Companies—Liquidation—Preference—Company's books of account—Entries showing payments—Whether evidence against payee—Companies Act 1961 (W.A.), s. 293—Bankruptcy Act 1966 (Cth), s. 122. Evidence—Company's books of account—Entries recording payment to creditor &hich if made would be void as preference—Sufficiency of evidence in proceedings against creditor.

Decisions

September 5.
BARWICK C.J. The learned Acting Chief Justice upon a summons issued by the liquidator of D. Manzi &Sons Pty. Ltd. (in liquidation) declared that the payment of $35,859 made on 22nd February 1974 by the said company to or for the use of Domenico Manzi and Mariana Manzi constituted a preference to the said Domenico Manzi and Mariana Manzi and was void. He also declared that Antonio Natale Manzi and Maria Diloreto were indebted to the company in separately specified sums and made consequential orders for "repayment" of those sums to the liquidator. The declarations and orders were based upon s. 293 of the Companies Act (W.A.) incorporating the preference provisions of the Bankruptcy Act. (at p673)

2. The only evidence before his Honour were entries in the company's books of account. By several journal entries under date 22nd February 1974 Domenico Manzi and Mariana Manzi were said to be indebted to the company in the respective sums of $16,496 and $19,363 and Antonio Natale Manzi and Maria Diloreto were indebted to the company in the respective sums of $7,229 and $1,933. (at p673)

3. By journal entry under the same date $35,859 was credited to Domenico Manzi and Mariana Manzi and applied by the company through journal entries to discharge the several debts to which I have referred. It was not shown that the appellants, or any of them, were parties to, or agreed to, these journal entries. (at p673)

4. The propriety of these entries was challenged by the respondents. A bookkeeper who had earlier been instructed by the company to make the journal entries of 22nd February, 1974, and who had access to the company's books of account, produced an account which showed that the appellants, Domenico Manzi, Mariana Manzi, Antonio Natale Manzi and Maria Diloreto, so far from having been in debt to the company on 22nd February 1974, were in credit with the company in the respective amounts of $226, $3,152, $243 and $68. (at p673)

5. To satisfy s. 293, so far as presently relevant, payment of money must have been made to the appellants or for their account. In fact no money was paid on the 22nd February 1974, or for that matter at all, in the sum of $35,859, but it was said that the entries in the company's books of account constituted payment of money by the company to the appellants on the 22nd February 1974. (at p673)

6. As I have said, the appellants were not shown to be in any wise privy to the said entries in the company's books, or for…

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 Manzi v Smith

Details

AGLC: Manzi v Smith [1975] HCA 35
Case: [1975] HCA 35
Decision Date: 5 September 1975

CaseChat Overview and Summary

The case of *Manzi v Smith* concerned a dispute between the plaintiff, Manzi, and the defendant, Smith. The precise nature of the dispute is not detailed in the provided text, but it was heard and determined by the High Court of Australia, with judgment delivered by Chief Justice Barwick and Justices Mason and Jacobs.

The central legal issues before the High Court revolved around the interpretation and application of certain legal principles, likely relating to property law or contractual obligations, given the context of a dispute between private parties. The court was required to ascertain the rights and liabilities of the parties based on the evidence and submissions presented.

The reasoning of the court, as delivered by the Justices, would have involved an analysis of relevant statutes and common law principles. The judgment would have articulated the legal tests and standards applied to the facts of the case to reach its conclusions. The specific legal principles applied are not elaborated upon in the provided excerpt.

The final orders or outcome of the case are not disclosed in the provided text.

Orders