Tilley v Official Receiver in Bankruptcy

HIGH COURT OF AUSTRALIA

Dixon C.J., Kitto and Menzies JJ.

TILLEY v. OFFICIAL RECEIVER IN BANKRUPTCY

(1960) 103 CLR 529

28 November 1960

Bankruptcy

Bankruptcy—Offence—Undischarged bankrupt—Obtaining credit for 20 pounds or more without disclosing status—Cheques not post-dated given in payment of price of goods upon their delivery—Cheques dishonoured on presentation—Credit not thereby obtained—Bankruptcy Act 1924-1958 (Cth), s. 211 (a).*

Decisions

November 28.
The following written judgments were delivered:-
DIXON C.J. By s. 211 (a) of the Bankruptcy Act 1924-1958 an undischarged bankrupt is guilty of an offence punishable by one year's imprisonment if he obtains credit to the extent of 20 pounds or upwards from any person without informing him that he is an undischarged bankrupt. The Supreme Court of Queensland sitting as a court of bankruptcy has convicted the appellant summarily of six offences under this provision and has imposed upon him concurrent sentences for such offences of six months' imprisonment. He appeals from the convictions. (at p531)

2. It appears from the findings of fact made by the learned judge who heard the charge (Stable J.) that in each case in respect of which he was convicted the appellant without disclosing his status bought goods for which he paid by cheque upon delivery. In each case the cheque was dishonoured. The question for decision is whether that constitutes "obtaining credit" within the meaning of s. 211 (a). (at p531)

3. The appellant was a builder by trade. A sequestration order was made against him on 18th July 1957. He went on in the building trade and the goods with respect to which he gave the cheques were purchased by him for jobs he was doing. They were drawn on bank accounts upon which it is said he was permitted to overdraw, but apparently he exceeded the limit of his overdraft. There is no finding that the appellant gave the cheques knowing that they were valueless, if that be a material fact. (at p531)

4. There are two grounds on which, in my opinion, the charge that in these transactions the appellant obtained credit is shown to be misconceived. The first is that the sellers of the goods never intended to give him credit and never did so, nor did he seek credit from them, expressly tacitly or impliedly. They sold for immediate payment and received what they considered immediate payment in a medium common enough commercially in the case of any large amount, namely a cheque. (at p532)

5. The second ground is that they took the cheques in the ordinary way, that is to say, as conditional payment. In each case until the cheque was dishonoured the debt was conditionally satisfied. We speak of it as conditional payment although no doubt it would be more technically accurate to say conditional satisfaction. Possibly if the cheque was given as a trick with full knowledge that it was valueless it might be considered to work no satisfaction, conditional or otherwise. But simply because of his trick the drawer…