Crew, Re D.S. Ex Parte Australian Guarantee Corporation Ltd

[1986] FCA 523

IN THE FEDERAL COURT OF AUSTRALIA	1
GENERAL DIVISION	) OLD Part X 224 of 1986

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BANKRUPTCY DISTRICT OF THE SOUTHERN	)
DISTRICT OF THE STATE OF OUEENSLAND	)

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RE: DAVID STEWART CREW

EX PARTE: AUSTRALIAN GUARANTEE CORPORATION LIMITED

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DATE OF HEARING: 30 OCTOBER 1986

I	DATE	JUDGMENT	DELIVERED:	30 OCTOBER 1986
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COUNSEL :

. for the appllcant	Feez Ruthinq & Co.
Mr. D.C. Andrews instructed by

. for Ampol Petroleum (Qld.) Mr. K. Philp of Davies Philp

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Mullican Ltd. Pty.

J. A. LYONS

ASSOCIATE TO PINCUS J.

30 OCTOBER 1986

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C A T C H W O R D S

BANKRUPTCY - resolution that deed of assignment be executed -

omission to nomlnate trustee - applicatlon to Court to fill

vacancy - large debts and very small	assets - exercise of
dlscretion.

Bankruptcy A c t , 1966 ss.187(1), 2 0 4 ( 4 ) , 220(2)

Re: David Stewart Crew

Ex parte: Australian Guarantee Corporation Limited

Qld Part X 224186

PINCUS J.

BRISBANE

30 OCTOBER 1986

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IN THE rEDERAL COURT OF AUSTRALIA	)
GENERAL DIVISION	) QLD Part X 22 4 of 198 6
BANKRUPTCY DISTRICT OF THE SOUTHERN	)
DISTRICT OF THE STATE OF OUEENSLAND	)

RE: DAVID STEWART CREW

EX PARTE: AUSTRALIAN GUARANTEE CORPORATION LIMITED

MINUTES OF ORDER

JUDGE MAKING ORDER:	PINCUS J.
DATE OF ORDER:	30 OCTOBER 1986
WHERE MADE:	BRISBANE
THE COURT ORDERS THAT:

The application be dismissed with costs fixed at $200

NOTE:	Settlement and entry of orders is dealt with	in
Rule 124 of the Bankruptcy Rules.

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IN THE FDERAL COURT OF AUSTRALIA	)
GENERAL DIVISION	) QLD Part X 224 of 1986
BANKRUPTCY DISTRICT OF THE SOUTHERN	)
DISTRICT OF THE STATE OF DUEENSLAND	)

CREW	STEWART	DAVID	RE:	:	’.
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EX PARTE:	AUSTRALIAN GUARANTEE CORPORATION LIMITED	I -.
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PINCUS J. 30 October 1986

EX TEMPORE REASONS FOR JUDGMENT

This is an application by Australian Guarantee

Corporation Limited, a creditor of Mr. D.S. Crew, for an order

that the court nominate Mr. R.A. Barber, a registered trustee, to

be the trustee of a deed of assignment. Mr. Crew appointed Mr.

Barber his controlling trustee under s.188 of the Act, and a i

meeting of creditors was consequently held, on 17 September last.

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At that meeting there was a motion by a Mr. Wiseman of

Australian Guarantee Corporation Limited, the present applicant,

that a solicitor, Mr. Buchanan, be elected to chair the meeting,

and that was passed. Subsequently there was passed a motion that

Mr. Crew execute a deed of assignment under Part X. The

applicant, being owed a sum of $147,143.08, voted for the motion

as did A.G.C. Finance Limited which was owed $1,926.79. Three

other creditors who were represented voted against the motion, and

since their debts totalled $81,525.06, it would have been lost but

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for the intervention of the chairman. He held three proxies

totalling $136,668.61 in his own favour and voted for the motlon.

Thus it was passed.

Nothing is placed before me to throw any doubt upon the

valldlty of the vote, but it should be noticed that those in

favour of the motion at the meeclng were the applicant, an

associated company, and a member of the applicant's firm of

solicltors who "advised that he was acting independently of the

creditors for whom he was nomlnated thelr proxy."

Under s . 2 0 4 ( 4 ) of the Act, where a speclal resolution

requiring the debtor to execute a deed of asslgnment has been

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passed:

"the creditor shall by resolution nominate a

registered trustee or registered trustees to be the

trustee or trustees of the deed."

That did not occur, and the purpose of the present application is to remedy the deficiency. Mr. Andrews, on behalf of the applicant

creditor, has drawn my attention to a number of provisions of the

Act under which that might possibly be done, and has helpfully

pointed out the difficulties attaching to each. His principal

submission appears to be that the court should treat the absence

of a trustee as a vacancy within the meaning of s.220(2), which

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vacancy might be filled under that provision.

...

Mr. Philp, solicitor, has appeared for Amp01 Petroleum

Limited, a creditor, and expressed opposition and asked for an

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adjournment. According to the statement of affalrs the only asset

available for the creditors appears to be the sum of $370 cash.

The creditors are said to total $573,500. So that the assets

caught by an assignment would be less than one-tenth of	1 per cent
in value of the total of the debts.

If a deed were executed the question might arlse whether

the transactlon was one "for the benefit of creditors" within the

meaning of the statute. See the definition of "deed of

assignment" in s.187(1) of the Act; and Re Beames; Ex parte

Beneficial Finance Corporatlon Llmlted (1985) 7 F.C.R. 216 at

p.227. The proposed deed would certainly not be within the splrit

of the provlsions relating to deeds of assignment. Here the

appllcation seeks to have the Court's discretion exercised in	! ,
favour of perfecting the resolution referred to above.	I
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The purpose of the resolution was, in a practical sense,

not to benefit creditors but to benefit the debtor. In my

opinion, the Court should not, in general, lend its aid in such

circumstances, but should leave the creditors who wish to assist

the debtor to their own devices. To do otherwlse would in my

opinion be unfair to that significant minority ( 2 2 per cent in

value) of the creditors who opposed the motion.

The application will be dismissed.

In this matter, the resisting creditor Amp01 has been

successful and should, in my view, receive costs. However, in the

circumstances, I think the costs should be limited and fixed, for

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two reasons. One is because of the difficulty, to which attention

has been drawn of dissecting out costs relating to a foreshadowed

application to attack what has been done, from the costs of

resisting today's application.

The second reason is that I think I should take into

account the fact that no doubt, without fault in the ordinary

sense, it was Mr. Hulse who suggested the course which has turned

out to be legally ineffective. Therefore, the order will be that

the application be dismissed, with costs fixed at $200.

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