Re: BRIAN FORSHAW and EDWARD CHRISTIAAN SENT And: JEFFREY ROBERT THOMPSON and FIRST NATIONAL LIMITED No. G34 of 1992 FED No. 222 Bankruptcy (1992) 106 ALR 633
COURT
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION Black CJ.(1), Sweeney(2) and Lockhart(3) JJ.
CATCHWORDS
Bankruptcy - meaning and width of Court's "jurisdiction in bankruptcy" under Bankruptcy Act 1966 - meaning of "matter" under Part X - power of Court to review decision of Chairman at a meeting of creditors - whether a debt in dispute encompasses a contingent debt - whether Court may intervene concerning entitlement to vote at meetings under Part X.
Solicitors for the Appellant : Q.D. George and Co.
Solicitors for First Respondent : P. Lambourne
Thompson Redhead
Solicitors for Second Respondent: J. Waters
Barker Gosling
ORDER
The Court orders that:
1. Both appeals be dismissed.
2. The appellants pay the costs of the respondents of each appeal. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
I have had the advantage of reading the reasons of Lockhart J. which led him to agree in the Court's order that each appeal be dismissed with costs and I agree with his Honour's reasons.
JUDGE2
I have had the advantage of reading the reasons of Lockhart J. which led him to agree in the Court's order that each appeal be dismissed with costs. I agree with those reasons and would simply add that a judge of the Court, asked to adjourn the petitions already on foot against the debtors, might usefully refer to Field v. Commercial Banking Co. of Sydney Ltd (1978) 22 ALR 403.
JUDGE3
On 6 March 1992 the Court heard and dismissed these two appeals
from the judgment of a single Judge of the Court (Spender J.), heard together by consent. The Court said that it would publish its reasons for judgment later. Two questions arise in the appeals. The first and primary question is whether the decision of the chairman of a meeting of creditors of a debtor called under Part X of the Bankruptcy Act 1966 ("the Act") pursuant to s. 190 admitting the claim of a creditor to vote at the meeting is examinable by the Court. The second question is whether, assuming the answer to the first question is in the affirmative, the learned primary Judge erred in the exercise of his discretion when refusing to grant an injunction restraining the chairman of the meeting from permitting the creditor to vote at it.
On 19 February 1992 Spender J. heard together two urgent applications, one by the appellant, Brian Forshaw, and the other by the appellant, Edward Christiaan Sent (to whom for convenience I shall refer together as "the debtors"). They raise the same issues.
In each application an order was sought from the Court that the respondent,…
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.
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Details
AGLC
Forshaw, B. & anor v Thompson, J.R. & anor [1992] FCA 222 ((1992) 106 ALR 633)
Case
[1992] FCA 222
Decision Date
CaseChat Overview and Summary
In the Federal Court of Australia, Forshaw and another appellant brought an appeal against Thompson and another respondent concerning matters of bankruptcy. The appellants challenged the respondent’s entitlement to vote at meetings of creditors, questioning whether the Court could review the Chairman’s decision on the matter. The appellants also sought to establish that a contingent debt should be considered as a debt in dispute under the Bankruptcy Act 1966.
The central legal issues before the Court involved the interpretation of the term "matter" under Part X of the Bankruptcy Act and the extent of the Court's jurisdiction in bankruptcy. Specifically, the Court needed to determine whether a contingent debt was encompassed within the definition of a "debt in dispute" and if the Court had the power to intervene in matters concerning the entitlement to vote at meetings of creditors. The appellants argued that the Court could review the Chairman’s decision, while the respondents contended that the Court’s jurisdiction was limited and that contingent debts were not to be considered as debts in dispute.
The Court found that the term "matter" under Part X of the Bankruptcy Act did not extend to include disputes concerning the entitlement to vote at meetings of creditors. The Court held that the power of the Court to review the Chairman's decision was constrained by the legislative framework, which did not permit such intervention. Additionally, the Court ruled that contingent debts were not to be regarded as debts in dispute under the Act. Consequently, the Court dismissed the appellants' appeals and ordered that both parties bear their own costs.
Orders
Orders of the court
The Court orders that:
1. Both appeals be dismissed.
2. The appellants pay the costs of the respondents of each appeal.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.