Bayne v Blake (No 2) [1909] HCA 61; (1909) 9 CLR 360 (30 September 1909)

HIGH COURT OF AUSTRALIA

Lila Elizabeth Bayne Appellant; and Blake and Another Respondents.

Mary Bayne Appellant; and Blake and Another Respondents. (No. 2.)

H C of A

On appeal from the Supreme Court of Victoria.

30 September 1909

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

The appellant Lila Elizabeth Bayne in person.

Mann, for the respondents.

Griffith C.J.

I think that, although the appellants are not represented by counsel, the matter of their argument has been very fully presented to the Court in the written statement handed in by Miss Bayne, and in the fair manner in which Mr. Mann has presented his argument. The respondents presented petitions for adjudication of insolvency against both the appellants. The debts upon which they relied comprised, in one case, amounts ordered to be paid by the appellant to the respondents by this Court and by the Privy Council, and in the other case the amount ordered by the same order of the Privy Council to be paid by the other appellant to the respondents. There is no doubt that that money was due. An objection is taken that the respondents ought not to be allowed to set the debt up as a petitioning creditor's debt because the respondents had in subsequent proceedings counterclaimed for those judgment debts and obtained judgment thereon, and it is said that, under those circumstances, the judgment debt now relied upon was merged in the later judgment. Mr. Mann referred to a case decided in the time of Queen Elizabeth in which that exact point was raised and determined. It was held that there was nothing in the objection, and from that time to the present I do not think it has ever been suggested that there was anything in it. It would be a very singular thing if the right of a party to enforce a judgment of this Court in respect of a debt were to be taken away by reason of the creditor having attempted to enforce the same debt in the Courts of Victoria. There is nothing in the objection, and I take leave to share the doubt expressed by Mr. Mann as to whether, for the purposes of a petitioning creditor's debt in insolvency proceedings, there is any merger of a debt in a judgment. That disposes of the main objection.

There are two other objections. One is that the proceedings in insolvency so prosecuted were in the nature of an abuse of process of Court. That would be a ground, if proved, for an adjournment of the proceedings and, possibly, for dismissal of the petition, but I agree with the learned Judge in the Court below that there is no foundation for the suggestion in this case. The action pending when the insolvency proceedings were taken was an action for damages for personal injury alleged to have been sustained by the appellants by the wrongful act of the respondents. The debt in respect of which the petition was presented is a debt which certainly was due. Whatever the result of the proceedings in the action might be that debt would remain due. Moreover, the cause of action was one which would not pass to the trustee in insolvency, and it has now been determined conclusively that there was no cause of action. Moreover, there was no connection between the claim in that action and the petitioning creditor's debt. The case is as if a man had brought an action against his creditor for defamation and had lost his action. The fact that an appeal in that action was pending might be a ground for the creditor not being allowed to present a petition in insolvency in respect of his debt upon that judgment, but it would not be a ground for not allowing the creditor to present a petition in insolvency in respect of the original debt arising out of an entirely different matter. I am, therefore, unable to see in the present case any ground for suggesting that the proceedings were an abuse of process of Court.

We have been asked now to allow a further ground of appeal to be taken, viz., that there is no reason to think that there are any assets in the estate of either of the appellants. First of all, there is no evidence before us that that is the true state of the facts. But, if it were, that that is a ground for not making an order for sequestration is conclusively negatived by In re Leonard; Ex parte Leonard[1]. As pointed out in that case, when a petition is presented it is impossible to say whether there will prove to be any assets or not. "All the petitioning creditor" said Lord Esher, M.R.[2] "then knows or need know is that a debt is owing to him, and that, after taking the necessary steps to procure payment of that debt, he cannot get payment of it; and therefore he asks that the debtor may be made bankrupt."

The Court cannot at that stage tell whether the proceedings in bankruptcy will have no result. If the debtor is made bankrupt, there will be a public examination of him, and then it may be ascertained whether he has any assets. At the time of the petition and adjudication the Court has not the proper materials for judging whether there are assets or not.

So that the objection is really no objection at all. The case of In re Betts; Ex parte Betts[3], mentioned in the appellants' statement, was a case in which the debtor was already bankrupt, and that was held to be a ground for refusing to make him bankrupt a second time, the only possible result of which would be to give rise to disputes between two sets of assignees under the adjudication, and, as there were no assets, it would be entirely futile. Strictly speaking, perhaps, this point could not be raised, but it may be satisfactory to the appellants to know that every aspect of their case which they desire to present to the Court has been considered. For these reasons the appeal should be dismissed.

Barton J.

I concur.

O'Connor J.

I concur.

Appeals dismissed with costs.

Solicitors, for the respondents, Blake & Riggall.

[1] (1896) 1 Q.B., 473.

[2] (1896) 1 Q.B., 473, at p. 475.

[3] (1897) 1 Q.B., 50.