V.-C. J.

1870

v.

SHERWIN.

debt, any exception must be construed strictly. The word "debt," in sect. 5, is distinguished from and does not include an order for payment of costs. In Reg. v. Pratt (1), Lush, J., referring to the HEWITSON different language of sect. 4, says: "The words in the enacting part, 'default in payment of a sum of money,' are advisedly used instead of 'debt,' in order to include cases which might not properly have been called cases of debt, such as costs on a judgment of nonsuit, or costs on a verdict for the Defendant, or damages in an action of tort, or costs under a rule of Court."

[They also referred to the rules and forms under the Debtors Act, 1869, of the 1st of January, 1870.]

SIR W. M. JAMES:

This is a new and very important point, but I am of opinion that the application is within the Act of Parliament. It seems to me that where a Court of competent jurisdiction has ordered a man to pay a sum of money, whether in the shape of costs or anything else, that is a debt due from him in pursuance of an order or judgment of this Court, which is a competent Court to make the order. It seems to me to be a play upon words to say that a debt arising ex contractu and a debt arising in respect of costs differ in any way from one another. There is an order of the Court directing a sum of money to be paid, and that is a debt under the

order.

I was at first struck by Mr. Fry's suggestion, that “default in payment was put in contradistinction to "debt" in the Act; but that suggestion seems excluded by the language I find in the very same section, in another subdivision of it. The words there are, "may direct any debt due from any person in pursuance of any order or judgment of that or any other competent Court to be paid by instalments, and may from time to time vary or rescind such order." In that case it is clear the debt is spoken of as a debt which becomes due from a person by reason of an order or judgment of the Court. It seems to me to be clearly within the Act, and I see no good reason why it should not be. I do not see why, if a man has an order against him to pay costs, he should

(1) Law Rep. 5 Q. B. 176, 182.

V.-C. J. 1870

v.

SHERWIN.

not pay them if he has the means. It has been sworn that these gentlemen are in receipt of good salaries; they have had the HEWITSON Opportunity of filing an affidavit in answer, and they have not done so. Whether they have the means or not must be known to them. The order that I propose to make is, that they pay £5 for the costs of this application at once, and pay the other costs by instalments of £1 each, every month, and in default of such payment then the Plaintiff can apply for a committal.

Solicitors: Messrs. Heather, Son, & Gill; Messrs. Drew & Wilkinson.

Ex parte WILLIAMS. In re PULLEN.
Bankruptcy Act, 1861, ss. 192, 198—Deed of Arrangement—Unreasonable Amount
of Composition ·Application to vacate Registration and Leave to issue
Execution-Laches.

A creditors' deed, under the 192nd section of the Bankruptcy Act, 1861,
may be impeached for inadequacy of composition importing fraud.
Such a deed, when registered, is in the nature of a record, and the Court
has power to order the registration to be vacated.

Mere delay in applying to set aside a creditors' deed for fraud, is in itself no ground for refusing such an application, if the position of the parties be not altered.

Ex parte Savin (1) distinguished.

THIS
was an application by Williams, a dissentient judgment
creditor, asking that the registration of a deed of arrangement
might be cancelled, and that he might be allowed to issue execu-
tion. The judgment was obtained on the 5th of May, 1869. The
deed was dated the 8th, and registered the 12th of May, 1869, and
was made between Pullen of the one part, and his creditors assent-
ing to or bound by the deed of the other part; and after reciting
the inability of the debtor to pay his creditors in full, it contained
a covenant by the debtor to pay a composition of 1s. in the pound
on the 1st of July following, a release by the creditors, and a pro-
viso making the deed void on failure by Pullen to pay the com-
position according to his arrangement. By the documents filed
with the deed, it appeared that the number of creditors was five,
all of whom assented to the deed with the exception of the ap-
plicant, who was entered as a judgment creditor for £56 7s. 8d.
The amount of debts was stated to be £537, and the amount of
the assets £200; an amount therefore, as estimated by the debtor
himself, sufficient to pay at least 78. in the pound. From these
figures it appeared that the consent of the requisite majority of
creditors in number and value had been obtained; but the appli-
cant claimed to be entitled to a further sum of £100 for one year's
rent. In the view taken by the Court it became immaterial to
consider this question.

(1) Law Rep. 1 Ch. 616

C. J. B. 1870

Feb. 2, 5.

C. J. B.

1870

~

WILLIAMS.

Mr. Finlay Knight, for the judgment creditor :—

The amount of composition is, on the debtor's own shewing, Ex parte grossly inadequate. The deed, not having been entered into boná fide for the benefit of all the creditors, can be set aside by the Court: Ex parte Cowen (1); Hart v. Smith (2); Ex parte Greaves (3).

In re

PULLEN.

Mr. Reed, in support of the deed :—

The Court will not consider inadequacy of composition as a ground for cancelling a deed of arrangement. At all events the judgment creditor, having lain by for eight months, is now precluded by delay from making this application: Ex parte Savin (4); Ex parte Sampson (5); Ex parte Banfield (6); Ex parte Davis and Denton (7); Ex parte Sullivan (8); Ex parte Ames (9).

Feb. 5. Mr. BACON, C.J., after stating the facts, and referring to those which were disputed, and observing that they were irrelevant, continued:

The creditor who disputes contends that he is not bound by the deed, for that it is unreasonable in its provisions, and cannot have been entered into with that good faith which is essential to the validity of such a composition as this deed seeks to enforce upon all the creditors who dissent from its stipulations.

In answer to this it has been argued that the deed is strictly in conformity with the provisions of the statute, and that the creditors who have assented are in number and value sufficient to bind the party moving, who is the only creditor who dissents. The point, however, which was mainly relied on in answer to the motion, was the length of time which had elapsed between the registration of the deed of composition and the application to set it aside; and it is an objection entitled to great consideration. The doctrine of laches is well known, and in suitable cases is acted upon in Courts

(1) Law Rep. 2 Ch. 563.
(2) Ibid. 4 Q. B. 61.
(3) Ibid. 5 Ch. 326.

(4) Ibid. 1 Ch. 616.

(5) Law Rep. 1 Ch. 476.
(6) Ibid. 154.

(7) Ibid. 2 Ch. 363.
(8) 15 L. T. (N. S.) 434.

(9) 19 L. T. (N.S.) 270.

of Law wherever the Court is not by its peculiar rules precluded
from adopting it; and much more frequently in Courts of Equity,
where no restriction of their power exists. The foundation of it
is, that during the interval of delay much may have been done;
rights may have been transferred or acquired without notice or
reasonable suspicion that the validity of the transactions could or
would be questioned, and innocent persons may be prejudiced by
the opening of disputes which might have been brought forward
at an earlier period. But where no such ground of reasonable ap-
prehension exists, I am not aware that mere delay is of itself an
answer to a just claim. Several cases were referred to in the course
of the argument, in which the Court, without pronouncing upon
the legal rights involved in the discussion, has decided against
the applicant on the ground of his laches. In Ex parte Banfield (1)
the period of delay was eleven months, but during that period the
validity of the deed had been recognised to a certain extent by a
Judge at Chambers, and his decision had not been questioned; and
upon this decision the estate of the debtor had been partly dis-
tributed. In these circumstances, and expressly because to decide
in favour of the application would be to disturb what had been
done towards the distribution of the estate, it was refused. In
Ex parte Savin (2), the length of time between the registration of
the deed and the application was much less, being from the 16th
of March to the 31st of May in the same year. The instrument
there executed was a deed of inspectorship; one of its objects was
the carrying on of considerable trade, for which purpose the trustees
were empowered to advance money for the completion of contracts,
and to raise money by mortgage of the debtor's estates. During
the interval I have mentioned, the deed had been acted upon,
liabilities had been incurred, rights had been acquired, and the
Court might well, as it did, look with the utmost disfavour upon a
creditor who, upon no better ground than that the addresses of
some of the creditors were not sufficiently described in the re-
gister, asked to set aside the deed; the consequence of which
would not only have been injurious to the assenting creditors, but
would have exposed the trustees to liabilities they had not in-
curred for their own benefit. This application was therefore refused
(1) Law Rep. 1 Ch. 154.
(2) Law Rep. 1 Ch. 616.

C. J. B 1870

Ex part WILLIAM

In re PULLEN