Mader, Re F.H. Henderson, Ex Parte L.E.

[1986] FCA 632

IN THE FEDERAL COURT OF AUSTRALIA	)
GENERAL DIVISION	) QLD P654 of 1986
BANKRUPTCY DISTRICT OF THZ SOUTHERN	)
DISTRICT OF THE STATE OF OUEENSLAND	)

RE: FRITZ HEINRICH MADER

EX PARTE: LLOM EDWARD HENDERSON

MINUTES OF 02DER

JUDGE MAKING ORDEP,:	PINCUS J.
DATE OF ORDER:	9 OCTOBER iSE6
WERS K.WE :	ERISWNE
THE CrJURT OPCC2.S TEAT:

1 -.

I find the act of bankruptcy aileqed :n the

petltlor,.

7

L .

I am sat:sfled of the proof of the ocher matcers of

which :he Act requlres proof.

3 .

I make a sequestratlon order In respect of the estate of the debtor.

4.

Incldental to the proceedipgs, lncludlng reserved

The costs of the petitlonlnq credltor of and. Act.

Settlement and entry of orders is dealt with In

Rule 124 of the Bankruptcy Rules.

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I N THE FEDERAL COIJ9T OF AUSTRALIA )

CENERAL DIVISION ) QLD P654 of 1986

BANKRUPTCY DISTRICT OF THE SOUTHERN )

DISTRICT OF THE STATE OF DUEENSLAND )

RE: FRITZ HEINRICH W E R

EX PAiiTE: LLOYD EDNARD HENDERSON

PINCUS 2 . 9 OCT'IBER 1986

EX TEMPOFX REASONS COR JTJDGMENT

Thls 1s a i'?tltlon f o r d sequesLratlon o r e e r b:r Fr. L . C .

Henderson, alleq1nq thzt he lent the aehtor the SIX of $ Z O . O r ) O In

May 19R5. I dealt at the hearlng with what might be descr1Ee.i as prodedural aspects of the matter, but reserved my 3ecls1on because I was uncertain as to Its substantlve aspects.

Tne petltlon alleges the C O ~ F ~ S S ~ O R of an act of

bankruptcy, namely the glving of notlce to credltors that the

debtor has suspended, or was about to suspend payment of hls

debts. I am satisfled that he gave such notice.

A more dlfficult question, however, whlch is dlscussed

in an mterlocutory judgment given on 17 July 1986, 1s whether or not the petltloner is a creditor. The matter depends, in essence, upon the effect to be given to a document, being annexure "A" to

an affidavit of the petitioner filed on 20 June 1986, which is

2

T	,
headed "Redchamp Research Station Lmited", and purports to be
executed under the seal of that company. The polnt taken is that,
on the face of It, t'ne document does not create a relatlonship of debtor and creditor between the petltloner and Mr. Mader, but one
becween the company and Mr. Henderson.

The macter was brlefly discussed In the ~udgment

referred to above at 2 . 3 , m whlch I said that a slmllar problem

was discussed In an unreported declsion of Connolly J. m the

Supreme Court of Queensland, delivered on 19 March 1986 In Sunblrd

Plaza ProDrletary Llmlted v. Malonev. It was argued before me

that, if the prlnclple there adopted 1 s correctly stated, Its

appllcazlon is confined to guarantees. That seens to me unlikely.

The law's tradltlonal tenderness towards qLarantors would seem to

be 1nconsistfr.t wl'ch a rule maklng guarantors l1aSle In a

sltuatlon In which prlnclpal debtors would not Se.

In my vlew, on the authorlty of the Cunblra ??aza case

and the decisions there relled on, the execution lust described 1 s

enough to make the signatory llahle for the debt If, cf course,

that was the true agreement.

I understand that the declslon in the Sunblrd Plaza case

has qone on appeal to the Full Court of the Supreme Court, but

that no decision has been handed down by that court. Having agaln looked at the decislon of Connolly J., I have come to the view that the signature here is sufficient to make Mr. Mader personally liable, but a more difficult problem is whether or not the true agreement was that he should be personally liable.

I

c 1 3 .

It was argued by Mr. Dutney, on behalf of the

petitioner, that that depends prlncipally, If not wholly, upon the

terms of the document annexure " A " whlch are as follows:

"I, Fritz Hemrich Mader hereby acknowledge the

personal loan of $20,000 from Lloyd Edward

Henderson as of the 28th May 1985.

The full amount of $ 2 0 , 0 0 0 to be repaid In full,

plus all interest and other charges Incurred by behalf, within 30 days from thls date.

Untll thls debt 1s cleared, I agree to pay LLOYD

EDWARD HENDERSON a consulting fee of $1000 per

week, from REDCHAMP RZSEARCH STATION LIMITED. I

also agree to refund In full cnthin 60 days from

thls date all other outstandmg monles owlng to

LLOYD EDWARD HZMDERSOM for t r ave l , accommodatlon

and o t h e r expenses Incurred by him and myself on

behalf of 3ACLTGALOC.I FLW3 kIMIAGEYZNT PTY. LTC.

matters to date."

The flrst two sentences of the documents s ~ e m

unequivocally c c pomt towards persnnal llablllty IF Mr. Yader.

Of course, the expression "personal loan" is a strong indication

in that dlrectlon. A more troubling p r o v l s l o n 1s the tkrd

sentence, whlch can be argued. tc, conflr,e the 1lablllr;y which Mr.

Mader undertakes to alscharge to payment from the company; that

is, It 1 s posslble that the true intention of the parties was that

the company alone could be resorted to for payment.

Certalnly, the ideas expressed In the documents are a

llttle confused. I have looked at authorities which seem to me likely to provide some solution to the problem, but have found none, not surprisingly, which is close enough to these facts to be

of assistance. The question seems to me one purely	of
construction of the particular document.

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Without any complete confldence that the construction

which I favoured when I wrote my reasons on 17 July 1986 1 s correct, I have declded that I should adhere to that provlslonal vlew and construe the document, despite its headlng and mode of execution, and the thlrd sentence, as intended to make Mr. Mader personally llable.

I am therefore satlsfled that the debtor-credltor

relationshlp alleged exists, as contended by Mr. Dutney. As I have sald, the other formal matters have already been disposed of

at the hearlng, and I propose to make a sequestration order.

I flnd the act of bankruptcy alleged I n the petition. I

am satlsfled of the proof of the other matters of whlch the Act

requlres proof. I make a sequestratlon order ln respect of t h e

estate of the debtor and order rhat the costs of the petltlonlqg credltor of an& lncldental to the proceedlngs, lncludlnq reserved

costs, be taxed and pald ln accordance wlth the Act.