Hyams v Elder Smith Goldsbrough Mort Ltd

High Court of Australia|1976-07-01|Before: Mason JJ, Gibbs J, Mason J

High Court of Australia Barwick C.J. Gibbs and Mason JJ. Hyams v Elder Smith Goldsbrough Mort Ltd [1976] HCA 18

ORDER Objection to competency upheld. Appeal dismissed as incompetent. Appellant to pay respondent's costs including reserved costs and costs of any proceedings incidental to the appeal. Barwick C.J.

Mr. Einfeld has put before us quite clearly and forcibly a number of reasons why we should hold that the order substituting a petitioning creditor indirectly involved a claim to property or civil right of the value of $3,000 or more. But the order, in my opinion, does no more than effect the substitution of petitioning creditors.

Although a creditor seeking an order of substitution must claim the existence of a debt of the required amount as at the date of the act of bankruptcy, it is not necessary, in my opinion, that that creditor should establish, as part of his application, that his debt was in fact in existence at that time. Of course, if it appears on the face of the material he produces in support of his applition that his debt was not in existence at the appropriate time the Court should not order the substitution. McNamara v Langford [1] , properly understood, decides no more than that. Whether or not the substituted petitioning creditor's debt is sufficient in point of time to support the petition will be decided when the petition is heard.

Here, we are told that the Judge in Bankruptcy anticipated that situation by saying that he was satisfied over the objection of the appellant that the creditor's debt was in existence at the appropriate time. However, even if the Judge made his satisfaction in this respect a ground for making the order for substitution, the order itself does not for that reason indirectly involve a claim as required by the Bankruptcy Act 1966-1973 Cth. Further, the finding itself did not involve a claim to property or a civil right. It was at the highest no more than a finding as to a time at which the debt was in existence.

Last, it was said that the order led to consequences which involved more than $3,000. It was said that, but for the order substituting the petitioning creditor, the petition would have lapsed. On the one hand, it is said the petitioning creditor thus, by the order, gained the possibility of receiving its debt: on the other hand, that the debtor suffered the possibility of his estate being sequestrated. However, the order does not involve these possibilities even if they may ensue. Also, in any case, neither of these possibilities of itself is shown to have the requisite value. Thus, in my opinion, however the matter is put, the order substituting the petitioning creditor did not involve directly or indirectly a claim to property or a civil right at all.

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