Stuart-Robertson v Lloyd [1932] HCA 33

High Court of Australia|1932-07-01|Before: Tiernan JJ, McTiernan JJ, Evatt J

Gavan Dufly C.J., Rich, Starke, Dixon, Evatt and MeTiernan JJ.

STUART-ROBERTSON a isnketgeke ides RESPONDENT, AND LLOYD. ping 3 jreuee ee cine tpaiee al APPLICANT,

Bankruptey - Constitutional Law - Member of State Parliament - Allowance granl State Act - Appropriation under Federal Act for benefit of creditors - |

- Pay, pension, salary, emoluments, profits, wages, earnings, or ine Discretion of Court - Constitution Act 1902 (N.S.W.) (No. 32 of 1902), sec. Bankruptcy Act 1924-1930 (No. 37 of 1924 - No. 17 of 1930), secs 5, The Constitution (63 & 64 Vict. c 12), secs. 51 (xvit.), 106.

Sec. 101 of the Bankruptcy Act 1924-1930 applies to the allowance to 1 members of the Legislative Assembly of New South Wales are entitled sec. 28 of the Constitution Act 1902 (N.S.W.): 'The proviso to sec. 10 Bankruptcy Act does not exclude such an allowance from the ope the section.

The Constitution Act 1902 (N.S.W.) The Bankruptcy Act 1924 provides, by sec. 28: - "Every mem- provides, by sec. 101: - " Sub ber of the Legislative Assembly now this Act, where a bankrupt serving or hereafter to serve therein receipt of pay, pension, salary, shall . . . be entitled to receive, ments, profits, wages, ¢ by way of re-imbursement for expenses income, the trustee shall incurred by him in the discharge of his distribution amongst. the parliamentary duties, an allowance at much thereof as the Court, of a specified rate "per annum. . application of the trustee, Such allowance shall be charged on 'the Provided that this section Consolidated Revenue Fund, and shall apply to any pay, pension, | be payable monthly at the rate afore- or wages which by any Act said to every such member from the Act is made exempt from time of his taking his seat, and, inevery or incapable of being case, until he resigns or his seat is charged." vacated," &e.

under see. 28 of the Constitution Act 1902 (N.S.W.) is a valid exercise of the power vested in the Parliament of the Commonwealth by see. 51 (xvri.) of the Constitution.

'The estate of a member of the Legislative Assembly of New South Wales having been sequestrated, the Official Receiver applied for an order under see. 101 of the Bankruptey Act 1924-1930 in respect of the allowance to which the bankrupt was entitled under see. 28 of the Constitution Act 1902 (N.S.W.). The Court of Bankruptey, having regard to the circumstances of the

including the nature of the allowance and its purpose, to the fact that the bankrupt was a married man with a wife and family dependent upon him, and on the assumption that he had no other source of income, ordered that out of his parliamentary allowance the bankrupt should contribute the sum of 44 per week to the trustee of his estate for distribution amongst his creditors.

Held, by Gavan Duffy C.J., Rich, Starke, Dixon and McTiernan JJ. (Evatt J. dissenting), that the discretion conferred on the Court by see. 101 of the Bankruptcy Act had been exercised according to law and the order should not 'be disturbed.

i from the Court of Bankruptcy (District of New South Wales the Territory for the Seat of Government). A sequestration order was made on 9th April 1931 against Robert james Stuart-Robertson, a member of the Legislative Assembly of New South Wales, and his seat in such Assembly thereupon became "vacant in accordance with the provisions of sec. 34 of the Constitution _ Act 1902 (N.S.W.), but at the ensuing election he was re-elected to the Assembly. _ Charles Faixfax Waterloo Lloyd, the Official Receiver of the

Sequestrated estate, applied to the Court of Bankruptcy for an order under sec. 101 of the Bankruptcy Act 1924-1930 in respect of the parliamentary allowance to which the bankrupt was entitled under Sec. 28 of the Constitution Act 1902 (N.S.W.). The Court of Bankruptcy aS informed that the amount of the allowance was £576 8s. 2d. per annum. The Court ordered the bankrupt to contribute out of his parliamentary allowance the sum of £4 per week to Lloyd for distribution amongst the creditors of the bankrupt. In doing so, his Honor Judge Lukin pointed out that the bankrupt had offered no _ evidence on the question of the amount of the order ; that it did not appear whether he earned anything outside or in addition to the

Sec. 101 of the Bankruptcy Act 1924-1930 in its application to allowances H. C. oF A.

H.C. or A. moneys receivable by him for his parliamentary duties; and ¢ ran the onus of proving how much of such moneys receivable s Srvarr- retained by the bankrupt seemed to rest on the bankrupt. His Ronmms stated that, in his opinion, having regard to the whole of the ci T10xP. stances of the matter, including the nature of the allowance its purpose, to the fact that the bankrupt was a married man

a wife and family dependent upon him, and upon the a

Honor to make the order as indicated above. 3 From this decision the bankrupt now appealed to the High Co on the grounds, (1) that so far as secs. 5 and 101 of the Bank Act 1924-1930 purported to deal with the rights and pri a member of a State Legislature they were wltra vires ; (2) parliamentary allowance in question did not come within or any other section of the Bankruptcy Act, and (3) that allowance was exempt from attachment, and, being incapabl being assigned or charged, came within the proviso to sec. 101.

Loaton K.C. (with him Kinsella), for the appellant. The a received by the appellant pursuant to sec. 28 of the Constitution 1902 (N.S.W.) is an allowance, and, therefore, does not come Wi the class of property dealt with in sec. 101 of the Bai p 1924-1930. The allowance is given for a particular purpose, so long as it remains simply an allowance it does not pass tot t Official Receiver under sec. 60 of the Bankruptcy Act, nor covered by sec. 101. There is a distinction between an a and an emolument, the latter being what the recipient is abl save from an allowance after deducting therefrom his o expenses (R. v. Postmaster-General (1)). An allowance is salary. Salary is what is paid for services rendered, an allow: something paid for the purpose of reimbursing charges incu the recipient. The Court must be satisfied that all the expen and demands incurred ana made in the performance of the baal rupt's parliamentary duties for which the allowance was madi have been met or provided for, before it will order that any thereof be paid to the trustee under sec. 101. An allowance

toa member of Parliament cannot be attached (Callaghan v. Hunter (1)). In endeavouring to ascertain what the Legislature intended by the word " salary " consideration cannot be given to the purpose which the remuneration was paid (Hollinshead v. Hazleton (2) ). the allowance is by way of reimbursement for expenses incurred cannot be regarded as income. If sec. 101 confers a power as ed in the order, then it is an interference by the Federal ent in the function of government of a State Legislature. State Legislature never intended that the allowance, or any part , should be taken for the benefit of a member's creditors. The ture of the allowance shows that it is absolutely inalienable and fore comes within the proviso to sec. 101. So far as Judge in's order may be taken to proceed from the exercise of discretion, uch discretion was manifestly exercised on a wrong principle.

Moverley, for the respondent. The descriptive words appearing . 101 of the Bankruptcy Act should be given their fullest import. Ithough the allowance received by the appellant under sec. 28 of e Constitution Act 1902 (N.S.W.) is not necessarily " salary," it y be considered as an " emolument," or " profit," or "income " within the meaning of the section. The principle underlying the 'ruptey Act is that of securing equal distribution of the moneys ofa bankrupt. The definition of "property " in sec. 4 of the Act s indicative of the general object of the Act that wherever it is possible the property of a bankrupt shall go to his creditors. It annot be said that the allowance is not the property of the appellant ; therefore, under sec. 60 of the Act, it is vested in the respondent, as Official Receiver, and thereby becomes subject to all provisions "of the Act relating thereto. As shown in R. v. Postmaster-General 6 "emolument " is regarded in law as being the difference between the expenses incurred and the sum received. The Federal Parlia- ment properly exercised its powers in enacting that such a balance, 'atleast, of the allowance is attachable for the purpose of distribution amongst the creditors of a bankrupt member of a State Legislature. All amounts received by the appellant are capable of being regarded

(1) (1889) 3 Q.LJ. 152. (2) (1916) 1 A.C. 428. (3) (1878) 3 Q.B.D. 428.

as "income" within the meaning of the section. The allowar is recognized by the State Legislature as being income in (1) (p) of the Income Tax (Management) Act 1928-1929 (N
The Constitution Act 1902 (N.S.W.) nowhere suggests the amou the expenses incurred or likely to be incurred by a member of Legislative Assembly. The onus is upon the appellant of to the Court, if he so desires, that there is no surplus available his allowance for distribution amongst his creditors. The allo received by the appellant by way of reimbursement falls "income." The pension of a retired Judge of a Crown Colony been held to be "income," and attachable (Hx parte Hi In re Huggins (1)). The allowance is one to which the a has a legal claim, and it is, therefore, attachable (Hx parte Wi In re Wicks (2)). An allowance granted under a superannu Act to a retired civil servant has been held to come within operation of sec. 53 of the Bankruptcy Act 1883 (Eng.), wh provision similar to sec. 101 of the Bankruptcy Act 1924-1930 re Lupton; Ex parte Official Receiver (3) ). The allowance doe come within the operation of the proviso to sec. 101. There i Federal or State Act by reason of which the allowance is exen from attachment or assignment or charge. Upon a review of f facts it is clear that the discretion conferred upon the Court by se 101 was properly exercised by the Judge in Bankruptey and th fore his Honor's order should not be disturbed by this Court.

The following written judgments were delivered :- -

Gavan Durry C.J. anp Dixon J. The order appealed recites that it appears to the Court of Bankruptcy that the ba is a member of the Legislative Assembly of New South Wales, and as such, is in the enjoyment of the annual allowance of £576 8s. 2d and directs that £4 a week, portion of such allowance, be tf the Official Receiver by the bankrupt during his bankruptey t be applied in payment of his debts. ;

(1) (1882) 21 Ch. D, 85. (2) (1881) 17 Ch. D, 70. : (3) (1912) 1 K.B. 107.

the operation of sec. 101 of the Bankruptcy Act 1924-1930. To do so, the allowance must fall within the description " pay, pension, salary, emoluments, profits, wages, earnings, or income," and must not fall within the exception "* pay, pension, salary, or wages which 4 by any Act or State Act is made exempt from attachment or incap- able of being assigned or charged." Further, the provision must be constitutionally capable of applying to State parliamentary allowances. The Constitution Act of New South Wales describes the nature of the payment. It provides that every member of the Legislative Assembly shall be entitled to receive by way of eimbursement for expenses incurred by him in the discharge of his _ parliamentary duties an allowance. It prescribes that the allow- o 'ance shall be payable monthly to him from the time of taking his t until he vacates his seat or the Parliament ends (sec. 28). For

purposes of State income tax, the allowance forms part of the member's assessable income and a deduction is authorized of £100 _ in respect thereof (Income Tax (Management) Act 1928-1929, sec. ; - 19(1)(p)). Although it is given the character of an indemnity for expenses, the allowance is payable regardless of the expenditure, if any, actually incurred and of the nature and extent of the duties which the member is called upon to discharge. The payment forms part of his general resources and may be applied as he thinks fit. It is, therefore, "'income"' of the bankrupt within the narrowest meaning of that word. Compare Ex parte Benwell ; In re Hutton (1) ; Inve Shine; Ex parte Shine (2); Hollinshead v. Hazleton (3).

The category stated in the exception includes a much smaller class of receipts than that contained in the positive enactment in sec, 101. As the allowance is given the character rather of reim- bursement or indemnity than of remuneration, there is some difficulty in bringing it within the description ' wages." But even if it fall within that description, the exception cannot cover it unless by a State Act it is made exempt from attach- ment or incapable of assignment or charge. It may be that it is inalienable according to the principles of the common law. The

(1) (1884) 14 Q.B.D. 301, at p. 307. (2) (1892) 1 Q.B. 522, at pp. 527, 529. (3) {i9i6) 1A.C., at p. 449.

The question for decision is whether the allowance comes within - ©. or A. 1932.

H.C. oF A. application of these principles depends, no doubt, upon the cha Ra and purpose of the allowance, and these are matters which the Sruarr- stitution Act (N.S.W.) describes. But the statute does not expr cared or imply any legislative intention that the allowance shall] loxP. unassignable. Its unassignability must arise, if at all, from doetai Gavan Dufly which are founded upon considerations of public policy, and do n¢ PixonJ- depend for their application upon the intention of the Legislatun There is no other State enactment which can be relied upon, 1

follows that the allowance does not fall within the exception con

tained in sec. 101. No good reason appears for denying to ti Commonwealth Legislature power to enact such a law ex

to State parliamentary allowances. It does not impose any bur upon legislators as such, and it does not attempt to take for credi any payment which the laws of a State have not left at the of the recipient. It gives power to appropriate for the beni the creditors the allowance because it is "income " of the mi Moreover, it respects legislation of a State which grants a " salary and makes it inalienable. How much further the power of Parliament enables it to go, it is unnecessary to consider, for i clear that such a law is valid. It follows that the Judge in Ban ruptey possessed a discretion to make the order appealed from.

exercising that discretion he did not proceed upon any wrong prit ciple, and we ought not to substitute our judgment for his. The appeal should be dismissed with costs.

Ricu J. I consider that the appellant's parliamentary allowa falls within sec. 101 of the Bankruptcy Act 1924-1930, which valid law of the Commonwealth, and that the primary Judge prop exercised his discretion in making the order appealed from.

In my opinion the appeal should be dismissed with costs.

Srarke J. The main question in this case is whether the a ance of £576 to members of the Legislative Assembly of New Soutl Wales by way of reimbursement for expenses incurred by them the discharge of their parliamentary duties is salary, emol or income within the meaning of sec. 101 of the Bankruptey 4 1924-1930.

Provisions such as are made in sec. 101 of the Bankruptcy Act ve been applied to salaries that are inalienable at common law,

jiament under the resolution of the House of Commons (Hollins- ad v. Hazleton (1) ). Such payments are salaries or income within meaning of the law of bankruptcy. In the Australian Bank- Act the words are "salary, emoluments, profits, wages, earnings, or income." The allowance under the New South Wales \ct is expressed to be by way of reimbursement for expenses incurred in the discharge of parliamentary duties. But the sum is the same 'allmembers whether expenses be incurred or not. And members re under no obligation to account in any way for the expenditure he allowance. Moreover, it is payable monthly, at the rate of 6 per annum, and is charged upon the Consolidated Revenue Fund. must, I suppose, take the Parliament at its word, and not treat nce," in the Act mentioned, as a euphemism for salary, but ning a reimbursement for expenses. But even so, the words uments" or "income" in sec. 101 cover the allowance and the case within the principle of the decision in Hollinshead . Hazelton.

~ Another question raised in this case is whether the proviso to sec. 101 excludes the allowance from the operation of that section : "Provided that this section shall not apply to any pay, pension, lary, or wages which by any Act or State Act is made exempt from attachment or incapable of being assigned or charged." past, and the allowance as granted is not for such services, but is a 'reimbursement for expenses incurred (see In re Shine; Ex parte Shine Q) ). Assume, contrary to my view, that the allowance is within the words of the proviso "' pay, pension, salary, or wages," and that by its 'nature it is incapable of being assigned or charged by reason of the rule of law based upon publie policy prohibiting the assignment or charging 'of salaries, pensions or allowances attached to public offices or positions, does the State Act make the allowance incapable of being 'assigned or charged ? This is a somewhat delicate question, because the proviso should be given a liberal construction ; but on the whole

(1) (1916) 1 A.C. 428, (2) (1892) 1 Q.B., at p. 531, per Fry LJ.

The proviso points to payments for services rendered, present or"

I think the better construction of the proviso is that the must appear from the words of the Commonwealth or and not arise merely from some rule of law based upon publ or other ground. The State Act in question in this case d in terms, make the allowance incapable of being assigned or

Another ground raised by the notice of appeal is that s in so far as it affects allowances to members of the State Parl such as are in question here, is beyond that competence Parliament of the Commonwealth. But the Parliament has power to make laws for the peace, order and good gove the Commonwealth with respect to bankruptcy and insolvency. limitation upon the power is found in the Constitution and u such a limitation can be found there, then it does not ¢ (Amalgamated Society of Engineers v. Adelaide Steamship A provision such as sec. 101 is a law with respect to ban and the Constitution does not forbid such a provision. ment therefore fails.

The Bankruptcy Court, in the exercise of its discretionary directed that the sum of £4 per week, portion of the said allo should be paid by the bankrupt to the Official Receiver in B ruptey in order that the same might be applied in paymen debts. The Court, before making the order, considered the of the bankrupt and the expenses he necessarily incurred performance of his parliamentary duties, and, no doubt, made allowance for those expenses. And with the Court's discre exercised, we ought not to interfere. 4

Evarr J. By sec. 28 of the New South Wales Constitution every member of the Legislative Assembly of that State is ent to receive an allowance of £576 per annum " by way of reimbi ment for expenses incurred by him in the discharge of his parl mentary duties." Does this allowance, which is payable mon come within the description of " pay, pension, salary, emolum profits, wages, earnings, or income " so as to be caught by th + paragraph of sec. 101 of the Federal Bankruptcy Act 1924-1!

ting under sec. 101, the Court of Bankruptcy has ordered a pay- ment of £4 a week to the Official Receiver of the bankrupt, a member of the Assembly. In my opinion the decision of the House of Lords in Hollinshead v. Hazleton (1) clearly covers this part of the case, the parliamentary allowance is part of the member's " income." But the proviso to sec. 101 excludes from the operation of the 4 rst paragraph any "pay, pension, salary, or wages" which "by any Act or State Act " is made exempt from attachment or incapable of being assigned or charged. It was contended that the Constitution Act is a " State Act " having the described effect upon the allowance

or wages," and to none of such descriptions it really answers. Further, the Constitution Act does not seek to exempt the allowance irom attachment or to render it incapable of being assigned or atged. The second ground of appeal therefore fails. Then it is said that sec. 101 is not valid so far as it applies to the allowance of State members of the Legislative Assembly. It is the 'tution Act itself of the State which provides for the allowance order to enable the functions of legislation to be effectively per- formed by the members. It is true that some parts of the Constitu- tion Act are more easily capable of alteration than others, that no 'special formalities are needed for the amendment of sec. 28, and that amendments have been frequently passed. But occasionally the suggestion has been made that none of the Commonwealth _ legislative powers enumerated in sec. 51 of the Federal Constitution are capable of exercise so as to trench upon the provisions of the "State Constitution, to which a special protection is said to be accorded by sec. 106 of the Federal Constitution. If so, does sec. 106 shield against the operation of Commonwealth legislation under sec. 51, every provision found in the Constitution Act of a State, or only

those provisions or terms, wherever found, which really define and _ describe the framework and scheme of its government ?

_ All I need say in the present case is that I am of opinion that an "enactment: such as sec. 101, which applies to all bankrupts and does. not discriminate against members of the Parliaments of the States,

is valid, although it applies to allowances established by a p contained in the Constitution Act of a State. It is a law with to bankruptcy and insolvency.

But I have come to the conclusion that in this case the Court; Bankruptcy should not have made any order against the bankray Although all of the allowance is "income" within sec. 101, jurisdiction was exercisable with respect to it, the nature and ] pose of the allowance should have been recognized by the before it decided to distribute part of it amongst the bank creditors. By State law, a member of the Assembly who become bankrupt vacates his seat, so that the appellant must have done s¢ and subsequently sought and obtained re-election to the Assembl The law contained in the State Constitution treats the allo as something given to meet expenses necessarily incurred in performance of the member's duties, and the Court of Bankruptey

should, in my opinion, have deferred to such very clear exp of intention. It may well be that the time has come to treat allowance merely as a "salary" for services rendered. But whi the terms of the Constitution itself remain as they are, they are tt plain to permit acceptance of the view that a member's allo is to be assimilated to that of the salary of an ordinary serv: the Crown. It seems to me that it is not a relevant question the Court of Bankruptcy to enquire how much of the allowance ¢ reasonably be turned away from the sole purpose for which i exists and is granted, into the pockets of the bankrupt's credit The allowance can be subjected to an order under sec. 101 only treating as of no moment the purpose for which the allowance charged upon the Consolidated Revenue Fund.

In my opinion, the Court of Bankruptcy erroneously exe! its discretionary power under sec. 101 by not paying suffic regard to the fact that the allowance, although "income " of bankrupt, is deemed by the Constitution Act to be employed so and employed fully, in and about meeting the expenses incurred the discharge by him of his parliamentary duties. In the circum stances, I am of opinion that no order should have been made.

Upon this ground, but upon it alone, I think that the a should succeed.

McTiernan J. The learned Judge in Bankruptcy, Judge Lukin, correctly described the characteristics of the appellant's allowance, payable to him as a member of the Legislative Assembly of New South Wales pursuant to sec. 28 of the Constitution Act 1902 of New South Wales, in these terms: " It is at present a definite fixed

sum of £576, a proportionate part whereof is payable monthly. It ™*tiemn J

'is payable by force of a statute and is not a voluntary allowance. It is a regular payment to which the member is legally entitled. He is entitled to it whether the House is in session or not. It is a charge on the Consolidated Revenue Funds. It is payable to him whether he attends the House or not. It is payable to him whether

hein fact incurs expenses or not. No condition whatever is attached to this payment."

In my opinion the allowance is " income " within the meaning of _ that word in sec. 101 (In re Shine (1); Bx parte Benwell (2) ; Ex parte Huggins (3); Ex parte Webber; In ve Webber (4); Hollinshead v. Hazleton (5) ). Sec. 51 of the Bankruptcy (Ireland) Amendment Act _ 1872 (35 & 36 Vict. c. 58), which was in question in the last-mentioned : case, commenced in these terms: '" When a bankrupt is in receipt

the Court may, from time to time, _ make such order as it thinks just for the payment of such salary or income . . . to the Official Assignee or the trustee." The resolution of the House of Commons, passed on 10th August 1911, in pursuance of which the salary of the bankrupt, in common _ with other members, was paid was in these terms: " Resolved, that in the opinion of this House provision should be made for the payment of a salary at the rate of £400 a year to every member of this House, excluding any member who is for the time being in Teceipt of a salary as an officer of the House, or as a Minister, or as an officer of His Majesty's Household." Lord Atkinson said in Hollinshead v. Hazleton (6) : - * The question then remains, What is the character of these payments ? They are not merely gratuities, or arbitrary voluntary payments, which the authority making them, the Crown, can at any moment stop. That is clear, I think. The

at pp. 529, 531. (4) (1886) 18 Q.B.D, 111. (2) (1884) 14 Q.B.D. 301. (5) (1916) 1 A.C., at pp. 449, 454, 461, (8) (1882) 21 Ch. D., at p 92. 462-463.

Crown is bound by statute to make them. They are expr styled, both in the resolution and the Appropriation Act salaries. In In re Shine (1) Fry L.J. endeavoured to g definition of salary, which he admitted was not com said: 'Whenever a sum of money has these four chara

first, that it is paid for services rendered ; secondly, that it is) under some contract or appointment ; thirdly, that it is by time; and fourthly, that it is payable at a fixed ti inclined to think that it is a salary, and not the less so becat e liable to determination at the will of the payer, or that it is lis deductions.' The word ' appointment ' in this definition a little difficult to apply it to the present case, unless the el a member to serve in Parliament be considered an ' appointm But this is clear, I think, that this sum of £400 must nee paid to members for one or other of four purposes : - (1) To! their dignity, and as a remuneration, in advance or otherwis the discharge of their duties. (2) To keep up their di enable them to discharge their duties. (3) To keep up their di altogether irrespective of the discharge of their duties, ability to discharge them. (4) As a solatium for their membe irrespective altogether of either their dignity or duties. exhaustive. If the first, I should be inclined to hold that paid was a salary. If any one of the other three, I should be to hold it was 'income' in the nature of a salary, but I think, the Judges thought in Shine's Case, it must be either the o the other."

In this case I think the appellant's allowance is covered term "income" in sec. 101, but in view of the characteris which sec. 28 of the Constitution Act 1902 impresses it, I do not: it is included in " pay, pension, salary, or wages," mentioned proviso to sec. 101. Moreover, that proviso does not apply to an within that limited category unless such " pay, pension, s wages " is by any Act or State Act made exempt from atta or incapable of being assigned or charged. The appellant's ance may well be incapable of being assigned by him upon gi of public policy (Hollinshead v. Hazleton (2); Wells v. Foster (3))

(1) (1892) 1 QB., at p. 531. (2) (1916) 1 A.C., at p. 461. (3) (1841) 8 M. & W. 149; 151 E.R. 987.

he objects and purposes for which an Act was passed, so far as they can be gathered from its contents, may disclose grounds of iblic policy upon which the assignment of any " pay, pension, y, or wages " payable under such an Act would be unlawful.

: ature intended to limit the immunity to any " pay, pension, salary, 'or wages" with respect to which there was some provision in an by which the things in that category are made exempt from attachment or incapable of being assigned or charged. In the view that the allowance is "income" within the meaning of sec. 101, and is not withdrawn from the operation of the section by the iso, it is not necessary to decide, as was argued on behalf of the respondent, that the allowance passed to the trustee as property of the bankrupt upon the making of the sequestration order. The idth of the definition given to property in the Bankruptcy Act is ated and explained by Jessel M.R. in Ex parte Huggins (1). Sec. (01 applies to property that vests in the trustee and to property not Sc vesting (In ve Shine (2); In re Garrett (3)). If the true view is at the grant of the allowance did pass to the trustee, it must, the above view that it is within sec. 101, be dealt with by him ibject to the power vested in the Court by sec. 101 (Ex parte Huggins ; Inve Lupton (4) ). On the other hand, if the allowance did t pass to the trustee, and the true view is that it is within sec. 101, the present case is analogous to In re Garrett. In that case, sec. ae (1) of the Police Pensions Act 1921 (11 & 12 Geo. V. c. 31), the

statute under which the pension was payable, provided that the "grant should not, upon the pensioner's bankruptcy, pass to the

trustee or other person acting on the creditor's behalf. Farwell J. 'said (5) : - Sec. 14, sub-sec. 1, prevents the pension vesting in the e, but there is nothing in its language to prevent the trustee

from making an application under sec. 51, sub-sec. 2, or to prevent the Court, if it thinks just, from acceding to that application. An order under sec. 51, sub-sec. 2, does not have the effect of passing i part of the pension to the trustee in the sense of vesting it in

a) (1882) 21 Ch. D., at pp. 91-93. (4) (1912) 1 K.B, 107. (2) (1892) 1 Q.B. 522. (5) (1930) 2 Ch., at pp. 141-142, per (8) (1930) 2 Ch, 137. Farwell J.

H.C.or A. him. The only result of the order is that the Court directs : such portion of the pension as the Court thinks just shall be in paying the bankrupt's debts. That is a power in the Co consistent with sec. 14, sub-sec. 1, of the Police Pensions A . and there is nothing in that sub-section to exclude sec. 51, sub- Metiernan J. of the Bankruptcy Act 1914." Sec. 51, sub-sec. 2, of that Act (B

ruptey Act 1914 (4 & 5 Geo. V. ¢. 59)) corresponds with sec. 10

the Bankruptcy Act of Australia. In In re Shine (1) Lord J

bankrupt which is not part of his property so as to vest trustee in his bankruptcy. It follows, to my mind, that the to which sec. 53 applies must be income in the nature of as Sec. 53 of the Bankruptcy Act 1883 (46 & 47 Vict. c. 52) co with sec. 51, sub-sec. 2, of the Bankruptcy Act of 1914. The order of the learned Judge was also attacked on the that it is ultra vires the Parliament of the Commonwealth to law under which the allowance payable to a member of al Legislature, as such, may be made available in bankruptey fo benefit of his creditors. The Parliament of the Commonwi power to make laws with respect to bankruptcy (sec. 51 No provision of the Act affecting the appellant was attacked ground that it was not a law with respect to bankruptcy. appellant is subject to these provisions of this Act as a deb the parliamentary allowance which he is receiving is made availal to his creditors as "income " of which he is in receipt. Co the Constitution by the rule in the Engineers' Case (2), it is 0 i possible to discover that the power conferred by sec. 51 (xv1. subject to the limitation for which the appellant contends.

the appeal should be dismissed. Appeal dismissed with c

Solicitors for the respondent, Weaver & Allworth. ; J. (1) (1892) 1 Q.B., at p. 527. (2) (1920) 28 G.LR. 129.

At a glance

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