Hamilton v Warne

This case concerned an appeal to the High Court of Australia from an order of the Supreme Court of Victoria. The appeal arose from a petition for sequestration of the estate of William Herdman Hamilton, presented by James Warne. The order nisi for sequestration alleged that Hamilton had committed an act of insolvency by failing to satisfy a judgment debt, as an execution issued on that judgment had been returned unsatisfied after Hamilton was called upon by a sheriff's officer to satisfy it.

The legal issues before the High Court were whether the Supreme Court had erred in rejecting evidence tendered by Hamilton, which sought to prove that he had paid part of the judgment debt prior to the demand being made. This evidence was intended to demonstrate that the demand made by the sheriff's officer was for a sum greater than that actually owing, and therefore constituted an invalid demand for the purposes of establishing an act of insolvency under section 37(viii) of the *Insolvency Act 1890* (Vict.). A further issue was whether such a defence, if valid, was sufficiently particularised in Hamilton's notice of objection to be admissible.

The High Court held that the evidence of part payment was material and should have been admitted. The Court reasoned that for an act of insolvency to be established under section 37(viii), the debtor must be properly called upon to satisfy the judgment. A demand for a sum exceeding the actual amount due was considered an invalid demand, as it did not accurately reflect the judgment debt. The Court applied the principle that provisions creating serious consequences, such as sequestration, must be strictly complied with. While there was some debate as to whether this constituted a "special defence" requiring more specific particulars in the notice of objection, the Court indicated that even if it were, an amendment should have been allowed.

Consequently, the High Court allowed the appeal, discharged the order nisi for sequestration, and remitted the case to the Supreme Court for a rehearing. The respondent was ordered to pay the costs of the appeal.