Re, Hennessy

• Jurisdiction: Ireland
• Judgment Date: 21 May 1932
• Date: 21 May 1932
• Court: Supreme Court (Irish Free State)

Supreme Court.

In re Hennessy.

In re MARY HENNESSY, a Bankrupt (1)

Insurance (Unemployment) - Arrears of contributions due by bankrupt in respect of employed persons - Crown debt - Prerogative of the Crown - Preferential Payments in Bankruptcy (Ireland) Act, 1889 (52 & 53 Vict. c. 60) - Unemployment Insurance Act, 1920 (10 & 11 Geo. 5, c. 30), sect.22, sub-sect. 6, sect. 26, sub-sect. 5.

Appeal from an order of the High Court (Sullivan P. and Hanna J.), dated the 16th December, 1930, affirming a decision of the Circuit Court Judge for Cork, dated the 9th March, 1930.

In the Cork Local Bankruptcy Court in the matter of Mary Hennessy of Castlemartyr, in the County of Cork, widow, a bankrupt, the Minister for Industry and Commerce applied for an order that there be paid to him out of the funds to the credit of this matter "the sum of £36 2s. 3d., whereof the sum of £1 6s. 11d. is a preferential claim, and whereof the sum of £34 15s. 4d., the balance of the said sum, is a 'Crown debt,' taking priority as such."

The amount sued for represented arrears of contributions payable under the Unemployment Insurance Act, 1920 (10 & 11 Geo. 5, c. 30), by the bankrupt in respect of employed persons, of which the sum of £1 6s. 11d. represented contributions during the four months before the date of the order of adjudication, and to which priority was given by sect. 26, sub-sect. 5, of the Act, and the

balance was arrears of earlier contributions, for which priority was claimed under sect. 22, sub-sect. 6, of the Act as a "Crown debt."

The Circuit Court Judge ordered that the said sum of £1 6s. 11d. be paid to the Minister as a preferential payment, and gave liberty to the Minister to prove for the balance, viz. £34 15s. 4d. as an ordinary creditor in the said bankruptcy proceedings.

The Minister for Industry and Commerce appealed from so much of this order as related to the sum of £34 15s. 4d., to the High Court, but that Court affirmed the decision of the Circuit Court Judge, applying the decision of Johnston J. in In re A. & B. Taxis, Ltd.(1).

From the decision of the High Court the Minister appealed to the Supreme Court.

The Unemployment Insurance Act, 1920, sect. 22, sub-sect. 6, provides that all sums due to the unemployment fund "shall be recoverable as debts due to the Crown, and without prejudice to any other remedy may be recovered by the Minister [of Labour] summarily as a civil debt."

Sect. 26, sub-sect. 5, provides: "There shall be included among the debts which, under sect. 4 of the Preferential Payments in Bankruptcy (Ir.) Act, 1889, are, in the distribution of the property of a bankrupt . . . to be paid in priority to all other debts, all contributions payable under this Act by the bankrupt . . . in respect of employed persons during the four months before the date of the order of adjudication . . . and that Act shall have effect accordingly."

The Supreme Court held that, as regards the contributions payable under the Act by a bankrupt in respect of employed persons, the Minister for Industry and Commerce (to whom all the powers and duties of the Minister of Labour under the Act have been transferred) is entitled to claim, not only the priority given by sect. 26, sub-sect. 5, of the Act to the four months' contributions immediately prior to the date of the adjudication, but is also entitled to claim priority to ordinary creditors in respect of the anterior arrears of contributions, since they must be placed in the same category as Crown debts.

In re Galvin, [1897] 1 I. R. 520, applied; In re A. & B. Taxis, Ltd.[1931] I. R. 87, distinguished.

Cur. adv. vult.

Kennedy C.J. :—

The judgment of the Court will be read by Mr. Justice Murnaghan.

Murnaghan J. :—

In this appeal the Minister for Industry and Commerce seeks to obtain an order that payment should be made in this bankruptcy matter of the sum of £34 15s. 4d., being the amount of arrears of contributions due by the bankrupt under the provisions of the Unemployment Insurance Act, 1920, in priority to the ordinary creditors.

By sect. 22, sub-sect. 6, of that Act all sums due to the unemployment fund "shall be recoverable as debts due to the Crown, and without prejudice to any other remedy may be recovered by the Minister...