Commissioner of Taxation (Cth) v Jaques [1956] HCA 40

High Court of Australia Dixon C.J. Webb, Fullagar, Kitto and Taylor JJ. Commissioner of Taxation (Cth) v Jaques [1956] HCA 40

ORDER Appeal allowed with costs. Order of the Federal Court of Bankruptcy discharged. In lieu thereof, declare that none of the payments made by the bankrupt Walter Neville Winkler to the appellant the Deputy Commissioner of Taxation, and referred to in the notice of motion dated 18th October 1955, is void as against the trustee of the property of the bankrupt by reason of the provisions of s. 95 of the Bankruptcy Act 1924-1950. Order that the respondent pay the appellant's costs of the application in the Federal Court of Bankruptcy instituted by the aforesaid notice of motion.

Cur. adv. vult.

The following written judgments were delivered:—

Aug. 9 Dixon C.J., Fullagar, Kitto and Taylor JJ.

This appeal is brought against an order made by the Federal Court of Bankruptcy (Clyne J.) upon an application in connexion with the estate of one Winkler.

On 16th July 1953, Winkler presented a debtor's petition upon which, on the same day, a sequestration order was made against him. On nine occasions within the preceding six months, he had made payments to the Deputy Commissioner of Taxation at Sydney, the aggregate amount paid being £3,077 18s. 5d. All the payments were in respect of sales tax which Winkler owed under the provisions of the Sales Tax Assessment Act (No. 1) 1930-1953 Cth. and the Sales Tax Act (No. 1) 1930-1952. After the making of the sequestration order the official receiver made a demand upon the deputy commissioner for the repayment to him of the whole amount of the payments, contending that each payment constituted a preference, priority or advantage, which was void as against him by virtue of s. 95 of the Bankruptcy Act 1924-1950 Cth.. The deputy commissioner claimed to be entitled to retain the amount, on the two grounds that s. 95 (1) had no application against the Crown, and that, within the meaning of s. 95 (2), the payments had been received in good faith and for valuable consideration and in the ordinary course of business. The official receiver thereupon applied to the Bankruptcy Court for a declaration that the payments were void under s. 95, and for an order for the payment of the amount thereof to him. The application succeeded, and the resulting order is the subject of this appeal.