Some difficulty has been caused in recent years by judicial dicta and decisions as to the meaning of the word ‘credit’ for the purposes of the three statutory offences created by (i) section 13 of the Debtors Act, 1869; (ii) section 155 of the Bankruptcy Act, 1914; and (iii) section 156 of the same Act. The material words are:

1. in (i), ‘If in incurring a debt or liability…he has obtained credit1 under false pretences, or by means of any other fraud…’

2. in (ii), ‘Where an undischarged bankrupt (a) …obtains credit to the extent of 10 or upwards from any person without informing that person that he is an undischarged bankrupt…’

3. in (iii), ‘If any person who has been adjudged bankrupt or in respect of whose estate a receiving order has been made (a) in incurring any debt or liability has obtained credit under false pretences or by means of any other fraud…’.

It will be observed that in (ii) the gist of the offence lies in failing to inform of the bankruptcy, and it is not necessary for the prosecution (as it is in (i) and (iii)) to allege or to prove ‘false pretences’ or ‘any other fraud’.

The expression ‘to give (or obtain) credit’, in the ordinary economic acceptance of the words, signifies that a person is entrusted with money or goods on the faith of future payment for them. ‘Credit’ does not appear to be a term of art, and therefore when it occurs in a statute it should be interpreted to accord with the tenor and purpose of the statute as a whole. Credit is a different and separate thing from any economic or other advantage which the possession of credit may produce. Thus a vendor who makes a complete transfer of the goods sold and allows the purchaser time in which to pay for them clearly gives to the purchaser not only the goods, but also credit.

The converse must also be true, so that if the purchaser pays the purchase money in advance and allows the vendor time in which to deliver the goods he gives not only the money but also credit to the vendor.