Burns v Lorac Mining Pty Ltd - [1985] FCA 63

CATCHWORDS

Banlcruptcy - deed o€ asslgnment witnessed

by p a r t y t o

deed - s.216

Bankruptcy A c t n o t s a t i s f i e d

- deed Invalid -

a p p l i c a t i o n u n d e r

s.222

Bankruptcy

A c t no t necessa ry

c o u r t h a s j u r l s d l c t i o n u n d e r

s.30

Bankruptcy Act.

ROBERT J O H N FRED BURNS and PETER IVAN FELIX	GEROFF
v. LORAC EIETING PTL’. LIMITED

No.	XI1 of 1 9 8 4

Beaunont, J.

6 March 1985.

Sydney.

IN THE FEDERAL COURT OF AUSTRALIA

) )

QUEENSLAND REGISTRY	No. XI1 of 1984
GENERAL DIVISION

BEXKEN:

ROBERT JOHN

FRED BURNS and

PETER IVAN FELIX GEROFF

Appllcants

LORAC MINING PTY. LIMITED

Respondent

ORDER

Judge making order: Beaumont, J.

Date order made:	6 March 1985.
Where made:	Sydney

THE COURT ORDERS THAT:

Appllcatlon. as amended,

dlsmlssed.

Discharge

the

xisting

injunction.

3 .

Bppllcants

respondent‘s

pay

costs

the

application, Including reserved costs.

11.1 THE

FEDERAL

COURT

OF AUSTRALIA !

)

QUEENSL-AND REGISTRY	)	No.	X I 1 of 1984
1
GENERAL DIVISION	1

BETWEEN :

ROBERT J O H N FRD BURNS and

PETER IVAN FELIX GEROFF

Applicants

AND	:	LORAC M I N I N G PTY.	LIMITED
Respondent

CORAM: Beaumont, J.

m: 6 March 1985.

REASONS FOR JUDGMENT

The appllcants In this matter are the trustees

the property of Geoffrey Charles Lawrence and

Desma Florence

Lawrence ("the debtors") pursuant to

a deed

of asslqnment

dated 8 October 1984 purportedly executed under

Fart 1.'

the Bankruptcv Act,

1966.

The history of the matter is

as follows. On

February

1983, the debtors entered into a written lease

agreement

with General Credits Llmited as lessor for the

lease of

a used Cessna aircraft Res.

No. VH-CMV

("the

alrcraft”). The

lease was for a term of

18 months from 22

February 1983. Clause

7 of the lease w&-j

as follcws:

“If upon the

goods being received lnto the

Lessor’s

possesslon consequent upon the

expiration of the period of the lease

any

extenslon

thereof

the

goods

are

disposed of by the Lessor for the best price the Lessor can reasonably obtaln at

the time,

and

the net proceeds of such

disposal (after allowing for all costs and

expenses

incidental

such

disposal

Including

storage) are

less

than

the

residual value stated

in the Schedule, the

Lessee undertakes to

pay to theh Lessor by

way of indemnity for the capital loss so

sustained the amount of such deficiency

(additionally to any rent

or other moneys

payable by the

Lessee) PROVIDED THAT no

amount shall be payable under this Clause if the Lessor disposes of the goods other

than by public auction

or to or through

traders dealing in goods of a similar description and…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Burns v Lorac Mining Pty Ltd

Details

AGLC: Burns v Lorac Mining Pty Ltd [1985] FCA 63
Case: [1985] FCA 63
Decision Date: 6 Mar 1985

CaseChat Overview and Summary

The case of Burns v. Lorac Mining Pty Ltd involved the applicants, Robert John Fred Burns and Peter Ivan Felix Geroff, as the trustees of the property of Geoffrey Charles Lawrence and Desma Florence Lawrence, who were bankrupts. They sought to challenge the sale of a Cessna aircraft by the respondent, Lorac Mining Pty Ltd. The dispute centered around a deed of assignment executed by the bankrupts, which the applicants claimed assigned all divisible property to them for the benefit of creditors. The respondent argued that the deed was invalid because it did not comply with s.216(2) of the Bankruptcy Act, which requires that the execution of the deed by the debtor and the trustee be attested by a witness, and that this was not a party to the deed.

The central legal issue before the court was whether the deed of assignment was valid despite the failure to comply with s.216(2) of the Bankruptcy Act. The court had to determine the consequences of this non-compliance and whether the deed was, therefore, invalid. Additionally, the court needed to address the respondents' preliminary objection that the deed was invalid and that the applicants had no standing to bring the proceedings.

The court held that the failure to comply with s.216(2) of the Bankruptcy Act rendered the deed of assignment invalid. This non-compliance was fundamental to the execution of the deed itself and not merely a formal defect. The court reasoned that the rule requiring an independent witness to attest the execution of the deed was designed to ensure that the debtor signed the deed voluntarily. Since the applicants had failed to establish a valid title to sue due to this defect, the applicants had no standing to challenge the sale of the aircraft. The court also noted that the applicants could not claim relief under the general law because the deed was intended to operate under Part X of the Bankruptcy Act, not independently in equity.

In light of these findings, the court dismissed the application, discharged the existing injunction, and ordered the applicants to pay the respondent's costs, including reserved costs.

Orders