Cock v Howden [1915] HCA 64; (1915) 20 CLR 552 (22 September 1915)

HIGH COURT OF AUSTRALIA

Cock Appellant; and Howden Respondent.

H C of A

On appeal from the Supreme Court of Victoria.

22 September 1915

Griffith C.J., Powers and Rich JJ.

Mitchell K.C. and S. R. Lewis, for the appellant.

Starke and Morley, for the respondent.

The judgment of the Court was delivered by

Griffith C.J.

This was an application made to the Court of Insolvency under sec. 32 of the Insolvency Act 1897, which authorizes that Court on the complaint of, amongst other persons, the debtor, to inquire into the conduct of the trustee and to take such action thereon as may be deemed expedient. A complaint was duly made and an inquiry held at which various facts were elicited, upon which, at some stage of the proceedings, the Court was asked to make an order against the trustee for repayment to the estate of certain sums of money paid out of it by him. Strictly speaking, an order of that sort should be made in separate proceedings upon notice to the trustee. The Rules provide that every application to the Court shall be by motion, of which notice is to be given to the party affected, unless the Court otherwise orders. Now, if in the course of the proceedings all the facts had been elicited, and all the parties had agreed that the proceedings should be treated as a motion on notice, it would be too late afterwards for the trustee to object to an order on the ground of the absence of formal notice. For the appellant it is said that that is exactly what happened. For the respondent, however, it is said that it is not; that his counsel did not realize until after the close of the inquiry that an application was being made for an order against his client for repayment of these sums of money. As the matter stands, there being a conflict as to what happened, we think we cannot safely act upon the assumption that the matter was treated on that basis. In that view it appears that the Court did not act in accordance with the maxim Audi alteram partem, and, therefore, that the order cannot stand. Under these circumstances it is not necessary, and for other reasons it is not desirable, to express any opinion on the merits.

On the appeal to the Supreme Court that Court was apparently of opinion that the conduct of the trustee, so far from being blameworthy, was meritorious. I have indicated my own opinion on that question during the argument, and will say no more about it.

Mr. Starke has very properly admitted that if the judgment of the Supreme Court stands it should be without prejudice to any proper proceedings being taken for the return of these sums of money to the trust estate. Moreover, we think that the order of the learned Judge of the Court of Insolvency for payment of the costs of the proceedings by the respondent was within his jurisdiction, and was properly made.

The result is that the judgment of the Supreme Court must be varied by inserting after the words reversing the order of the Court of Insolvency the words "except so far as it directs the payment of costs by the appellant Howden to the respondent Cock, but without prejudice to any claim that may be made against the appellant in a proper proceeding by a competent complainant for repayment of the sums of £133 6s. 9d., £203 15s. 3d. and £25 in the said order mentioned," and by omitting the direction for payment by Cock of £20 towards the costs of Howden in the Court of Insolvency. The order of the Court of Insolvency will be restored so far as regards the costs to be paid by Howden to Cock. There will be no order as to the costs of this appeal.

Order accordingly.

Solicitors, for the appellant, Morgan & Fyffe.

Solicitor, for the respondent, J. W. Dixon.