Ferris v Martin [1905] HCA 65; (1905) 2 CLR 525 (27 June 1905)

HIGH COURT OF AUSTRALIA

H C of A

On appeal from the Supreme Court of New South Wales.

27 June 1905

Griffith C.J., Barton and O'Connor JJ.

Armstrong, for the appellant.

Pickburn for the respondent.

Armstrong, in reply,

June 27

Griffith C.J.

This is an appeal from an order of the Supreme Court of New South Wales, discharging an order made by A. H. Simpson J., by which he directed that a writ of capias ad satisfaciendum, sued out by the respondent against the appellant, should be set aside, and the appellant discharged from custody. The writ of ca. sa. was issued in an action in which the respondent had recovered against the appellant a verdict of £500 damages for slander and £30 for breach of contract. The application to set aside the writ was made on several grounds, of which I propose to notice two only. The first was that the writ was issued and the appellant arrested without the leave of the Supreme Court in its Bankruptcy jurisdiction, and the second that the respondent had procured the sequestration of the appellant's estate in bankruptcy upon her judgment debt.

As I understand it, the learned Judge of first instance set aside the writ on the first ground. The Full Court was of opinion that that ground was not tenable, having regard to the Statute law as it now exists, and that the objection with respect to the Bankruptcy Act was invalid. I will deal briefly with the question as to the failure to obtain the leave of the Bankruptcy Court before issuing the writ of capias. That turns upon Statute law. By the Act 11 Vict., No. 13, usually called the Defamation Act, it was provided in sec. 14 that from and after the passing of that Act, "no law which is now or may hereafter be in force" in New South Wales for the relief of insolvent debtors "or for the abolition of imprisonment for debt shall extend or be construed to extend to affect or discharge from his liability any person who shall be indebted for any penalty damages or costs adjudged against him in any proceeding either civil or criminal for the printing or publishing of any ... defamatory words." Those are the material words of the section. It applied to future as well as to existing law. I think that the word "law" in this section must be read to mean Statute law. It in effect amounted to a limited Interpretation Act, to affect all existing as well as future legislation. The existing Statute to which it was intended to apply was the Insolvency Act (5 Vict. No. 17), but in its terms it was applicable to all Statutes "now or hereafter to be in force." Like all Interpretation Acts, however, it must be read subject to the proviso "unless the context otherwise requires." Reading it in that way, no real difficulty can arise, at any rate as to sec. 10 (3) of the Bankruptcy Act 1898, upon which the objection with which I am now dealing was founded. That section provides as follows:?[His Honor read the section and continued.] Reading these two sections together the effect will be that sec. 10 of the Bankruptcy Act must be read as not extending to the case of a defendant indebted for damages in an action for publishing defamatory words. Thus read, there is no inconsistency between the two Acts. It seems to have been assumed that the Bankruptcy Act was in effect a repeal of sec. 14 of the Defamation Act (11 Vict. No. 13), but for the reasons I have given I do not think it necessary to come to that conclusion. Later, in 1901, the Defamation Act (11 Vict. No. 13) was repealed and re-enacted, the provisions contained in sec. 14 being re-enacted in sec. 24 of the Defamation Act 1901, in that respect leaving the law as it was before. A greater difficulty would arise under sec. 44 (3) of the Bankruptcy Act 1898, which expressly deals with the case of debtors of this kind, and if a question arose under that section, it might be contended with great force that the legislature, having applied its mind to that particular subject, must be taken to have excluded the application of the general provision contained in sec. 14 of the then existing Defamation Act. Whether under those circumstances, the Defamation Act being re-enacted at a date later than that of the Bankruptcy Act 1898, it would be held that the consolidation had or had not effected a change in the law, is a matter which does not arise in this application. It is therefore not necessary to consider it. But there is a serious difficulty, and it would be much more satisfactory if the legislature would solve it. For these reasons I do not feel at all pressed by the contention that the respondent should have obtained the leave of the Bankruptcy Court before suing out the writ of capias.

I pass now to the other objection, that the plaintiff was not entitled to issue a writ of ca. sa. because she had already made the appellant bankrupt. Now, the respondent is standing upon her common law rights. She claims that the Statute law of New South Wales does not affect the case at all. I assume that there is no other Statute law than that quoted to us which affects it. That is a matter which may some day be argued. For the purposes of this case I assume that the supposed common law right to issue a writ of capias is part of the law of New South Wales, except so far as it has been taken away by the Acts for the abolition of imprisonment for debt, which do not extend to cases of defamation. But if the respondent relies upon her common law right she must take that right with all the common law incidents that attach to it. Now those incidents are well known. They are nowhere more clearly stated than in the case of Miller v. Parnell[1] decided in 1815 by the Court of Common Pleas. In that case the defendant had been taken in execution under a writ of capias, and an application was made for his discharge on the ground that the plaintiff had previously sued out a writ of fieri facias[2] . "No doubt, a plaintiff having sued out a writ of fieri facias, may, if he pleases, omit to execute the fieri facias, and take out a writ of capias ad satisfaciendum, and execute that before the fieri facias is returned or returnable. But there is also no doubt that if the plaintiff does execute his fieri facias, he cannot have a writ of capias ad satisfaciendum till the fieri facias is completely executed and returned. This is a middle case. So far as the defendant is concerned, the goods, to the extent of their value, have been levied; and the question is, whether the plaintiff, after taking them, may change his mind, and sue out a writ of capias ad satisfaciendum without returning his former writ. If this might be, it would confer a power that might be much abused. If the fieri facias be returned, there is something to bind the plaintiff, and to limit for how much he shall have the body, by showing how much he has already gotten. If a plaintiff might take goods under a fieri facias, and hold them a month, or the greater part of the long vacation, and then change his mind, and say, "I will not sell, but will take the body of the defendant under a capias ad satisfaciendum," it might be the engine of very great oppression. The plaintiff may, by the practice of the Court, sue out both these processes together, if he will, and may use either the one or the other, as he sees advisable, but by using the fieri facias first, he makes his election, and after having so elected, he cannot use the other process, till after the return of the first. We therefore think, that this writ of capias ad satisfaciendum, being sued out after the fieri facias had issued, and after the sheriff had taken the goods under it, and before its return, cannot be supported." The writ was therefore set aside.

That was no new doctrine. It merely stated the recognized rule governing the plaintiff's right to levy execution against the body of his debtor. The authority of that case was distinctly affirmed by the Court of Appeal in In re A Debtor; Ex parte Smith[3] . That, then, is the law to which the respondent has sought recourse. Now that decision applies in terms only to a writ of fieri facias, but long before that, the effect of taking the goods by a petition in bankruptcy by a judgment creditor had come up for consideration before Lord Hardwicke L.C. The first case reported on the point was in 1743: Ex parte Wilson[4] [5] : "This Court will not suffer a petitioning creditor to arrest a bankrupt, and for this reason, because that a commission of bankruptcy is considered both as an action and an execution in the first instance; and after the petitioning creditor has laid hold of all the bankrupt's effects, it would be a great absurdity for the same person to be permitted to arrest him likewise." That is simply applying the principle clearly stated in Miller v. Parnell[6] . Another case was decided in the same year by the same Lord Chancellor: Ex parte Ward[7] [8] : "The petition must be allowed as against the petitioning creditor, for he has determined his election by taking out the commission, ... but," he continued "there is no foundation to grant what the petition prays with regard to the assignees; for notwithstanding they are creditors of the bankrupt, yet as they refused to prove their debts under the commission, the barely being assignees ... will not determine their election; for they can only be considered as creditors at large, since they have not proved any debt." Then three years later, in the case of Ex parte Lewes[9] , the same Lord Chancellor said: "A petitioning creditor cannot keep the bankrupt in gaol, because he has no election as a common creditor has; for if he was to elect to proceed at law, the commission must of course be superseded, which would affect those creditors who have proved under the commission." That is to say, treating a petition in bankruptcy as in the nature of an execution at common law, the creditor could elect to abandon the execution against the goods and have his execution against the body, but he could not do so in the case of bankruptcy, because other persons were interested, and therefore he was held to have irrevocably determined his election. These principles are illustrated in authorities extending over one hundred and fifty years, and from them it follows that a petitioning creditor, having irrevocably elected to have recourse to the goods of the debtor, cannot afterwards take the debtor's body in execution. The case in the New South Wales Court which was relied upon by the respondent, Nicholls v. Rosenfeld[10] , is not in any way inconsistent with this decision. In that case the plaintiff, the judgment creditor, was not the petitioning creditor, but had proved in the estate. It is not necessary to say whether that would or would not be sufficient to show that he had determined his election. That is not this case. In this case the respondent, by obtaining the order of sequestration has irrevocably elected to have recourse to the debtor's goods, and she cannot now, according to the practice of the common law to which she has resorted, claim to have recourse also to execution against his body.

For these reasons I think the order of Simpson J. was right, though not on the same grounds, and that the order of the Full Court discharging it should be set aside, and that of Simpson J. restored.

Barton J.

I concur in the opinion that the order of Simpson J. should be restored, and on the ground upon which the Chief Justice has put it, namely, that the doctrine of election applies to this case. After the exhaustive way in which His Honour has gone into the matter, there is no necessity for me to say more than this, that the case of Miller v. Parnell[11] has been recognized as good law to the present day, and is to my mind a conclusive authority for the position taken up by the appellant.

It has been argued that sec. 24 of the Defamation Act affects the case, on the ground that the doctrine of election comes within the meaning of the words "law now or hereafter in force for the relief of insolvent debtors." I cannot accede to that argument. It does not appear to me that the doctrine of election can be classed as a law for the relief of insolvent debtors, because it is a part of the common law of England dependent upon principles applicable to the whole range of the common law, and not simply to the case of insolvent debtors, and therefore it does not seem to me to be a matter intended to be dealt with by sec. 24 of the Defamation Act. Holding that opinion, and that being, so far as I can see, the main argument advanced by the respondent on this point, I agree with His Honor the Chief Justice that that doctrine applies to this case; and that therefore there is no necessity for us to consider the question as to the form of the writ, or whether the leave of the Bankruptcy Court should have been obtained before issuing it. But it is as well to mention the difficulty as to the consolidation of the Acts, which has arisen from the fact that the Bankruptcy Acts were consolidated before the Defamation Acts. I cannot help saying that it would be much more satisfactory to the Courts and the public if this matter were cleared up by some legislation declaratory or otherwise, so that in any future proceedings a conclusion, which a large part of the community might think und???rable, might be avoided. It is quite possible,?I cannot s??? more than that?that owing to the transposition of these two br???hes of the Statute law which have been consolidated, the Court may come to some conclusion, which, though clearly founded upon legal principles, may not be at all acceptable to laymen, because there are cases in which the intention of the legislature has to be decided according to principles which bind the Courts in the interpretation of Statute law, while they may be aware that it is very improbable that the intentions to be deduced from the words used were those which the legislature entertained when it adopted the course it did. I throw out these observations because it is well that attention should be called to this state of the law, in order that there may be an opportunity of preventing the rights of parties becoming the sport of legal principle in opposition to the real intention of those who framed the law.

I do not go into the question of the form of the judgment or of the necessity for obtaining the leave of the Bankruptcy Court, because, in my opinion, the doctrine of election solves the whole case. I agree that the appeal should be allowed, and the order of Simpson J. restored.

O'Connor J.

In the view I take of this case it is only necessary to consider one of the grounds urged by Mr. Armstrong on behalf of the appellant, namely, that the respondent, having made use of her judgment to petition for an order for sequestration in bankruptcy against the appellant, having proved in his estate and been classed as a creditor, cannot, while the bankruptcy is pending, exercise this remedy of capias ad satisfaciendum. The Defamation Act gives no new remedy. It simply preserves the remedies which existed at the time of the passing of the Act 10 Vict. No. 7, which, speaking generally, abolished imprisonment for debt. The plaintiff's remedies in an action for slander are the same as they were nearly fifty years ago, and the law regulating them is to be found in the old books dealing with the exercise of rights and remedies against property and person commonly exercised in such cases. Now the rule of law as to election is a very old one and arises out of the very nature of the remedies themselves. In Bacon's Abridgement, 7th ed., vol. iii., p. 393, it is put in this way: "When the plaintiff has judgment, he has it in his election to sue out what kind of execution he pleases; but he cannot regularly take out two different executions on the same judgment nor a second of the same nature, unless upon failure of satisfaction on the first." Then in a note reference is made to Miller v. Parnell, as reported in 2 Marsh., 78, and the writer continues: "Therefore, if the plaintiff, upon a judgment or recognizance at common law, sues out an elegit, he can have no capias ad satisfaciendum afterwards to take the body, because he hath determined his choice by that writ to the goods and chattels, and a moiety of the land, which being entered upon the record, he is thereby estopped; and though he takes but an acre of land in execution, yet it is held a satisfaction of the debt, be it never so great, because in time it may come out of it." In regard therefore to the remedy of elegit or taking the land, it has always been the law that where a plaintiff elects to use that remedy, he cannot be allowed to exercise the other remedy against the person. The same principle of election has also obtained with regard to the use of the other remedy of fieri facias. In the case of Miller v. Parnell[12] to which my learned brother the Chief Justice has referred, it was pointed out that the remedy of taking the debtor's goods in execution must be finally dealt with before the remedy on the writ to take the body can be exercised. From the very nature of the writ of capias ad satisfaciendum it is apparent that the Courts in order to guard against abuse of process must exercise some control over those who seek to use it in satisfaction of a judgment. The writ is thus described in another passage in Bacon's Abridgement, 7th ed., vol. iii., p. 395, note (a): "The Statute of James ... treats this however only as a doubt;" (referring to a decision that if a person taken on a capias ad satisfaciendum died in execution, a plaintiff had no further remedy) "for the body is merely a pledge for the debt; it is taken not in satisfaction, but ad satisfaciendum. The debtor is presumed solvent, and is therefore coerced of his liberty until he makes payment. His imprisonment is not a punishment, but merely a means of getting at that property which he is supposed to possess, and fraudulently withhold. If he dies in prison without having surrendered his property, it is perfectly content with this proceeding that a new writ should issue attaching immediately upon the property. The judgment of the Court, that he shall pay, is still unexecuted."

Now it has always been the law that when a creditor takes the body of the debtor that is deemed a satisfaction of the debt, and for this reason, that if he voluntarily releases him he shall have no further remedy. Of course if he is released by operation of law, the plaintiff still has a remedy. That was the case in In re G. R. Dibbs[13] , in which it was held that, notwithstanding that the body of the debtor had been taken and held for the period prescribed by Statute, there was no satisfaction of the debt, because the release was by operation of law, and not by the act of the parties. The doctrine of election has been similarly applied in the case where the creditor has taken goods in execution. His Honor the Chief Justice has referred to Miller v. Parnell[14] , and the cases which follow it. They all proceed upon the principle that, where the remedy of execution against the goods has been exercised, until the writ has been completely returned there cannot be any remedy exercised against the person of the debtor. A plaintiff cannot have two remedies going on at the same time. The same principle was applied in Cohen v. Cunningham[15] , on the ground that the remedy by enforcement of bankruptcy is really in the nature of an execution against the debtor's goods. That is the principle upon which the cases, in 1 Atkyns referred to by the Chief Justice, proceeded. In his judgment in the case Ex parte Wilson[16] , Lord Hardwicke L.C., says, "This Court will not suffer a petitioning creditor to arrest a bankrupt, and for this reason, because that a commission of bankruptcy is considered both as an action and an execution in the first instance."

It would seem therefore to be a well established principle that where a judgment creditor has pursued his remedy against property, whether by fieri facias directly levying upon the goods, or by way of a proceeding in bankruptcy, which brings the whole of the property of the debtor into Court for the purpose of satisfying this and other debts, he cannot, until that remedy has been followed out and determined, exercise any other remedy against the person of the debtor. Now those being the common law rights of the respondent and appellant in this respect, does the Defamation Act in any way alter them? I will assume for the purpose of the observations which I am about to make that sec. 24 of the Defamation Act 1901 has repealed, so far as may be necessary, the provisions of the Bankruptcy Act 1898. It provides: [His Honor then read sec. 24, sub-sec. (1) of the Defamation Act 1901.] Now the law which puts the respondent to her election in this case is not a law for the relief of insolvent debtors. It is part of the general common law, which arises from the very nature of these remedies, and it would be stretching the Statute a long way to say that a branch of the common law, because it is applied in relation to a case where a plaintiff seeks a remedy in the Insolvency Court, comes within the words "a law ... for the relief of insolvent debtors." The matter appears to me to depend entirely on the common law rights of the parties, and the words of sec. 24 do not in any way affect those rights. I agree with their Honors, that under sec. 24 the common law rights of the parties are preserved just as they stand. When the estate of the debtor is released from bankruptcy, the same remedies that existed before will revive. The bankruptcy is merely an interlude. If the respondent has not recovered the whole amount of the judgment, the debtor's liability for the balance remains, and may be enforced, to the extent of the debt remaining unsatisfied when the bankruptcy is at an end, as if the bankruptcy had never taken place. In that way the intention of the legislature, which was to preserve the remedies which a plaintiff had under the Defamation Act, apart altogether from the Bankruptcy law, as they existed before, is carried out.

I am of opinion therefore, that the writ of ca. sa. was rightly set aside.

Appeal allowed with costs. Order appealed from discharged with costs of appeal to Supreme Court. Order of A. H. Simpson J. restored.

Order that costs of the motion in the Supreme Court be set off against the respondent's judgment. Execution for costs of the appeal to the High Court not to issue if the respondent executes a release of a corresponding amount of her judgment debt.

Solicitors for appellant, Levy & Fulton.

Solicitors for respondent, Lambton, Milford, & Abbott.

1. [1815] EngR 1071; 6 Taunt., 370.

2. [1815] EngR 1071; 6 Taunt., 370, at p. 371.

3. (1902) 2 K.B., 260.

4. [1743] EngR 91; 1 Atk., 152.

5. [1743] EngR 91; 1 Atk., 152.

6. [1815] EngR 1071; 6 Taunt., 370.

7. [1743] EngR 115; 1 Atk., 153.

8. [1743] EngR 115; 1 Atk., 153.

9. 1 Atk., 154.

10. 7 N.S.W. L.R., 322.

11. [1815] EngR 1071; 6 Taunt., 370.

12. [1815] EngR 1071; 6 Taunt., 370.

13. 2 N.S.W.L.R., 10.

14. [1815] EngR 1071; 6 Taunt., 370.

15. 8 T.R., 123.

16. [1743] EngR 91; 1 Atk., 152.