PURCELL AND OTHERS v. THE PUBLIC CURATOR Acts Amendment Act of 1909 does not expressly or by implication enact that debenture holders or their receiver have any right to restrain a distraining landlord. Section 18 merely imposes an oF QUEENSLAND. obligation on a receiver, but does not take away the rights of any other person. As to the landlord's right of distraint, Redman, 7th Ed., p. 467. Common law rights cannot be taken away, except by express language. Beale, p. 336; Potter v. Minahan (1), Hocking v. The Western Australian Bank (2), The Distress, Replevin and Ejectment Act of 1867, S. 58. The provision contained in s. 18 of The Companies Act Amendment Act of 1909 is taken from the English Act with verbal alterations, and it was never intended that the Queensland Act should prejudicially affect the landlord's rights. Palmer's Company Law, 11th Ed., p. 320; General Share and Trust Company v. Welley Brick and Pottery Co. (3), Russell v. East Anglian Railway Co. (4). A receiver is merely an agent for debenture holders. Deyes v. Wood (5), Halsbury, Vol. 11, pp 172-3, 180. Section 145 of the Insolvency Act may not be made applicable at all by s. 18 of the Companies Act Amendment Act, but if it is applicable, the sections give no right to restrain a distraining landlord, but confer on him an additional right to those already in existence by virtue of the common law. The right to restrain does not arise under the Companies Act until there has been an adjudication by the Court. The difficulty has arisen from an attempt to apply the English Act in circumstances in which it is not applicable. Newton v. Scott (6), In re Browning (7). If the goods are in fact the goods of the mortgagee, s. 145 has no application. Brocklehurst v. Lawe (8), Railton v. Wood (9). On the evidence before the Court no equity of any value is attached to the goods-no bid was made when the goods were put up for auction. If the mortgage debt is greater than the value of the goods, s. 145 does not apply, inasmuch as the goods are not actually the property of the company, but of the debenture holders, as soon as the debenture charge becomes fixed. In re New City Constitutional Club Coy. (10), In re Harpur's Cycle Fittings Co. (11), In re Marriage, Neave & Co. (12) (1) 1908, 7 C.L.R. 277. (2) 1909, 9 C.L.R. 739. (3) 1882, 20 Ch.D. 130, 260. (4) 1850, 3 Mac. & G. 104, at p. 118. (5) [1911] 1 K.B. 806. (6) 1842, 9 M. & W. 434. (7) 1894, 19 V.L.R. 509. (8) 1857, 7 E. & B. 176, at p. 184. (10) 1886, 34 Ch.D. 646. PURCELL AND OTHERS V. THE Stumm, in reply: The decision in Re Marriage, Neave & Co. (1) was prior to the English Act of 1898. If the defendant's OF QUEENSLAND. contention is correct, the landlord could defeat preferential claims for wages and rates. PUBLIC CURATOR Lukin J. C.A.V. LUKIN J. This is a special case stated under s. 6 of the Judicature Act, and raises the question whether a receiver, who is appointed on behalf of the holders of a debenture of a company, duly secured by a floating charge, and who has lawfully entered under such charge into the possession of the assets of such company on certain demised premises, is entitled to restrain a landlord of such premises from levying or proceeding with a distraint for overdue rent against the goods of such company, on paying three months rent prior to the levying of such distress, an amount considerably less than that due. The relevant facts may be shortly stated: The late T. J. Ryan was the landlord, and the Rockhampton Newspaper Co. Ltd. was the tenant of the premises in question. The rent reserved was £378 per annum. On the 14th September, 1921, there was overdue for rent £819. On the 26th February, 1918, the plaintiffs advanced the company £3000, and received a debenture duly executed and duly registered as a floating charge on the undertaking and property of the company. At the time of the taking possession and the levying of distraint hereafter mentioned, the company had assets, apart from the possibly unrealizable asset of goodwill, approximating £9500, as against £8782, claims of creditors, so that apparently there was more than sufficient to pay the indebtedness, not only on this debenture and on all preferential claims, but the whole of the indebtedness of the company to their creditors. On the 2nd September, 1921, default having been made by the company, a receiver was, in accordance with the terms of such debenture, duly appointed by the debenture holders, and such receiver entered into possession of all the assets on the demised premises, and caused an advertisement of a proposed sale of such assets for the 21st September, 1921. On the 19th September, 1921, defendant distrained for the sum of £850, an amount in excess of that actually due, £819, but no point is made, and no question turns on the excessive amount claimed. At the date of distress there were, besides the moneys due under such debenture and for the (1) [1896] 2 Ch. 663. rent mentioned and to other general creditors, sums of money due for wages and for local rates, which are, no doubt, preferential debts within the meaning of the sections hereinafter referred to. On the 21st September, 1921, the property was submitted to public auction, but as no bid was forthcoming, the receiver bought in the said property for the sum of £4000. On the same day the plaintiffs tendered to the defendant, and the defendant refused to accept, the sum of £126 for three months' rent prior to the 2nd September, 1921, and one month's rent to the 30th September, 1921, the plaintiffs claiming that the defendant was, by reason of certain statutory provisions, to be referred to presently, entitled in priority to such three months' rent only, with the ordinary remedies of an unsecured creditor against the company for the balance. Plaintiffs thereupon on the same day issued their writ, asking for a declaration of their rights and for an injunction to restrain the defendant from further proceeding on such distress, and on an ex parte application, an interim injunction was obtained on the usual undertaking as to damages restraining the defendant from further proceeding with such distress until further order, with leave to the defendant to move on twenty-four hours' notice to dissolve such injunction. On the 8th October the defendant gave notice of intention to move for a dissolution of such injunction, and the hearing of the motion was, by consent, adjourned from time to time. On the 22nd November, 1921, a resolution was duly passed authorising the voluntary winding up of the company, thereby causing such voluntary winding up to commence as from that date-s. 120, Companies Act. As no facts were in dispute and the defendant had been secured by the plaintiffs' undertaking to damages, the parties, at my suggestion, have stated this special case, raising the questions of law for the opinion of the Court. For the plaintiffs, it is contended that the joint effect of s. 18 of The Companies Act Amendment Act of 1909, which provides “(1) Where either a receiver is appointed on behalf of the holders of any debentures of a company secured by a floating charge, or possession is taken by or on behalf of those debenture holders of any property comprised in or subject to the charge, then, if the company is not at the time in course of being wound up, the debts which in every winding up are under the provisions of The Companies Acts, 1863 to 1896, relating to preferential payments to be paid in priority to all other debts, shall be paid PURCELL AND OTHERS v. THE PUBLIC CURATOR or QUEENSLAND. Lukin J. PURCELL AND OTHERS V. THE PUBLIC CURATOR OF QUEENSLAND. Lukin J. forthwith out of any assets coming to the receiver or other person taking possession as aforesaid in priority to any claim for principal or interest in respect of the debentures. "(2) The periods of time mentioned in the said provisions of the said Acts shall be reckoned from the date ofthe appointment of the receiver or of possession being taken as aforesaid, as the case may be. "(3) Any payments made under this section shall be recouped as far as may be out of the assets of the company available for payment of general creditors; " and of section 21 of The Companies Act Winding-up Act of 1892 which provides— "In the winding up of a company the same rules shall prevail and be observed for determining the respective priorities of creditors, and for determining what creditors are entitled to take or retain the property of the company as security and for determining the validity of any security, as are in force for the time being under the law of insolvency with respect to the estates of persons adjudged insolvent; " and of section 143 of the Insolvency Act, which provides"The debts hereinafter mentioned shall be paid in priority to all other debts, excepting rent, as hereinafter provided. Between themselves such debts shall rank equally, and shall be paid in full, unless the property of the insolvent is insufficient to meet them, in which case they shall abate in equal proportions between themselves-that is to say "(1) All local rates due from him at the date of the order of "(3) All wages or salary of any clerk, servant, laborer, or save as aforesaid all debts provable under the insolvency shall be paid pari passu; "— and of section 145 of the Insolvency Act, which provides"No distress for rent shall be made or levied or proceeded in against the property of a debtor after an order of adjudication has been made against him or after a petition has been presented by him under Part III. of this Act, but the landlord or person to whom the rent is payable shall be entitled to receive out of the estate in priority to all other creditors so much rent as shall be then due, together with a sum in lieu of rent proportioned to the period (if any) that has elapsed between the last date at which rent became due, and the date of the order of adjudication, but so that the whole sum so received shall not exceed the amount of three months' rent. "But the landlord or person entitled to rent may prove for any surplus that may be due above such sum;" establishes his contention that the landlord is deprived of his common law right of distraint and of obtaining the full benefit thereof, and that he is limited to a preferential claim of three months' rent only as against the debenture holders. I have considered the whole of these sections, and the various arguments made and the authorities quoted by counsel on each side thereon. In particular, I have given full consideration to Mr. Stumm's argument made that s. 18 (supra), in express terms, provides what is to take priority over debentures, and that the receiver is entitled, under subsec. 3 of that section, to be recouped as far as they may be out of the assets of the company available for payment of general creditors. Having taken into consideration the rules of interpretation of statutes in regard to their effect on the common law and on pre-existing rights, I have come to the conclusion that I cannot accept the plaintiffs' argument as sound. I think the sections must be interpreted in the light of the rule of interpretation that statutes do not take away private rights, except by express words, by plain implication, or by necessary intendment. I think it should be borne in mind that the company was not at any relevant time that is to say, when the distress was levied or before it could, and would have, in the ordinary course of events, been completed-in the course of being wound up, and that the plaintiffs' contention is based merely on the appointment of the receiver and the taking possession on behalf of the debenture holder of property subject to the charge. Section 18 prescribes that certain specified consequences follow from such PURCELL AND OTHERS v. THE PUBLIC CURATOR oF QUEENSLAND. Lukin J. |