Davis v Mackerras [1930] HCA 15; (1930) 43 CLR 488 (11 August 1930)

HIGH COURT OF AUSTRALIA

Davis Respondent, Appellant; and Mackerras Applicant, Respondent.

H C of A

on appeal from the Court of Bankruptcy District of Victoria.

11 August 1930

Isaacs C.J., Gavan Duffy, Rich, Starke and Dixon JJ.

Morley, for the appellant.

Gorman K.C. and T. G. Jones, for the respondent,

The following written judgments were delivered:—

Aug. 11

Isaacs C.J.,

Gavan Duffy, Starke and Dixon JJ.

Sec. 85 of the Bankruptcy Act 1924-1929, by sub-sec. 1, postpones a wife's claim as a creditor of her husband to the claims of his other creditors for valuable consideration, in respect of "any money or other estate of the wife ... lent or intrusted by her to him." In this case it is clear, assuming, as we must in the circumstances, that the facts are those found by the learned Judge who heard the application, that in law there was no loan and no intrusting of the £900 in contest to her husband. Starting with the accepted fact that the £900 was her property, she permitted her husband to arrange with the bank in her presence to transmit the sum to Auckland, stating that it was his wife's money, and in order to provide for the possibility of some event preventing her from there drawing it herself, the right to draw it was alternatively given to the husband. But she had the right and the power to draw the money, and her right was as between husband and wife expressly made primary, his being secondary and conditional only. Unless the extreme contention for the appellant that any permitted physical possession, however limited in time and purpose, as, for instance, as a mere messenger, be accepted, the facts of this case are clearly outside the section. The word "intrusted" is undoubtedly a flexible word, and its signification conforms to the context and the occasion of its use. In sec. 85 it occurs in an Act relating to bankruptcy, and in a section which is openly directed to protecting other creditors in preference to a claim by husband or wife in the other's bankruptcy. Further, the word "intrusted" is placed on a level with "lent," and the result of each is that the property so dealt with is "treated as assets" of the bankrupt's estate, the lender or intruster being postponed to other creditors. This indicates that "intrusted" implies that some legal power or some authority has been conferred upon the bankrupt enabling him to use or dispose of the property as if it were his own, whether he is under any obligation or not to account for it or its proceeds to his wife. Rigby L.J. in In re Cronmire; Ex parte Cronmire[1], expressed that view, as we understand him, when he said intrusting property to a husband meant "handing it over to him to deal with it as he might think fit." No possession for mere physical custody or service comes within sec. 85.

Rich J.

I do not propose to attempt an exhaustive definition of the word "intrusted." Its meaning depends upon the context in which it is found. In the present case the word has not its colloquial or general meaning, but is used of property impressed with a kind of trust. In certain classes of cases, such as divorce, bankruptcy and collision cases, I am somewhat sceptical of the evidence given, but as the learned primary Judge, who saw the witnesses and heard their evidence, believed Mrs. Mackerras, I accept his finding. Even so, the result of her evidence is far from imposing any fiduciary obligation on the respondent. I agree that the appeal should be dismissed with costs.

Appeal dismissed with costs.

Solicitors for the appellant, Cleverdon & Hayes.

Solicitors for the respondent, McInerney & Williams.

[1] (1901) 1 K.B. 480, at p. 484.