M and H J Webb Pty Ltd v M N Armour

[1999] NSWCA 203

CITATION:	M & H J Webb Pty Ltd v M N Armour & Anor [1999] NSWCA 203
FILE NUMBER(S):	CA 40243/98
HEARING DATE(S):	17 June 1999
JUDGMENT DATE:	17 June 1999
PARTIES :	M & H J WEBB PTY LTD MAXWELL NORMAN ARMOUR ROSEMARY EVELYN ARMOUR
JUDGMENT OF:	Giles JA at 1; Sully AJA at 8

LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S) :	DC8161/97
LOWER COURT JUDICIAL OFFICER:	Vincent ADCJ

COUNSEL:	Claimant - B J Skinner Opponents - M J Windsor
SOLICITORS:	Claimant - Pickering Priestley, Yamba Opponents - Donovan Oates Hannaford, Port Macquarie
CATCHWORDS:	DISTRICT COURT - judgment debt - Registrar's order for payment by instalments - judge declines to rescind order - whether disretion that should be payment by instalments miscarried - no error of principle shown - leave to appeal refused.
DECISION:	Extend time for leave to appeal until today; refuse application for leave to appeal; order claimant to pay the opponent's costs of the applications.

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40243/98
DC 8161/97

GILES JA
SULLY AJA

Thursday 17 June 1999

M & H J WEBB PTY LTD v MAXWELL NORMAN ARMOUR & ANOR

JUDGMENT

1    GILES JA: The claimant wishes to appeal from the refusal of Acting Judge Vincent to rescind the Registrar's order for the payment of a judgment debt by the opponents by instalments. It needs leave to appeal, and an extension of time for seeking leave to appeal. In the circumstances which have been explained, I consider that the extension of time should be given. The merits of the putative appeal have been argued, so that if leave were given the appeal could be disposed of without a further hearing.

2    It was necessary for the claimant to show, in accordance with the principles now well established and conventionally found in House v The King (1936) 55 CLR 499 at 504-5, that his Honour erred in the exercise of his discretion. The argument was that his Honour had erred in principle in taking into account or giving undue weight to a matter which he should not have so treated, what his Honour referred to as the commercial inutility of rescinding the order; and in not giving weight or sufficient weight to what in submissions before us was taken up within the phrase “commercial morality”.

3    The facts clearly established that in the absence of an order for payment by instalments the claimant intended to bankrupt the opponents, and that if that were done the proceeds of all assets would go to secured creditors and the claimant would get nothing. There was no evidence that other creditors were calling for payment, or would be prejudiced in the absence of bankruptcy or by the continuance of the order in question. Nor was there any evidence of prior dealings by the opponents with their assets or anything else which the processes of bankruptcy might call into scrutiny. In those circumstances, in my view, his Honour was well entitled to pay regard, in the manner he did, to the inutility of bankruptcy, and so of rescinding the order, and to the acceptability of the course of permitting the opponents to trade and pay the claimant, as the evidence indicated they would be able to do in accordance with the programme of payments the subject of the order.

4    The commercial morality invoked in the submissions was of two kinds.

5    One was the regard which a court considering the making of a bankruptcy order or a winding up order should have to the public interest, or the interest of creditors generally, as distinct from the interest of the debtor or of the particular creditor applying for the order. As I have indicated, there was nothing in the evidence before his Honour to require him to bring that kind of commercial morality into play in the exercise of his discretion, even if it were appropriate to bring it into play in the different context of the making of an order for payment by instalments. If the order were made, on the evidence before his Honour, the opponents would not be engaging in insolvent trading, nor was there anything requiring scrutiny under the processes of bankruptcy.

6    The other was that it was said that it was contrary to correct commercial practice to force upon the claimant delay in the payment of its debt, and the status of a banker of the opponents, so as to deprive it of an entitlement to bankrupt the opponents. That delay and deprivation will often be the result of an order for payment by instalments, and I do not think that the fact that the order was made in this case demonstrates a failure to have a proper regard to ”commercial morality”; or that there was any failure by his Honour to pay regard to the effect on the claimant of the making of the order. He clearly did take that into account.

7    In the result, I do not think that any error as is now alleged by the claimant in the exercise of his Honour's discretion, or any other ground within the principles in House v The King, have been shown. In my opinion, the appeal, if leave were granted, would have no prospect of success; and the appropriate order to make is that leave to appeal should be refused.

8    SULLY AJA: Yes, I agree.

9    GILES JA: The formal orders will be: Extend the time to apply for leave to appeal until today. Refuse the application for leave to appeal. Order the claimant to pay the opponents’ costs of the applications.

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