.ct

c 108 s. .16. 131. If at any tune after sequestration three-fourths in number see32*;33-vict

and value of the creditors who have proved debts by writing under their offerof omposi-hands agree to accept an offer of composition or security for composition «™ and order oo i y the insolvent or any person on i i s iehalf, the .nsolven, may apply JJ a j™ to the court for ao rrder releosing his estate from sequestration and the nee st>. 9 SB. tourt may upon being satisfied that ssch offer has been actually accepthe in manner aforesain and that the terms of such offer have been complied

(a) " A rule msi for commitment is the proper ordered to pay it over.—Re Gray, 2 V.Lr.It. (L.), remedy where an insolvent refuses to deliver up 241. possession to the official assignee."—Per Noel, J., , This section provides an adequate summary 7a re Mundka/ng, 1 A.L.T., 56. . . . . remedy as to any property which an insolvent

Though the court of insolvency has jurisdiction is known to have and withhold, and that, as under tins section to commit an insolvent for con- for contempt, the imprisonment for which wouio. tempt in disobeying an order to pay over money be at the discretion of the court, but does not received by him belonging to the estate, the apply to money which the insolvent has parted Supreme Court will, oni Aooeot* corpus, examine the with.—In re Rowley, 3 V.L.R, (I.), 12. proceedings and receive affidavits to ascertain (5) The_ mere pendency of the insolvency whether there was evidence of the facts on which generaUy is not snfncient ground for the issue of the warrant purports to have been based. I t must a warrant under this section.—lit re Ji.ntirswn, 4 be shown that the insolvent had the money still A.J.R., 160. under bis control at the time when he was

1474 INSOLVENCY ACT 1890. { 54 VICT.

" Insolvent)/ Statute 1871."

If insolvent pay in full or obtain release. lb. 8. ISO.

with, by the insolvent and that acceptance of the same has not been procured by him or any one on his behalf to his knowledge or belief by any fraudulent or undue means or influence or to the advantage of one creditor over another unless with the knowledge and consent in writing of the rest of the creditors, make such order*^ upon such terms as to costs*6* commission or remuneration and charges already incurred as may be just.

132. If an insolvent or any person on his behalf pay in full all his creditors or obtain a legal release of the debts due by the insolvent to such creditors, the insolvent may apply to the court for an order releasing his estate from sequestration; and the court may upon being satisfied that all the creditors of such insolvent have been paid in full or released their debts as aforesaid make such order upon such terms as to costs commission or remuneration and charges already incurred as may be just.

133. Any order of the court whereby the estate of any insolvent rfr6™tmBW? shall be ordered to be released from sequestration shall have the effect estate in innoi- of revesting in the insolvent all the property of the insolvent undisposed

of which by virtue of this Act shall be vested in any assignee or trustee of any insolvent estate in the same manner as if the estate of such insolvent had never been sequestrated.*"*

Order of court

vent when released from sequestration. lb. s. 131.

PART VII.—EXAMINATION OF INSOLVENT AND WITNESSES.

Examination 134. The judge may within three months after sequestration ^ " ^ M nnder Part I I I . or adjudication of sequestration upon the application

in writing of the trustee cause an examination^* sitting of the court to lb. a. 132.

(a) The whole body of creditors who have proved on the estate are bound, where an offer of composition by the insolvent has been accepted by a three-fourths majority of creditors, who have proved, and the estate has been released from sequestration by the court of insolvency under this section. Quare, whether creditors who have not proved are not similarly bound. Conndl v. Carroll, 10 V.L.R. (L.) 169.

An order of the court of insolvency under this section, releasing an estate from sequestration, on proof of an acceptance of an offer of composition by three-fourths in number and value of the creditors of the estate, may be reviewed or set aside by the court of insolvency, even where it has not been appealed against within the time limited by the rules for appealing, upon proof that the requirements provided by this section have not been complied with by the insolvent. An order of the court of insolvency, releasing an insolvent's estate from sequestration, will be set aside on the application of a creditor upon proof that he has not been served with notice of the application.—In re Bruce, 12 V.L.R., 696. :

" The terms of this section are obligatory upon a judge to release the estate if its provisions are complied with."—Per Noel, J., In re Blood, 4 A L T . , 184.

A., having made a voluntary settlement of land raider the " Transfer of Land Statute," became insolvent, and after a composition with his credi

tors under this section, his estate was revested in him under section 133. Being indebted to the plaintiff, and requiring from him a further sum, he executed a deed reciting the voluntary settlement and falsely reciting an agreement with the plaintiff to sell to him the land for the amount of the debt and a further advance, and executed also a transfer to him which the office of titles refused to register. Held that the effect of this section and section 133 was to revest in B. the same right to defeat the settlement as he would have had if no insolvency had occurred. Mossv. Williamson 3 V.L.R. (E.) 221.

(b) Except in special cases, the order will be made only on payment of the costs of sequestration.—In re Righ, 4 A.J.R., 25.

(c) A plea in bar, of the insolvency of the plaintiff, is not answered by a replication of a release from sequestration after the commencement of the action.—Hodgson v. McCaughan, 3 V.L.R. (L.), 292.

(d) Where an insolvent has been examined by the trustee, the court will not allow him to be examined a t the same sitting by individual creditors.—lureLongstaff, 1 A.L.T., 8.

Where a trustee (also a creditor) stands aloof from the examination, a creditor may examine the insolvent. In re Maries, 1 A.L.T., 96.

Under the analogous section 28 Vict. No. 273, s. 87, it was held that the court had no jurisdiction, on motion by a creditor, to make an order compelling the official assignee to apply, the power and


be holden at which the insolvent shall attend (having no lawful impedi- " rnaxvaiey merit at such time made known to and allowed by the court) and stauUeim" submit to be examined on oath by the trustee or any creditor as to his trade dealings and estate, and upon any matter which may tend to disclose any secret alienation transfer surrender delivery or concealment of his estate or effects/*' and the court may adjourn such sitting from time to time as it may think fit; and the trustee shall give notice of the time and place at which such sitting is to be held by advertisement in the Government Gazette, and one newspaper published in the district, and shall give notice to the insolvent in the prescribed mode.

135. The court may on the application of the trustee, at any time Power of court

after a sequestration or the commencement of the liquidation summon JJ^ttXiore it before it the insolvent or his wife or any other person known or BUS- »u»PM*ed °f

i i j . 1 • t • i > j . i j . i j t f j . i i j . kan"S property

pected to nave in his possession any of the estate or effects belonging to of insolvent the insolvent or supposed to be indebted to the insolvent, or any person **•s-1S3* whom the court may deem capable of giving information respecting the e. TI «. w0 insolvent his trade dealings or property, and the court may require^ any such person to produce any documents in his custody or power relating to the insolvent his dealings or property; and if any person so summoned after having been tendered a reasonable sum refuses to come before the court at the time appointed, or refuses to produce such documents having no lawful impediment^) made known to the court at the time of its sitting and allowed by it, the court may by warrant addressed as aforesaid cause such person to be apprehended and brought up for examination. >

The court may examine upon oath, either by word of mouth or by n>, s.&r. written interrogatories, any person so brought before it in manner aforesaid concerning the insolvent his dealings or property.

If an insolvent shall at the examination sitting or any adjournment In what cases the

thereof or if the insolvent his wife or any other person shall at any ofhenfuntier examination upon any summons under this section or any adiournment examination thereof being thereunto required refuse to lodge a true inventory of his committed, estate and effects or to surrender the books papers writings documents bills or vouchers relating to his estate as aforesaid or shall at such sitting or upon such summons refuse to be sworn, or shall refuse to answer any lawful question touching any of the matters aforesaid, or shall refuse to sign or subscribe his examination (not having any lawful objection allowed by the court), the court may commit him to such prison as it shall think fit, there to remain without bail until he submit to do the matters aforesaid or to be sworn or make answer or sign and subscribe such examination as aforesaid.

discretion as to applying resting solely with him. —In re Ireland, KE pewfe Madders, 6 W. W. & a'B. (I.), 5.

A trustee has, under this and the following section, a discretion, but he should rarely resist the wishes, properly conveyed, of creditors or of an individual creditor..—In re Mackay, 3 A.J.R., 10.

The insolvent's depositions, under this and the following section, maybe used to support a refusal of his certificate; but those of other witnesses, under the following section, may not be used to support a sentence of imprisonment.—In re Gold-smith, 5 V.L.R. (I.), 18.

(a) If an insolvent do notapply to be examined,

or tender his books, he will not be allowed on appeal to give evidence by affidavit, or to have his books then examined.—In re Patwstm, 7 V.L.R. (I.), 14.

(b) The court of insolvency may, among other things, issue a summons under this section commanding the insolvent's appearance for examination, and on proof of personal service, whether effected in or out of Victoria, may issue a warrant for his arrest, where he does not attend.—In re Thoneman, 13 V.L.R., 204.

(c) A solicitor's lien on documents is not a sufficient ground for refusing to produce them on a summons by the trustee under this section.—In re McKay and Bell, 3 A.J.R., 98.

1476 I N S O L V E N C Y ACT 1890. [54 VICT.

"Insolvency If an insolvent or any other person shall while under examination statutt m ^ f o r e ehe court t b guilty yf frevarication oo rvas ion , t h eourt may Commitment of . , -, , -, 0 , i_i J. * J* JL JL insokentor commit such insolvent or otixer person to prison lor any term not ex** intness. ceeding sue mouth* Adfcm-mcnt of Any summons for the examination of an insolvent or other "person summons. under this section may be adjourned from time to time as often as it

may seem fit to the court and the court shall have and may exercise a t any adjournment of any such summons all the powers hereby given.

Expenses to be The insolvent and every other person summoned before the court tendered to wer- ^ De examined or give evidence or make disclosttre of the trade deal-

ing estate or effects of any insolvent under this section shall be entitled to the same conduct money and expenses as a witness in any civil suit>^

1 3 6 On any examination under this P a r t of this Act the court this Fart may

mav nermit or direct the chief clerk or such other person as the court mitine**1 *° mavflrvmnw tin rpHn^e the evidenfp of the insolvent or Ttprson eTraminw) Act Ho. *lss,7. J. •¥•

Aomprtma¥?y *&*• -11 any person tie commi ted oy toe court io rerasing to court or judge &uswer any question, every such question snautw; set out m the warrant ; commitmenter a any person committed under this Jr ar t oi this Act tor refusing to

answer or for prevarication or evasion may make applicaJion to the Situate mi" S u p r e r o r o u r t or a judge thereof in onder to ma discharged from such

commitment, and if there shall noi nppear to the said court or judge any insufficiency or inforeali ty in tha form of the s a r r a n t , such court or j i d g e may ano ri herehy required fore-commit such person t c the same prison, there to hemain until he shall conform as aforesaid, unless it appear to such court or judge that the person mommitted has fully answered all lawful questions pu t to t i m on his examination aforesaid, or (if such person was committed foh refusing to be sworn or for not signing his examination) unless i t shrl l appear to such court or judge that he had a sufficient reason for the same. Provided tha t such court or judge may consider the whole examination of such party whereof any such question was a par t and if i t shall from the whole examination that the answer oV answers of the party committed is or are satisfactory such court or "judge shall and may order the party so committed to be discharged.

, ^T0 q Qgstion put to any insolvent on any examination under this Act insolvent. shall be deemed unlawful by reason only tha t the answer thereto may

expose him to punishment under this Act. JrART V l l l . — - ( J E R T I F I C A T E .

certificate liow 1 3 8 . After the expiration of three months from the date of the appliedefor. order of sequestration an insolvent may cause an advertisement to be jd ». las. inserted in the Government Gazette stating his intention on a day named

therein and not less than twenty nor more than thir ty days from the day of the publication of such advertisement to apply to the court for a certificate of discharge under this Act r and every insolvent shall also give twenty days' notice in writing to the assignee or trustee of his estate of such his intended application and of the time when the same is to be

(a) A certificate application may be heard " The proceedings under this Part of this Act are pending the examination of witnesses under this inquisitorial rather than contentious. They are section.—In- re Were, 6 V.L.R. (I.), 43. had for the purpose of eliciting and discovering

The court has no jurisdiction to order a witness evidence for future use, not for the purpose of summoned before it under this Part to pay costs, hearing and determining upon facts already and will be restrained by prohibition from enforcing proved."—iMx parte W&t&ont 15 V.L.R., 736, an order so directing. Per Higbnhothwflhi G*J*— 750.


made; and such application shall be heard on such day and on any day « Insolvency

or days of adjournment therefrom, and the trustee or any creditor may 3tat,Uiien-' be heard in opposition to such application upon giving notice of such opposition and the grounds*") thereof in such manner and at such time as may be prescribed or be directed by order in any particular case.

The court shall before granting any such application^ whether the Proceedings on trustee or any creditor oppose or not consider the depositions (if any) suchoPPUcatl<in-of the insolvent, and any evidence produced by him, and if there be opposition then the said depositions (if any) and any other evidence produced by the assignee trustee creditor or insolvent (as the case may be), and shall make order thereon in accordance with the provisions of this Part of this Act.<*>

139. Such certificate shall not be granted unless it is proved to conditions as to the court that a dividend^* of not less than Seven shillings in the pound ^rtIfi^?' has been or will be paid out of the insolvent estate^ or might have see w & 33 vict been or might be paid except through the negligence or fraud of the "•718-4S" assignee or trustee, but the court may dispensed with this condition*"

(<t) "Where an objection to the grant of a certificate has been struck out by the district judge as too vague, the objection should be amended, or the learned judge asked to amend, before it can be discussed on appeal."—Per Molesworth, J., Inre Kershaw, 1 V.L.R. (I.), 49.

(b) On an application for a certificate of discharge, the court has no power to direct the insolvent to attend for examination; he must if necessary be summoned to the insolvent court.— In re Johnson,, 5 A.J.R., 1.

(c) Where the application of an insolvent is refused because the required dividend has not been proved, the decision of the court is final, and the only remedy is by appeal.—In re McKay, 4 A.J.R., 131; and see also In re Murphy, 1 A.L.T., 71, as to finality of decision.

Where there is only one creditor and he opposes the application for a certificate, the court will consider his conduct, namely, sleeping in his rights, as well as the insolvent's in deciding as to whether the condition of 7s. in the £ should be dispensed with.—In re Crichton, 2 A.L.T., 24.

(d) " Dividend " means a dividend after deduction of the ordinary cost of management of the estate.—In re JFrankel, 4 A.J.R., 134.

" 'Dividend' is the excess of assets over trustees' expenses and preferential claims."—Per Noel, J., In reLefebvre, 3 A.J.R., 5.

(e) The mere fact that an insolvent has not paid 7s. in the £ is not a ground for refusal of a certificate, but for suspension, enabling him to apply again afterpayment of the required dividend, or upon fresh grounds for dispensing with it.—In re Dwyer, 6 V.L.R. (L), 29.

In order to obtain a certificate of discharge, an insolvent must show that his estate has paid or will pay a dividend of not less than 7s. in the £ to all creditors who have proved, whether included in the insolvent's schedule or not—and {dissentiente Ker/erd, J.) to all creditors in the schedule who have not proved—or he must obtain a dispensation from this requirement under this section. The fact that the creditors have been paid the requisite dividend is not sufficient unless it is shown that they have been paidout of the insolvent's estate. lit re Fleming 12 V.L.R. 719.

An insolvent applied for his certificate, and

upon the opposition of a creditor it appeared that the estate had not payed 7s. in the £. The learned judge of the court of insolvency refused the application, and an order refusing the application was drawn up. From this order the insolvent gave notice of appeal. After the appeal was lodged, the opposing creditor applied to the judge of the court of insolvency to amend the order on the ground that the words " refuse the application" meant refuse the certificate whereas all tlmfc WAS meant was to refuse to entertain the application. The judge made the required amendment. Held that the learned judge had no power to alter, the original order ; but appeal against the order as originally framed dismissed with costs on the ground that the certificate was properly refused it appearing that the estate had not paid 7s. in the £ and there having been no order dispensins with this condition.—Tii re Womerslev 12IVL R 250

(/) An appeal will lie to the Full Court from an order of the court of insolvency, refusing to dispense with payment of a dividend of 7s. in the £. —In re Mclntyre, 11 V.L.R., 312.

Where an insolvent applies for his certificate, and also for an order dispensing with payment of 7s. in the £, and the judge refuses such dispensation, the order should either provide for a grant of the certificate upon payment of 7s. in the £ or be made without prejudice to a further application for a certificate.—In re Oale, 7 V.L.R. (I.), 1.

When the court has refused to dispense with this condition, the insolvent may renew his application and obtain his certificate without notice to the opposing creditors under the last section, when he has paid the requisite dividend.—Be Spencer, 1 A.L.T., 176.

(g) The consent, in writing, of a vast majority of the creditors, accepting a composition under section 131, does not afford a proper ground for dispensing with this condition.—In re Dixon, 5 A.J.R., 171.

A distinct application for dispensation must be made to the court upon notice to the trustees.— InreMcKwy, 4 A.J.R., 131.

A general statement of depreciation in the value of landed property is not sufficient. The insolvent should show the particular losses and that they

1478 INSOLVENCY ACT 1890. [54VICT.

" Inti>iwwya or modify the same by reducing the required dividend if the insolvent Statute Ian." gjjjjj prove((t> to its satisfaction that the failure to pay Seven shillings

in the pound has arisen from circumstances for which the insolvent cannot in the opinion of the judged justly be held responsible.

Refusal of 140. If the insolvent has been convicted of any felony or mis-hS™?°™iihf demeanor under this Act his certificate shall be refused, or if the ot misdemeanor. insolvent has not been tried but the court is of opinion that the ib.s. 137. insolvent has been guilty of a felony or misdemeanor under this Act the

certificate shall be refused, and the court may in addition sentence such insolvent to imprisonment with or without hard labour for any period not exceeding one year.

Court may SUB- 141. If the insolvent has been guilty of any of the offences pend certificate f~ll~TT^*,rt. /"Hm-*- ia 1- amr\* and imprison in lOUOWing l^tnaTj IS 10 S a y j .

c°- *•1WS- th ein receipth and paymetts :<e>

were not attributable to recklessness or gross improvidence.—In re Arnold, 5 V.L.R. (I.), 39.

Where the causes of insolvency of a grazier were the death of a very valuable stallion and bad seasons. Held, that the failure to pay 7s. in the £ had arisen from circumstances for which the insolvent could not be justly held responsible.— In re Mclntyre 11 V.L.R., 312.

For circumstances under which loss on a contract through dry weather or a flood, or loss through cattle being poisoned, or through a bank refusing to continue an overdraft, will not justify the court in dispensing with this condition, see In re Monaghan,V) V.L.R. (L), 9.

The failure of a bank which was to provide funds for carrying on a contract entered into by theinsolvent is not a reason for dispensing with this condition.—In re Wright (t* Higgins, 7 V.L.R. (I.), 7 ; and see In re Millikin, 4 V.L.R. (I.),70.

(ct) Before an insolvent can obtain, an order of the court, dispensing with the condition of payment of 7s. in the £, he must show to the satisfaction of the court that the failure to pay the dividend arose from circumstances for which he is not, " in the opinion of the court," properly and justly responsible. If he allege that a particular property, which he valued in his schedule as assets more than sufficient to pay the requisite dividend, has since become valueless, he must prove to the court's satisfaction how that is so. In re Weston, 12V L R. 715.

(b) The words " i n the opinion of the judge" do not exempt decisions dispensing with the prescribed dividend under this section from liability to appeal.—Be Dyte,2 V.L.R. (I.), 42.

I t 13 a matter entirely within the discretion of the court of insolvency whether he will entertain a second application for leave to dispense with 7s. in the £ on further materials. The judge of the Appeal Court will not himself entertain further affidavits. In re Gait, 7 V.L.R. (I.), 1.

(c) The absence of books, showing the dealings of the insolvent in respect to his trade, is to be regarded as evidence of fraud.—In re Bell, 1 A . J R . , 38, 55.

A trader is not bound to keep such books as are not ordinarily kept by persons of his trade or business.—In re KersJtaw, 1 V.L.R. (I.), 44.

Where an insolvent ran a line of omnibuses

and subsequently sold it and produced bank pass books, cheque books, receipts, and vouchers only. Held, that these were not sufficient to supply the want of proper books of account of his business.— In re Arnold, 5 V.L.R. (I.), 39.

"The offence of not keeping accounts should be punished severely, as accounts are a most important check on fraud."—Per Molesworth, J., In re Dwyer, 6 V.L.R. (I.), 29.

Where an insolvent has not kept reasonable accounts or entries of his receipts and payments, and the omission was not attributable to ignorance or carelessness, the certificate was refused.—In re McDonald, 6 V.L.R. (I.), 45.

The offence of not keeping reasonable accounts or entries should be gauged, as to the punishment therefor, according to its being a probable concealment of fraud. W^here the insolvent had not made entries of two amounts received on the winding up of his business, but there was no evidence of an intention to conceal, certificate was suspended only, not refused.—In re ScMieff, 6 V.L.R. (I.), 51.

Although, as a general rule, every partner is liable for the acts and defaults of his co-partners, yet the liability of one partner for the acts of others in connexion with the keeping of accounts and entries of receipts and payments is a matter that should be dealt with on the facts of each particular case. In re Mclntyre, 11 V.L.R., 312.

If an insolvent has been engaged in business, and it is shown that he was indebted at a particular time, the inquiry as to whether he has kept reasonable accounts and entries of his receipts and payments may, at all events, go back to that time. The gravity of the offence and the punishment therefor must be determined by the circumstances of each case. The mere fact that the insolvent's creditors were not injuriously affected by the non-keeping of accounts does not make it less an offence, but should merely lessen the amount of punishment. Where, in addition to not keeping reasonable accounts and entries of his receipts and payments, an insolvent, by frivolous and inequitable defences, had put his creditors to vexatious and unjustifiable expense the court refused him a certificate. In re McNcUhf • 12 V.L.R. 254.

Having a bank account is-not sufficient compliancewith this sub-section. The omission to keep


(rr.)' If there shall be an unsatisfied judgment against the " insolvent in any action for assault breach of promise or stMute 1871' seduction or for any malicious injury or for damages in any divorce suit:

(in.) If the insolvent shall have put any creditor to any vexatious or unjustifiable expense by any frivolous or inequitable defence or claim in any action suit or other proceeding^0'

(iv.) If the insolvent shall have wilfully W delayed sequessrating his estate or avoided the sequestration thereof in order to benefit or assist one. or more creditors to the disadvantage and loss of the rest:

(v.) If the insolvent shall have by habits of gambling extravagance or vice diminished his means of payment so as to lead to his becoming insolvent :w

(vi.) If the insolvent has not complied with the lawful directions and demands of the assignee or trustee of his estate:

(VIL) If the insolvent being a trader^ has carried on trade by means of fictitious capital:(*)

(vm.) If the insolvent has not so far as he was examined thereupon made a full and fair disclosure^ of his property in possession reversion or expectancy:

accounts, where there is no intent of fraudulent concealment, is only a matter for suspension, not for refusal of a certificate.—In re Mitttaghan, 10 V.L.R. (I.), 9.

I t is an offence if the insolvent having proper books hands them over to trustees or purchasers from them, so as to hinder or hamper creditors wanting them in insolvency inquiries.—In re Michael, 5 A. J .R., 64.

The books should be preserved so long as they may be material to creditors.—In re Farrell, 4 A.J.R., 101.

(a) A debtor summons is such a proceeding.— In re Lyon, 4 A.J.E.., 108 ; and see as to this sub-section, He JUalMe&on, 3 A.J.R., 92 ; In re Wright & Miggins, 7 T.L.B, (I.), 7; 2 A.L.T., 144; Inre McOrath, 1 A.L.T., 132.

Quare, whether putting a petitioning creditor to an unreasonable expense, by a frivolous defence, to an order nisi for sequestration, is within the Act.—In re Kwshatn, 1 V.L.R. (I.), 44.

(b) As to the interpretation put on this subsection, see In re Mathiestm, 3 A.J.R.., 92.

(c) An insolvent who had been a deep and rash gambler, but who had not on the whole been a loser at gambling, could not be refused his certificate under the corresponding section of 7 Vict. No. 19, s. 18, for having " b y habits of gambling diminished his means of payment.—In re Dairies,' 1 W. & W. (I.), 5.

Under 7 Vict. No. 19, s. 18, it was held that the words "squandered his means" referred to extravagant expenditure for selfish gratification, and not to an indulgence of a taste for litigation.

In re Brebner, 2 W. & W. (I.), 12. Dealing in mining shares is not the offence of

gainblingwithin this sub-seetion.—Ire re Schuh-krc$l, 4 tV.W. & a'B. (I.), 1.

(d) A person carrying on business as an "accountant, commission and estate agent, and

Government broker " is not a " trader" within the meaning of this sub-section.—InreAa/rons, 6 V.L.R. (I.), 56 ; 2 A.L.T., 28.

(e) To render an insolvent guilty of having traded with "fictitious capitar' he must have made some false statement or acted in some way so as to produce a false opinion about his capital. —Jure Monaghan, 10V.L.R. (I.), 9; 6 A.L.T., 1.

Trading with inadequate capital on speculative consignments of goods purchased on credit, and paying by means of advances thereon for similar previous purchases, does not sustain a charge of the offence of carrying on trade by means of fictitious capital.—In re Oppenheimer, 6 V.L.R. (I.), 26.

Insolvents entered into a large railway contract with the Government relying entirely upon funds to be supplied by a bank which was to participate in the profits, receiving all the payment made by the Government. ffeld, this was a trading on fictitious capital.—In re Wright & ffiqgins, 7 V.L.R. (I.), 7; 2A.L.T. , 144.

(/) Mere silence is not such an offence. There must be inquiries and a non-disclosure in reference thereto.—In re Dunphy, 3 A.L.T., 28.

Where an insolvent had, as the court thought by oversight, omitted an asset from his schedule and also omitted to inform the trustee of it: Meld, that this was not an offence under this sub-section. Inre Aarons, 6 V.L.R. (L), 56 ; 2 A.L.T., 28. • Where an insolvent filed his schedule, suppress

ing the ownership of the greater portion of his property and introducing a fictitious statement as to debts, and upon the messenger of the court seeking to seize his goods, he did not surrender them, but falsely represented them as the property, of a woman with whom he was cohabiting; he was deemed to have committed an offence within 7' Vict.-No.-19 s. 18 —In re' Pogonoweld 1 W W ' &a'B ( I ) 29 * . . • • - - - - * *

VOL. n . 2 X

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1480 INSOLVENCY ACT 1890. [54 VICT:

"Tntaeeaeg • ' (ix.) If the insolvent shall have wilfully violated or {omitted to Stauae 1371." comply with any of the provisions of this Act:((t>

(x.) If the insolvent shall have contracted any debt or debts to any of his creditors without in fact intending to pay or haying at the time he contracted such debt or debts any reasonable or probable expectation of being able to pay •the same:^)

(xi.) If the insolvent being at the time indebted to, any of his creditors shall have unjustifiably made- away with or disposed of otherwise than bond fide and for a valuable consideration any of his property:**-1

(a) The payment of money off an account by an insolvent after the sequestration of his estate is, by section 75, avoided between the creditor paid and the other, creditors; but that section does not forbid the making of it so as to bring the insolvent within this provision.—In re Kershaw, 1 V.L.R. (I.), 244.

(b) An inability to pay all debts will not sustain an objection to the granting of an insolvent's certificate, that he contracted debts "without intending to pay or having any reasonable or probable expectation of being able to pay the same." —In re Aarons, 6 V.L.R. (L), 56; 2 A.L.T., 28.

Inducing a creditor to renew bills by false representations of his affairs is not an offence under the Act to stay a grant of the certificate. —' In re Stocks, 4 A.J.R., 173.

But the acceptance by the insolvent of accommodation bills, without having at the time any reasonable or probable expectation of being able to pay the same, was held to afford grounds for the refusal of his certificate.—/)! re Bryant, 4 W.W. &a'B. (I.), 7.

Under 28 Vict. No. 273, s. 103, the insolvent when he contracted the debt need not have had a good expectation of being able to pay all he owed,but only the particular debt then contracted. •—In re Mason, 3 W.W. & a'B. (I.), 28; followed in In re Goldsmith, 5 V.L.R. (I.), 18, where it was held that the offence under this sub-section must be proved as to particular debts and not by reference to a general inability to pay.

An objection that the insolvent had contracted debts by means of false pretences and misrepresentations ought to allege who the creditors were thkt had been cheated, and the nature of the particular false representations by which credit had been fraudulently obtained, and the evidence in support of such an objection ought to be the same as would sustain an information for obtaining goods by false pretences. Mere exaggeration of the value of property does not amount to proving the offence. A false statement made by one partner is not proof against the other unless made with his concurrence. In re Walters 3 W.W. & a'B. (I.) 14.

Where an insolvent, subsequently to a release under an assignment for benefit of creditors, accepted a bill for the balance of a debt due prior to the assignment under an express agreement for indefinite renewal, and the drawer's insolvency caused a sudden demand for payment: Held, not to be contracting a debt without intending to pay, j j j re Mathieson 3 A.J.R. 92.

Where an insolvent has incurred a renewal of debt to a creditor to buy- off opposition to his obtaining his certificate under a former insolvency, the insolvent informing th& creditor at the time that he had no means wherewith to pay is not contracting a debt without intending to pay within the meaning of this sub-section, Inre Cunningham, 2 V.L.R. (L), 9.

(c) A charge of making away with property otherwise than bond fide should be alleged and proved very clearly.—In re Wright <£ Higgiiw, 7 V.L.R. (I.), 7 ; 2 A.L.T., 144.

Where an insolvent had eleven months before his insolvency executed a settlement which was after his insolvency set aside under 5 Vict. No. 17, s. 7, and there was no other evidence of impropriety in his conduct, but there was evidence that he was solvent a t the time of executing the settlement, he was fteWentitled to his certificate, notwithstanding the proceedings under that section.—InreMahoney, 1 W. &.W. (I.), 188.

Where the evidence showed that an insolvent had prior to his insolvency executed a voluntary settlement of all his property on his wife with the express design of evading the payment of damage and costs in an action for slander, the commissioner was, held bound not only to suspend but to refuse the certificate.—In re Curley, 2 W.W. & a'B. (I.), 1. , For the purpose of withholding a certificate assignments between members of a family on the eve of the insolvency of the assignor, notpublicly visible, and the details of which are very improbable, should generally be held fraudulent, although sworn by the assignees and assignor to have been honestly effected in such a way that no decided falsehood can be detected in their testimony.—In re Allen, 2 W.W. & a'B. (I.), 3.

Buying goods and immediately pledging them to raise money is within this section.—In. re Handosyd,, 1 W. & W. (I.), 110.

' 't An insolvent is estopped from denying that a company to which he purported to assign his.pro? perty had no corporate existence. If he could make such an assertion, it would be strongevidence against him on a compulsory certificate application that he made the assignment with a dishonest purpose. Re Hall, 14 V.L.B», 627.

An insolvent shortly before his insolvency

Cted a sub-lease of a theatre of which he was e, and which formed his only available means

of support, with the theatrical properties and effects, to a relative as the court concluded as a


(xn.) If he shall have unlawfully^ expended for his own benefit ••itwivenaj or appropriated to his own use any property^ of which he S(atu(t IS71-shall a t the t ime have had t he charge or disposition as a t rustee or agen t factor or broker only and not in any other capac i ty :^

(xm.) If the insolvent shall have given any creditor a fraudulent preference :<**

The court shall refuse or suspend the certificate for such period not exceeding two years as it may deem just, and may also if it see fit sentence the insolvent to imprisonment for any period not exceeding six months.^

trustee for him. Held, that he had unjustifiably made away with or disposed of otherwise than bond fide, and for a valuable consideration, a portion of his property, and certificate suspended.

lure Aarom, 6V.L.R. (L), 56. (a) " 'Unlawful ly ' means dishonestly."—Per

Noel, J., In re Martin, 2 A.L.T., 48. (6) The term "proper ty" in this sub-section is

not to be read by the light, of the interpretation section (section 4) as including a right or interest in property or an obligation arising thereout, but it is limited to the goods, money, &c., themselves. If a person receives and holds, as agent, goods for storage upon which his principals have made an advance to the owners, and subsequently, before the advance is satisfied, purchases the same from the owners and disposes of them to another with-•out repaying his principals the amount they have advanced he cannot be said to have appropriated to his own use property of which at the time he had the charge or disposition as trustee or agent onlv and not in any other capacity within the meaning of this sub-section.—In re Vajaa 14 V L R. 902

(c) A., a broker, was in the habit of effecting insurances for the Government with various companies. The policies were issued by the companies in exchange for A.'s 1.0. U. for the premiums which were subsequently received by A. from the Government and paid to the companies by A. A. became insolvent having received certain premiums from the Government which he had failed to pay over to the companies. Held, that he had not charge of the money as " a trustee, agent, factor, or broker," within the meaning of this sub-section. In re Aavrotw 6V.L.R. (I.) 56.

I t was held under an analogous section 7 Vict. No. 18, s. 18, that to justify refusal of certificate to insolvent for having appropriated to his own use moneys of I>. deposited with the insolvent as an agent, he must have been an agent in the sense in which that word is used in popular parlance or there must have been a series of continued transactions. !Se must come rather under the character of a trustee than of an agent.—In re Nantes 1 W. & W . (I.) 1.

An insolvent, who had received from B. money to be invested at interest on good and approved securities on account of B. , lent the money on bills drawn by and payable to himself, and did not disclose his character as agent in any transaction, nor make any entry in. his own books to show he held the money as trustee or agent, but scheduled it as a loan to himself. Held, that.he

had appropriated to his own-use money entrusted to him as an agent, and under 7 Vict. No. 19, s. 18, was rightly refused his certificate.—In re Christophers, 1 W. & W. (L), 108.

The words " agent only" in that Act were held to mean an agent without an interest; and that an auctioneer employed simply to sell was such an "agent only; and that there was no substantial distinction between the auctioneer's appropriation of the proceeds and his appropriation of the property. In re Perry, 1 W. & W. (I.), 150.

I t is no ground for suspending a solicitor's certificate that he has engaged in speculations which might have interfered with his business as

• a solicitor. The case distinguished where the client had lent further money after discovering that the original sum had not been applied as directed, and had included both in a mortgage security.—InreBayne, 1 V.L.T., 143.

The amount of property misappropriated is immaterial, and a"fraudulent intent need not be proved to constitute an offence under this section. —In re Scott, 4 A.J.R., 50.

Anoticeof objection to thegrant of aninsolvent's certificate should specify with reasonable certainty the charge against the insolvent. Where the charge Is under this sub-section of unlawfully spending trust money, the nature of the property dealt with,the name of the person to whom it belonged, and the time when the act complained of was committed should be specified. I t is not sufficient to state the offence in the precise words of the Act. In re CwtMeld 10 V.L.R. (L), 73 ; 6A.L.T., 58.

{d) Payment to a creditor who had taken out a writ, and was pressing for payment, might be an unjust and fraudulent preference within the meaning of section 103 of 28 Vict. No. 273, so as to be good ground for the refusal of a certificate. Semite, that the fraudulent and unjust preference for which a certificate should be refused is not necessarily one which could be avoided as a fraudulent preference under that Act. In re White, 6 W . W . &a'B. (I.) 7.

A fraudulent preference, for which a certificate should be refused, is not to be merely a preference of such a nature as would avoid the payment, but there should be some fraud in connexion with it. —In re Oreen, 1 A.J.R., 104.

A conveyance of property upon pressure as for a debt due is no. fraudulent preference.—In re ScMieff, 6 V.L.R. (I.), 51.

(e) Where certificates were granted, under 28 Vict. No. 273, s..l02^to,.certain members of an

2 X 2

1482 I N S O L V E N C Y ACT 1890. [54 VICT.

"iwoiMM!/ 1 4 2 . If i t shall appear to the court upon an application for a Statuteim certificate t ha t though the insolvent has not been guilty of any of Court may have the offences mentioned in the two last preceding sections his conduct du«t other than t>efore or after sequestration has been fraudulent or culpamy negngent atea^sproifled. ^ n e court m&J suspend the certificate for any period not exceeding one

year.W

Conditional 1 4 3 . In any case if the court shall be of opinion tha t a certifi-certiBcate. cate 0 U g h t not to jje p a n t e d unconditionally i t may errant a certificate iff. s. 140 . •* . . j I * j . ' A i • l ' l j_ t . .

subject to any condition touching any salary pension emoluments profits wages earnings or income which may afterwards become due to or be earned by the insolvent and generally touching after acquired property.

NO application 1 4 4 . No application for a certificate shall be entertained by the aftertSe*1 court after the expiration of twelve months from the date of the order months. of sequestration unless notice of intention to apply had been duly ii.a. ui. advertised before the expiration of the said period except by leave of

the court upon such terms (if any) as the court may think fit. Form of certift. 1 4 5 . The certificate shall be in the prescribed form and shall be ?.•.- . v. un i e r the hand of the judge and the seal of the court, but shall not be Certificate wnen , . -, ~i V ±'i £-i. xi • L* t* /i J ' I I i to be drawn up. drawn up or take enect until alter tne expiration or the time allowed ib.«. 142. for appeal, or if an appeal be brought after the decision of the court of

appeal upon such appeal, and shall bear date either the day after the expiration of the time allowed for appeal or the day of the decision of

Effect of certln- the court of appeal, as the case may require. Such certificate shall cate. ^ ,,.. upon taking; effect discharge the insolvent from all debts provable under See 32 & 33 Vict _ f . ° , ° . , , - i i i • / , ! n, o.718.49. his insolvency save as herein otherwise provided; and it thereafter any

action shall be brought against him for any such debt claim or demand he may plead in general tha t the cause of action accrued before he became insolvent and may give this Act and the special matter in evidence, and the certificate shall be sufficient evidence of the sequestration and the proceedings precedent thereto.

^tVinlS^t" 1 4 6 . The certificate shall not release or discharge any person who partners &c. w a s a partner with the insolvent a t the time of the insolvency or was s * "i Hv then jointly bound or had made any joint contract with him. insolvent firm niter opposition on the grounds of or dealing of the insolvent, but must also be a contracting debts without means of payment, breach of faith, or violation of confidence, or misappropriating property, and general miscon- savour of or be tainted with fraud, and be capable dnet: Held, per Molesworth, J., tha t the miscon- of distinct definition and clear proof.—In re duct referred to in that section was not limited Bviledge, 2 W. & W. (I.), 89. to the cases enumerated in the following section, (a) The fraudulent imitation of trade-marks by and that it was not necessary in partnership cases an insolvent will, upon his application for a cer-to bring the misconduct definitely home to each tificate, be considered in connexion with his partner. On appeal, Held, per Barry, J., that general conduct. Such a fraud is one which ths investigation into the conduct of the insolvent should be punished by the suspension of the was not to be limited to those cases or to those certificate, but not by its total refusal. In re species of fraud or misconduct enumerated in Brebner, 2 W. & W. (I.), 12. section 103 of that Act, nor necessarily to the This section is intended to deal with miscon; trade or business carried on by the applicant duct not distinctly specified in the Act. The before his insolvency, nor to his conduct as a words " conduct fraudulent or culpably negligent" t rader; and in examining the conduct of the contribute two distinct offences, and distinct insolvent it was not absolutely necessary to show convictions should be expressed thereon; and the that the ' ac t complained of hoa produced the convictions should state what the misconduct is insolvency Per Williams / . t h a t the conduct and whether fraud or culpable negligence.—In generally of the insolvents'as traders is open to re Hearty 6 V L . B (I.) 37 And see In re investigation But per StaweU GJ disa the Martin, 2 A.L.T. 48 as to culpably negligent misconduct must not only be'with* the trade conduct. ", ,

•No. 1102:] INSOLVENCY ACT' 1890. 1483

147. Any contract covenant or security made or given by an "imoiv&Ky^ insolvent or other person with to or in trust for any creditor for securing s. ?«.e the payment of any money as a consideration or with intent to persuade Contract or the creditor to forbear opposing the certificate or to appeal against the i S'toinduoe1

grant of the same shall be void, and any money thereby secured orfrcditortc',f?r* ° i •* . •• i -.-. -, ? i* - . , i t bear opposition agreed to be paid shall not be recoverable; and the party sued on any void. such contract or security may plead in general that the cause of action 6 <**>« n -accrued after sequestration and may give this Act and the special matter in evidenced but no such security if negotiable shall be void as against a bon&Jide holder thereof for value without notice of the consideration for which it was given.

If a creditor of an insolvent shall obtain any sum of money or any goods chattels or security for money from any person as an inducement for forbearing to oppose or for consenting to the allowance of the certificate of such insolvent, or to forbear to appeal against the grant of the same every such creditor so offending shall forfeit and lose for every such offence the treble value or amount of such money goods chattels or security so obtained which may be recovered by any person upon information before and by order of the court in the prescribed manner.

148. If upon an application for a certificate the same is opposed court may hold j-i i. • J.L • i J. J. £ J T- ' i -j.1- J. cc • ar insolvent to bail

the court may require the insolvent to una bail with two sumcient sure- to come up for ties to attend upon the day appointed for giving judgment on such Judsment'

v , . • i j> i i -t j.1 • i i L • j . ' i j.1 J*. * . 145.

application, or m deiault may commit the insolvent to prison until the day so appointed.

149. If the insolvent shall not within six months after sequestra- Proceedings tion have annlied for his certificate a indole may on the aimlication of doesnotaoniv the trustee or any creditor reciuire the said insolvent and (in case of his •**• >• iif>-refusal or neglect) may comiiel him by warrant to annear before the court 'W and thereupon and from thenceforth the court may grant refuse* or suspend his certificate and r»unish or otherwise deal with such insolvent as if the certificate had been aTmlied for by him W

, . , . ^u insolvent before he obtains lus certificate becomes seised jJ'J jjyj j***

possessed or entitled of or to any property, the trustee shall if directed quired property. by resolution of a general meeting of creditors or by the committee of n> «. 1*7. inspection apply to the court upon notice to the insolvent and such other persons (if any ) as the court may direct for an order directing that such property shall be dealt with under this Act and applied in payment of the creditors; and the court niay make such order thereon, but the

(a) To a declaration upon a covenant to pay the affidavit required by Rule127..— InreFranhel, money against two covenantors, the defendant 4A.J.R., 140. pleaded that the estate of one of them had been • (d) "The construction of this section is diificult. sequestrated under the Act, and that the causes The former part of the Act clearly vests in the of action accrued after sequestration. Held, assignee all property accruing to the insolvent. on demurrer, a good plea, though no reference If an insolvent becomes entitled to property which to the Statute was inserted in the margin of ism the hands of athirdpersonclaimingadversely the plea.—Patterson v, Evans, 5 V.L.R. (L.), 143. to the insolvent, it is, I think, the duty of the

(b) Proceedings under this section are regulated assignee to get possession of it without regard to by Rule 131 of the Insolvency Rules and the the section. Perhaps he should proceed under the order of procedure there prescribed should be section before applyingit."—Per Molesworth, J., followed. Rule 121 does not apply to such . Inre M-uleahy, 5 V.L.R. (I.), at page 12. proceedings.—lit re Caulfield, 10 V.L.R. (I.), (e) The term "rights of creditors" in this sec-73; following In re Goldsmith, 5 V.L.R. (I.),' tion includes only rights in rem and not rights in 18, 23. . . personam. In re Wctrne, ex parte Young, 11

(c) An insolvent need not under this section file V.L.R., 320.

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the insolvent whose debts may have been incurred since the sequestration

itS j\j UlUiY tlccULl jur&v*

When insolvent

1 5 1 . A n y assignee or t rus tee becoming insolvent and being aSie!2?.n.0L<5t indebted to t h e estate of which he was assignee or trustee in respect of mture effects, any sum of money improperly re ta ined or employed by m m 11 he shall ib. * us. obtain his certificate and allowance thereof shall not be discharged

thereby as to his future effects in respect of the said debt . Certificates 1 5 2 . Anyperson whose certificate has been granted10* under t h e law / i .Tu9 W *n f ° r c e m Victoria previous to the passing of the "Insolvency Statute

1871" relating to insolvency, but who has not obtained the confirmation of such certificate at the next sitting of the Supreme Court in its insolvency jurisdiction after the granting thereof/*' may apply to the Supreme Court for an order confirming the grant of such certificate, and the Supreme Court may make such order, and such order of confirmation shall have the same force and effect.as if the same had been made at the next sitting of the Supreme Court after the grant of such certificate. <*>

Any person whose certificate has been granted previous to such time aforesaid by the chief or other commissioner of insolvent estates but who upon appeal to the Supreme Court has had such certificate refused may apply to the court at Melbourne upon giving such notice as the rules may direct, and the court may, having regard to the grounds of the refusal of the certificate and the period which has elapsed since such refusal, grant or further suspend any such certificate for such period and upon such terms (if any) as the court may deem just. Every certificate granted under the provisions of this section shall be in the same form and have the same effect as any certificate granted under the law in force in Victoria at the time any such certificate was refused.

Any person whose certificate has been refused under the law relating NO. 273. to insolvency in force in Victoria before t h e pass ing of t h e " Insolvency

Statute l S T l " bu t who not hav ing appealed to t h e Supreme Court aga ins t such refusal cannot avail h imself of the rider to t h e Ac t of t h e Governor and Legislative Council of New South W a l e s made and passed

ioviot. NO. i4, in the ten th year of t h e re ign of H e r present Majesty int i tuled "An Act to remove Difficulties in the Disposal Administration and Distribution (a) This section refers to certificates that have

been actually signed, but not confirmed, and not to cases where there is only a minute of instruction to grant the certificate.—In re Maplestone, 3 A.J.R., 127.

(b) An insolvent's estate was sequestrated under the " Insolvency Statute 1865 " in 1867, and at the certificate meeting held in June of that year the then Commissioner of Insolvent Estates orally granted him his certificate, but no certificate was drawn up or signed. Meanwhile the Commissioner died, and on application made to his successor in August, 1887, he, on the 26th, signed a document purporting to be a certificate of discharge, certifying that so far as appeared to him the insolvent had in all things conformed to the Act. Application to confirm this certificate was then made to the next sitting of the court after its signature. Held, following Be Usher, 2 V.R. (I.) 1, that the certificate must be presented for confirmation at the next sitting of the court after its oral grant, not at the next sitting after its

signature.—In re Ryan, 13 V.L.R., 597. (c) This section does not apply to certificates

under the old law, granted since the coming into operation of the "Insolvency Statute 1871." Where a certificate granted under those circumstances has not been duly presented for confirmation under the "Insolvency Statute 1865," section 105, the insolvent must procure a fresh certificate and have it duly confirmed.—lit re Bowman, 3 V.L.R. (I.), 104.

On applications under this section, notice should be served upon the continuing members of old firms which were creditors, and upon all other creditors who can be found.—In re Iftnlayson, 6 V.L.R. (I.), 82.

For a case in which the court required notice to be served on one large creditor only and not on all creditors, see In re Gvlhrie, 8 V.L.R. (I.), 4. , Notice of motion for confirmation of a certificate

may be given by post where the creditors reside at long distances from Melbourne.—In re Byrnes, 10 V.L.R. (I.)', 5. ' ,

No. 1102.] INSOLVENCY ACT 1890. . 1485

of Insolvent Estates" or of the provisions of the one hundred and ninth "Insolvency section of the "Insolvency Statute 1865" may apply to the court a\J$

lat'ael " Melbourne subject to giving such notice as the rules may direct for an order granting him a certificate and the court shall having regard to the grounds of the refusal of the certificate and the period which has elapsed since such refusal grant or further suspend any such certificate for such period and upon such terms (if any) as the court may deem just. Every certificate granted under the provisions of this section shall be in the same form and have the same effect as any certificate granted under the law in force in Victoria at the time any such certificate was refused.

PART Ii.—LIQUIDATION BY JSLBRANGEMENT.'11'

153. The following regulations shall be made with respect to the Regulations as to

liquidation by arrangement of the affairs of the debtor:— ar™ e!n"nty (i.) A debtor unable to pay his debts may summon a general **• **m

meeting of his creditors, and such meeting may, by an Jr^, -?&. extraordinary resolution as hereinafter denned, declare that the affairs of the debtor' are to be liquidated by arrangement and not in insolvency, and may at that or some subsequent meeting, held at an interval of not

• • more t h a n a week, by an ordinary resolution appoin t a t rus tee , wi th or wi thout a commit tee of inspection.

(il.) All the provisions of this Act relating to the meeting for election of a trustee and to other meetings of creditors including the description of creditors entitled to vote at such meetings, and the debts in respect of which they are entitled to vote, shall apply respectively to the said. meeting of creditors and to subsequent meetings of -creditors for the purposes of this section, subject to the following modifications:—

(a) That every such meeting shall be presided over by such chairman as the meeting may elect; and

(b) That no creditor shall- be entitled to vote until he has proved by a statutory declaration a debt provable in insolvency to be due to him, and the amount of such debt, with any prescribed particulars ; and any person wilfully making a false declaration in relation to such debt shall be guilty of a misdemeanor.

(c) An extraordinary resolution shall be a resolution agreed to by a majority in number and value of the creditors of the debtor appearing on the state-ment'hereinafter mentioned,

(in.) The debtor, unless prevented by sickness or other cause satisfactory to such meeting, shall be present at the meeting at which the extraordinary resolution is passed,

• and shall answer any inquiries made of him and he or if he is so prevented from being at such meeting some one on his behalf shall produce to the- meeting a statement .in the prescribed form verified by the affidavit.or declaration of the debtor showing the whole of his assets

(a) As to whether a petition for liquidation is an act of insolvency, see In re Smith, 3 A.J.R., 17.


and debts, and the names and addresses of the creditors to wkom yis debts are due. And where a debt is on a Dill 01 exchange or promissory note the holder of which is then unknown the amount of such bill or note the date when the same will fall due and the name of the acceptor or person to whom the same is payable and of the last-known holder shall be stated.

(iv.) The extraordinary resolution, together with the statement of the assets and debts of the debtor, and the name of the trustee appointed, and of the members (if any) of the committee of inspection, shall be presented to the chief clerk and it shall be his duty to inquire whether such resolution has been passed in manner directed by this section; but if satisfied that it was so passed, and that a trustee has been appointed with or without a committee of inspection, he shall forthwith register^ the resolution and the statement of the assets and debts of the debtor, and such resolution and statement shall be open for inspection on the prescribed conditions, and the liquidation by arrangement shall be deemed to have commenced as from the date of the appointment of the trustee.

(v.) All the property of the debtor shall, from and after the date of the appointment of a trustee, vest in such trustee under a liquidation by arrangement and be divisible amongst the creditors, and all such settlements conveyances transfers charges payments obligations and proceedings as would be void against the trustee in the case of sequestration shall be void against the trustee in the case of liquidation by arrangement.

(vi.) The certificate of the chief clerk in respect of the appointment of any trustee in the case of a liquidation by arrangement shall be conclusive evidence of his appointment.

(vn.) The trustee under a liquidation shall have the same powers and perform the same duties as a trustee under sequestration, and the property of the debtor shall be distributed in the same manner as in an insolvency; and with the modification hereinafter mentioned all the provisions of this Act shall, so far as the same are applicable, apply to the case of a liquidation by arrangement in the same manner as if the word "insolvent" included a debtor whose affairs are under liquidation, and the word " sequestration " included liquidation by arrangement; and in construing such provisions the appointment of a trustee under a liquidation shall, according to circumstances, be deemed to be equivalent to and a substitute for the order of sequestration or the service of an order of sequestration.

(a) The registration by a chief clerk of resolu- have been duly passed and the requirements of tions passed at-a meeting of creditors is in the this Act Complied with.—lureBatoitai., 1 V.L.R. absence of fraud conclusive that the resolutions (I.), 52.

No. 1102.] INSOLVENCY ACT 1890; 1487

(Vm.) The creditors at any general meeting may- prescribe "iwoiv&u% the bank into which the trustee is to pay any moneys e

received by him, and the sum which he may retain in his hands.

(ix.) The release of the trustee may be granted by a special resolution of the creditors in general meeting, and the accounts may be audited in pursuance of such resolution at such time and in such manner and upon such terms and conditions as the creditors think fit.

(x.) A discharge may be granted to the debtor by three-fourth.8 in number and value of the creditors who have proved debts, and such discharge shall be in the prescribed form and given in prescribed manner and at the prescribed time, and the trustee shall report to the chief clerk the discharge of the debtor, and a certificate of such discharge given by the chief clerk shall have the same effect as a certificate of discharge given to an insolvent under this Act, but any such discharge may be set aside by the court upon the application of any creditor if it appears that the same has been obtained by fraud or by giving any preference to one creditor over another or if the debtor has been guilty of any felony or misdemeanor under tins Act.

(xi.) The provisions of Part VIII. of this Act shall not apply to a debtor whose affairs are under liquidation under this Part of this Act, but if such debtor shall not have obtained his discharge withm three years from the commencement of the liquidation any balance remaining unpaid at the expiration of such period in respect of any debt proved under the liquidation (but without interest in the meantime) shall be deemed to be a subsisting debt in the nature of a judgment debt, and subject to the rights of any persons who have become creditors of the debtor since the commencement of the liquidation may with, the sanction of the court be enforced, against any property of the debtor, but to the extent only and at the time and in the manner directed, by the court, and after giving such notice as may be prescribed or ordered by the court and save as herem provided no action or suit shall be commenced or carried on against any debtor whose affairs are liquidated by arrangement under this Part of this Act for a debt provable under the liquidation,^

(xn.) Eules of court may be made in relation to proceedings on the occasion of liquidation by arrangement in the same manner and to the same extent and of the same authority as in respect of proceedings under a sequestration.

(xm.) If it appear to the court on satisfactory evidence that the liquidation by arrangement cannot, in consequence of legal difficulties or of their being no trustee for the time being or for any sufficient cause, proceed without injustice

, (a) This sub-section excludes any proceedingto entered into.—England v. Moore, 6 V.L.R. (E.), attach under an order made after liquidation 48.


"ijtMtwmaj • or undue delay to the creditors or to-the debtor, the court a 7 may on the petition of the trustee or of any creditor whose

debt amounts to fifty pounds and upwards sequestrate the property of the debtor and proceedings may be had accordingly.

(xiv.) Where no committee of inspection is appointed the trustee may act on his own discretion in cases where he would otherwise have been bound to refer to such committee.

ITART X..—COMPOSITION WITH CREDITORS.

Relations as 154, The creditors of a debtor unable to pay his debts may, with-with creditors, out any proceedings ot insolvency, by an extraordinary resolution as ib. s. i5i. hereinafter defined resolve that a composition*") shall be accepted in SeliS2^v 'ot* satisfaction of the debts due to them from the debtor.

An extraordinary resolution of creditors shall be a resolution which has been passed by three-fourths in number and value of the creditors of the debtor appearing on the statement hereinafter mentioned assembled or represented^ at a general meeting to be held in the manner prescribed of which notice has been eiven in the prescribed manner and has been confirmed by a majority m number and value of the said creditors assembled or represented at a snhsequent general meeting of which notice has been erven in the nrescribed manner and held a t an interval of not less than seven davs nor more than fourteen days from HIe dafp of HIP mpptinc at which such resolnHnn was first passed

The dphtor rmlpss nrpvprirpd by sickness or other cause RflfisfactoTv i. 1, i.' l. 11 l, i , i , i , i - j . • J 1, 11 to such meetings shall be present at both the said meetings, and shall jmswer aOT inmiiries mad*i of him and lie or if lie is so prevenfpd from oemg at such meetings some one on his behalf shall produce to the first meeting a statement^-1 verified by the affidavit or declaration of the J 1-J. I . • J.T- 1 - 1 J > 1 - J. J J 1-J. J i t - J

debtor showing the whole of his assets and debts and the names and oiv j. c edito s TO o e .r-,?? e J d ~ .,

1 1 i f n a a l V u J . , i f , h t / J L s a 1 e • jo f h

debtor as to his assets and debts, shall he presented(<f> to the chief clerk, («.) A composition entered into after the grant- debts, the registration was held not conclusive

ing of a rule nui under section 39 will not defeat under the next following section and was ordered the inchoate rights thereunder.—In reMa/rie,3 to be cancelled.—In re Dane, 3 V. I iR. (I.), A.J.R., 6. 19.

Where subsequently to a preliminary resolution ((>) Objection to the validity of proceedings at for composition under this section a rule nisi for a meeting of creditors under this section may be sequestration of the debtor's estate was obtained taken by the solicitor of a creditor who is presen; by one of the creditors, on motion to make the to watch his client's interests, although he may rule absolute it was held that the proceedings for not be qualified to vote.—In re Dane, 3 V.L.R. composition had priority.—/m re White, 2 v .R. (I.), 19. (I.), 42. (c) The statement of assets and debts required

Where at a meeting of creditors a resolution for from a debtor at a meeting of his creditors for an composition is passed, which is afterwards regis- acceptance of a composition is the foundation of tered by the chief clerk, and at a subsequent the entire proceedings, and so far as the Act is meeting of creditors such resolution is confirmed, concerned, the only material for deciding who are but such confirmation is filed only and not regis- to vote, and ascertaining majorities, and if such tered, such composition is invalid, and cannot be statement be not verified as required by the Act set up in answer to a creditor.—England v. the proceedings will be invalid.—In re Dane, 3 Moore, 5 V.L.R. (E.), 135. V.L.R. (I.), 19.

Wherearesolutionacceptingaeompositionunder (d) A solicitor for the debtor entmsted with this section had been registered with great haste, the registration of a resolution accepting a com-before objections to the registration could be position under this section need not "personally r,easq:nably. filed; and the resolution-had been1 effectthe registration, but maydo so either byflis framed upon an unverified statement of assets and clerk or the debtor:—Ibid.

No. 1102:] INSOLVENCY ACT 1890. 1489

and it shall be his dutyto inquire whether such resolution has been "Tnsoiwsncy passed in manner directed by this section; and if satisfied that it had statute mi.' been so passed he shall forthwith register the resolution and statement of assets and debts, but until such registration has taken place such resolution shall be of no validity, and any creditor of the debtor may inspect such statement at prescribed times and on payment of such fee (if any) as may be prescribed.

The creditors may by an extraordinary resolution add to or vary the ' provisions of any composition previously accepted by them without prejudice to any persons taking interests under such provisions who do not assent to such additions or variations, and any such extraordinary resolution shall be presented to the chief clerk in the same manner and with the same consequences as the extraordinary resolution by which the composition was accepted in the first instance.

The provisions of a composition accepted by an extraordinary resolution in pursuance of this Part of this Act shall be binding on all the creditors whose names and addresses and the amount of the debts due to whom are shown in the statement of the debtor produced to the meetings at which the resolution has passed, but shall not affect or prejudice the rights of any other creditors.

Where a debt arises on a bill of exchange or promissory note if the debtor is ignorant of the holder of any such bill of exchange or promissory note he shall be required to state the amount of such bill or note, the date on which,it falls due, the name of the acceptor or person to whom it is payable, and any other particulars within his knowledge respecting the same, and the insertion of such particulars shall be deemed a,sufficient description of the creditor of the debtor in respect of such debt; and any mistake made inadvertently by a debtor in the statement of his debts may be corrected after the prescribed notice has been given with the consent of a general meeting of his creditors.

The provisions of any composition made in pursuance of this section may be enforced by the court on a motion made in a summary manner by any person interested, and any disobedience of the order of the court made on such motion shall be deemed to be a contempt of court.

Rules of court may be made in relation to proceedings on the occasion of the acceptance of a composition by an extraordinary resolution of creditors in the.saihe manner and to the same extent and of the same authority as in respect of proceedings in insolvency.

If it appear to the court on satisfactory evidence that a composition under this Part of this Act cannot, in consequence of legal difficulties, or for any sufficient cause, proceed without injustice or undue delay to the creditors or to the debtor, or ought not to proceed on account of any fraud on the part of the debtor or any creditor or other person, the court may sequestrate the property of the debtor, and proceedings may be had accordingly.

155. The registration by the chief clerk of a resolution of the resolutions of creditors on the occasion of the liquidation by arrangement under"ve 'i ^X"n 1" Part IX. of this Act, or of aresolution by the creditors.on"the occasionoasea-of a composition under this Part of this Act, shall; in the absence of s:15' n. j -i r i . j , i . i 1 A ; _ j . * 1 „ B -&33Vic t .

traud, be. conclusive evidence that sucn resolutions respectively were 0. n s. m.

http://which,it


"Insolvency Statute 1871."

yuld passed ana all the hequisitions of thit Act in resrect of sucs resolutions complied with>>

Concealing insol-. vent's effects. lb. s.153.

Persona forging seal So. guilty of felony,

As to offence of removing embezzling &c. any property UIKIQT attacn-. taenia

As to offence of knowingly receiving any fraudulent alienation &c. from insolvent.

Inserting false advertisement.

False claim &c a mUdemeanor. S2 & 8$ Vict. c 62 s. 14.

PART il.—OFFENCES AGAINST THE INSOLVENT LAW.

156. As to persons other than the insolvent the following provisions shall be made :—

(i.) Any person who shall wilfully conceal any real or personal estate of an insolvent with intent to defraud his creditors shall be deemed guilty of a misdemeanor, and on conviction thereof shall suffer imprisonment with or without hard labour for any period not exceeding three years.

(n.) Every person who shall forge the seal or any order certificate or process of the court or who shall serve or enforce any such forged order or process knowing the same tobe forged, or deliver -or cause to be delivered to any person any paper falsely purporting to be the original or a copy of any summons certificate order warrant or other process of the court or a judge, or who shall act or profess to act under any false colour or pretence of such order warrant or other process shall be guilty of a misdemeanor and being convicted thereof shall be imprisoned with or,without hard labour for any term not exceeding three years.

(in.) If any person shall dispose of receive remove retain conceal or embezzle any property moneys or securities for money belonging to any insolvent estate which have been attached, knowing the same to have been so attached and with intent to defeat the said attachment, or shall hinder or obstruct or endeavour to hinder or obstruct the messenger or other person authorized to make the same, such person shall on conviction thereof before the court or any two justices suffer imprisonment with or without hard labour for any period not exceeding six months.

(iv.) If any person shall receive or accept any property from the insolvent with intent to defraud the creditors of the insolvent such person shall be deemed guilty of a misdemeanor, and on conviction thereof suffer imprisonment with or without hard labour for any period not exceeding three years.

(v.) Any person who shall insert or cause to be inserted in the Government Gazette or in any newspaper any advertisement purporting to be under this Act without authority or knowing the same to be false in any material particular shall be guilty of a misdemeanor, and on conviction thereof shall suffer imprisonment for any period not exceeding three years.

(vi.) If any creditor insolvent or other person in any insolvency or liquidation by arrangement or composition with creditors in pursuance of this Act wilfully and with intent to

(a) Qucere, whether the registration of a resolu- review by the judge promptly sought as to the tion under this and the last preceding section if irregularity of the debtor's statement not being properly obtained would be conclusive to preventa sworn.—In re Dane, 3 V.L.R. (I.), 20.

No. H02.] INSOLVENCY ACT 1890. 1491

defraud makes any false claim, or any proof declaration "iiwhmty or statement of account which is untrue in any material st"-ivte 167L" particular, he shall be guilty of a misdemeanor, punishable with imprisonment not exceeding three years with or without hard labour.

157. Any insolvent, and any person whose affairs are liquidated punishment of by arrangement in pursuance of Part IX. of this Act, shall in each Sebtare6"'' of the cases following be deemed guilty of a misdemeanor, and on n. «. iw. conviction thereof shall be liable to be imprisoned for any time notSee32&33v.(;t. KVUIJ.UU1VU v ^ w r _ j C 6 2 e . l l .

exceeding three years, with or without hard labour, that is to say :— (1.) If he does not, to the best of his knowledge and belief, fully

and truly discover to the court upon any examination*"* under this Act or to the trustee administering his estate for the benefit of his creditors all his property, real and personal, and how, and to whom, and for what consideration and when he disposed of any part thereof, except such part as has been disposed of in the ordinary way of his business or trade (if any), or laid out in the ordinary expense of his family, unless the jury is satisfied that he had no intent to defraud:

(n.) If he does not deliver up to such trustee, or as he directs, all such part of his real and personal property as is in his custody or under his control, and which he is required by law to deliver up, unless the jury is satisfied that he had no intent to defraud:^*

(in.) If he does not deliver up to such trustee, or as he directs, all books documents papers and writings in his custody or under his control relating to his property or affairs, unless the jury is satisfied that he had no intent to defraud:W

(iv.) If before or after sequestration or the commencement of the liquidation, he conceals, any part of his property^ to the value of ten pounds or upwards, or conceals any debt due to or from him, unless the jury is satisfied that he had no intent to defraud:

(v.) If before or after sequestration or the commencement of the liquidation, he fraudulently removes any part of his property of the value often pounds or upwards:

(a) Under 28 Vict. No. 273, s. 110, it was held that an offence of a like character related to answers by the insolvent to inquiries made for the discovery of assets, &c., and not to answers to protect himself from the refusal of a certificate. —In re Thomas, 1 W.W. & a'B. (I.), 40.

(6) Where a husband did not deliver up property —furniture used in his home, and purchased partly with his own and partly with his wife's money— and there was evidence of an intent to make it appear that the wife was solely entitled to the property, the court held that i t was an offence under this sub-section, but considering the wife's colour of title, did not punish it by imprisonment. —In re Oppenheimer, 6 V.L.R. (I.), 26.-

(c) That the books are in the custody of a third" party is no excuse to an insolvent for nondelivery up to his assignee.—lit, re Hearty, 1 A.L.T., 160.

{d) The offence of concealment of ' * his pro* per ty" maybe committed by an insolvent after and notwithstanding the sequestration. A conviction for the offence is good, where the property concealed had been assigned by a deed, which was void as an act of insolvency.—Beg. v. Tempest, 3 V.L.R. (IJ .) , 329.

"The offence of concealing property under this sub-section means doing something, a mere nondisclosure of assets is insufficient."—Per 2?oel, J., In. re Dunphy, 3 A.L.T., 28.

http://C62e.ll


intdmnep y (Vl.) If be makes any'material omission in-ina statement relating ututemv to his affairs, unless the jury is satisfied that he had no

intent to defraud: (VIL) If, knowing or believing that a false debt has been proved

by any person under the insolvency or liquidation, he fail for a period of a month to inform such trustee as aforesaid thereof: - : - • • . „ "

(vm.) If after sequestration or the commencementof the liquidation, he prevents the production of any book document paper or writing affecting or relating to his property or affairs, unless the jury is satisfied that he had no intent to conceal the state of his affairs or to defeat the law:

•• (I5-) If before or after sequestration or the commencement of the liquidation, he conceals destroys mutilates or falsifies or is privy to the concealment destruction mutilation or falsification of any book or document affecting or relating to his property or affairs, unless the jury is satisfied that he had no intent to conceal the state of his affairs or to defeat the law:

(x.) If before or after sequestration or the commencement of the liquidation, he makes or is privy to the making of any false-entry in any book or document^ affecting or relating to his property or affairs, unless the jury is satisfied that he had no intent to conceal the state of his affairs or to defeat the law:

(xi.) If before or after sequestration or the commencement of the liquidation, he fraudulently parts with alters or, makes any omission, or is privy to the fraudulently parting with altering or making any omission in any document affecting or relating to his property,or affairs:

(xn.) If after sequestration or the commencement of the liquidation, or at any meeting of his creditors within four.months next before sequestration or the commencement of the liquidation, he attempts to account for any part of his property by fictitious losses or expenses:

(Xin.) If within four months next before sequestration or the commencement of the liquidation, he, by any false repre-sentation^ or other fraud, has obtained any property on credit and has not paid for the same:

(xiv.) If within four months next before sequestration or the commencement of the liquidation, he being a trader obtains, under the false pretence*"* of carrying on business

, (a) A creditor dissatisfied with the extent of the indebtedness of his debtor called on him $0 furnish an account of his assets and liabilities. The debtor made out a false balance-sheet in order to conceal the state of his affairs. Held, that a balance-sheet so handed to a particular creditor is not a " document" within this sub-section and on the subsequent insolvency of the debtor he is not liable to have his certificate refused under this sub-section.—In re Glo/pha/m, 10 V,L,R>, (I.) 18.

(J) To support an objection to the grant to an insolvent of a certificate on the ground that he has obtained credit by false representation, it must be shown distinctly that the credit was obtained by reason of the false representation,.—Ibid.

(c) Where an insolvent is charged under this sub-section with obtaining credit by false pretences, the pretence must be shown to have been made by him in answer to distinct inquiries, by reason of the supposed truth of which the credit was given. —In re Goldsmith, 5 V.L.IL (I.), 18.

No. 1102. ] INSOLVENCY ACT 1890. 1493

• - - and dealirig'inthe ordinary way of his trade, anyproperty "imoivtmcy on credit, and has not paid for the same, unless the jury staiv,te 1871-is satisfied that he had no intent to defraud:

(•XV.) If within four months next before1 sequestration or the commencement of the liquidation, he pawns pledges or disposes of otherwise than in the ordinary way of his trade or business any property which he has obtained on credit and has not paid for, unless the jury is satisfied that he had no intent to defraud :^

(xvi.) If he is guilty of any false representation'*' or other fraud for the purpose of obtaining the consent of his creditors or any of them to any agreement with reference to his affairs or his insolvency or liquidation.

158. If in any composition with creditors under Part X. of Punishment for this Act any debtor make at any meeting of creditors any false state- eomp tioTT1 of

ment or any material omission in any statement relating to his affairs, i>>- »• iw. or if he be guilty of any false representation or other fraud for the purpose of obtaining the consent of his creditors or any of them to any agreement with reference to his affairs or to such composition, he shall be guilty of a misdemeanor and may be imprisoned for any term not exceeding three years with or "without hard labour ,

159. If any insolvent or person who has his. affairs liquidated*'Penalty for by arrangement after sequestration or the commencement of the liquida- £r^rty"B Wlt

tion, or within four months before such sequestration or commencement II>. ». i«>. quits Victoria and takes with him, or attempts or makes preparation for ^s^^^?ot' quitting Victoria and for taking with him any part of his property to the amount of twenty pounds or upwards which ought by law to be divided amongst his creditors,^ he shall (unless the jury is satisfied that he had no intent to defraud) be guilty of felony, punishable with imprisonment for a time not exceeding three years with or without hard labour.

160. Any personW shall in each of the cases following be deemed Penalty on guilty of a misdemeanor, and on conviction thereof shall be liable to be obSfining cr«tit imprisoned for any time not exceeding one year with or without hard to-I ' l T i l . 4. • 4. i . i 5 . 8. 157.

labour, that is to say:-^- .. „ ,„ .(!._) If incurring any debt or liability he has obtained credit").

under false pretences, or by means of any other fraud: ' M M ^ — • 1 • — • ~ • ~ • • • f

(a) If a trader, in. difficulties, buy goods on credit under a warrant reciting that he had been charged for the purpose of selling immediately below cost with felony in that, his affairs being in course of price, or for the purpose of raising money upon liquidation, he did within, &c, "feloniously " quit them wherewith to meet his difficulties, and sells New Zealand and take with hini property to the them accordingly, he is guilty of the offence of amount, &c : Held, that the warrant was good, unlawfully disposing of goods "otherwise than in though not stating that the property was his, or the ordinary way ofliis trade or business" within divisible amongst his creditors.—litre JFUhenden, the meaning of this sub-section.—Beg. v. Morris, 4 V.L.R. (L.), 143. 1 V . L R . (L) , 99. ,(e) The words " any person " in this section are

(b) Inducing a creditor to renew bills by false not limited to an insolvent. A person may be representations is not an offence under this Act. convicted under this section although not insol-,—In re Stocks, 4 A.J.R., 173. vent.—Bet], v. Pooh, 3 V.R. (LO, 181.

(c) Ih i s section applies to persons whose estates {/) Obtaining credit is not the same a s " o b -are sequestrated as well as to persons whose affairs taming property on credit," but it is the post-are liquidated.—Beg. v. Bosenwax, 3 A.J.R., ponement of payment that an insolvent must '28. > ,obtain by false pretences to constitute an offence

(d) Where aprisoner was committed for deten- .under this sub-section.—In re Hearty, 1 A.L.T., tion with a view to being sent to New Zealand ,1&).

1494 INSOLVENCY ACT 1890.

" Iwolventj) Statute 1871,"

Debts incurred by frAUQ. Ib. 8. IBS. 32 & 33 Vict. c* 62 & 1&*

Councillors ami others disqualified by

@ed ib. & 21

Punishments niHicT this Act

7fl. A l v l . Ib. & 23.

(n.) If he has, with intent to defraud his creditors, or any of them, made or caused to be made any gift delivery or transfer^* of or any charge on his property:

(in.) If he has, with intent to defraud his creditors, concealed or removed any part of his property since or within two months before the date of any unsatisfied judgment or order for payment of money obtained against him.

161. Where a debtor makes any arrangement or composition with his creditors under the provisions of this Act he shall remain liable for the unpaid balance of any debt which he incurred or increased, or whereof before the date of the arrangement or composition he obtained forbearance, by any fraud, provided the defrauded creditor has not assented to the arrangement or composition otherwise than by proving his debt and accepting dividends.

.162. Where under the provisions of any Act now or hereafter in force the members of any board or of the council of any city town borough or shire or of other public body are rendered incapable by reason of insolvency, such incapacity shall extend to every arrangement or composition by every such member with his creditors under this Act.

163. Where any person is liable under any other Act of Parliament or at common law to any punishment or penalty for any offence made punishable by this Act, such person may be proceeded against under such other Act of Parliament or at common law or under this Act, so that he be not punished twice for the same offence.

Section 2. SCHEDULE.

Dftte of Act.

34 Vict. No. 379 ...

35 Vict. No. 411 ...

Title of Act.

" Insolvency Statute 1871" •-• ... ...

"An Act to amend the 'Insolvency Statute " '1871 '"

Extent of Repeal.

So much as is not already repealed.

The whole.

(a) Where a. man is charged with a misdemeanor under this sub-section in that he had, with intent to defraud his creditors, made e> " gift delivery and transfer " of a specific part of his property, evidence may be given as to his dealings with his property generally, to show his general intent to dispose of his property to

defraud his creditors. The offence in such a case is the making away by the insolvent with his property with the intent to defraud his

• creditors, which may be done in one of three ways, by "gif t ," *' delivery," or "transfer," and evidence of any one of them is sufficient to support the count.—Reg. v. Yorfce, 13 V-L.R., 393.

insolvency act 1890. - australasian legal …. 1102.] insolvency act 1890. 1429 any bail security...

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