Muntz v Smail [1909] HCA 13

262 HIGH COURT (1909.

(HIGH COURT OF AUSTRALIA.)

MUNTZ. : 3 3 5 f 5 5 . APPELLANT ; PLAINTIFF, AND SMAIL . J S i 5 4 F F . RESPONDENT. DEFENDANT,

ON APPEAL FROM THE SUPREME COURT OF VICTORIA,

H.C. oF AL Jysolvency—Fraudulent preference— With a view to prefer "--Disposition made to 1909. carryout legal obligation—Insolvency Act 1890 (Vict.) (No. 1102), see. 73—

ee Insolvency Act 1897 (Vict.) (No. 1573), sec. 116—Hquitable assignment of MELBOURSE. ~ — pyrure fund—Registration—-Book Debts Act 1896 (Vict.) (No. 1424), sec. 2. March 18, 19, Sepang ; In order that a disposition of property made by a debtor in insolvent circumstances to one of his creditors may be a fraudulent preference within Griffith C.3., the meaning of sec. 73 of the Insolvency Act 1890 (Vict.), the giving of a Betoun oma preference must be the substantial object which the debtor desires to achieve. Isaacs JJ.

The motive or reason which induces that desire is irrelevant.

'The defendant, a cattle salesman, on behalf of a principal sold cattle to A., advancing the purchase money himself and receiving from A. a promissory note for the amount of the advance, and also entering into a verbal agreement with A. that A, would re-sell the cattle through the defendant, who might repay hintself the amount of the advance out of the purchase money. A. having come into insolvent circumstances, instructed his solicitor to call « meeting of his creditors. Two days afterwards, being requested by other creditors to allow them to take some of the cattle in payment of their debts, he refused to do so on the ground that it would not be fair to the other creditors. Kight days afterwards and within a month of his insolvency, and before the

a

8 CLR.) OF AUSTRALIA.

promissory note became due, A., at the request of the defendant, and believ- ing that he was thereby fulfilling his obligation to the defendant, and that it would be wrong to do otherwise, sold the cattle through the defendant who received the purchase money and applied it in discharge of A.'s liability to him, In an action by the trustee in insolvency of A. against the defendant :