Re Jackson, G.N. & anor

[1992] FCA 436

436j 92-

JUDGMENT No. ... -..-

IN THE FEDERAL COURT OF AUSTRALIA	l	NO. QX 39 of 1991
GENERAL DIVISION	)
BANKRUPTCY DISTRICT OF	)
THE STATE OF OUEENSLAND	1

RE:  GRAHAM NICHOLAS JACKSON and
JILL MARION JACKSON

Debtors

EX PARTE: ROBERT THOMAS ADCOCK

Applicant

23 JUN 1992

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MINUTES OF ORDER

JUDGE MAKING ORDER:	Drummond J
DATE OF ORDER:	25 May, 1992
WHERE MADE:	Brisbane
THE COURT ORDERS THAT:
NOTE :	Settlement and entry of orders is dealt with in Rule
124 of the Bankruptcy Rules.

The application is adjourned to Monday, 6 July, 1992 at 9.45 a.m..

JN THE FEDERAL COURT OF AUSTRALIA	1	No. QX 39 of 1991
GENERAL DIVISION	1
BANKRUPTCY DISTRICT OF	1
THE STATE OF OUEENSLAND	)

RE :	GRAHAM NICHOLAS JACKSON and
JILL MARION JACKSON

Debtors

EX PARTE: ROBERT THOMAS ADCOCK

Applicant

C O N :  Drummond J F-.

PLACE: Brisbane

m: 25 May, 1992

In this case, application is made under S. 222(1) of the BankruDtcy Act 1966 fCth) ("the Act") for a declaration that a deed of arrangement entered into by the debtors, Mr. and Mrs. Jackson, is not void on the grounds that the meeting at which a resolution requiring the debtors to enter into a deed of arrangement was passed was properly called and that the resolution was, in effect, properly passed.

The evidence indicates that in paragraph 3 of the statements furnished by Mr and Mrs Jackson to their trustee appointed to call a meeting of their creditors, which statements contain a proposal to be put to the creditors in the meeting in compliance with S . 188(2)(c)(ii) of the Act, each of the debtors said:

"I covenant to pay to my trustee the sum of an amount equivalent to 5 cents in the $1 owing to unsecured creditors, ...".

Unfortunately, the proposal intended by them was not that each would pay 5 cents in the dollar, but that together they would pay a total of 5 cents in the dollar. The statements furnished to the trustee and in turn to all the creditors of the debtors were, I think, seriously misleading in that regard.

The meeting was held and a resolution was passed by those creditors present, by the requisite majority as to number and value, in favour of the deed. That took place on 9 April, 1991. Administration under the deed has thus been in place for some considerable period of time. However, I was told by counsel for the applicant that the evidence before me indicates that the creditors who attended totalled only some

72% in value of all the creditors who were circulated with the

proposals of the debtors.

It follows that if those creditors who did not

attend the meeting had in fact attended and voted against the

resolution in favour of entry into deeds of arrangement, the	requisite statutory majority might not have been achieved. I
have been referred to the decision of Re Gaaliardi: Ex Darte Mount (1984) 57 A.L.R. 718 for the general statement of principle therein contained that only matters of substance which have not been complied with should invalidate a deed. I regard the situation that has arisen here as one going to the root of the validity of the resolution.
The section under which this application is brought enables a declaration to be made declaring a deed void where there is doubt on a specific ground whether a deed of arrangement was entered into in accordance with Part X of the Act and complies with the requirements of Part X. Mr. Bickford, counsel for the applicant trustee, has, in the face of the intimation by me, which is reflected in these brief reasons, asked for an adjournment to procure evidence from those of the creditors who did not attend the meeting to hopefully indicate that they understood that the proposal was that they would receive a total of 5 cents in the dollar from both debtors.

If that can be evidenced, then I would be prepared

to make the declaration sought, on the basis that what on the

material before me appears to be a deficiency which goes to the root of the resolution in favour of the deed, would then be demonstrated by such evidence to be a matter of no real significance.

I will therefore grant the adjournment application.

I certify that this and the preceding
two pages is a true copy of the
reasons herein of the Honourable

Mr. Justice Drummond.

Associate: W%- Date: 25 May, 1992