082-NLR-NLR-V-17-In-re-THE-INSOLVENCY-OF-SAMSUDEEN.pdf
1914,
( 246 )
Present : Lasoelles C.J.- and De Sampayo A.J.
In re THE INSOLVENCY OF SAMSUDEEN8 D. C. Colombo, 2,537.
Frivolous and vexatious defence—“ Within six months next precedingof the filing of the petition ”—What is to he deemed the date of theoffence ?
Obiter, per Lascblles C.J.—" I am bound to say that I feel a gooddeal of difficulty in accepting the proposition that the offence ofraising a false and frivolous defence must be taken from the dateof the judgment ,in the action, and not from the filing of the answer."
A defence which is disbelieved ,by the Court is not necessarily" frivolous and vexatious ” within the meaning of section' 151 (7).
T
HE facts are set out in the judgment of the -Dis.trict Judge(H. A. Loos, Esq.): —
Only one of the insolvent’s creditors gave notice of opposition to thegrant of a certificate of conformity to him, bnt that notice was not *.given three clear days before the date of the certificate meeting, so thatthe notice must be disregarded.
1 2 N. L. It. 38.* 1 S. <7. R. 120.
( 247 )
The insolvent was sued in the aetion No. 86,008 of this* Court for the 1914.recovery of a sum of Bs. 6,400 in respect of certain machinery alleged jreto have been purchased by him. He filed answer denying the purchase, /n oof romp ofand on April 16, 1918, judgment was entered against him for the amount Samsuietnclaimed, with costs.
The insolvent did not appeal against that judgment, but oil April80, 1918, declared himself insolvent.
The question is, whether the insolvent has not been guilty of an offenceunder sub-section (7) of section 151 of the Ordinance No. 7 of 1858.
It was not contended by his counsel, that the defence raised by theinsolvent in the action No. ' 86,063 was not vexatious and frivolous, orthat the creditor had not been pn£ to unnecessary -expense—in view ofthe finding inthat action, such acontentioncould'scarcelyhavebeen
put forward with any success—but he contended that the offence, ifany, had been committed longer than six months before the filing ofthe petition ofsequestration of hisestate bytheinsolvent,andthat
therefore he had not been guilty of the offence referred to in section 151(7) of the Ordinance.
His contention was that the offence, if any, must be taken to havebeen committedwhen he refused toaccept delivery of themachinery,
and he relied on the case, In re Insolvency of Silva, D. C. Kalutara,186,1 in support of his contention.
The authority referred to appears to me to be aagainst the insolvent'scontention ; for it was held In that case that the offence must be deemedto have been committed upon the date of the judgment deciding the'facts upon which- the offence is based.
It was held in that case that the point of time at which it is judiciallydetermined thatthe expense, referred to insection 151(7)- atthe
Ordinance, has been caused to a creditor is that at which it should beheld that the offence has been committed.
Now, in the action No. 35,063, it was held on April 15, 1913, that thedefence raised by the insolvent was practically false—so that that wasthe date on which the offence “ must be deemed to occur," and thatwas the date on which it was judicially determined that unnecessaryexpenses had been caused to the creditor.
So that the petition for sequestration of his estate having been filedby the insolvent two weeks after that date, it appears to me that he isclearly guilty of the offence under section 151 of the Ordinance, andtherefore disentitled to a certificate of conformity.
I decline to award hiin a certificate.
The insolvent appealed.
Bawa, K.C., for Hie appellant.—The offence referred to by theDistrict Judge was committed prior to six months of the filing ofthe petition of sequestration. The offence of filing a false andfrivolous defence must be reckoned from the filing of the answer.Counsel cited Ex parte Johnson-2 Vanderstroaten’s Reports 2, In rethe Insolvency of Silva l. The District Judge in case No. 35,068 doesnot say that the defence was false or frivolous and vexatious.
1 (1910) 13 N. L. B. 254.
* 4 De Oex & Smale’s Reports 23.
( 248 )
1914.
In re theInsolvency oSamsudeen
Even if the defence in 35,063 was false, it could not be said thatit was therefore frivolous and vexatious. They refer to false defences./ Counsel referred to Annual Practice, Order 25, Buie 4, and the casesthere cited; D. C. Colombo, 2,184.
February 10, 1914. Lascelles C.J.—
This is an appeal by the insolvent against the refusal of a certi-ficate of conformity. The ground, and the only ground on whichthe certificate has been refused, is that indicated in the seventhsub-section of section 151 of the Insolvency Ordinance of 1853,namely, that within six months next preceding the filing of thepetition the insolvent ha6 “ put any of his creditors to any un-necessary expense by way of any vexatious and frivolous defenceor delay to any action for the recovery of any debt of demandprovable under the insolvency. ” The learned District Judge hasheld that the defence raised by the insolvent in action No. 35,063of the District Court of Colombo amounts to an offence under thesection. There is, in the first place, a difficulty as to whether thealleged offence was committed within six months of the filing of thepetition. It has been suggested that the period must be reckonedfrom the date of the judgment in the action, and not from the dateof the filing of the answer, and in support of that proposition wehave been referred to the judgment In re the Insolvency of Silva.I am bound to say that I feel a good deal of difficulty in acceptingthe proposition that the offence of raising a yfalse and frivolousdefence must be taken from the'date of the judgment in the actionand not from the filing of the answer. „I should have thought thatthe specific point of time at which the offence is committed wouldhave been the time when a frivolous and vexatious defence isplaced on the file, and I find that there is considerable authority inour reports in Ceylon for that view of the question. But I do notthink it necessary .to decide the present appeal on that ground.The action in which the insolvent iB said to have raised a frivolousand vexatious defence is one in which he was alleged to have beenthe Highest bidder at an auction for certain machinery. It appearsfrom the evidence that on the day after the auction, when theinsolvent became aware that the property had been knocked downto him, he at once repudiated the purchase, and denie.d that he hadmade the highest bid. When he was sued for the price of the goodshe raised the same defence, and the learned District Judge, afterhearing the evidence on both sides, gave judgment for the plaintiff,disbelieving the evidence of the defendant and 'his witnesses. Inmy opinion a defence of this sort is not a frivolous and vexatiousdefence within the meaning of the section. It is not a defence that
1 D. C. Min., Feb. 26,1906.
{1910) IS N. L. B. 254.
is obviously, and on the face of it, unsustainable. It is not a defence 1M4.raised for the purpose only of gaining time or of harassing thecreditor. It is a defence that was raised almost immediately after C.J.the conclusion of the sale, and it represents the answer which the inrethe'insolvent had rightly or wrongly made to the claim against him. Insolvency ofI am, therefore, of opinion that a certificate ought not to have been Samaudeenrefused on the ground that the defence in the other, action wasfrivolous and vexatious. I would set aside the order of the DistrictJudge, and remit the case to him to decide whether any certificate,and if so of what class, should be allowed to the insolvent.
Db Sampayo A.J —I agree.
Set aside.