High Court of Australia|1927-03-23|Before: Powers JJ

Gourlay v Casey [1927] HCA 6; (1927) 38 CLR 586 (23 March 1927)

Owen Dixon K.C. (with him Hogan), for the appellant.

Per Curiam. The first requisite is to construe the proviso to sec. 232 of the Insolvency Act 1915. For the appellant it is said that that proviso extends to all offences under the Act. For the respondent it is urged that it does not apply to the offences enumerated in sec. 235. The main reliance of the respondent is placed on the words "unless otherwise expressly provided" found in sec. 232, and introduced for the first time in 1915 and therefore since the decision in [].

The view put by the appellant appears to be correct. The words referred to, which mean "unless some inconsistent provision is expressly made" are enacted in relation to the general powers, described in pars. (a), (b) and (c) (see In re Tarn[2]). Under those general powers, which primarily extend to every application for a certificate of discharge or compulsory appearance under sec. 230, the Court may, as it thinks just, do any one of four things, namely, (1) grant an immediate absolute certificate of discharge; (2) refuse the certificate; (3) suspend the certificate for a period not exceeding two years, or (4) suspend the certificate until a dividend is paid or secured. To those general and primarily universal powers a proviso is enacted. It is that the Court's power is limited to refusal in all cases of statutory offences, "unless for special reasons the Court otherwise determines." The words are "shall refuse to grant the certificate" - that is a total refusal to grant the certificate whether of immediate or later operation. If, however, for special reasons the Court determines that refusal is not just, the embargo of the provision is removed and the other general powers operate, which include the immediate grant of an absolute certificate. Sec. 233, however, is an instance where it is "otherwise expressly provided." Similarly as to sec. 234. Sec. 235 is certainly an express provision "otherwise," but the question is to what extent. The respondent appears to treat the words "otherwise expressly provided" as if they meant "other provision expressly made"; so that wherever another provision was made, that was to cover the field. That would be disastrous to many sections. But, if we inquire as to the extent of the inconsistency between secs. 232 and 235, we find that sec. 235 expressly cuts down the general power of the Court by excluding the immediate absolute grant. It, however, leaves sec. 232 to operate otherwise, and adds a further power of imprisonment which is not inconsistent with anything in sec. 232. As to any argument founded on implication, it is excluded by the word "expressly." The proviso to sec. 232 therefore applies to the present case.

The words "special reasons" are to be construed. As Vaughan Williams L.J. pointed out in In re Solomons[3], the words of the statute leave much to the discretion of the learned Judge. Further, that case shows that among those special reasons may be circumstances connected with the offence and mitigating it, or conduct over a sufficient period of time showing that the insolvent is not likely to be a trading danger to the community[4]. But, as Romer L.J. says, the conduct of the insolvent that is especially to be regarded is his conduct with reference to the particular offence in question. Doubtless the discretion of the Court is very large, and necessarily so; but it must have as its basis some circumstances which it can reasonably regard as "special reasons" for lifting the particular offence out of the penalty of refusal. If nothing more appears than the offence of having "an unsatisfied judgment against the insolvent in any action for ... breach of promise" of marriage, the Court must refuse the certificate.

In the present case, the position of the insolvent is less favourable to him. It appears that in addition to the bare fact mentioned, he has told the creditor that she would get nothing; he has never endeavoured to pay the debt, and he has acted in a way that begets suspicion by transacting his business affairs through a banking account in his brother's name on which he, by general or special directions, operated as if it were his own; he produces no reliable evidence to support his story that the considerable sums of money he dealt with by receiving them, paying them into the bank and afterwards, to some extent at all events, drawing them out were not really his own money. In addition, the original circumstances of his indebtedness for money lent, though not part of the offence, are not without importance in judging of the propriety of relieving him from his insolvent status.

On the whole, it appears that the conditions on which the discretion permitted under the proviso to sec. 232 do not exist. We have carefully considered what are regarded by the Supreme Court and the learned Judge of the Insolvency Court as special reasons, but we are unable so to regard them. The appeal should therefore be allowed. The attitude of the insolvent during this appeal in refusing to consider any proposal to secure any part of the judgment debt renders it unnecessary to consider what mitigation of this course should be adopted, as in In re Stevens; Ex parte Board of Trade[5].

Appeal allowed. Orders of the Supreme Court and the Court of Insolvency discharged. Certificate refused. Appellant to have costs in all Courts.

[1] (1901) 27 V.L.R. 335; 23 A.L.T. 67.

[4] (1904) 1 K.B., at pp. 114-116.

Gourlay v Casey [1927] HCA 6;

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Gourlay v Casey [1927] HCA 6; (1927) 38 CLR 586 (23 March 1927)

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