Cock v Howden - [1915] HCA 64

ON APPEAL FROM THE SUPREME COURT OF Insolvency- Trustee - Inquiry into conduct -Order for repayment of money -

Motion-Notice to trustee -Insolvency Act 1897 (Vict.) (No. 1513), sec. 32- Insolvency Rules 1898 (Vict.), rr. 19, 20. MELBOURNE,

Sec. 32 of the Insolvency Act 1897 (Vict.) provides that " the Court " of Insol- Sept. 21, 22.

vency "shall take cognizance of the conduct of assignees and trustees; and in the event of the Court having any reasonable ground for believing that any assignee or trustee is not faithfully performing his duties and duly observing all the requirements imposed on him by any Act rules or otherwise with respect to the performance of his duties or is omitting to use reasonable diligence with respect to the performance of his duties, or in the event of any complaint being made to the Court in regard thereto by any creditor or the insolvent or any person interested, the Court shall inquire into the matter and take such action thereon as may be deemed expedient."

Rule 19 of the Insolvency Rules 1898 provides that every application to the Court (unless otherwise provided by the Rules or the Court shall in any particular case otherwise direct) shall be made by motion, and rule 20 provides that where any party other than the applicant is affected by the motion no order shall be made unless upon the consent of such party, or upon proof that notice of the intended motion has been served upon such party.

Held, that on an inquiry held under that section an order should not be made for the repayment by the trustee to the trust estate of sums of money paid out of it by him in the absence of a motion on notice to the trustee, or the consent of the trustee to the proceedings being treated as a motion on notice to him, that such an order will be asked for.

Decision of the Supreme Court of Victoria varied.

20 CLR 553

APPEAL from the Supreme Court of Victoria.

On 20th February 1909 Charles Matthew Germain Cock by deed assigned his estate to a trustee, John McAlister Howden, for the benefit of his creditors. On 22nd May 1914, on the com- plaint of Cock, the Court of Insolvency, thinking it fit that an inquiry should be ordered into certain matters concerning the conduct of Howden which were brought before it by Cock, ordered that Howden should attend at the Court for the purpose of such inquiry, " and for the purpose of the Court taking such action upon such inquiry as it may deem expedient."

An inquiry was accordingly held before His Honor Judge Moule, and the evidence of a number of witnesses was taken. At the close of the evidence the learned Judge made an order for the repayment by Howden to the trust estate of three several sums of £133 6s. 9d. £203 15s. 3d. and £25, and he further ordered Howden…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Cock v Howden

Details

AGLC: Cock v Howden [1915] HCA 64
Case: [1915] HCA 64
Decision Date: 22 September 1915

CaseChat Overview and Summary

This case concerned an appeal to the High Court of Australia from a decision of the Supreme Court of Victoria, which had overturned an order made by the Court of Insolvency. The dispute originated from a complaint by Charles Matthew Germain Cock against John McAlister Howden, the trustee of Cock's assigned estate. The Court of Insolvency, after an inquiry into Howden's conduct, had ordered him to repay certain sums of money to the trust estate and to pay Cock's costs.

The central legal issue before the High Court was whether the Court of Insolvency had erred in making an order for the repayment of money by the trustee without proper notice to him. Specifically, the Court had to consider the requirements of section 32 of the Insolvency Act 1897 (Vict.) and rules 19 and 20 of the Insolvency Rules 1898 (Vict.) regarding applications to the Court and the necessity of serving notice on affected parties.

The High Court reasoned that while section 32 of the Insolvency Act empowered the Court of Insolvency to inquire into a trustee's conduct and take expedient action, any order for repayment of money should ordinarily be made in separate proceedings initiated by a motion on notice to the trustee. The Court noted that the Rules stipulated that applications should be by motion, with notice to the affected party, unless the Court directed otherwise. Although it was argued that the parties had implicitly agreed to treat the inquiry as a motion on notice, the Court found a conflict in the evidence regarding this agreement. Consequently, the Court concluded that the order for repayment could not stand as it was made without adherence to the principle of *audi alteram partem* (hear the other side), as there was no proof of notice or consent to proceed without formal notice.

The High Court varied the judgment of the Supreme Court. It restored the order of the Court of Insolvency regarding the costs payable by Howden to Cock, but it did so without prejudice to any future proper proceedings that might be taken for the recovery of the sums of money. The High Court also omitted the Supreme Court's direction for Cock to pay Howden's costs in the Court of Insolvency. There were no orders as to the costs of the appeal to the High Court.

Orders