Ebert v Union Trustee Co of Australia Ltd [1960] HCA 50

High Court of Australia Dixon C.J. McTiernan and Windeyer JJ. Ebert v Union Trustee Co of Australia Ltd [1960] HCA 50

ORDER Appeal dismissed with costs.

Cur. adv. vult.

The Court delivered the following written judgment:—

Aug. 9 Dixon C.J., McTiernan and Windeyer JJ.

This is an appeal from an order of the Federal Court of Bankruptcy dated 29th May 1959, dismissing an application to set aside a bankruptcy notice. The bankruptcy notice was issued upon the application of the respondent, the Union Trustee Company of Australia Limited. It was based upon a judgment debt for costs. By the judgment the Supreme Court of Queensland dismissed with costs an action or suit in which the appellant was plaintiff and the respondent trustee company was defendant.

The ground upon which the application to set aside the notice was founded was that the appellant debtor had a counter-claim or cross demand exceeding the claim of the respondent trustee company. The alleged cross demand was of an extremely unusual description. It was founded upon the view that by a course of proceedings a liability of the requisite amount might be imposed on the trustee company. First a will of which the trustee company is administrator with the will annexed is to be pronounced invalid or alternatively a given devise contained in it is to be struck out as forming no part of the testator's testamentary intention. Thereupon the appellant will, as she claims, establish a title to a greatly increased interest in the estate and the respondent trustee company would, because of the manner in which it has dealt with the estate or the assets, be liable to the appellant in an amount exceeding the judgment debt. It was contended that this was a cross demand that was sufficient to defeat the bankruptcy notice and that sufficient support for it had been shown or suggested to entitle her to have the notice set aside or at all events suspended pending further proceedings to establish her claim. Clyne J., before whom the application came, was of opinion that the supposed cross demand was not of a description which could possibly fall within the language of s. 52 (j) of the Bankruptcy Act 1924-1958 and his Honour dismissed the application to set aside the bankruptcy notice. Notwithstanding an earnest and closely reasoned argument by Mr. Stonham in support of the appeal we have found ourselves unable to doubt the correctness of this conclusion of Clyne J. But it is necessary to give an account of the facts of the case before proceeding to discuss the reasons which make it appear to us inevitable.