Lorimer v Smail [1911] HCA 44

H.C. or A. ON APPEAL FROM THE SUPREME COURT OF 191i. VICTORIA.

» Insolvency - Settlement by woman who afterwards becomes insolvent - Regi Sept. 20, 25. of settlement - Insolvency Act 1897 (Vict.) (No. 1513), sec. 100.

oOo Sec. 100 of the Insolvency Act 1897 (Vict.} provides that '' Every settle

O'Connor JJ. of property on or for the wife or children or both wife and children of

_ before or in consideration of marriage or a settlement made on or for the wife 'or children or both wife and children of the settlor of property which has accrued to the settlor after marriage in right of his wife shall in case of the insolvency of the settlor at any time thereafter be absolutely void and of no effect against the assignee or trustee in insolvency unless such settlement be in writing and" registered in the mode prescribed.

Heid, that the section does not apply to settlements made by women.

Decision of the Supreme Court of Victoria : In re Lorimer, (1911) V.L.R., 168; 32 A.L.T., 172, reversed.

On 18th January 1907 Isabella Susanna Farckens, then a ridow, executed a settlement, whereby, in consideration of the atural love and affection she bore to her three children, she ransferred to herself and her children a certain piece of land to be held for the use and benefit of herself for life, and on her decease to her children, naming them, and their heirs and trans- ferees in fee simple as tenants in common. A transfer was accordingly executed on 11th February and a certificate of title _ was issued in the joint names of the settlor and her children. 'his settlement was not registered under the provisions of sec. 100 of the Insolvency Act 1897. Mrs. Farckens subsequently remarried and became Isabella Susanna Lorimer, and in July 1910 she voluntarily sequestrated her estate.

_ The trustees of her estate moved in the Court of Insolvency x a declaration that the transfer of 11th February 1907 was id and of no effect against them and that the property com- "prised therein formed part of the insolvent estate, and for an order that the transferees of the property should execute such transfers and other assurances as might be necessary to vest the _ property in the trustees.

The ground of the motion was that the transfer was a settle- ment of property on the children of the settlor requiring regis- tration under sec. 100 of the Insolvency Act 1897.

'The Judge of the Court of Insolvency held that sec. 100 did not apply to settlements by women, and he dismissed the motion with costs. On appeal to the Supreme Court this decision was versed: In re Lorimer (1).

(1) (1911) V.L.R., 168 ; 32 ALL.T., 172, VOL, XII. 35,

ie settlor made after the commencement of this Act not being a settlement H.C. or A.

An appeal to the High Court was now brought on beh Mrs. Lorimer and her children.

Arthur, for the appellants. See. 100 of the Insolvency 1897 does not apply to settlements by a woman. It does provide for a settlement by a wife on her husband or on husband and children. The evil the legislature was aiming was the ordinary one of asettlement by a man, and they had in mind settlements by a woman. The collocation of wi the same as is used in sec. 72 of the Insolvency Act 189 1 denote a settlement by a man.

Mann, for the respondents. Married women are by sec. i the Insolvency Act 1897 subject to the insolvency law. See. refers to three classes of settlements - a settlement on a wil settlement on children, and a settlement on both wife and chi Two of these are applicable to settlements by men only, and third, a settlement on children, is applicable to settlements by either men or women. If there were no exception, there be no reason for limiting the meaning of that class whic! applicable to settlements by either men or women. Of the exceptions, with regard to marriage settlements words are to describe them generally, and they are consistent with the tion covering settlements made by men or women. The sec exception is applicable only to settlements by men, but thai only because of the particular subject matter dealt with. ' fact that this second exception is only applicable to settleme by men is no reason for limiting settlements on children to settl ments by men, nor is the fact that the section makes no prov' for settlements by wives on their husbands or on their hu and children. The policy of the legislature is to apply the visions of the insolvency law equally to males and females, the Court should give such a meaning to sec. 100 as will that policy. The grammatical construction should be follo in a case of doubt. [He also referred to sec. 72 of the I vency Act 1890 and secs. 103, 104 of the Insolvency Act 189!

Arthur, in reply. The marriage settlements referred to in 100 can only be such marriage settlements as are included is

classes previously referred to, and therefore cannot include ijage settlements by a wife on her husband or on her hus- d and children, so that no assistance can be drawn from that ption. The section must be read as a whole and cannot be led up into different parts and then interpreted as if each had no reference to the others: Crates on the Interpretation tututes, pp. 98, 174, 198; Mersey Docks and Harbour Board _ Henderson Bros. (1); Nolan v. Clifford (2).

(Grirrir C.J. referred to Rein v. Lane (3): Doe v. Bartle (4).]

_ Grirrita C.J. The question for determination in this case ends entirely upon the construction of sec. 100 of the Znsol- cy Act 1897, which provides that: - "Every settlement of sy on or for the wife or children or both wife and children settlor made after the commencement of this Act not being lement made before or in consideration of marriage or a ment made on or for the wife or children or both wife and ildren of the settlor of property which has accrued to the lor after marriage in right of his wife shall in case of the olvency of the settlor at any time thereafter be absolutely and of no effect against the assignee or trustee in insolvency s such settlement be in writing" and registered in the mode reseribed by the section.

_ The general question of voluntary settlements was dealt with _ by sec. 72 of the Insolvency Act 1890. 'The appellants in this e contend that sec. 100 of the Act of 1897, which I have read, 0 application to a settlement made by a mother upon her

dren. The settlor in this case was a widow when she made the settlement, and the settlement was for the benefit of herself d her children. The respondents contend that, grammatically, ec. 100 is capable of including settlements by a mother upon her children, whether she is a widow or married, and should be construed. The Judge of the Court of Insolvency accepted he contention of the appellants, but the learned Judges of the

(1) 13 App. Cas., 595. (3) LR. 2Q.B., 144, (21 CER, 429, (4) 5B. & A., 492,

H.C. or A. Supreme Court were of the contrary opinion. It is a m

upon which opinions may well differ, and we must express 0 own. There is very little to be said about it. The responder say that the question is purely one of grammar. They say when a number of words are connected together in a senten subjects or objects by the word "or," you can reject all the w up to and including the final " or," and say the sentence is matically complete. So you can. But I do not think it follo that the meaning so arrived at is the true meaning of the en ment. You must have regard to the omitted words, to context, to the collocation, and to the purpose as relating to

Lane (1) - to see whether this merely mechanical operation give effect to the whole intention of the legislature. Havir regard to the context and to the collocation of the words, I that the word "children " is used throughout in conjunction the word " wife." I think it is right to have some regard to primdé facie probability of one construction as compared with other, where words are really ambiguous, although the argumer is a very dangerous one. It is quite clear that a settlement by a wife on her husband and children would not be void as far regards the husband, but it is said it would be void as regards the children. It seems primd facie highly improbable that legislature would forbid a mother to make gifts to her childrer and, still more improbable, that in an Insolvency Act it wo forbid gifts by a woman to her children, and allow gifts by he her husband, and yet that must be the effect of the respondent contention. On the whole I have come to the conclusion, thou; not without the doubt which is necessarily involved in differin, from the opinion of the learned Judges of the Supreme Court: and it is a mere matter of opinion - that the intention of th legislature was to use the word "settlor" in the sense of husband and not to include in it a wife. I think, therefore, |

the judgment of the Judge of the Court of Insolvency was righ and should be restored.

Barton J. read the following judgment: - No doubt we

are bound to look further than the mere literal meaning (1) LR. 2Q.B., 144.

the context. But the literal or grammatical meaning is also e plain meaning unless, to use the words of Jessel M.R. in entley v. Rotherham and Kimberworth Local Board of Health Ad); it is controlled by a " context even more plain, or at least as plain."

Whether the writing to be interpreted be a Statute or any her document, the rule is the same. It is clearly laid down by Sir John Leach V.C.,in Hume v. Rundell (2): - "In the con- struction of all instruments it is the duty of the Court not to confine itself to the force of a particular expression, but to collect the intention from the whole instrument taken together. But a Court is not authorized to deviate from the force of a par- ticular expression, unless it finds, in other parts of the instrument, expressions which manifest that the author of the instrument could nob have the intention which the literal force of a par- ticular expression would impute to him. However capricious may be the intention which is clearly and unequivocally ex- _ pressed, every Court is bound by it, unless it be plainly controlled by other parts of the instrument."

_ First, then, what is the literal or grammatical meaning of the words used ?

_ That is to be ascertained, not by cutting them into segments, nd sorting out a segment which will bear the desired meaning, _ but by taking the disputed phrase or passage as a whole. If the words "Every settlement of property on or for the 3

children of the settlor," were the only words used to describe the

settlement or the settlor, Mr. Mann's contention would be amply

justified. But we must take these words in their relation to the

rest of the passage, and consider the relation to the word

"children" of the words "wife or" which precede it, and the

words " or both wife and children" which follow it; and the

relation of the word "settlor " to all these expressions.

The settlor is a person who may make a settlement on "the wife or children or both the wife and children" of the settlor. The alternative to a settlement on either wife or children separ- ately is a settlement on both wife and children together. What

(1) 4 Ch. D., 588, at p. 592. (2) 2 Sim, & St., 174, at p. 17.

the words used and to consider the whole enactment, which H. ©. or A.

Can it be other than a man? He may be a man who has a but no children, or who has children but no longer a wife, or has both wife and children; and he may in any of these make a settlement which will, if not registered as prescribed, voidable at the instance of the assignee or trustee. But wi ever person or class of persons be the object or objects of settlement, the person who makes it cannot be a woman. Mann's construction is not only arrived at by ignoring relations inter se of the component parts of the passage, would have the effect of placing under the ban of the section provision made by a woman for her children, while leavir untouched a settlement made by a wife upon her husband; a it is, to say the least of it, improbable that the legislature tended to make so strange a discrimination. Further, the cess employed is condemned by Lord Halsbury L.C., in Me Docks and Harbour Board vy. Henderson Bros. (1) where he say

• 'It certainly is not a satisfactory mode of arriving at meaning of a compound phrase to sever it into its several p: and to construe it by the separate meaning of each of such p when severed." The phrase there in question was "trad inwards": but the principle applies equally to a passage like in question where the parts are inter-dependent, as I think are. Are there, then, in other parts of the enactment express which manifest that the legislative author of it "could not ha' had the intention which the literal force of the particular e pression would impute to it?" I have looked in vain for such controlling context. Certainly it does not exist in section we are to construe. Indeed, the exception of p nuptial settlements made in pursuance of a wife's equity to. settlement is couched in terms which include a repetition of th phrase which it is sought to construe in favour of the trustee and to that extent the grammatical construction of it is, perhaps, helped. Then sec. 72 of the Act of 1890 was referred to. Thoug! that section probably covers (inter alia) settlements made women, its terms do not assist the trustees. Indeed, a very cl

tie might say that the later portion of it, beginning with the H.C. oF A. ords "any contract or covenant," uses the words "his wife or = children" in a manner which tends possibly to indicate that the Lonrrmzr _ person referred to in the previous part of the section as the settlor 7...

• ;aman. But I am not adopting that kind of criticism. It is

enough to say that there is not in sec. 72 of the Act of 1890, yhen read in connection with sec. 100 of the Act of 1897, any ontext controlling the construction which the Judge in Insol- -yeney has placed on the latter.

Speaking for myself, I find nothing at all capricious in the intention which I think is expressed in the section. It is not "unreasonable that Parliament should have deliberately abstained from applying such a drastic provision as this to a settlement by which a solvent woman provides for her children. They may have considered it quite sufficient that they had already sub- jected an arrangement ordinarily laudable to the perils of the 72nd see. of the Act of 1890 - perils superadded to the risks it ran from the mother's ability to defeat it.

This particular settlement has not been attacked under sec. 72, although Mrs. Lorimer became insolvent three and a half years after its execution. It seems probable, therefore, that the trus- tees found that the beneficiaries could prove that Mrs. Lorimer (then Mrs. Farckens) was at the time she made it able to pay all her debts without the aid of the property settled. If this was really the fact, I am glad that we find the meaning of sec. 100 to be such that the attack under that section is also fruitless.

I think that the construction adopted by the learned Judge in Insolvency is the grammatical and natural meaning of the words, that there is no controlling context, and that his order was right and should be restored.

O'Connor J. The meaning which the Supreme Court put

upon the words of sec. 100 of the Insolvency Act 1897 is no

c doubt clear enough if one reads the section in the way in which the learned Chief Justice of the Supreme Court read it. He arrived at his conclusion by leaving out the words of the section which create the difficulty. The first few words of the section are those which have to be considered, and they read in this way:

H. C. or A. "Every settlement of property on or for the wife or children or b

wife and children of the settlor." Now it appears to me im) sible to give full effect to every word of that portion of the tion without inquiring into what is meant by "settlor.". words are not " Every settlement of property on or for the or children or both wife and children," but " Every settlement. y property on or for the wife or children or both wife and child: of the settlor." It is quite clear that read in that way the sett ment which is the subject matter of the section must be a settl ment made by a male settlor and can be nothing else. To att to construe the section by leaving out the word "settlor" to me to construe it without taking the whole of the words i dispute into consideration. There is a further reason, it seems to me, in favour of taki that which really gives a meaning to the whole sentence it consideration, and it is this: As the learned Judges of the Supre Court read the section, it amounts to an enactment that a set ment by a wife on her children must be registered under penal of becoming void, but that a settlement by a wife on her hus need not be registered. Considering that this is an Insolvency Act and is especially directed to the prevention of frauds creditors, it seems highly improbable that the legislature sho have dealt in that way with settlements on children, and sho have left out the very kind of settlements which were more lik to be used to the prejudice of creditors. x I therefore agree that the correct interpretation of the secti a is that arrived at by the Judge of the Court of Insolvency.

Appeal allowed. Judgment appealed fr discharged. Appeal from the Court 0 Insolvency dismissed with costs, and judgment of the Judge of the Court of Insolvency restored. Respondents te pay the costs of the appeal.

Solicitor, for the appellants, 0. J. MacFarlane for T. Robins

Ballarat. Solicitors, for the respondents, Phillips, Fow & Overend. BL