Heuir, Kenneth Russell & Anor; Ex Parte Bendeich, Graham Ross

[1998] FCA 641

KENNETH RUSSELL HEUIR and DIANA LESLEY HEUIR (Bankrupts)
Ex Parte: GRAHAM ROSS BENDEICH
No. QG 7029 of 1998
FED No. 641/98
Number of pages - 11
Bankruptcy

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

GENERAL DIVISION

COOPER J

Bankruptcy - Application to set aside deed of arrangement - exercise of discretion - whether appropriate in all the circumstances to set aside deed and make sequestration orders.

Bankruptcy Act 1966 (Cth) s 236

Re Doukidis; Ex parte Consolidated Construction Pty Ltd v Nelson (unreported, Federal Court of Australia, 26 June 1985) - Appl

Re Tripodi; Ex parte Col Johnson Pty Ltd (unreported, Federal Court of Australia, 22 January 1987) - Appl

Musolimo v Sidiropolous (1991) 101 ALR 235 - Appl

Re Gye and Perkes; Ex parte McIntyre (1989) 89 ALR 460 - Appl

Khera v National Australia Bank (1996) 71 FCR 133 - Appl

Williamson; Ex parte Wearne (1980) 43 FLR 305 - Appl

Re Dolman; Ex parte Elder Smith Goldsbrough Mort Ltd (1967) 10 FLR 38 - Appl

Chiragakis v Deputy Commissioner of Taxation (1986) 68 ALR 527 - Appl

BRISBANE, 8 May 1998 (hearing), 10 June 1998 (decision)

#DATE 10:6:1998

Counsel for the Applicant: MD Martin

Solicitor for the Applicant: Baker Johnson

No appearance for the Respondents.

THE COURT ORDERS THAT:

1. The application is dismissed.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

COOPER J

The applicant is the trustee under a Deed of Arrangement ("the Deed") executed by Kenneth Russell Heuir and Diana Lesley Heuir ("the debtors") on 13 August 1997. The applicant seeks orders that the Deed be set aside pursuant to s 236(1) of the Bankruptcy Act 1966 (Cth) ("the Act") and that a sequestration order be made against each of the debtors. Although served, the debtors did not appear on the hearing of the application.

Section 236 of the Act, so far as is relevant, provides :-

"236(1) The Court may, upon application by the trustee, a creditor or the debtor, or, if the debtor has died, the person administering the estate of the debtor, if it is satisfied: (a) that the debtor, or, if the debtor has died, the debtor or the person administering the estate of the debtor has failed to carry out or comply with a provision of the deed of arrangement; (b) that the deed of arrangement cannot be proceeded with without injustice or undue delay to the creditors, the debtor or, if the debtor has died, the estate of the debtor; or (c) that for any other reason the deed of arrangement ought to be terminated; make an order terminating the deed. 236(2) The Court shall not make an order terminating a deed on the ground specified in paragraph (1)(a) or (c) unless it is satisfied that it would be in the interests of the creditors to do so. 236(3) The trustee or a creditor may include in an application under subsection (1) an application for a sequestration order against the estate of the debtor and, if the Court makes an order on the first-mentioned application terminating the deed of arrangement, it may, if it thinks fit, forthwith make the sequestration order sought. ....."

The basis upon which the application is brought is set forth in the applicant's affidavit in support. Shortly put, it is that the creditors voting at a meeting of creditors on 24 July 1997 to consider the proposal that the debtors execute a Deed of Arrangement :-

(a) had regard to an appraisal by Ray Dank Real Estate in an amount of $275,000 for a property at 21st Avenue, Mount Isa tabled by the Controlling Trustee at the meeting of creditors;

(b) expected, in the light of this appraisal and the other property of the debtors, to receive a dividend of 100cents in the dollar or very near to it; and

(c) would not have voted in favour of the proposed Deed of Arrangement if they did not have such an expectation.

It was submitted by counsel for the applicant that the applicant :-

"... contends that this deed should be terminated principally on the grounds that the resolution was passed in the belief that the only real property of the debtors, being the shop and stock was worth, at least at the outset, nearly $300,000 - that's what the debtors said. And then at the meeting it was represented to those that attended that it was worth $275,000."

The property at 21st Avenue, Mount Isa did not achieve the appraised figure of $275,000 and upon sale only made $200,000. The achieved sale price was in accordance with a valuation obtained by the applicant from HTW Valuers on 11 September 1997.

On 21 October 1997 the applicant wrote to the debtors asking whether they were in a position "to carry out the terms of the Deed by ensuring the creditors ultimately receive 100cents in the dollar." That letter was not responded to.

The applicant has calculated the likely dividend to be no more than approximately 25.7cents in the dollar.

The Deed provided, so far as is presently relevant :-

"... 2. The Debtors convey and assign to the Trustee all their divisible property more particularly described in Schedule A hereto UPON TRUST to deal with the same in accordance with this Deed. 3. The Trustee accepts appointment as Trustee of this Deed and the conveyance and assignment of the said property upon trust hereinafter set out. 4. The debtors in conjunction with the Trustee shall get in and realise the assets of Combined Fuel and Freight as identified in Schedule A on the following basis :- (i) These assets are to be sold by private treaty within a period of six (6) weeks from the date of the Deed; (ii) If not so realised, then these assets are to be sold by general auction. 5. If the proceeds of sale of the assets referred to in clause 4 are insufficient or likely to be insufficient in the opinion of the trustee to enable a dividend of 100 cents in the dollar to be paid to all unsecured creditors in accordance with the terms of this Deed, then all other assets of the debtors shall subsequently be sold by the debtors in conjunction with the Trustee on the following basis :- (i) These assets are to be sold by private treaty within a period of six (6) weeks; (ii) If not so realised, then these assets are to be sold by general auction. 6. Notwithstanding anything contained in clause 4 and 5 above, the Trustee shall have absolute power and discretion to deal with the assets in any manner which the Trustee regards as being in the interests of creditors, including extending the period of sale mentioned in paragraphs 4(i) and 5(i) above. ..... 18. Each of the debtors covenant to pay to the Trustee an amount equal to the income contributions which they would be required to pay to a Trustee in Bankruptcy in the event that they had been made bankrupt, for the period of three years beginning on the day this Deed is executed. 19. For purposes of this clause, Part VI Division 4B of the Act shall apply. 20. Each of the debtors covenant to provide the Trustee upon request by the Trustee all information which they would be required to provide pursuant to Part VI Division 4B and in particular Sections 139U and 139V if they were made bankrupt. 21. The Trustee shall apply any moneys received by him pursuant to this Deed in making payments in the order described by sections 108 to 114 inclusive of the Act as modified by section 237(2) thereof. 22. The Trustee, at his discretion may from time to time hereunder declare and pay any dividend or dividends pro rata to the creditors of the debtors whose Proofs of Debt have been admitted by the Trustee to rank for a dividend. 23. The Trustee shall certify that the debtors have complied with the Deed provided that the debtors have in all respects complied with their obligations under this Deed and the Act, and then only after one of the following events occurs :- (i) a dividend of 100 cents in the dollar is paid to unsecured creditors; or (ii) all of the debtors' divisible assets assigned under this Deed have been realised by the Trustee. ..."

The intended operation of the Deed was that all property of the debtors would be assigned by them to the applicant (clause 2) and that recourse would be had first to the assets of the business carried on by the debtors under the style or firm name of "Combined Fuel and Freight", to seek to achieve a distribution of 100cents in the dollar (clause 4). If that could not be achieved, then all other assets of the debtors, including those specified in Annexure "A" to the Deed, were to be sold (clause 5). Included within the other assets were the real properties at 21st Avenue, Mount Isa and Bulolo Street, Mount Isa.

In addition, the debtors were liable to make income contributions for three years from the date of execution of the Deed (clause 18). Provided the debtors had complied with their obligations under the Deed and the applicant certified to that fact when the unsecured creditors received a dividend or dividends totalling 100cents in the dollar or all of the divisible assets had been realised by the applicant, the debtors were released from all provable debts owed by them (clauses 23 and 24).

The debtors were not obliged under the Deed to do more than assign over all of their property and make the income contributions if required to do so. They did not warrant that the assets were sufficient to yield a dividend of 100cents in the dollar or undertake to make good any shortfall.

The debtors completed a Statement of Affairs dated 23 June 1997. In that document they ascribed a value of $300,000 to the property at 21st Avenue, Mount Isa and also indicated that it was subject to a security in favour of the National Australia Bank for an amount of $105,000.

The debtors' controlling trustee, Mr Craig Bax, recommended acceptance by the unsecured creditors of the debtors' proposal. In a report given pursuant to s 189A of the Act, Mr Bax said, in part :-

"5.5 Valuations In the limited time available to the Controlling Trustee attempts have been made by the Controlling Trustee to value the material assets listed by the debtors in their Statement of Affairs. In the time available it has not been possible to obtain formal sworn valuations of the assets. The Controlling Trustee has attempted to independently verify the value attributed to any material asset which appeared in the Statement of Affairs. Full particulars of this independent verification (where possible) appear in Schedule F to this my report. Also included with Schedule F is a listing of any verification where possible of major liabilities claimed by the debtors which appear in the Statement of Affairs. ..... 10 QUALIFICATIONS ACCOMPANYING AND FORMING PART OF THIS REPORT ..... Creditors should therefore note the following: (a) The information and values disclosed in the debtors Statement of Affairs have been supplied by the Debtors and I have verified as far as practicable in the time available to me the correctness thereof. (b) I have not investigated the financial affairs of the Debtors save as mentioned in the Report and the Scheduled [sic] thereof. (c) Creditors should make their own enquiries in regard to the affairs of the Debtors however any material omissions or misstatement by the Debtors which are brought to my attention will be investigated as far as possible prior to the meeting. (d) As indicated above I have attempted to verify the accuracy of the information disclosed in the Debtors Statement of Affairs, however I am not able to express with certainty an opinion as to whether the Statement of Affairs would present a true and fair view of the financial position of the Debtors. ....."

Schedule F to the controlling trustee's report provided :-

" VALUATIONS

1. ASSETS

The following material assets of the debtor have had independent verification of their value :-

Description of Asset	Value as per Statement of Affairs	Independent Assessment of Value $	Source of Statement of Independent Assessment
Property 1 21st Avenue Mt Isa	$300,000.00	$275,000.00	Valuation of Ray Dank
Bulolo Street Mt Isa	$120,000.00	$112,000,00	Valuation of Ray Dank (Note 1)

2. LIABILITIES

The following is a list of the debtor's material liabilities and the independent verification possible in respect of same:

Description of Asset	Value as per Statement of Affairs	Independent Assessment of Value $	Source of Statement of Independent Assessment
National Australia Bank	$119,000.00	$148,514.30	Letter NAB 9.7.97

3. FURTHER COMMENTS AND NOTES

1. Half interest only."

The evidence establishes that Mr Bax tabled the appraisal of Ray Dank, of Ray Dank Real Estate, at the meeting and that document was available for perusal by any interested creditor.

The appraisal of Mr Dank is contained in a letter dated 2 July 1997. That letter said :-

"Dear Sir,

Attention: Mr Craig Bax

Re: (a) Property corner 21st Avenue and Buckley Avenue, Mount Isa Qld 4825

(b) Property at No 1 Bulolo Street Soldier's Hill North Mount Isa Qld 4825

Following your telephone call the driveway market appraisal on the above properties is as follows :

(a) Land $80,000.00

Building $195,000.00

Total $275,000.00

(b) Land $39,000.00

House & Improvements $73,000.00

Total $112,000.00

I bring to your attention that this is a Market Appraisal only and not a Valuation.

Comments: The shop is in a situation where a new owner would have to spend a lot of money and if a buyer could be found in the price range I am suggesting, I would strongly recommend it.

Please call if I can assist further.

DISCLAIMER

THE INFORMATION IN THIS PROPERTY REPORT HAS BEEN CAREFULLY COMPILED BY RAY DANK REAL ESTATE, BUT READERS SHOULD BE AWARE THAT IT IS INFORMATION FOR THEIR CONVENIENCE ONLY AND IT IS NOT INTENDED TO BE RELIED UPON IN ANY WAY AND THAT THIS REPORT SHOULD NOT BE TREATED AS A WARRANTY OR REPRESENTATION (BY RAY DANK REAL ESTATE) AS TO THE CORRECTNESS OF THE INFORMATION OR THAT IT SHOULD FORM PART OF ANY CONTRACT OR AGREEMENT. INTERESTED PARTIES MUST BE SURE TO UNDERTAKE THEIR OWN INDEPENTENT [SIC] INQUIRIES AND INVESTIGATION AND IN THIS WAY, SATISFY THEMSELVES THAT ANY DETAIL [SIC] PROVIDED HERE ARE TRUE AND CORRECT. DO NOT ACT WITHOUT HAVING CHECKED THE ACCURACY OF THIS INFORMATION.

Yours faithfully,"

Affidavits were filed from two creditors who attended the meeting on 24 July 1997. Mr Russell Adams, representing the largest unsecured creditor, deposed :-

"3. I recall at that meeting the controlling trustee Mr Craig Bax who was elected Chairman of the meeting tabled a market appraisal obtained by him from Ray Dank Real Estate showing the value of the property at 21st Avenue, Mt Isa at approximately $275,000.00. 4. I can further recall Mr Bax informing the meeting that if the property achieved the amount of the market appraisal that a dividend of 100cents in the dollar or very near that amount would be paid to ordinary unsecured creditors in the administration. 5. Indeed I can recall Mr Bax advising the meeting that Mr and Mrs Heuir had informed him that they believed that the property was worth in excess of $300,000.00 and that negotiations were taking place with the Mt Isa Irish Association for the purchase of the property. 6. It was my expectation that if creditors voted for the proposal a dividend of somewhere in the vicinity of 100cents in the dollar would be paid to ordinary unsecured creditors . ..... 8. If I had been aware that this was [sic] amount payable to ordinary unsecured creditors pursuant to the terms of the Deed of Arrangement at the date of the meeting I would not have voted for the proposal. ...."

Mr Graeme Dwyer, who represented another creditor, deposed :-

"5. It is my recollection that Mr Bax informed the meeting that if the property sold for $275,000.00 that a dividend of approaching 100cents in the dollar would be paid to all the unsecured creditors. Mr Bax informed the meeting and I variably [sic] believe that the debtors were of the view that the property was worth in excess of $275,000.00 and that the property would be purchased by the Mt Isa Irish Association relatively expeditiously. 6. It was my recollection that creditors had an expectation that if they voted for the debtors proposal that a dividend of 100cents in the dollar or a figure approaching that amount would be paid."

Although the oral submission of counsel for the applicant carried overtones of misrepresentation as to the value of the property at 21st Avenue, Mount Isa, the evidence does not bear this out. Any representation by Mr Bax was as to the belief of the debtors as to what the property was worth and that the Mount Isa Irish Association was negotiating with a view to purchasing the property. The Association was the adjoining land owner; it was negotiating and did in fact ultimately purchase the property, but not at what the debtors thought the property was worth. There is no suggestion in the material that the debtors did not hold the belief which Mr Bax stated they held. Irrespective of the belief of the debtors, the appraisal from the real estate agent, which was tabled at the meeting, became the material representation, if indeed it was a representation, as to the worth of the property.

On any fair reading of the letter from Mr Dank it is clear that he was not representing that the property should be valued at or have a value of $275,000. Rather, it was an appraisal of what he considered the property may bring on the then current market having viewed the property from the roadside and having regard to its location. The letter contains a statement of opinion subject to the qualifications, limitations and disclaimers contained in the letter.

It is clear from the affidavit of the applicant that the present application has been brought because it now appears that the expectations of the creditors voting in favour of the proposal will not be realised. There is no suggestion that the debtors have done anything which has frustrated or may frustrate the Deed or prevent it being administered in accordance with its terms or engaged in any conduct which has thwarted the unsecured creditors' expectations.

The provisions of s 236(1)(a), (b) and (c) with respect to deeds of arrangement, have their counterpart with respect to deeds of composition in s 242(1)(a), (b) and (c). Of s 242, Toohey J, when a member of this Court, said in Re Doukidis; Ex parte Consolidated Construction Pty Ltd v Nelson (unreported, Perth, 26 June 1985, No 142 of 1984 at 16 - 17) :-

"... On its face s 242 is concerned with a situation in which no objection is taken to the composition itself but it is said that for various reasons, including failure by the debtor to comply with a term of the composition, the composition should be terminated. The use of the expression 'terminated' is not consistent with setting aside a composition; rather it suggests bringing to an end a composition because it cannot be carried into final effect. In my view s 242 is quite inapplicable to the circumstances relied upon by Consolidated Constructions. I do not overlook that para (c) speaks of 'any other reason' but this has to be read conformably with the apparent purpose of the section. It is not simply s 222 or s 239 in another guise."

In Re Tripodi; Ex parte Col Johnson Pty Ltd (unreported, Federal Court of Australia, 22 January 1987) after setting out the statement of Toohey J cited above, Burchett J said that this statement must be true, mutatis mutandis of s 236 of the Act.

Both of these observations were agreed with by a Full Court of this Court (Beaumont, Burchett, von Doussa JJ) in Musolimo v Sidiropolous (1991) 101 ALR 235 at 246.

In Re Gye and Perkes; Ex parte McIntyre (1989) 89 ALR 460, Hill J, after agreeing with the statement of Toohey J cited above, continued in respect of s 242 (at 477) :-

"... Like s 239 it assumes a valid composition, that is to say one that complies with all the provisions of Pt X of the Act; it assumes reasonableness and benefit to the creditors but then proceeds on the basis that something has happened which justifies the court bringing the composition to an end before it has been fully carried out or complied with by the debtor."

More recently, a Full Court of this Court (Lockhart, Hill and Tamberlin JJ) in Khera v National Australia Bank (1996) 71 FCR 133, had occasion to consider the operation of s 236. Lockhart and Hill JJ said (at 145 - 146) :-

"Grounds on which the Court may terminate a deed of arrangement under s 236(1) generally would concern facts and circumstances that came into existence or arose after the execution of the deed of arrangement. Certainly par (a) would do so, but in the case of pars (b) and (c), the relevant facts may have existed before or after the execution of the deed or both (but may not have come to light until after the deed was executed). The grounds referred to in pars (a), (b) and (c) of s 236(1) are expressed in the disjunctive. Notwithstanding the width of the language of par (c) - 'that for any other reason the deed of arrangement ought to be terminated' - the presence of the word 'other' establishes that par (c) is not available if the facts support a finding that may ground termination under par (a) or (b). It is only if the facts do not fall within par (a) or (b) that the Court may rely on par (c). Notwithstanding the generality of the language of par (c) of s 236(1), in our view if the facts lead to the application of s 222(4) (grounds for declaring the deed void under s 222(2)), s 236 cannot be relied on. In other words, matters which bear on the validity of the meeting of creditors and which would lead to the deed being avoided, are encompassed solely by s 222 and not by s 236. This view is supported by the final three paragraphs of the judgment of Toohey J in Doukidis, by Musolino at 246, and by Hill J in Re Gye; Ex parte McIntyre (1989) 89 ALR 460 at 475 - 477."

It was submitted by counsel for the applicant that the discretion under s 236 was to be exercised having "regard to all relevant matters including the interests of creditors of the debtors and of the public" (per Lockhart J in Williamson; Ex parte Wearne (1980) 43 FLR 305 at 311 - 312). Because the debtors, in executing an authority pursuant to s 188 of the Act had committed an act of bankruptcy and were insolvent, counsel submitted that the unsecured creditors were prima facie entitled to sequestration orders and it was in the public interest that the debtors be bankrupted.

It was further submitted by counsel for the applicant that as the debtors were not bankrupt the applicant was denied the ability to have recourse to s 120, s 121 and s 122 of the Act to attempt to recover property of the debtors which has passed out of their hands and s 116 to get access to any after acquired property.

In my view the exercise of the discretion under s 236(1) requires that all relevant interests be taken into account including the interest of the debtors: Re Dolman; Ex parte Elder Smith Goldsbrough Mort Ltd (1967) 10 FLR 38 at 391 (which judgment was cited by Lockhart J in Re Williamson in support of the proposition stated above).

In the instant case there is no suggestion that the Deed cannot be carried into final effect. Nor is there any suggestion that the debtors have disposed of property at an undervaluation (s 120), disposed of property to defeat or delay creditors (s 121) or given any creditor an undue preference (s 122). Nor is there any evidence that the debtors have acquired property of any significance since the execution of the Deed. Finally, there has been no suggestion that the debtors have been guilty of a breach of the Act or of the rules of commercial morality.

Counsel for the applicant submitted that a sequestration order was required in order to investigate whether or not any of these things had occurred and that it was in the public interest that there be such an investigation. If the applicant was of the view that an examination of the debtors as to their property was justified, that course has been, and remains, open to the applicant irrespective of whether the Deed is terminated (s 84 and s 237 of the Act). Where an arrangement has been terminated to allow for an investigation, there has been some material before the Court which gives rise to "a feeling of disquiet about the [debtor's] affairs being continued under a Part X administration" (per Lockhart J, with whom Fisher and Davies JJ agreed, in Chiragakis v Deputy Commissioner of Taxation (1986) 68 ALR 527; see also Khera v National Australia Bank at 146 - 147, 148). That is not this case.

Counsel for the applicant submitted that the interest of Malpass Enterprises Pty Ltd ought to be given effect to by terminating the Deed. It was submitted that this creditor was the largest unsecured creditor and only voted in favour of the proposal because it expected to receive 100cents in the dollar or thereabouts.

In my view, the creditors who voted in favour of the proposal on 24 July 1997 made a commercial judgment on the material then available to them. The terms of the roadside appraisal, and the controlling trustee's report, make it abundantly clear that the figure of $275,000 was not a valuation and that the creditors should not rely on it for that purpose. Mr Dank's comments in the letter carry the clear implication that the property may not be readily saleable at $275,000 in the situation in which it then was.

For any creditor to treat the material before the creditors' meeting and the statements made by Mr Bax at the meeting, as representations that the property had a value of $275,000 and would achieve that figure on sale, having regard to the terms of the letter and Mr Bax's report, was not reasonable conduct on the creditors' part acting in their own interests. Nor does it follow that if the property had been sold for $275,000 that the creditors would have received 100cents in the dollar. On the figures in Exhibit "B" to the applicant's affidavit, such a result would have produced a dividend of 79cents in the dollar. What has occurred is that the debtor's property overall has not achieved the hoped for returns on realisation, and the costs of realisation and administration and their effect on the net funds available for distribution, have not been fully appreciated by the creditors. For example, the controlling trustee's costs under the Deed are fixed at $7,500 plus outlays approved by the applicant. The controlling trustee's costs are shown in Exhibit "B" as $23,700 and the applicant's past and expected costs and outlays total $60,175 without taking into account a realisation fee of $10,430.

From the debtors' standpoint, they entered into the Deed in order to avoid bankruptcy, which is the statutory purpose of arrangements under Part X of the Act. They have done what is required of them and so far as they are concerned, the matter has been completed. They remain obliged to make contributions of income if their earnings are such as to require a contribution. As I have said above, there is nothing in the conduct of the debtors which would suggest that the public interest would be served in terminating the Deed and making a sequestration order.

In reality the administration under the Deed is complete or substantially complete and only awaits the distribution of a dividend to the unsecured creditors. There is no reason why the Deed cannot be carried into final effect.

Lockhart J, in refusing to set aside the deeds in Re Williamson Ex parte Wearne, made some observations which are pertinent to the present application. His Honour said (at 313) :-

"If I were to accede to the submissions of counsel for the applicants and avoid the deeds and then either make summary sequestration orders or leave it to the creditors to decide whether fresh deeds should be executed, I have the firm view that, at the end of the day, what little there may be available now for unsecured creditors will be spent in more legal and administration costs, whittling away even further what remains for unsecured creditors, without any benefit to them or the public. I must take a practical view and not indulge in speculation as to theoretical possibilities of other assets emerging or other creditors possibly coming to light if the debtors are made bankrupt. There is nothing to suggest that either possibility would become a reality."

I hold such a view in the present case.

In my view this is not a proper case in which to terminate the Deed. Nothing has occurred since the meeting of creditors which means that the Deed cannot be carried into final effect and therefore should be terminated. There has been no misrepresentation as to any material fact prior to the vote of the creditors. Indeed, as the authorities show, an application under s 236 of the Act assumes the validity of the Deed. The only circumstance which has arisen after the meeting of creditors is that they have realised that their expectation of receiving 100cents in the dollar will not be met.

Having considered the interests of all parties, the creditors, the debtors and the public and being of the opinion that present available funds will be further reduced, to the detriment of the unsecured creditors, if the Deed was terminated and sequestration ordered, the justice of the situation is against the termination of the Deed. The applicant has not made a ground under s 236(1)(b) or (c) and has not shown that it would be in the interests of the creditors to terminate the Deed.

The application is dismissed.