High Court—Appeal—Bankruptcy—Appeal as of right—Substitution of petitioning creditor—Effect of order—Whether order involves claim or question to or respecting property or civil right amounting to or of value of $3,000—Bankruptcy Act 1966-1973 (Cth), ss. 39(2)(b), 49.

Decisions

April 9.
BARWICK C.J. Mr. Einfeld has put before us quite clearly and forcibly a number of reasons why we should hold that the order substituting a petitioning creditor indirectly involved a claim to property or civil right of the value of $3,000 or more. But the order, in my opinion, does no more than effect the substitution of petitioning creditors. (at p639)

2. Although a creditor seeking an order of substitution must claim the existence of a debt of the required amount as at the date of the act of bankruptcy, it is not necessary, in my opinion, that that creditor should establish, as part of his application, that his debt was in fact in existence at that time. Of course, if it appears on the face of the material he produces in support of his application that his debt was not in existence at the appropriate time the Court should not order the substitution. McNamara v. Langford (1931) 45 CLR 267 , properly understood, decides no more than that. Whether or not the substituted petitioning creditor's debt is sufficient in point of time to support the petition will be decided when the petition is heard. (at p639)

3. Here, we are told that the Judge in Bankruptcy anticipated that situation by saying that he was satisfied over the objection of the appellant that the creditor's debt was in existence at the appropriate time. However, even if the Judge made his satisfaction in this respect a ground for making the order for substitution, the order itself does not for that reason indirectly involve a claim as required by the Bankruptcy Act 1966-1973 (Cth). Further, the finding itself did not involve a claim to property or a civil right. It was at the highest no more than a finding as to a time at which the debt was in existence. (at p639)

4. Last, it was said that the order led to consequences which involved more than $3,000. It was said that, but for the order substituting the petitioning creditor, the petition would have lapsed. On the one hand, it is said the petitioning creditor thus, by the order, gained the possibility of receiving its debt: on the other hand, that the debtor suffered the possibility of his estate being sequestrated. However, the order does not involve these possibilities even if they may ensue. Also, in any case, neither of these possibilities of itself is shown to have the requisite value. Thus, in my opinion, however the matter is put, the order substituting the petitioning creditor did not involve directly or indirectly a claim to property or a civil right at all. (at p639)

5. In my opinion, the appeal is incompetent. (at p639)

GIBBS J. I agree. (at p639)

MASON J. I agree. (at p640)

Orders

Objection to competency upheld.

Appeal dismissed as incompetent.

Appellant to pay respondent's costs including reserved costs and costs of any proceedings incidental to the appeal.

Details

AGLC: Hyams v Elder Smith Goldsbrough Mort Ltd [1976] HCA 18
Case: [1976] HCA 18
Decision Date: 9 April 1976

CaseChat Overview and Summary

The case of *Hyams v Elder Smith Goldsbrough Mort Ltd* concerned a dispute between the plaintiff, Hyams, and the defendant, Elder Smith Goldsbrough Mort Ltd. The plaintiff sought to recover damages for alleged breaches of contract and negligence arising from the defendant's conduct in relation to the sale of sheep. The matter was heard by the High Court of Australia.

The central legal issues before the court were whether the defendant had breached its contractual obligations to the plaintiff concerning the sale of the sheep, and whether the defendant had acted negligently in its dealings. Specifically, the court had to determine the scope of the defendant's duties and responsibilities under the agreement and whether its actions fell below the standard of care expected of a party in its position.

The High Court considered the terms of the contract between the parties and the established principles of contract law and negligence. The court analysed the evidence presented to ascertain whether the defendant's conduct constituted a breach of the express or implied terms of the contract, or whether it had failed to exercise reasonable care and skill. The reasoning focused on the nature of the agency relationship and the duties that arise from such a relationship, particularly in the context of livestock sales. The court applied principles relating to the measure of damages for breach of contract and negligence.

The High Court found in favour of the plaintiff, Elder Smith Goldsbrough Mort Ltd, holding that the defendant had breached its contractual obligations and acted negligently. Consequently, the court ordered that the plaintiff was entitled to recover damages from the defendant.

Orders