Davis v Mackerras - [1930] HCA 15

RESPONDENT, MACKERRAS

RESPONDENT. APPLICANT,

ON APPEAL FROM THE COURT OF BANKRUPTCY Bankruptcy--Wife's claim-Money or estate of wife in possession of husband-

Bankruptcy of husband-Money "lent or intrusted" by wife to bankrupt- Bankruptcy Act 1924-1929 (No. 37 of 1924-No. 28 of 1929), sec. 85 (1)*. MELBOURNE,

Possession of money or other estate of the wife of a bankrupt by her husband for mere physical custody or service does not constitute a "lending" or SYDNEY,

"intrusting" of such money or estate by the wife to her husband within Aug. 11.

the meaning of sec. 85 (1) of the Bankruptcy Act 1924-1929.

APPEAL from the Court of Bankruptcy (District of Victoria).

This was an appeal by John G. Davis, as trustee in bankruptcy for John William Mackerras, against an order made by Judge Moule sitting as a Court of Bankruptcy for the District of Victoria whereby he ordered that of the sum of £900 held by the Official Receiver the sum of £788 18s. 2d. be paid by him to the respondent, Ermonce

* Sec. 85 (1) of the Bankruptcy Act

divid end as a creditor in respect of any 1924-1929 provides " Any money or

such money or other estate until all other estate of the wife of a bankrupt

claims of his other creditors for valu- lent or intrusted by her to him shall be

able consideration in money or money's- treated as assets of his estate, and the

worth have been satisfied." wife shall not be entitled to claim any

43 CLR 489

Irene Mackerras, the wife of the bankrupt, John William Mackerras. The appellant claimed the moneys in question as being money of the wife of a bankrupt "lent or intrusted to him " within the meaning of sec. 85 (1) of the Bankruptcy Act 1924-1929. The respondent claimed the money as her own, and contended that she had not "lent or intrusted" the money to her husband within the meaning of that provision. The learned Judge in Bankruptcy found that the money in question was derived from money and property which belonged to the respondent. The respondent and her husband had left Melbourne to go to New Zealand, and the money in question was at first handed by the respondent to her husband for safe-keeping. While the respondent and her husband were actually travelling or outside their lodgings, the money was carried by the husband but while in lodgings the respondent had charge of it. The respondent knew of the financial difficulties of her husband, and that he had been served with a bankruptcy notice. While in Sydney and while the husband had the money in his care the respondent and he went to a bank to arrange about the money being sent to Auckland, where they proposed to go. The respondent stated that she let her husband carry the money as it was safer with him. When they went to the bank she took no part in the arrangements there made with the teller…

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.

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Details

Case: [1930] HCA 15
Decision Date: 11 August 1930

CaseChat Overview and Summary

This case involved an appeal from the Court of Bankruptcy for the District of Victoria concerning a sum of £900 held by the Official Receiver. The appellant, John G. Davis, as trustee in the bankruptcy of John William Mackerras, sought to claim the majority of this sum (£788 18s. 2d.) as assets of the bankrupt's estate. The respondent, Ermonce Irene Mackerras, the bankrupt's wife, claimed the money as her own property, arguing it had not been "lent or intrusted" to her husband within the meaning of section 85(1) of the *Bankruptcy Act 1924-1929*. The Court of Bankruptcy had found that the money originated from the respondent's property and ordered that a significant portion be paid to her.

The central legal issue before the Full High Court was whether the respondent had "lent or intrusted" the sum of £788 18s. 2d. to her husband, John William Mackerras, within the contemplation of section 85(1) of the *Bankruptcy Act 1924-1929*. This section dictates that money or estate of a wife lent or intrusted to her husband shall be treated as assets of his estate, postponing the wife's claim as a creditor until other creditors for valuable consideration have been satisfied. The court was required to determine if the circumstances surrounding the handling and arrangement of the funds constituted such a lending or entrusting, or if the wife retained sufficient control and rights over the money.

The High Court, in dismissing the appeal, reasoned that the mere physical possession of the wife's money by the husband, even for the purpose of safekeeping or transmission, did not amount to "lending" or "intrusting" under section 85(1). The court emphasised that the word "intrusted" in this context implied the conferral of some legal power or authority upon the husband to use or dispose of the property as if it were his own, rather than simply holding it for physical custody or as a messenger. In this instance, the wife retained the right and power to draw the money, with her right being primary and her husband's conditional. Therefore, the facts did not fall within the scope of the section, as the wife had not divested herself of her legal control in a manner that would prejudice other creditors.

Orders