Carlyle, J.E. v Permanent Trustee Nominees (Canberra) Ltd

[1985] FCA 188

IN THE FEDERAL COURT OF- AUSTRALIA 1

C€NERAC DIVISION

PAST X C,EElj OF

I?RR4NGEMEiE hU . I 3

BANKRUPTCY DISTRICT OF THE SObTHERN !

OF 1975

O I S m I C T OF THE STATE OF OUEENSLAND !

RE: J O H N EDWAARD CARLPLE'

DAT'E OF HERRING: 3 MW? I s a s

DATE JUCGMENT	D E L I b F R D :	16 MAY 1985
COlJNSEL :

. for the applicant

. for the respondent

D.T. O ' B R I E N

iG MAY 1985 ASSOCIATE TO PINCIJS .J.

.

.

IN THE rTDEF!AL COURT OF AUSTRALIA )

GENERAL	D I V I S I O N	)	PAkT X DEED C €
ARRANGEMENT NG . 32

BANKRUPTCY DISTRICT OF THE SOUTHERN )	OF i975
DISTRICT OF THE STATE OF QUEENSLAND )

RE: JOHN EDWARD CARLYLE

M PARTE: PERMANENT TRUSTEE NOMINEES

( CANBERRA 1 LTD

MINUTES OF ORDER

MAKIN	JUDGE	ORDE2:	PINCUS J .
DATE OF O R D E i :	16 MAP 1985
WE2E MADE:	BRISBANE

THE COURT DECLASES THAT:

1. The deed of arrangement made bezveen John Edward Carlyle as debtor and Lloyd George Rees and John Robert Rees as Registered Trustees on 6 January 1976, 1s blndlnq on the respondent Permanent Trustee Nominees (Canberra) Ltd.

2 . The rslease contamed in !Clause 11

thereof operates to release John Edward Carlyle from the debc claimed in these

proceedings to be due CO Permanent

Trustee Nommees (Canberra) Ltd.

THE COURT ORDERS THAT:

1. The application by Permanent Trustee

Nominees (Canberra) Ltd be dlsmlssed.

2 . Pernanent Trustee Nominees (Canberra) Lta

pay the costs of John Edward Carlyle of

and Incldental CO each appllcation.

- NOTE : Settlement and entry of orders 1s dealt wlth in Order 36

of the Federal Court Rcrles.

. I

IN THE FEDERAL C0UF.T OF AUSTRALIA	)
GENERAL DIVISION	) PffiT X EFED CIF

ARRANGEMENT NO 3 2

BANKRUPTCY DISTRICT OF THE SOUTHERN ) OF 1975

DISTRICT OF THE STATE OF OUESSLAND )

RP: JOliN E D W D CAPLYLE

PINCUS J. 16 MAY 1965

REASONS FOR JUDGMENT

I have to determine an application under s . 2 3 3 ( 2 ) of the

Bankruptcy Act 1966, by Permanent Trustee Nomlnees (Canberra1

Ltd, whxh I shall call “the guarantee credltor”, for leave to

commence legal proceedings claiming a large sum agalnst John

Edvard Carlyle, whom I shall call “the debtor”. “hat appilcatlon

1 s resisted by the debtor, on the ground that sdch leual

proceedings as the guarantee credltor cleslres to Institbte are

prevented by a deed of arrangemen- executed by t h e debtor m

1976. The debtor makes a cross-appllcatlon f3r 3 deciarition

under s.30(1) of the Act that the deed 1s blndlnq ori tne

qarantee crsditor.

:

2 .

On 7 OctZber 1975 the ciebtor executed, pursuant to s.laS

of the Act, an authority In favour of Lloyd George Rees tg cail a

seeting of his credltors for the purposes of Part X. On 3

November 1945 che debtor executed - a statutory declaratlon -

verlfjring nis statenent of affairs. The guarantee creditor was not Included in the list of unsecured credltors In Part I1 of the

statement of affairs, but was mentloned l.? Part V I I , Clause 4.

which glves "partlculars of my contingent liabilities and any

other llabilitles not specified in a prevlous part of this

statement . . . ' I . A meetmq of creditors, pursuant to the usual

advertisement, slas held on the same day, 3 November 1975, and the

guarantee creditor was Chere represented. It was resolved that

the debtor esecute a deed of arrangement cmzaininq certaln

provlslons mentloned in the resolutlon.

There 1 s B suggestion in the- material that there mlqht

have been difficulty in qEantifping the preclse amount due at the

end of 1975. under the guarantee. However, there 1s no doubt

that the guarantee crnditor was at that time Indeed a creditor.

mat is not, I thir.k, . disputed.

The debtor relies upon Clause 11 of the dsed 33

constituting a release of all obligations to creditors, mcluding

the guarantee Creditor. Alternatively, the suucestlon was

advanced that for the purpose of granting declaratory rellef, the

Court may exerclse equitable ~ur~sdlctlon and treae tne deed as

hzving been rectified as far as necessary.

' .

3 .

It is not as clear to me as it should be precisely wnat background fdcts I am entitled to take lnto account l n construng

the deed. However, one such fact 'S that when cne deed xas

executed the guarantee creditor was, as I have sald. clearly a

crsdltor. Yet recltal (6) of the deed date4 6 Ju17 1976 says

tnat "The names nf the credltors of tae Debzor in,l rhe several

iI!lGUnts qwlnq to such credltors ar% se: r o r c h rhe 5ecsnd

Schedule hereto" - whlch Second Schedule :i(;eF n c t aent;m the

quazantee creditor. It 1 s clear that ln tr,? sentence lust quoted

the expresslon "the creditors" prlma facie means "all the

credltors". The recltal does not say that the names of che

credltors who are to be bound are set forrh but s m p i y speaks of

- the creditors. Reinforcement of that constructlon, If

-

reinforcement 1s needed, is easily to be found. The precedlng

recltal, ( c ) . , says "That a meetlng of the creditors of the D e D t s r has held on the 3rd day of November, 1975 . . . ' I . That was, plainly, a meetlng of the creditors generally, lncludlng the

guarantee credltor.

The arqument of Mr Mulr, f o r the guarantee -redltsr, vas that the credltors bound were Intended only to be ,:hcse se< out

L n the Second Schedule. He pointed nut chat under- 5 . 2 3 . 1 1' a

deed need not release all debcs. However. the firt tfl? :he Second Schedule does not, apparently ;;hrough i m e rnis t lk , properly set out che names of the creditors does nct seem to me to chrow m y real doubc upon the mcenclcn reve2ied 37 the deea.

It is posslble, In n e w OZ exhrblt "D" to tnp affl3iavlt of L . 5 .

Fiees, that the use of that document caused the error.

4.

Clause 11, OF which'the deotor relles. says znonq other

things, that "the creditors shall release the Debtor from all

debts and liabllities due and owlng by hlm to them . . . ' I . The

guarantee creditor would. have me read tne ezpresslon "che

that construction- IS reasonably open. The deed 1 s . cf course,

blnding on all the creditors, under s . 2 3 3 ( 1 ' .

It might also be argue& -that the conscructlon pUC

forward by the debtor is improbable, as It would reach an unfair

result, since the guarantee creditor would not be entltled t z any

distribution. Although Clause 1 supports that n e w , the

entltlement ta a distributlon 1 s cut reallv .zleac; Clauss i ( b )

which provldes for distrlbucion reftrs In one ?lac? to " b e

credltors of the Debtor" and In the proviso to 'cne uzsecured

creditors set forth m schedule 1 hereto". In the event, there

gas no distrlbutlon to the unsecured credltors at ail, 3s the

taxatlon authorltles obtained all the money left after expenses.

It may be that any unfairness could, had the matter m e n a Live

Issue, have been overcsme by interpretlng Clause 6 as entitling

- the guarantee credltsr to a distribuclon, or recclfy1nq ~ t .

However that nay be, there is nothlng ln the rather obsckre

provisions a€ Clause 6 to take away from the plain statement of the debtor's rlghts m Clause 11, whlch are exerclsaoie agalnst "the credltcrs", meanizq all the creditors.

.

5.

Mr htney, counsel for the debtor, suggested :hat tm

sllp which seems to have been made l n the drafting of the deed

was caused by che failure of its draftsman to noz1ie the

reference to contlngent Creditors In the Second Schedule,

mentloned above. Lt 1s not necessary to reach a conclusion about

that, nor do I think che evldence as to what was sal6 at che

meeting, presumably advanced as tnrcwmr; Ll+c upcn what people

mzght reasonably nave understood the de52 to provme for. is of

any real asslstance. The questlon is whe%ner the lnccmgleteness

of the list of creditors In th? deed prgduces :;p.e result, readlng

the document 3s a whole, thac che expression "the crcdltors" In

Cause 11 1s to be taksn to mean "such of the creditors as are

listed herein". On that my oplnlon is ln favour of the debcor

and I propose to make the declaration he seeks, wlth the

difference only that I think tne declaratlon should be made In

respect of the debt I n question, and no others. 1 declare chat

the deed of arrangement made between John Edward Carlyln as

debtor and Lloyd George Rees and John RcLert 4ees as Registered

Trustees on 6 Zanuary 1976, is blnding on t:he resp0nder.t

Permanent Trustee Nomlnees (Canberrs) Ltd, and that the release

contained m Clause 11 thereof operates to reiease John Eilxara

Clrlyle from the debt: clslnsd In these Froceedlngs t: b? d1-e :'c.

Permanent '%ustee Nommees (Canberra, Ltd. i dlsmlss t	e	.	:
appllcazlon by Fermanent Trustee Nomlnees 'CanDecra: Ltd	ant

order chat it pay the costs of Joi-a Zdward Carlyle cjf and

1nclder.tal to each application.

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