should be refused. : v Ward, Barton J., and O'Connor J., concurred.

should be refused. : v Ward, Barton J., and O'Connor J., concurred. - [1905] HCA 25 - HCA 1905 case summary — Zoe

[22]

the name of the above-named insolvent (purchased from one Mason on or about the 16th August, 1900), and which js 'ie: claimed by the said Elizabeth Jane Jack, forms part of the said insolvent estate, on the ground: - That the sum of £320 which has been paid therefor formed portion of the moneys of the above. named insolvent," &e. ae On the hearing of the motion before His Honor Judge Mole. worth, the only evidence as to the facts of the case was he deposition of Mrs. Jack, which had been taken on her examina tion before the Court of Insolvency in John Jack's insolvency, and also before His Honor Judge Molesworth. This deposition, with the several documents which were exhibits thereto, were put in evidence on behalf of the trustees, and their effect is sufficiently stated in the judgment of Griffith C.J. hereunder. : The motion having been dismissed, the trustees appealed to the Supreme Court, which allowed the appeal [Jn re Jack (1)], and declared that the trustees were entitled to the interest claimed by - Mrs. Jack in the land, and that the grocer's licence referred to in the notice of motion formed part of the insolvent estate. ; Mrs. Jack now appealed to the High Court on the grounds _ (inter alia) - -

That the Judge of the Court of Insolvency had no jurisdiction _ to make the order or declaration which he was asked to make, and therefore the Full Court had no jurisdiction to make, or ought not to have made, the order and declaration the subject-matter this appeal.
That the decision of the Judge of the Court of Insolvency : was not against evidence or the weight of evidence. :
That in reversing the findings of fact of the Judge of the Court of Insolvency, the Judges of the Full Court disregarded the rule of law that they should not interfere with findings of en unless such findings are unreasonable. 5; That upon none of the grounds relied on in the appeal Full Court should the said appeal have been allowed.
That even if the grocer's licence was paid for by the? or with the insolvent's money, the said licence did not pass to the trustees in insolvency. J

[30]

HIGH COURT Whether there is a resulting trust is entirely a question of tek In Bernicko v. Walker (1), Hood J. held that Savings out of house keeping money belonged to the wife. The question of fact j what was the intention of the husband? See also Lush on Law of Husband and Wife, 2nd ed.,p.199 ; Barrack v. McCulloch, (2); Lady Tyrvell's Case (3); Brooke v. Brooke (4). The word "goodwill" may be used in two senses, it may be attached to property, or it may be merely personal reputation. Goodwill in the latter sense would not pass to the trustee on insolvency: Cooper v. Metro- politan Board of Works (5). A grocer's licence, so far asit is any- thing, is an incident attaching to the premises in respect of which it is granted, although it is not a part of the realty in the strict sense of that word. See Ashburner on Mortgages, p. 175. Here the lease and the licence go together, and the rent agreed tobe : paid for both is not severable. The licence may be severed - from the premises, and may be assigned separately. 'The assignee cannot take the licence unless he also takes the lease of the land ; he cannot take the licence except as an incident of the business carried on on the land. Here the lease was determined _ for non-payment of rent. See Ex parte Royle (7); Kelly y. Montague (8); Chissum v. Dewes (9); Pile v. Pile (10); Whitley - v. Challis (11); Cadogan v. Lyric Theatre Ltd. (12) ; West London Syndicate Ltd. v. Commissioners of Inland Revenue (13); Anthoness vy. Anderson (14), and sees. 5, 10, 17, 38, 46, 101, 102, 115 of the Licensing Act 1890. The Licensed Premises Act 1894 (No. 1364) seems to suggest that in the opinion of the legis: - lature a licence is an incident of the licensed premises. A grocer's licence is not "goods" or "chattels" within the meaning of sec. 70 (v.) of the Insolvency Act 1890, and therefore cannot bein the ; reputed ownership of an insolvent. The reputed ownership section ; is intended to apply in Victoria to tangible articles only. Things savouring of realty or incident to realty are not goods or chattels, , nor is a right to enter premises or to carry on business on certain

[72]

'the quality of property than a licence which may be shifted from he toplace. So that if a licence which is attached to premises isnot property, d fortiori a grocer's licence, which may be shifted é "fom place to place, is not property. If the licence be property, "then, as to the savings, the onus of tracing the money of the "jnsband into the property of the wife is on the trustees. The wife being found in possession of property, the trustees must prove every ingredient of ownership in the husband. One neces- ary ingredient is that the husband gave no assent to the wife Keeping the savings. If they prove that any of the savings -telong to the husband, then they have to trace those savings into 'the property. All that the trustees could possibly be entitled to is an inquiry as to how much of the savings went into the Jandand how much went into the licence, and a charge over the land and licence respectively for the sums so found. Follow- 'ing trust funds assumes.a relation of trustee and cestui que trust. Ifthe relation between the husband and his wife is only that of debtor and creditor there is no right to follow the funds. The trustees are not entitled to now rely on aright to acharge. They should have made a claim of that sort distinctly by their motion Asto sec. 70 (v.) of the Insolvency Act 1890, the trustees cannot tike a part without taking the whole. They must take both the ase and the licence, or neither: Ex parte Allen; In re Fussell () Although there was no disclaimer of the lease, it was 'posible to surrender it without disclaimer, and that the trustees id The provision as to " things in action" in sec. 70 (v.) of the Insolvency Act 1890, shows that "goods and chattels" in that 'etin are to be limited to chattels which can be in the visible occupation of a person. The words " goods and chattels" tan corporeal personal property, and not incorporeal personal 'Woperty. If the lease and licence can be separated, the licence Msnot lent or entrusted to the husband within the meaning of

[92]

"she had to establish her defence, rested his decision practically upon : he ground that he did not think he ought to disbelieve the

appellant. He says "the only ground I am asked to disbelieve : her upon is her own evidence," and he declined to disbelieve her, 'and dismissed the motion. When the matter went to the Full "(Court the learned Judges seem to have treated it in the same "wy, as if the onus were upon the appellant to prove that she was "lawfully i in possession of the property. a Beckett J. says : - " All 'depends upon the wife showing that, with regard to the property which was bought in the husband's name, it was bought with her "noney." With the greatest respect, that is throwing the onus upon the wrong party. It was for the trustees to show that the money was the money of the husband, unless some Statute anged that onus. «Beckett J. further says: - <In addition to the general improbability of such an amount having been aved, there are certain figures which the other members of the Court attended to more closely, following with closer scrutiny than Iwas able to give, which seem to demonstrate that her ~ story cannot be true." But if it be not true, then we know noth- 'ing of the facts except that the money came out of the ap- fellant's banking account. Hodges J., after pointing out that the question between the parties in the Court of Insolvency was whether the money was really the insolvent's or whether it was his wife's, goes on to say : - "She was therefore cross- ttamined with the view of showing that it was not her Toney really." But the learned Judge seems to have thought 'that the appellant was giving evidence to support her case, 'that the onus of proof was upon her, and that the Judge of te Court of Insolvency was justified, if he thought her evi- ence did not prove her case, in giving judgment against her. ut, as I have pointed out, that was not the position at all. Hodges J. further says: - "I come to the conclusion that the sband was as fast as he could drawing money from the busi- "as, handing it to the wife, who paid it to her account, and that, time went on and as business became worse and he became 'lote nearly insolvent, the withdrawals from the business and the Yments to the credit of the wife increased, and that accounts

[98]

"gol, in May 1903, she entered into an agreement witha building

aniety to buy a piece of land, and to make certain payments for i, £100 was paid in cash, which was drawn out of the appel- "jint's acount on 25th May, 1903, and the next payment in May 1904 of £100 was also drawn out of that account. Those are all 'thefacts proved that I can discover. What was the position on 'thosefacts ? The trustees thought it was sufficient to prove that a money or some part of it had once been the husband's, and "that thereupon they were entitled to succeed. So far as regards 'the two payments of £100 each, I have very great doubt whether this would have been so before the Married Women's Property At, but since that Act the matter is made absolutely clear. See. 0 of the Married Women's Property Act 1890 provides that : - "All such deposits" (that is deposits in a Savings Bank &e.) ". . ,. which, after the commencement of this Act shall wk... . placed . . . . or transferred in or into or "nade to stand in the sole name of any married woman, shall be 'deemed unless and until the contrary be shown to be her separate property." So that the trustees, having undertaken to prove that this money was the money of the insolvent, tendered evi- "tence which showed that the money was the property, not of the husband, but of the wife until the contrary was shown, and they 'iered no evidence to show the contrary. Bearing in mind that "the trustees have no better title than their assignor unless a Statute gives it, the position is the same as if the husband had made the claim. Sec. 13 of the Married Women's Property Act 1890 provides that : - "If any investment in any such deposit shall have been made by a married woman by means af money of her husband without his consent, the Court may "Upon an application under section twenty of this Act order such investment and the dividends thereof or any part thereof to be tansferred and paid respectively to the husband." What position fen would the husband have been in if he had made this appli- tation ? He would have had to prove that the money claimed as his was deposited without his consent. The foundation of the

[100]

husband's consent, and there is not a scintilla of evidence that it was not with his consent. So far the application would fail, But sec. 13 goes on : - " Nothing in this Act contained shall give validity as against creditors of the husband to any gift by a husband to his wife of any property which after such gift shall continue to in 4 the order and disposition or reputed ownership of the husband. or to any deposit or other investment of moneys of the husk made by or in the name of his wife in fraud of his creditors, but any such moneys so deposited or invested may be followed" & But, as I remarked at the outset, if fraud is alleged it must be proved, and in this case no evidence on that subject was offered, : The only other better title that the trustees set up with respect to these moneys, and it was not pressed very much, was under sec. 72 of the Insolvency Act 1890, which provides that: - * Any settlement of property . . . shall, if the settlor becomes in- solvent within two years after the date of such settlement, be void as against the assignee or trustee of the insolvent estate under this Act, and shall, if the settlor becomes insolvent at any subsequent time within five years after the date of such settle ment, unless the parties claiming under such settlement can prove that the settlor was at the time of making the settlement able to pay all his debts without the aid of the property comprised in such settlement, be void against such assignee or trustee." The : term "settlement" isdetined by that section as including "any conveyance or transfer of property," and property undoubtedly includes money. Therefore it is suggested that these savings from the allowance given by the husband to the wife might be : treated as a "settlement," that is to say, that they were transfers of property to her made from time to time, and might be peached on that ground. But that argument is disposed of by the judicial interpretation put upon that section. The last case on the subject, and the only one to which I need refer, is Jn ie Plummer (1), before the Court of Appeal. The section had come : before Courts of first instance on several occasions, first in In

[112]

are tempest Or other calamity rendered unfit for the carrying on 'of the business of the licensee he may be authorized to carry his business temporarily in some neighbouring premises. all the pensions I have referred to are equally applicable "jp grocers' licences and victuallers' licences. There is, however, adistinction between them as to removeability, for under the _ present law a licensed victualler's licence cannot be removed from one house to another. Whether there can be such a thing salicence in the abstract - -a thing in the air - it is not necessary todetermine. The effect or quality of a licence has been deter- ined by authority which, in my opinion, this Court is bound tofollow. I refer first to some observations of Sir John Cross in Bx parte Thomas (1). That was a case of a bankrupt licensed vietualler. Speaking of goodwill Sir John Cross (2) says: - "I "am not aware of any case in bankruptey, on which a question jas arisen respecting the commodity called goodwill; and yet, -aeording to the present argument, there must exist such a ommodity in every bankruptcy. It is easy to conceive there to be such a thing as local goodwill, arising from the habit which customers have been in of frequenting the same place. "There is another kind of goodwill which may be called personal, ad this has been said to be incapable of sale. But there may tea goodwill, like that in the present case, which is partly personal and partly Jocal. This, so far as it was personal, remained with the bankrupts, notwithstanding their bankruptcy, nd did not pass to the assignees; for it is nothing else than the

ower to recommend the customers of the old concern to the new me, a power which cannot be exercised by assignees. So far therefore as this goodwill is personal, it does not appear to me to 'telong to either of the parties now before me. It is a matter of alinary occurrence, that where a publican has premises for the _Msidue of a term, he can sell the goodwill; for he can decline to "give up the possession, unless upon receiving a premium). But I "am of opinion, that under the peculiar circumstance of this case, 'Wsuch thing as goodwill can be considered as having been sold ty the assignees, there being in fact no such commodity to sell."

[154]

interpretation of the Act, to follow the sum given by the father: to show that it was used by the son as capital in the business whieh he carried on, and to call upon the son, if any capital remained in the business, to pay it over tothe trustee. . . . . Butlam of opinion that the Act of Parliament never intended to give such right as the trustee claims, because if transactions of this kind which certainly are not morally wrong, are included in the ope tion of sec. 47, all gifts from a father to a son for his advancement in life could be recovered from the unfortunate son at any time within ten years if the father became bankrupt, unless the so could show that his father was able to pay all his debts without the aid of the gift at the time it was made. It was contended that this was a 'transfer of property' within sub-see. 3 of see. 47, and by the interpretation clause in the Act 'property' includes money. I think the meaning of sub-sec. 3 is that where money is settled as property it may be recovered by the trustee in the same way that property which is ordinarily the subject of settle ment might be. It would be impossible to put on sub-see. 3 the - construction contended for on the trustee's behalf without render- _ ing void many transactions which, as matter of moral obligation, are perfectly proper and right." Of course the applicability" of an authority of that kind necessarily depends upon the credit given to the story of the respondent, and I have dealt wit ae that subject. The next case in point of date is Jn re Vansittarl, ex parte Brown (1). There there was a gift of jewellery and shares by a bankrupt to his wife within two years of hs c bankruptcy. That gift was held to be within the clause an 7 the ground that it was plainly the transferror's object that the very subject-matter should permanently remain the property of the transferee, and that the husband contemplated the retention by his wife of the presents. The same principle was applied in In re Tankard, ex parte Oficial Receiver ( 3 Wright J. said (3): - *The retention of the property in some sense must according to these cases be contemplated, and n0 4 its immediate alienation or consumption." It seems to me impos sible to regard the moneys which passed from the husband to ie

[167]

so. The fact that the moneys were at one time the husband's pefore they got into the wife's possession, is a neutral fact. The important fact is whether the husband consented to the moneys deing paid into the wife's account. It appears to me the onus of proof imposed by the Act could not be discharged by the trustees without proving that the moneys were paid into the wife's account without the consent of the husband. Looking through the evidence called, I see absolutely no evidence of want of consent on the part of the husband to these moneys being paid into the wile's separate account. As the evidence stands, I should think it would be very difficult to infer that the husband was not well aware of her payments into the account. As to the other way in which the primd facie presumption raised by section 10 that the moneys standing in the wife's name in a Savings Bank was her property, that is by proving that the moneys were deposited in fraud of the husband's creditors, there

isan entire absence of evidence. Comments may be made on the nature of the transaction - suspicions may be raised.. But it is impossible to get rid of the primd facie case made by the pro- visions of sec. 10 of the Murried Women's Property Act 1890, by mere suspicion. The trustees, no doubt acting under advice, chose to rest their case practically upon the wife's account of the transaction. The husband was not called, and no other evidence _ was given; and the wife's account being the only evidence, it has tobe taken. No doubt if the evidence of the wife taken as a _ whole proved the case set up by the trustees, that would be quite as good as any other evidence. But her evidence must _ be taken as a whole, and on it I see no ground for coming to the conclusion that these moneys were paid into the wife's account from her savings without the consent of the husband, or were paid in in fraud of the husband's creditors. That being 0, the trustees have failed to establish the allegation that the moneys out of which the land and premises were bought were the husband's property and therefore part of the husband's estate, it follows that they failed also to establish their position in regard tothe sum of £320 paid for the licence, which would appear, on the evidence before us, to be the wife's property.

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Coming to the question of the licence, what was the position at the time of the insolvency ? This licence had Originally bean purchased with the wife's money. It was, together with the. land and premises, leased to the husband by deed under which he undertook, among other things, to keep it attached to the. premises in which the business was carried on. When the liceng, was first bought it was apparently held in the husband's name, and was attached to the premises on which he then carried on which was bought by the wife, the licence was apparently removed so as to enable him to carry on business under the licence in the new premises, because we find that, in the lease which the wife makes of the premises, both the premises and the licence are mentioned as the wife's property. So that the position of the parties was this : - The licence being a personal licence was in the name of the husband and authorized him to carry on the busines | of a grocer selling wine and spirits on these particular premises - which were his wife's. He undertook by agreement with her to carry on the business on these premises, and to hold the licence solely for the purpose of carrying on business there. When the insolvency of the husband took place the trustees only stepped _ into his shoes. No paramount right is given to the trustees in respect of this licence. No right is given by the Licensing Ad 1890 in respect of a grocer's licence such as that given in respect of a victualler's licence. Any rights the trustees can exercise in respect of this grocer's licence are bounded entirely by the respective rights of the husband and the wife. The first question _ is whether the licence was property which passed to the trustees. I have no doubt whatever that it was not. The licence may be described as having two attributes each being absolutely distinct from the other. First, it is a personal licence to the husband to carry on this business, and secondly, it is a licence to carry on business in these premises. Therefore, carrying a business in accordance with the licence must necessarily imply a continuance in the premises in respect of which the sie 1s A granted. If the husband loses possession of the premises then the licence is absolutely of no value to him. Before he a remove the licence to other premises he has to get the consent 0

At a glance

Court

Decision date

Before

Source

Judgment (173 paragraphs)

Parties

Cited By (15)