Rozenbee v Kronhill [1956] HCA 65

High Court of Australia Dixon C.J. Webb and Fullagar JJ. Rozenbee v Kronhill [1956] HCA 65

ORDER Appeal dismissed with costs.

Cur. adv. vult.

The Court delivered the following written judgment:—

Oct. 15 Dixon C.J., Webb and Fullagar JJ.

This is an appeal from a sequestration order made by the Federal Court of Bankruptcy (Clyne J.). The appellant debtors are Uszer Rozenbes, Betti Rozenbes, Chaim Rozenbes and Dina Rozenbes, who carry on business in partnership under the trade name of "Rose & Bess Knitwear". Uszer Rozenbes and Dina Rozenbes are the son and daughter respectively of Chaim Rozenbes, and Betti Rozenbes is the wife of Uszer Rozenbes. The petitioning creditors and the respondents on this appeal are Jacob Kronhill and his wife, Julia Kronhill, who carry on business in partnership under the trade name of "Nicewear".

The act of bankruptcy on which the petition was founded was that the debtors had made an assignment of their property to a trustee for the benefit of their creditors generally (Bankruptcy Act 1924-1954, s. 52 (a)). The making of the sequestration order was resisted on the ground (as stated in the affidavit of Uszer Rozenbes) that the petition "is not genuine but is in pursuance of an improper purpose, namely to extract from the debtors a sum of money as a benefit for themselves as against other debtors". The word "extortion" is often used to describe conduct of the kind thus alleged. The petition was also resisted on the ground that it was in the best interests of the creditors generally that the estate of the debtors be administered under the deed of assignment. Only the first ground was argued on this appeal. With regard to the second ground, it is of some importance to note that in rejecting it Clyne J. said: "I think it is clear that there are many matters which require an examination of the debtors' affairs, an examination which cannot be made under an administration but can be made under a sequestration order." With regard to the first ground, it is necessary to consider the evidence in some little detail.