SCHNEIDER V. WITCOMBE

IN THE HIGH COURT OF AUSTRALIA.

SCHNEIDER

REASONS FOR JUDGMENT.

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40958 A. H. Pertiren, Aorixe Govr. Pruss.

IN_THE HIGH COURT OF AUSTRALIA

"NEW SOUTH __ WALES __ REGISTRY

SCHNEIDER ve WITCOMBE Wednesday 9th August, 194k.

CUDGMENT

LATHAM C.J: We are all of opinion that this appeal must be dismissed.

As to the £23 paid on the 24th December 1942, the position was that Schneider knew that Simpson, the Bankrupt, owed a large amount to Robinson. £400 of Simpson's money had been paid on the 2nd December into Schneider's account. Schneider knew that Robinson was unable to pay his debts as they became due. There was no dispute as to the effect of the payment in giving preference. It is. not possible for Schneider to show he was paid in good faith and for valuable consideration in the ordinary course of business.

As to the other amounts - leaving out the £2/12/6 paid to the hospital, as to which no question arises, and leaving out also the payments after the sequestration order was made on the 16th March 19h3- those in question are two sums of £30 and £100. An Order was made for repayment of these by virtue of the doctrine of relation back, which is embodied in sections 90 and 91 of the Act, upon the basis that that money was the money of the trustee.

That part of the case is beyond challenge. The only question is whether Schneider can bring himself within the protective provisions of section 96 or section 96A, namely, absence of notice of an act of bankruptcy, and "in good faith and in the ordinary course of business" under section 96, or under section 96A a payment made "without notice of the presentation of a bankruptcy petition, and either pursuant to the ordinary course of business or otherwise bona fide".

In my opinion there was notice of an act of bankruptcy when these payments were made on the 25th February and onthe 10th March respectively, because the transaction as to the £23 had then taken place.