THE BOARD OF EX PARTE TRADE & THE OFFICIAL RECEIVER. official receiver will authorize the employment, but his sanction 1884. ought to be applied for. Further than this, it is true that by IN RE STRAND, section 105 of the Act, "the costs of and incidental to any proceedings in Court under this Act shall be in the discretion of the Court;" and by that section jurisdiction over costs is given to the Court. But that provision only applies to "proceedings in Court." The second meeting of creditors cannot be included under those words. [MATHEW, J.: We should like to hear you, Mr. Winslow, upon the words "of and incidental to any proceeding in Court." That appears to be your only difficulty.] Winslow, Q.C.: The public examination of a debtor is beyond doubt a proceeding in Court. In the same manner I submit that the meeting of creditors is "incidental to" the proceedings in Court. As a matter of fact, all that takes place under a petition is really a proceeding in Court. In the present case, a scheme of arrangement was proposed, and this would have been adopted, but the Board of Trade appear to object to any scheme of arrangement in small bankruptcies. In order to draw a scheme of arrangement properly the assistance of a solicitor is essential. The Court has a general power to allow costs. (In re Mew, Ex parte Pearce, L. R., 2 Ch. Div. 320, was referred to.) M. D. Chalmers in reply. MATHEW, J.: In this case a technical objection was raised, upon the ground that Judgment. Mr. Norman, the solicitor, had been made a respondent, and the debtor omitted. That objection was afterwards removed, however, by an amendment of the notice of appeal; and it was decided that the question should be decided upon the construction of the Bankruptcy Act, 1883, as regards the question of jurisdiction. The present appeal is an appeal against an order made by the County Court judge at Canterbury, directing the official receiver of that Court to pay out of the assets the costs of Mr. Norman, incurred by him in attending, in the capacity of solicitor for the debtor, the debtor's public examination, and the second meeting 1884. of creditors. It has been argued that these costs were disallowed IN RE STRAND, by the taxing master. In my opinion, such was not the case. It EX PARTE THE OFFICIAL THE BOARD OF appears to me that when the matter was brought before the taxing TRADE & master, no order allowing these costs had been made by the RECEIVER. County Court. But the County Court judge subsequently made an order allowing these costs. Then comes the question, Had the County Court judge jurisdiction to make such order? The section to be considered is section 105, which provides that "(1) Subject to the provisions of this Act and to general rules, the costs of and incidental to any proceeding in Court under this Act shall be in the discretion of the Court: Provided that where any issue is tried by a jury, the costs shall follow the event, unless, upon application made at the trial, for good cause shown, the judge before whom such issue is tried shall otherwise order." Now, as far as the public examination of the debtor is concerned, there can be no doubt whatever that there was jurisdiction. But, with regard to the second meeting, it is necessary to look far more closely at the wording of the section. The particular words to which attention must be given are "the costs of and incidental to any proceeding in Court." Now, the second meeting was not a proceeding in Court; and, in my opinion, it was not incidental to any proceeding in Court within the meaning of the section. It was a meeting called to consider the confirmation of a scheme of arrangement, which had been before submitted to the first meeting. I am of opinion, therefore, that there was no jurisdiction to make that part of the order relating to the second meeting of creditors; and, in doing so, the County Court judge was wrong. CAVE, J., concurred. Solicitors: The Solicitor to the Board of Trade for the Board of A. Norman for the respondent. In connection with the above case, the following letter was afterwards published by Sir T. H. Farrer, Permanent Secretary to the Board of Trade : "SIR,―The attention of the Board of Trade having been called to the report. . . . of a case before the Divisional Court of the Queen's Bench Division, Ex parte The Board of Trade, in which it is stated that the official receiver had informed a meeting of creditors that the 'Board of Trade objected to any scheme of arrangement in small bankruptcies,' I am directed by the Board of Trade to state that there is no foundation for the statement in question, and that the Board of Trade have never entertained or expressed any such objections. The official receiver concerned, also assures them that he never made any such statement. When the matter was mentioned in the Divisional Court, it was at once denied by Mr. Chalmers on behalf of the Board of Trade. "Board of Trade, "Whitehall Gardens, T. H. FARRER. To this the learned editor of the "Solicitors' Journal," in which paper the above letter was published, appends the following note: "[We are glad to find that no such objections have been expressed by the Board of Trade. It was, however, positively asserted in Court by the counsel for the debtor that the official receiver had informed the creditors at their second meeting that he had received instructions from the Board to that effect, and this assertion was justified by an affidavit made by a person who was present at the meeting. Our reporter did not understand Mr. Chalmers as actually denying that such instructions had been given by the Board, but only as saying that he had never heard of them. The letter of Sir T. H. Farrer, however, proves what the official receiver said at the meeting must have been misunderstood.]" 1884. IN RE STRAND, THE OFFICIAL IN RE WOODALL, EX PARTE WOODALL. Bankruptcy Act, 1883, Section 4, Sub-section 1 (g). Bankruptcy Notice served by Executrix of Judgment Creditor-Rules of the Held:-That a creditor in order to serve a bankruptcy notice under section 4, sub-section 1 (g) of the Bankruptcy Act, 1883, must be entitled and in a position to issue execution: and that in consequence a bankruptcy notice against a judgment debtor cannot be issued by the executor of a creditor who has obtained final judgment, unless such executor has first obtained leave from the Court to issue execution on the judgment under Rule 23 of Order XLII. of the Rules of the Supreme Court, 1883. THIS was an appeal on behalf of the debtor W. Woodall, to set aside a receiving order made against him by Mr. Registrar Pepys on May 29th last, on the application of Martha Houlston. COURT OF BEFORE BAGGALLAY, L. J., COTTON, L. J., LINDLEY, L.J. 1884. June 27. 1884. IN RE WOODALL, EX PARTE WOODALL. The facts of the case were as follows: The petitioning creditor was the sole executrix under the will of the late William Houlston, deceased, who died on the 20th July, 1882. On 11th November, 1879, Mr. Houlston issued a writ against the debtor for 3337. 3s. 2d. principal and interest due to him from the debtor on his promissory note of the 1st April, 1879, for 3237. 5s. payable on demand, and on 6th December, 1879, Mr. Houlston obtained final judgment against the debtor for 3347. 5s. 4d. debt, and 77. 17s. costs. Mr. Houlston issued execution upon such judgment, and recovered part of the amount due thereon, and on the 22nd March, 1880, he issued a debtor's summons under the Bankruptcy Act, 1869, for the balance of principal and interest then due on such judgment, viz.: 2467. 3s. 3d.; and on the 19th of May, 1880, presented a petition in the London Bankruptcy Court, founded upon such debtor's summons. When the petition came on to be heard on the 11th June, 1880, it was adjourned at the request of the debtor until 9th July, 1880, with the view of his making some arrangement for settlement of the debt. On such adjournment it was further adjourned until 30th July, 1880, when it was adjourned sine die, with liberty for either party to apply. Such adjournments led to an arrangement between the parties, which was embodied in a deed of covenant dated 3rd July, 1880. Under this deed, however, the debtor had only paid on account of the debt sums amounting together to about 1007., leaving something like 1507. due for principal at Mr. Houlston's death, and a debtor summons under the Bankruptcy Act, 1869, was issued in December, 1883, but in consequence of the promises of the debtor the matter was allowed to stand over. On April 10th, 1884, no payment having been made, a bankruptcy notice was issued by Mrs. Houlston for principal and interest of the debt, amounting to 1607., and a petition was filed and served on May 12th, 1884. On May 26th, the debtor served notice of his intention to oppose the petition, alleging amongst other grounds (4) "That the judgment mentioned in the petition was obtained by one William Houlston, against me in the year 1879, which has become abated, and no proceedings have been taken to revive the same or to obtain the benefit thereof by the petitioning creditor, and therefore the same is not a good petitioning creditor's debt. On May 29th, however, the learned registrar made the receiving order as prayed, and from this decision the debtor now appealed. T. Brett (Herbert Reed with him) for the appellant. No act of bankruptcy has been committed, and therefore no receiving order ought to have been made. Section 4, subsection 1 (g), of the Bankruptcy Act, 1883, provides in effect that "If a creditor has obtained a final judgment against a debtor for any amount, and execution thereon not having been stayed, has served on him a bankruptcy notice under the Act requiring him to pay the judgment debt in accordance with the terms of the judgment, or to secure or compound for it to the satisfaction of the creditor or the Court, and he does not within seven days after service of the notice either comply with the requirements of the notice or satisfy the Court that he has a counter-claim, set-off, or cross demand, which equals or exceeds the amount of the judgment debt, and which he could not set up in the action in which the judgment was obtained,” then such debtor commits an act of bankruptcy. First, I submit that the Act speaks not of a balance of a judgment, but of a judgment. But I say further, that an executrix cannot take action without renewing the judgment. Rule 23 of Order XLII. of the Rules of the Supreme Court, 1883, provides that "In the following cases, viz.: (a) where six years have elapsed since the judgment or date of the order, or any change has taken place by death or otherwise in the parties entitled or liable to execution; * the party alleging himself to be entitled to execution may apply to the Court or a judge for leave to issue execution accordingly. Any such Court or judge may, if satisfied that the party so applying is entitled to issue execution, make an order to that effect, or may order that any issue or question necessary to determine the rights of the parties shall be tried in any of the ways in which any question in an action may be tried. And in either case such Court or judge may impose such terms as to costs or otherwise as shall be just." * 1884. IN RE WOODALL, EX PARTE WOODALL. |