Hungier v Grace [1972] HCA 42

Hungier v Grace [1972] HCA 42

The respondent failed to establish that the appellant made the four disputed loans in the course of carrying on the business of money-lending. Although the loans were numerous, substantial, repeated over years, and produced high calculated rates of return, they arose from an arrangement proposed by the respondent for financing his timber transactions and sharing the benefits, involved only the respondent as borrower, were initiated by the respondent, and had repayment periods and returns determined by the respondent's business needs rather than by the appellant as a money-lending business. Section 22 of the Money Lenders Act 1958 Vict therefore did not bar the appellant's proof of debt.

Jurisdiction
Australia
Procedural Posture
Appeal / Appeal to the High Court of Australia From an Order of the Federal Court of Bankruptcy Rejecting or Expunging the Appellant's Proof of Debt in a Scheme of Arrangement
Outcome
Appeal allowed with costs.
Legal Topics
['proof of Debt' 'scheme of Arrangement Under Pt Xi' 'unlicensed Money Lender' 'business of Money Lending' 'loans Involving Profit Sharing']
['bankruptcy' 'money Lending' 'debt Recovery'] ['proof of Debt' 'scheme of Arrangement Under Pt Xi' 'unlicensed Money Lender' 'business of Money Lending' 'loans Involving Profit Sharing']

Case Brief

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Procedural Posture

Appeal / Appeal to the High Court of Australia From an Order of the Federal Court of Bankruptcy Rejecting or Expunging the Appellant's Proof of Debt in a Scheme of Arrangement

Legal Issues

  1. 1 ['Whether the appellant was a money lender within the meaning of s. 3 of the Money Lenders Act 1958 Vict when he made the loans to the respondent.' 'Whether s. 22 of the Money Lenders Act 1958 Vict prevented the appellant from recovering the money lent or interest, or from maintaining his proof of debt.' 'Whether the respondent had discharged the onus of proving that the appellant was carrying on the business of money-lending.']

Ratio Decidendi

The respondent failed to establish that the appellant made the four disputed loans in the course of carrying on the business of money-lending. Although the loans were numerous, substantial, repeated over years, and produced high calculated rates of return, they arose from an arrangement proposed by the respondent for financing his timber transactions and sharing the benefits, involved only the respondent as borrower, were initiated by the respondent, and had repayment periods and returns determined by the respondent's business needs rather than by the appellant as a money-lending business. Section 22 of the Money Lenders Act 1958 Vict therefore did not bar the appellant's proof of debt.

Court Disposition

Appeal allowed with costs.

Orders

  • ['Order of the Federal Court of Bankruptcy made on 2nd September 1971 set aside.' 'In lieu thereof, order that the notice of motion of the respondent Leslie Grace to that Court filed on 28th February 1968 be dismissed.' 'The respondent Leslie Grace do pay the costs of that notice of motion other than the costs dealt...