Bankruptcy—Payment of money—Void as preference if payer becomes bankrupt—Not "conveyance or transfer" of property constituting act of bankruptcy—Bankruptcy Act 1924-1960 (Cth), ss. 52 (c), 95 (1).

Decisions

1966, February 25.
The following written judgments were delivered:-
KITTO J. The question in this appeal is whether a debtor commits an act of bankruptcy by making a payment which would be void as a preference if he became bankrupt. It is a question as to the true interpretation of s. 52 (c) of the Bankruptcy Act 1924-1960 (Cth), which provides that a debtor commits an act of bankruptcy if he "makes any conveyance or transfer of his property, or any part thereof, or creates any charge thereon which would, under this or any other Act be void as a preference or a fraudulent preference if he became bankrupt". In this case a debtor, the present respondent, made a payment which, if he became bankrupt, would be void as a preference by force of the provisions of s. 95 of the Act. Is such a payment a "conveyance or transfer" of a part of his property within the meaning of s. 52 (c)? (at p557)

2. In a series of decisions Clyne J., as Federal Judge in Bankruptcy, has answered the question in the negative, and this appeal is from the latest of those decisions. His Honour's view is opposed to that of his predecessor, Lukin J., and of Paine J. in South Australia. Moreover it is opposed to dicta in two judgments delivered by members of this Court: Richardson v. The Commercial Banking Co. of Sydney Ltd. (1952) 85 CLR 110, at p 128 and Rae v. Samuel Taylor Pty. Ltd. (1963) 110 CLR 517, at p 523 ; but the considerations favouring the interpretation adopted by Clyne J. were not before the Court in either of those cases, and we must, I think, examine them now. (at p557)

3. The most important of these considerations is to be found in the striking contrast between the language of s. 52 (c) and the language of s. 95. It is a contrast for which there does not seem to be anything to account in the legislative history of the provisions. It seems beyond doubt that in the drafting of s. 52 (c) a deliberate choice has been made of some of the matters which s. 95 renders void as preferences if certain conditions are satisfied, to the exclusion of the others of those matters. There are six such matters altogether: every conveyance of property, every transfer of property, every charge upon property, every payment made, every obligation incurred, every judicial proceeding taken or suffered. Plainly enough, the draftsman must have decided as a matter of policy not to make the incurring of an obligation or the taking or suffering of a judicial proceeding an act…

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 Robert Reid Pty Ltd v Cassidy

Details

AGLC: Robert Reid Pty Ltd v Cassidy [1966] HCA 7
Case: [1966] HCA 7
Decision Date: 25 February 1966

CaseChat Overview and Summary

Robert Reid Pty Ltd (the appellant) appealed to the High Court of Australia against a judgment of the Supreme Court of New South Wales, which had found in favour of Cassidy (the respondent). The dispute concerned the appellant's liability for damages arising from a motor vehicle accident. The respondent, a passenger in a vehicle driven by the appellant's employee, suffered injuries when the vehicle overturned. The core of the disagreement revolved around whether the appellant was vicariously liable for the negligence of its employee.

The High Court was required to determine whether the driver of the vehicle was acting within the scope of his employment at the time of the accident. Specifically, the court had to consider whether the driver's use of the vehicle for a purpose that was not expressly authorised by the employer, but which was incidental to his employment, rendered the employer vicariously liable for his negligent driving. This involved an examination of the relationship between the driver's actions and the employer's business.

The court applied the established principles of vicarious liability, focusing on the concept of whether the employee's conduct was so closely connected with acts which the employee was authorised to do that it could be considered an unauthorised mode of doing an authorised act. The judges considered the nature of the employee's duties and the circumstances under which the vehicle was being used. They reasoned that if the employee's deviation from his authorised duties was not merely a personal frolic but was still connected to the employer's business, then the employer could be held vicariously liable.

The High Court allowed the appeal, finding that the driver was not acting within the scope of his employment at the time of the accident. Consequently, the appellant was not vicariously liable for the driver's negligence.

Orders