Rae v Samuel Taylor Pty Ltd [1963] HCA 37

Rae v Samuel Taylor Pty Ltd [1963] HCA 37

Because no seizure occurred, the respondent did not become a secured creditor and s. 92 did not protect the payments. The bailiff received the money as authorised agent for the judgment creditor, so the payments were in favour of the respondent. The payments made after 6th May 1959 were made within six months of the petition, when Leslie was unable to pay his debts as they became due, and gave the respondent a preference; the respondent did not prove the statutory good faith and ordinary-course defence. Those payments were therefore void against the trustees under s. 95.

Jurisdiction
Australia
Procedural Posture
Bankruptcy / Appeal From Order of Judge in Bankruptcy Dismissing Trustees' Application
Outcome
Appeal allowed with costs.
Legal Topics
['preferential Payments' 'relation Back of Bankruptcy' 'writ of Fieri Facias' 'execution Against Goods' 'secured Creditor Status']
['bankruptcy and Insolvency' 'civil Procedure and Enforcement of Judgments'] ['preferential Payments' 'relation Back of Bankruptcy' 'writ of Fieri Facias' 'execution Against Goods' 'secured Creditor Status']

Case Brief

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Procedural Posture

Bankruptcy / Appeal From Order of Judge in Bankruptcy Dismissing Trustees' Application

Legal Issues

  1. 1 ['Whether payments made by the bankrupt to a bailiff after delivery of a writ of fieri facias but before seizure were proceeds or benefits of an execution protected by s. 92 of the Bankruptcy Act 1924-1960.' 'Whether delivery of a writ of fieri facias to the bailiff made the respondent a secured creditor for the purposes of the Bankruptcy Act.' 'Whether payments made on 20th May 1959, 29th May 1959 and 5th June 1959 were preferences within the meaning of s. 95 of the Bankruptcy Act 1924-1960 and void against the trustees in bankruptcy.' 'Whether the respondent established that the payments were received in good faith, for valuable consideration, and in the ordinary course of business.']

Ratio Decidendi

Because no seizure occurred, the respondent did not become a secured creditor and s. 92 did not protect the payments. The bailiff received the money as authorised agent for the judgment creditor, so the payments were in favour of the respondent. The payments made after 6th May 1959 were made within six months of the petition, when Leslie was unable to pay his debts as they became due, and gave the respondent a preference; the respondent did not prove the statutory good faith and ordinary-course defence. Those payments were therefore void against the trustees under s. 95.

Court Disposition

Appeal allowed with costs.

Orders

  • ['Order of the Judge in Bankruptcy discharged.' 'Declared that the payments made by the bankrupt on 20th May 1959, 29th May 1959 and 5th June 1959 and totalling £206 5s. 4d. constituted preferences within the meaning of s. 95 of the Bankruptcy Act 1924-1960 and are void against the trustees in bankruptcy.'...